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EXHIBIT 10.11
Prepared by, recording RECORDER'S STAMP
requested by, and
when recorded return to:
Hunton & Williams
One NationsBank Plaza, Suite 2650
101 South Tryon Street
Charlotte, North Carolina 28280
Attention: Michael Nedzbala, Esq.
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FINANCING STATEMENT
FROM
RFS FINANCING PARTNERSHIP, L.P.,
the Borrower,
TO
__________________
Trustee
FOR THE BENEFIT OF
LASALLE NATIONAL BANK,
as Indenture Trustee,
the Beneficiary
Relating to Premises in:
City/Town:
County:
State:
Dated as of: November 21, 1996
- - ------------------------------------------------------------------------------
[THE INDEBTEDNESS SECURED BY THIS DEED OF TRUST IS ALSO SECURED BY OTHER
MORTGAGES AND DEEDS OF TRUST ENCUMBERING OTHER PROPERTY LYING OUTSIDE OF THE
STATE OF ________________. PURSUANT TO SECTION __________ OF THE CODE OF
_____________, AS AMENDED, RECORDATION TAX SHALL BE BASED UPON $_____________,
BEING THE ALLOCATED LOAN AMOUNT, THAT IS, THE PROPORTION THAT THE VALUE OF THE
REAL PROPERTY ENCUMBERED BY THIS DEED OF TRUST BEARS TO THE ENTIRE AMOUNT
CONVEYED BY ALL SUCH MORTGAGES AND DEEDS OF TRUST.]
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TABLE OF CONTENTS
Page No.
RECITALs .............................................................................................. 1
GRANTING CLAUSES....................................................................................... 2
SECTION 1. GENERAL TERMS........................................................................ 6
Section 1.01. The Borrower's Bonds........................................................ 6
Section 1.02. Prepayment.................................................................. 6
Section 1.03. Release of the Mortgaged Property........................................... 6
SECTION 2. PAYMENTS............................................................................. 8
Section 2.01. Payments.................................................................... 8
Section 2.02. Setoff...................................................................... 8
SECTION 3. REPRESENTATIONS AND WARRANTIES CONCERNING THE
BORROWER............................................................................................... 8
Section 3.01. Partnership Existence....................................................... 8
Section 3.02. No Litigation............................................................... 8
Section 3.03. No Breach................................................................... 8
Section 3.04. Partnership Action.......................................................... 9
Section 3.05. Approvals................................................................... 9
Section 3.06. ERISA....................................................................... 9
Section 3.07. Impositions................................................................. 9
Section 3.08. Investment Company Act...................................................... 10
Section 3.09. General Partner............................................................. 10
Section 3.10. Restricted Activities of Borrower and General Partner....................... 10
Section 3.11. Other Activities............................................................ 10
Section 3.12. Employees................................................................... 13
Section 3.13. Solvency.................................................................... 13
Section 3.14. No Foreign Person........................................................... 13
SECTION 4. THE BORROWER'S REPRESENTATIONS AND WARRANTIES CON-
CERNING MORTGAGED PROPERTY........................................................... 13
Section 4.01. Improvements................................................................ 13
Section 4.02. Casualty; Condemnation...................................................... 13
Section 4.03. Zoning and Other Laws....................................................... 13
Section 4.04. Lease....................................................................... 14
Section 4.05. Permits..................................................................... 14
Section 4.06. Utilities................................................................... 14
Section 4.07. [Reserved].................................................................. 14
(i)
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Page No.
Section 4.08. Hazardous Materials......................................................... 14
Section 4.09. Warranty of Title........................................................... 15
Section 4.10 Flood Insurance............................................................. 15
Section 4.11 Condition of Mortgaged Property............................................. 15
SECTION 5. COVENANTS OF THE BORROWER............................................................ 15
Section 5.01. Financial Statements........................................................ 15
Section 5.02. Litigation, Etc............................................................. 16
Section 5.03. Partnership Existence, Etc.................................................. 16
Section 5.04. Prohibition of Fundamental Changes.......................................... 17
Section 5.05. Neither a Foreign Person nor an Investment Company.......................... 17
Section 5.06. ERISA....................................................................... 17
Section 5.07. Limitation on Liens......................................................... 18
Section 5.08. Indebtedness................................................................ 18
Section 5.09. Investments................................................................. 18
Section 5.10. Dividend Payments........................................................... 18
Section 5.11. Partnership Activities; Books and Records................................... 19
Section 5.12. Payment for Labor and Materials............................................. 19
Section 5.13. Modifications of Lease...................................................... 19
Section 5.14. [Reserved].................................................................. 19
Section 5.15. Performance of Other Agreements............................................. 19
Section 5.16. Operation of the Mortgaged Properties....................................... 20
Section 5.17. Environmental Matters....................................................... 20
Section 5.18. Insurance; Casualty......................................................... 21
Section 5.19. Payment of Impositions, Liens and Utilities................................. 26
Section 5.20. Condemnation................................................................ 27
Section 5.21. Leases and Rents............................................................ 28
Section 5.22. Maintenance of Mortgaged Property; Waste.................................... 30
Section 5.23. Alterations................................................................. 30
Section 5.24. Compliance with Applicable Law.............................................. 30
Section 5.25. Transfer or Encumbrance of the Mortgaged Property........................... 31
Section 5.26. Estoppel Certificates....................................................... 31
Section 5.27. Operating of Hotel.......................................................... 31
Section 5.28. Changes in the Laws Regarding Taxation...................................... 31
Section 5.29. No Credits on Account of the Secured Obligation............................. 32
Section 5.30. Documentary Stamps.......................................................... 32
Section 5.31. Right of Entry.............................................................. 32
Section 5.32. Performance of Other Agreements............................................. 32
(ii)
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Page No.
SECTION 6. RIGHTS AND REMEDIES.................................................................. 32
Section 6.01. Appraisals.................................................................... 32
Section 6.02. Events of Default............................................................. 32
Section 6.03. Remedies...................................................................... 33
Section 6.04. Right to Cure Defaults........................................................ 37
Section 6.05. Appointment of Receiver....................................................... 38
SECTION 7. WAIVER............................................................................... 38
Section 7.01. Waiver of Counterclaim........................................................ 38
Section 7.02. Sole Discretion of the Beneficiary............................................ 38
Section 7.03. Waiver of Notice.............................................................. 38
Section 7.04. Other Mortgages; No Election of Remedies...................................... 39
Section 7.05. Notices....................................................................... 40
Section 7.06. Non-Waiver.................................................................... 41
SECTION 8. SECURITY AGREEMENT RECORDATION....................................................... 41
Section 8.01. Security Agreement............................................................ 41
Section 8.02. Recording of Deed of Trust, etc............................................... 42
SECTION 9. RIGHTS OF THE BENEFICIARY............................................................ 43
Section 9.01. Further Acts, etc............................................................. 43
Section 9.02. Recovery of Sums Required To Be Paid.......................................... 43
Section 9.03. Costs of Defending and Upholding the Lien..................................... 44
Section 9.04. Additional Actions............................................................ 44
Section 9.05. Additional Security........................................................... 44
SECTION 10. APPLICABLE LAWS........................................................................... 44
Section 10.01. Usury Laws.................................................................... 44
Section 10.02. Governing Law; Jurisdiction; Waiver of Trial by Jury.......................... 45
SECTION 11. MISCELLANEOUS............................................................................. 46
Section 11.01. Exculpation................................................................... 46
Section 11.02. Duplicate Originals........................................................... 46
Section 11.03. Indemnity and the Beneficiary's Costs......................................... 46
Section 11.04. Incorporation by Reference.................................................... 47
Section 11.05. Amendments.................................................................... 48
Section 11.06. Headings, etc................................................................. 48
Section 11.07. Addresses of Mortgaged Properties............................................. 48
Section 11.08. Wire Transfer................................................................. 48
Section 11.09. Severability.................................................................. 48
(iii)
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Page No.
Section 11.10. Covenants To Run with the Land................................................ 49
Section 11.11. Trustee's Duties.............................................................. 49
Section 11.12. Business Days................................................................. 50
Section 11.13. Relationship.................................................................. 50
Section 11.14. No Merger..................................................................... 50
LIST OF SCHEDULES AND EXHIBITS
Schedule A Description of Premises
Schedule B Exceptions to Good Condition
Schedule C Environmental Reports
Schedule D Street Address of Mortgaged Property and Other Mortgaged Property
Annex I Local Law Provisions
(iv)
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DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY
AGREEMENT AND FIXTURE FINANCING STATEMENT
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND
FIXTURE FINANCING STATEMENT ("Deed of Trust") dated as of November 21, 1996,
made by RFS Financing Partnership, L.P. (the "Borrower"), a Tennessee limited
partnership, having an address 889 Ridge Lake Boulevard, Suite 100, Memphis,
Shelby County, Tennessee 38120, as borrower, assignor and debtor, in favor of
________________________, as trustee, and his or its successors in trust hereby
created (the "Trustee") as trustee for the benefit of , as
indenture trustee under an indenture (the "Indenture") dated of even date
herewith, between the Borrower and such trustee, (together with its successors
and assigns, the "Beneficiary"), having an address at 135 South LaSalle Street,
17th Floor, Chicago, Illinois 60674-4107, as beneficiary, assignee and secured
party.
RECITALS:
A. Except as otherwise specified or as the context may otherwise
require, capitalized terms used herein shall have the meanings assigned to those
terms in the "Glossary" attached as Annex I to the Indenture.
B. The Borrower and the Beneficiary are executing the Indenture,
pursuant to which certain bonds, dated as of the date hereof in the aggregate
principal amount of SEVENTY-FIVE MILLION Dollars ($75,000,000) (the "Bonds")
will be issued.
C. The Borrower is the owner of the real property described on Schedule
A annexed hereto, together with all buildings, structures and improvements
located thereon.
D. A condition to the issuance of the Bonds is that the Borrower
execute and deliver this Deed of Trust and the Other Mortgages.
E. The Stated Maturity of the Class A Bonds is August 20, 2008 and of
the Class B Bonds is November 21, 2011.
F. The Beneficiary will hold its interest in and to, inter alia, this
Deed of Trust as indenture trustee for the benefit of all Bondholders who hold
Bonds issued pursuant to the Indenture.
G. This Deed of Trust is given by the Borrower in favor of the
Beneficiary to secure the payment and performance in full when due, whether at
Stated Maturity, by acceleration or otherwise (including, without limitation,
the payment of interest and other amounts which would accrue and become due but
for the filing of a petition in bankruptcy (whether or not a claim is allowed
against the Borrower for such interest or other amounts in any such bankruptcy
proceeding) or the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code, 11 U.S.C. ss. 362(a)), of (i) all payment, performance and
other obligations of the Borrower now existing or hereafter arising under or in
respect of the Indenture, the Bonds and the other Loan
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Documents (including, without limitation, the obligation to pay principal,
interest and all other charges, fees, expenses, indemnities and other payments
related to or in respect of the obligations contained in the Bonds and the other
Loan Documents), and (ii) without duplication of the obligations described in
clause (i), all payment, performance and other obligations of the Borrower now
existing or hereafter arising under or in respect of this Deed of Trust,
including, without limitation, with respect to all charges, fees, expenses,
indemnities and other payments related to or in respect of the obligations
contained in this Deed of Trust (the obligations described in clauses (i) and
(ii), collectively, the "Secured Obligations").
H. The obligations of the Borrower are limited recourse obligations as
more particularly described in Section 11.01 hereof.
GRANTING CLAUSES:
For and in consideration of the sum of Ten Dollars ($10.00) and other
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower hereby grants, transfers, bargains, sells, assigns
and conveys to Trustee in trust, with power of sale and right of entry and
possession, and hereby grants to the Beneficiary, a security interest in and
upon, in and to the following property and rights, whether now owned or held or
hereafter acquired (collectively, the "Mortgaged Property"):
GRANTING CLAUSE ONE
All right, title and interest in and to the real property described on
Schedule A hereto (the "Premises").
GRANTING CLAUSE TWO
TOGETHER WITH any and all buildings, structures, fixtures, additions,
enlargements, extensions, modifications, repairs, replacements and improvements
now or hereafter located on the Premises or any part thereof (collectively, the
"Improvements").
GRANTING CLAUSE THREE
TOGETHER WITH all easements, rights-of-way, strips and gores of land,
streets, ways, alleys, sidewalks, passages, sewer rights, water, water courses,
water rights and powers, air rights and development rights, zoning rights and
all estates, rights, titles, interests, privileges, liberties, tenements,
hereditaments and appurtenances of any nature whatsoever in any way belonging,
relating or pertaining to the Premises or any part thereof, and the reversion
and reversions, remainder and remainders, and all land lying in the bed of any
street, road or avenue, opened or proposed, in front of or adjoining the
Premises or any part thereof to the center line thereof and all the estates,
rights, titles, interests, dower and rights of dower, courtesy and rights of
courtesy, property, possession, claim and demand whatsoever, both in law
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and in equity, of the Borrower of, in and to the Mortgaged Property and every
part and parcel thereof, with the appurtenances thereto.
GRANTING CLAUSE FOUR
TOGETHER WITH all machinery, equipment, fixtures (including but not
limited to all heating, ventilating, air conditioning, plumbing, lighting,
communications and elevator fixtures), appliances, machinery and other property
of every kind and nature whatsoever owned by the Borrower, or in which the
Borrower has or shall have an interest (to the extent of such interest), now or
hereafter located upon the Mortgaged Property, or appurtenant thereto, and
usable in connection with the present or future operation and occupancy of the
Mortgaged Property and all building equipment, materials and supplies of any
nature whatsoever owned by the Borrower, or in which the Borrower has or shall
have an interest (to the extent of such interest), now or hereafter located upon
the Mortgaged Property, or appurtenant thereto, or usable in connection with the
present or future operation and occupancy of the Mortgaged Property (hereinafter
collectively called the "Equipment"), and the right, title and interest of the
Borrower in and to any of the Equipment which may be subject to any security
agreements (as defined in the Uniform Commercial Code) superior in lien to the
lien of this Deed of Trust. In connection with Equipment which is leased to the
Borrower or which is subject to a lien or security interest which is superior to
the lien of this Deed of Trust, this Deed of Trust shall also cover all right,
title and interest of the Borrower in and to all deposits, and the benefit of
all payments now or hereafter made, with respect to such Equipment.
GRANTING CLAUSE FIVE
TOGETHER WITH all awards or payments, including interest thereon, which
may heretofore and hereafter be made with respect to the Mortgaged Property, or
any part thereof, whether from the exercise of the right of eminent domain
(including but not limited to any transfer made in lieu of or in anticipation of
the exercise of said right), or for a change of grade, or for any other injury
to or decrease in the value of the Mortgaged Property.
GRANTING CLAUSE SIX
TOGETHER WITH all leases and subleases (including, without limitation,
all guarantees thereof) and other agreements affecting the use, enjoyment and/or
occupancy of the Mortgaged Property, or any part thereof, now or hereafter
entered into, including, without limitation, the Lease (collectively, the
"Leases") and all oil and gas or other mineral royalties, bonuses and rents,
fees, charges, accounts, credit card slips and other payments for the use or
occupancy of rooms and other public facilities in the Mortgaged Property
(including, without limitation, all guaranties, letters of credit, bonds or cash
security deposited thereunder to secure performance by the tenants or subtenants
thereunder to the extent not prohibited by law), profits and proceeds from the
Mortgaged Property (collectively, the "Rents") and all proceeds from the sale or
other disposition of the Leases and the right to receive and apply the Rents to
the payment of the Secured Obligations.
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GRANTING CLAUSE SEVEN
TOGETHER WITH all proceeds of and any unearned premiums on any
insurance policies covering the Mortgaged Property, or any part thereof,
including, without limitation, the right to receive and apply the proceeds of
any insurance, judgments, or settlements made in lieu thereof, for damage to the
Mortgaged Property, or any part thereof.
GRANTING CLAUSE EIGHT
TOGETHER WITH the right, in the name and on behalf of the Borrower to
appear in and defend any action or proceeding brought with respect to the
Mortgaged Property or any part thereof and, while an Event of Default remains
uncured, to commence any action or proceeding to protect the interest of the
Beneficiary in the Mortgaged Property or any part thereof.
GRANTING CLAUSE NINE
TOGETHER WITH all accounts and accounts receivable, contract rights,
interests, estate or other claims, both in law and in equity, which the Borrower
now has or may hereafter acquire in the Mortgaged Property or any part thereof.
GRANTING CLAUSE TEN
TOGETHER WITH all rights which the Borrower now has or may hereafter
acquire, to be indemnified and/or held harmless from any liability, loss,
damage, cost or expense (including, without limitation, attorneys' fees and
disbursements) relating specifically to the Mortgaged Property or any part
thereof.
GRANTING CLAUSE ELEVEN
TOGETHER WITH all right, title and interest of the Borrower in and to
all extensions, improvements, betterments, renewals, substitutes and
replacements of, and all additions and appurtenances to, the Mortgaged Property,
hereafter acquired by, or released to the Borrower or constructed, assembled or
placed by the Borrower on the Mortgaged Property, and all conversions of the
security constituted thereby, immediately upon such acquisition, release,
construction, assembling, placement or conversion, as the case may be, and in
each such case, without any further mortgage, grant, conveyance, assignment or
other act by the Borrower, 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
the Borrower and specifically described herein.
GRANTING CLAUSE TWELVE
TOGETHER WITH all transferable occupancy certificates, plans and
specifications, franchise agreements, license agreements, consents, management
agreements, service contracts and other licenses (including liquor licenses that
the Borrower presently holds, if any, or may
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hold at any time in the future), certificates, permits, authorizations,
agreements and contracts necessary or desirable for the use, occupation,
development, construction and operation of the Premises or other portions of the
Mortgaged Property or any part thereof, including all renewals, extensions and
replacements thereof, whether issued in the name of the Borrower or in the name
of any predecessor in title.
GRANTING CLAUSE THIRTEEN
TOGETHER WITH all of the Borrower's right, title and interest, if any,
in all surveys, title insurance policies, drawings, plans, specifications, file
materials, operating and maintenance records, catalogues, tenant lists,
correspondence, advertising materials, operating manuals, warranties,
guaranties, appraisals, studies, trade names, good will, books and records and
data relating to the Premises or the Equipment.
GRANTING CLAUSE FOURTEEN
TOGETHER WITH all refunds, rebates or credits in connection with a
reduction in real estate taxes and assessments charged against the Mortgaged
Property as a result of tax certiorari or any applications or proceedings for
reduction.
GRANTING CLAUSE FIFTEEN
TOGETHER WITH all right, title and interest in and to all tangible
personal property owned by Mortgagor (the "Personal Property"), and now or at
any time hereafter located on or at the Premises or used in connection
therewith, including, but not limited to: all goods, machinery, tools, insurance
proceeds and refunds of insurance premiums, equipment (including fire sprinklers
and alarm systems; office air conditioning; hearing; refrigerating; electronic
monitoring; entertainment; recreational; window or structural cleaning rigs;
maintenance equipment; equipment for the exclusion of vermin or insects; removal
of dust; refuse or garbage and all other equipment of every kind), lobby and all
other indoor and outdoor furniture (including tables, chairs, planters, desks,
sofas, shelves, lockers and cabinets), wall beds, wall safes, furnishings,
appliances (including ice boxes, freezers, refrigerators, fans, heaters, stoves,
water heaters and incinerators), inventory, rugs, carpets and other floor
coverings, draperies and drapery rods and brackets, awnings, window shades,
venetian blinds, curtains, lamps, chandeliers and other lighting fixtures and
office maintenance and other supplies;
TO HAVE AND TO HOLD the above granted and described Mortgaged Property
unto and to the use and benefit of Trustee, and its successors in trust,
forever.
PROVIDED, HOWEVER, these presents are upon the express condition, if
the Borrower shall well and truly pay to the Beneficiary the Secured Obligations
at the time and in the manner provided in the Bonds, the other Loan Documents
and this Deed of Trust and shall well and truly abide by and comply with each
and every covenant and condition set forth herein and in the Bonds and the other
Loan Documents, the Beneficiary shall reconvey the Mortgaged
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Property to the person or persons legally entitled thereto and shall, if
requested by the Borrower, duly execute and deliver to the Borrower a
satisfaction of this Deed of Trust in recordable form.
AND the Borrower represents to, covenants with and warrants to the
Beneficiary that:
SECTION 1. GENERAL TERMS.
Section 1.01. THE BORROWER'S BONDS. Two classes of Bonds shall be
executed and delivered by the Borrower pursuant to the Indenture, and each class
shall be payable as to principal and interest as specified in the Indenture,
with a final maturity for each class on the applicable Stated Maturity.
Section 1.02. PREPAYMENT.
The Bonds may be prepaid in whole or in part in accordance with, and
subject to the terms of, Section 2.01 of the Indenture.
Section 1.03. RELEASE OF THE MORTGAGED PROPERTY.
(a) The Borrower may obtain a release of the Mortgaged Property from
the lien of this Deed of Trust (and the Indenture) by giving not less than 30
nor more than 90 days' prior written notice thereof to the Servicer, upon which
the Beneficiary shall promptly execute, acknowledge and deliver to the Borrower
a release from the lien of this Deed of Trust (a "Release") in recordable form
with respect to the Mortgaged Property, provided that all of the following terms
and conditions are satisfied:
(i) no Event of Default has occurred and is continuing or
would not be cured upon release of the Mortgaged Property in accordance
with this Section 1.03;
(ii) such Release, other than a Release to be made in
connection with a Permitted Prepayment Event, shall occur on a Payment
Date following the Lock-Out Period;
(iii) the Borrower shall pay to the Beneficiary no later than
the Remittance Date (A) an amount (the "Release Price") equal to 125%
of the current Allocated Loan Amount for such Mortgaged Property, plus
accrued interest thereon through the related Accounting Date, which
Release Price will be applied to the repayment of the Bonds in
accordance with the Indenture and (B) the Yield Maintenance Premium
payable with respect to such Release Price, which will be paid on the
Bonds in accordance with the Indenture, except that no Yield
Maintenance Premium will be required for a Release made during the
Prepayment Window or in connection with a Permitted Prepayment Event;
and
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(iv) either (x) the Lease Debt Service Coverage Ratio for the
13 full 4-week accounting periods immediately preceding such Release
with respect to the Mortgaged Properties that would remain after such
Release is not less than the Lease Debt Service Coverage Ratio for such
periods with respect to all the Mortgaged Properties immediately prior
to such Release, or (y) the Lease Debt Service Coverage Ratio with
respect to the Mortgaged Properties that would remain after such
release is not less than the Initial Lease Debt Service Coverage Ratio
as of the Closing Date with respect to all of the Mortgaged Properties.
(b) Notwithstanding Section 1.03(a), if a Release is being obtained in
connection with the Lessee's purchase of the Mortgaged Property pursuant to the
related Lease as a result of the Borrower's default under the Lease, then the
conditions set forth in clauses (i), (ii) and (iv) of Section 1.03(a) need not
be satisfied, and with respect to the condition set forth in clause (iii) of
Section 1.03(a), the Release shall be made regardless of whether the Borrower
satisfies its obligation (a) to pay the required Yield Maintenance Premium
payable with respect to the principal portion of the Release Price or (b) to pay
any accrued interest with respect to such Release Price in excess of 30 days of
accrued interest.
(c) Notwithstanding Section 1.03(a), in connection with the sale of the
Mortgaged Property following a Permitted Prepayment Event, the Release Price
shall equal the greater of (i) the sum of (A) all Insurance Proceeds and
Condemnation Proceeds with respect to the Mortgaged Property (to the extent not
previously applied in accordance with this Deed of Trust) and (B) the sales
proceeds of any sale of the Mortgaged Property) and (ii) an amount equal to the
Allocated Loan Amount for such Mortgaged Property, plus accrued and unpaid
interest thereon through the related Accounting Date; provided, however, (1)
such Permitted Prepayment Event was not caused by the Borrower, and (2) such
event was not known to the Borrower on or prior to the Closing Date, and (3) any
related sale of the Mortgaged Property is to a bona fide third party or on bona
fide third party terms. Satisfactory evidence of these requirements contained in
the foregoing clauses (1)-(3) shall be delivered to the Rating Agency, the
Beneficiary and the Servicer or its designated nominee. Moreover, in connection
with a sale of a Mortgaged Property following a Permitted Prepayment Event, the
condition set forth in Section 1.03(a)(iv) need not be satisfied and no Yield
Maintenance Premium shall be due. Notwithstanding any of the foregoing, in no
event shall the Release Price for a Mortgaged Property exceed 125% of the
current Allocated Loan Amount for such Mortgaged Property, plus accrued interest
thereon through the related Accounting Date.
(d) Upon repayment of the Bonds and all other amounts due hereunder and
under the Loan Documents in full in accordance with the terms hereof and
thereof, the Beneficiary shall, promptly after such payment, release its Liens
with respect to all Mortgaged Properties.
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SECTION 2. PAYMENTS.
SECTION 2.01. PAYMENTS.
(a) The Borrower will pay the Secured Obligations at the time and in
the manner provided in the Bonds, the Indenture, this Deed of Trust and the
other Loan Document. This Deed of Trust shall be subject to the covenants,
conditions and agreements contained in the Bonds and the Indenture.
(b) All payments made by the Borrower under this Agreement shall be
made free and clear of, and without deduction or withholding for or on account
of, any present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority (other than taxes
imposed on the income of the Beneficiary).
SECTION 2.02. SETOFF. The Borrower agrees that, in addition to (and
without limitation of) any right of set-off or counterclaim the Beneficiary may
otherwise have, the Beneficiary shall be entitled, at its option, to offset
balances held by it or any of its Affiliates for account of the Borrower (or
amounts due from it to the Borrower) at any of its offices, in Dollars or in any
other currency, against any principal of or interest on the Bonds, or any other
amount payable to the Beneficiary hereunder, which is not paid when due
(regardless of whether such balances are then due to the Borrower), in which
case it shall promptly notify the Borrower thereof, provided that the
Beneficiary's failure to give such notice shall not affect the validity thereof.
SECTION 3. REPRESENTATIONS AND WARRANTIES CONCERNING THE BORROWER. The
Borrower represents and warrants to the Beneficiary that:
SECTION 3.01. PARTNERSHIP EXISTENCE. The Borrower: (a) is a limited
partnership duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization; (b) has all requisite power, and has
all material governmental licenses, authorizations, consents and approvals
necessary to own its assets and carry on its business as now being or as
proposed to be conducted; and (c) is qualified to do business and in good
standing in the state in which the Mortgaged Property is located.
SECTION 3.02. NO LITIGATION. Except as disclosed to the Beneficiary in
writing prior to the date of this Deed of Trust, there are no legal or arbitral
proceedings or any proceedings by or before any governmental or regulatory
authority or agency, now pending or (to the knowledge of the Borrower)
threatened against the Borrower which, if adversely determined, could have a
Material Adverse Effect.
SECTION 3.03. NO BREACH. None of the execution and delivery of this
Deed of Trust or any other Loan Document to which the Borrower is a party, the
consummation of the transactions herein and therein contemplated and compliance
with the terms and provisions hereof and thereof will conflict with or result in
a breach of, or require any consent (except such
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consents as have been obtained) under, the charter or by-laws, the Partnership
Agreement or the organizational documents of the Borrower or the General
Partner, or any applicable law or regulation, or any order, writ, injunction or
decree of any court or governmental authority or agency, or any agreement or
instrument to which the Borrower or the General Partner is a party or by which
any of them is bound or to which any of them is subject, or constitute a default
under any such agreement or instrument, or (except for the Lien arising under
the Loan Documents or any Permitted Liens) result in the creation or imposition
of any Lien upon any of the revenues or assets of the Borrower or the General
Partner pursuant to the terms of any such agreement or instrument.
SECTION 3.04. PARTNERSHIP ACTION. The Borrower has all necessary
partnership power and authority to execute, deliver and perform its obligations
under this Deed of Trust and the other Loan Documents to which it is a party and
to mortgage, give, grant, bargain, sell, alien, enfeoff, convey, confirm,
pledge, assign and hypothecate, and grant a security interest in, the Mortgaged
Property pursuant to the terms hereof and to keep and observe all of the terms
of this Deed of Trust on the Borrower's part to be performed; the execution,
delivery and performance by the Borrower of this Deed of Trust and the other
Loan Documents to which it is a party have been duly authorized by all necessary
partnership action on its part; and each of this Deed of Trust and the other
Loan Documents to which the Borrower is a party has been duly and validly
executed and delivered by the Borrower and constitutes, and the Bonds when
executed and delivered for value will constitute, its legal, valid and binding
obligation, enforceable in accordance with its terms.
SECTION 3.05. APPROVALS. No authorizations, approvals or consents of,
and no filings or registrations with, any governmental or regulatory authority
or agency are necessary for the execution, delivery or performance by the
Borrower of this Deed of Trust and the other Loan Documents to which it is a
party or for the validity or enforceability thereof.
SECTION 3.06. ERISA.
(a) As of the date hereof and throughout the term of this Deed of
Trust, (i) the Borrower is not and will not be an "employee benefit plan" as
defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, and (ii)
the assets of the Borrower do not and will not constitute "plan assets" of one
or more such plans for purposes of Title I of ERISA; and
(b) As of the date hereof and throughout the term of this Deed of
Trust, (i) the Borrower is not and will not be a "government plan" within the
meaning of Section 3(3) of ERISA, and (ii) transactions by or with the Borrower
are not and will not be subject to state statutes applicable to the Borrower
regulating investments of and fiduciary obligations with respect to governmental
plans.
SECTION 3.07. IMPOSITIONS. The Borrower has filed all United States
Federal income tax returns and all other material tax returns which are required
to be filed by the Borrower and has paid all taxes due pursuant to such returns
or pursuant to any assessment received by the
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Borrower; except such taxes which are being contested in good faith and by
proper proceedings and against which adequate reserves are being maintained in
accordance with Section 5.19 herein. The charges, accruals and reserves on the
books of the Borrower in respect of Impositions are, in the opinion of the
Borrower, adequate.
SECTION 3.08. INVESTMENT COMPANY ACT. The Borrower is not an
"investment company," or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act").
SECTION 3.09. GENERAL PARTNER. The sole general partner of the Borrower
is the General Partner. RFS Hotels is the owner of all of the issued and
outstanding capital stock of the General Partner, all of which capital stock has
been validly issued, is fully paid and nonassessable and is owned by RFS Hotels
free and clear of all mortgages, assignments, pledges and security interests and
free and clear of all warrants, options and rights to purchase. The Borrower has
no obligation to any Person to purchase, repurchase or issue any ownership
interest in it.
SECTION 3.10. RESTRICTED ACTIVITIES OF BORROWER AND GENERAL PARTNER.
Each of the Certificate of Limited Partnership and the Partnership Agreement of
the Borrower provides that the Borrower may not engage in any business activity
unrelated to the Mortgaged Properties. The charter of the General Partner
provides that the General Partner may not engage in any activity other than
acting as general partner of the Borrower and activities incidental to that
purpose.
SECTION 3.11. OTHER ACTIVITIES.
(a) The charter of the General Partner requires, until the Bonds are
paid in full and the Mortgaged Properties released from the lien of the
Indenture and the Mortgages, the General Partner shall not, without (a) the
affirmative vote of 100% of the members of its board of directors, and (b)
except with respect to subparagraph (vii), the consent of the Indenture Trustee,
do any of the following:
(i) take, or cause the Borrower to take, any action or suffer
to exist any circumstance that would constitute an "Event of Default"
under any Loan Document evidencing or securing the obligations secured
by the Mortgages;
(ii) amend, alter, change or repeal (A) the provision in the
charter relating to the need for a unanimous vote of the board of
directors, (B) the provision in the charter relating to the
subordination of the Borrower's indemnification obligations to its
officers and directors or (C) the Partnership Agreement or the
Certificate of Limited Partnership of the Borrower;
(iii) dissolve, wind up or liquidate, in whole or in part,
consolidate or merge with or into any other entity, or convey, sell or
transfer its properties and assets
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substantially as an entirety to any entity, or cause the Borrower to
dissolve or liquidate, in whole or in part, or merge with or into any
other entity, or convey, sell or transfer its properties and assets
substantially as an entirety to any entity except as otherwise may be
permitted by the Mortgages;
(iv) engage in any business or activity other than as
permitted by the General Partner's charter, or cause the Borrower to
engage in any business or activity other than as set forth in the
Partnership Agreement (or any successor provision thereto, however
designated);
(v) own any assets other than those related to, or derived
from, the Mortgaged Properties;
(vi) incur, assume or guaranty any indebtedness other than (A)
indebtedness not secured by the Mortgaged Properties consisting of
trade accounts payable (other than for borrowed money) incurred in the
ordinary course of business and (B) debt expressly permitted by the
Loan Documents;
(vii) file, or cause the Borrower to file, a voluntary or
involuntary petition or otherwise initiate, or cause the Borrower to
initiate, proceedings for the General Partner or the Borrower to be
adjudicated insolvent or seeking an order for relief as a debtor under
any chapter of the United States Bankruptcy Code, as amended (11 U.S.C.
ss. ss. 101 et. seq.), or file or cause the filing of, or cause the
Borrower to file or cause the filing of, any petition seeking any
composition, reorganization, readjustment, liquidation, dissolution or
similar relief for the General Partner or the Borrower under the
present or any future federal bankruptcy laws or any other present or
future applicable federal, state or other statute or law relative to
bankruptcy, insolvency or other relief for debtors; or seek or cause
the Borrower to seek, the appointment of any trustee, receiver,
conservator, assignee, sequestrator, custodian, liquidator (or other
similar official) of the General Partner or the Borrower or of all or
any substantial part of the properties and assets of the General
Partner or the Borrower, or make or cause the Borrower to make, any
general assignment for the benefit of its creditors, or admit in
writing its inability to pay its debts generally as they become due, or
declare or effect a moratorium on its debt or take any corporate action
in furtherance of any such action, or consent to or acquiesce in any of
the foregoing actions; or
(viii) sell, transfer, exchange, convey, encumber or otherwise
dispose of any or all of the General Partner's right, title or interest
as a general partner of the Borrower, except that the General Partner
may withdraw as the general partner if it finds a replacement general
partner that is a special purpose corporation, the charter of which
contains substantially the same provisions as the General Partner's
charter.
(b) The charter of the General Partner also contains provisions that,
until the Bonds are paid in full and the Mortgaged Properties released from the
lien of the Indenture and the
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Mortgages, requires the General Partner to take, and cause the Borrower to take,
the following actions:
(i) maintain its own books, records and accounts separate from
any other Person (as defined herein);
(ii) cause its financial statements to be prepared in
accordance with generally accepted accounting principles in a manner
that shows its assets and liabilities separate and apart from those of
any other Person;
(iii) pay all its liabilities and expenses only out of its own
funds;
(iv) pay the salaries of its own employees, if any, and
maintain a sufficient number of employees in light of its contemplated
business operations, but no more than necessary to perform authorized
activities;
(v) allocate fairly and reasonably any overhead for expenses
that are shared with an affiliate, including paying for the office
space and services performed by any employee of any affiliate;
(vi) maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character in light
of its contemplated business operations;
(vii) maintain arm's length relationships with all affiliates
and enter into transactions with affiliates only on commercially
reasonable bases;
(viii) in all dealings with the public, identify itself under
its own name and as a separate and distinct entity;
(ix) independently make decisions with respect to its business
and daily operations;
(x) not commingle its funds or other assets with those of any
other Person and hold all of its assets in its own name;
(xi) not assume or guarantee the liabilities of any other
Person or hold out its credit as being available to satisfy the
obligations of any other Person;
(xii) not acquire obligations or securities of, pledge it
assets for the benefit of, or make loans or advances to, any
affiliates;
(xiii) observe all applicable or customary organizational
formalities;
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(xiv) promptly correct any known misunderstanding regarding
its separate identity;
(xv) not identify itself as a division of any other Person;
(xvi) use separate stationery, invoices and checks bearing its
own name;
(xvii) not own any property, real or personal, other than (a)
the Mortgaged Properties (in the case of the Borrower) and General
Partner's interest in the Borrower (in the case of the General Partner)
and (b) the minimum amount of property necessary to perform authorized
activities; and
(xviii) not acquire the direct obligations of, or securities
issued by, any affiliate.
SECTION 3.12. EMPLOYEES. The Borrower has no employees.
Section 3.13. Solvency. None of the transactions contemplated by the
Loan Documents will be or have been made with an actual intent to hinder, delay
or defraud any present or future creditors of the Borrower, and the Borrower is
not and will not be rendered insolvent by such transactions or will have
received fair and reasonably equivalent value in good faith for the grant of the
Liens created by the Loan Documents. The Borrower is able to pay its debts as
they become due, including contingent obligations reasonably likely to become
due.
SECTION 3.14. NO FOREIGN PERSON. The Borrower is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986,
as amended, and the related Treasury Department regulations, including temporary
regulations.
SECTION 4. THE BORROWER'S REPRESENTATIONS AND WARRANTIES CONCERNING
MORTGAGED PROPERTY.
Section 4.01. Improvements. Except as disclosed in the surveys or title
policies delivered to the Beneficiary hereunder, all Improvements comprising a
portion of the Mortgaged Property lie wholly within the boundary and building
restriction lines of the Mortgaged Property, and no Improvements on adjoining
properties encroach upon the Mortgaged Property in any material respect.
SECTION 4.02. CASUALTY; CONDEMNATION. The Mortgaged Property is free of
material damage and waste and there is no proceeding pending or, to the best of
the Borrower's knowledge, threatened, for the total or partial taking by
condemnation or eminent domain of the Mortgaged Property and no Event of Loss
has occurred with respect to the Mortgaged Property.
SECTION 4.03. ZONING AND OTHER LAWS. The Mortgaged Property and the use
and operation thereof, separate and apart from any other properties, constitutes
a legal use under applicable zoning regulations and complies in all material
respects with all building codes, land
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use and environmental laws and other applicable requirements of law and all
applicable insurance requirements.
SECTION 4.04. LEASE. The Borrower has made available to the Beneficiary
a correct and complete copy of the Lease and all amendments thereto. As of the
Closing Date the Lease is unmodified and in full force and effect and the
Borrower is not, and, to the Borrower's knowledge, the Lessee is not in default
under the Lease.
SECTION 4.05. PERMITS. There has been issued in respect of the
Mortgaged Property all certificates, licenses, permits and governmental
approvals necessary or required to own, operate, use and occupy the Mortgaged
Property in the manner currently operated, including any required permits
relating to zoning, building code, land use and Hazardous Materials. Each such
permit is in full force and effect and the Borrower has not received any notice
of violation or revocation thereof.
SECTION 4.06. UTILITIES. The Mortgaged Property is served by all
utilities required for the current or contemplated use thereof. All public roads
and streets necessary for service of and access to the Mortgaged Property for
the current use thereof have been completed and are open for use. The Mortgaged
Property is served by public water and sewer systems. The Borrower has not
received any notice of actual or threatened reduction or curtailment of any
utility service now supplied to the Mortgaged Property.
SECTION 4.07. [RESERVED]
SECTION 4.08. HAZARDOUS MATERIALS. The Borrower and the Lessee have
obtained all permits, licenses and other authorizations which it is required to
obtain with respect to the Mortgaged Properties under all Environmental Laws,
except to the extent failure to have any such permit, license or authorization
would not have a Material Adverse Effect. The Borrower and the Lessee are in
compliance with the terms and conditions of all such permits, licenses and
authorizations, and are also in compliance in all material respects with all
other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables applicable to the Mortgaged
Properties contained in any applicable Environmental Law or in any regulation,
code, plan, order, decree, judgment, injunction, notice or demand letter issued,
entered, promulgated or approved thereunder, except to the extent failure to
comply would not have a Material Adverse Effect.
In addition, except as set forth in the reports and other materials
described in Schedule C hereto:
(a) No notice, notification, demand, request for information, citation,
summons or order has been issued, no complaint has been filed, no penalty has
been assessed and no investigation or review is pending or, to the best of the
Borrower's knowledge, threatened by any governmental or other entity with
respect to any alleged failure by the Borrower or the Lessee to have any permit,
license or authorization required in connection with the conduct of
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the business of the Borrower or the Lessee relating to the Mortgaged Properties
with respect to any generation, treatment, storage, recycling, transportation,
release or disposal, or any release as defined in 42 U.S.C. ss. 9601(22), of any
substance regulated under Environmental Laws ("Hazardous Materials") generated
by the Borrower or the Lessee.
(b) No Hazardous Materials have been released at, on or under the
Mortgaged Property to an extent that it has, or may reasonably be expected to
have, a Material Adverse Effect.
(c) There are no Liens arising under or pursuant to any Environmental
Laws on any of the Mortgaged Properties or properties, and no government actions
have been taken or, to the Borrower's knowledge, are in process which could
subject any of such properties to such Liens and the Borrower would not be
required to place any notice or restriction relating to the presence of
Hazardous Materials at any Mortgaged Property in any deed to such property.
SECTION 4.09. WARRANTY OF TITLE. The Borrower has good and marketable
fee title to the Mortgaged Property subject only to the Permitted Liens; the
Borrower has the right to grant, bargain, sell, convey and grant a security
interest in, the Mortgaged Property; and the Borrower owns the Mortgaged
Property free and clear of all liens, encumbrances and charges whatsoever except
the lien of this Deed of Trust and Permitted Liens. The Borrower shall forever
warrant, defend and preserve such title, subject to the Permitted Liens, and the
validity and priority of the lien of this Deed of Trust and shall forever
warrant and defend the same to the Beneficiary against the claims of all persons
whomsoever.
SECTION 4.10 FLOOD INSURANCE. No portion of the Improvements is located
in an area identified by the Secretary of Housing and Urban Development or any
successor thereto as an area having special flood hazards pursuant to the
National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of
1973, or the National Flood Insurance Reform Act of 1994, as each may be
amended, or any successor law, or, if any portion of the Improvements is now or
at any time in the future located within any such area, the Borrower has
obtained and will maintain the insurance prescribed in Section 5.18 hereof.
SECTION 4.11 CONDITION OF MORTGAGED PROPERTY. Except as set forth on
Schedule B, the buildings, structures and improvements included on or within the
Mortgaged Property are structurally sound and in good repair, and all
mechanical, electrical, heating, air conditioning, drainage, sewer, water and
plumbing systems are in proper working order.
SECTION 5. COVENANTS OF THE BORROWER. The Borrower agrees that until
payment in full of the Bonds, all interest thereon and all other amounts payable
by the Borrower hereunder:
SECTION 5.01. FINANCIAL STATEMENTS. The Borrower shall deliver or cause
to be delivered to the Beneficiary, the Servicer and the Rating Agency:
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(a) as soon as available and in any event within 120 days after the end
of each fiscal year of the Borrower (commencing with the first full Fiscal Year
following the Closing Date), consolidated statements of income and expenses of
the Borrower for such year and the related consolidated balance sheets as at the
end of such year, accompanied by a certificate of a senior financial officer of
the General Partner, which certificate shall state (i) that such consolidated
financial statements fairly present the consolidated financial condition and
results of operations of the Borrower as at the end of, and for, such Fiscal
Year and (ii) that no Default has occurred and is continuing (or, if any Default
has occurred and is continuing, describing the same in reasonable detail and
describing the action that the Borrower has taken and proposes to take with
respect thereto);
(b) promptly upon receipt thereof, copies of all written reports,
financial statements, budgets or plans delivered by the Lessee under the Lease;
(c) copies of all written reports, budgets or plans delivered by the
Borrower under the Lease; and
(d) promptly after the Borrower knows or has reason to know that any
Default has occurred, a written notice of such Default describing the same in
reasonable detail and, together with such notice or as soon thereafter as
possible, a description of the action that the Borrower has taken and proposes
to take with respect thereto.
SECTION 5.02. LITIGATION, Etc. The Borrower will promptly give to the
Beneficiary notice of (a) all legal or arbitral proceedings, and of all
proceedings by or before any governmental or regulatory authority or agency, and
any material development in respect to such legal or other proceeding affecting
the Borrower, except proceedings which if adversely determined, would not have a
Material Adverse Effect and (b) of any proposal by any public authority to
acquire any Mortgaged Property of the Borrower or any portion thereof.
SECTION 5.03. PARTNERSHIP EXISTENCE, ETC. The Borrower will preserve
and maintain its partnership existence and all of its material rights,
privileges and franchises; comply with the requirements of all applicable laws,
rules, regulations and orders of governmental or regulatory authorities if
failure to comply with such requirements would have a Material Adverse Effect;
pay and discharge all taxes, assessments and governmental charges or levies
imposed on it or on its income or profits or on any of its property prior to the
date on which penalties attach thereto, except for any such tax, assessment,
charge or levy the payment of which is being contested in good faith and by
proper proceedings and against which adequate reserves are being maintained;
maintain all of its properties used or useful in its business in good working
order and condition, ordinary wear and tear excepted; and permit representatives
of the Beneficiary (including its agents and contractors), during normal
business hours and upon reasonable prior notice, to examine, copy and make
extracts from its books and records, to inspect its properties, and to discuss
its business and affairs with its officers, all to the extent reasonably
requested by the Beneficiary.
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SECTION 5.04. PROHIBITION OF FUNDAMENTAL CHANGES. Except as expressly
provided in the Partnership Agreement, the Borrower will not (i) enter into any
transaction of merger or consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution) or (ii) acquire any
business or assets from, or capital stock of, or be a party to any acquisition
of, any Person except for (a) the purchases of FF&E, inventory and other assets
to be sold or used in the ordinary course of business, (b) purchase of the
Mortgaged Property, and (c) Investments permitted under Section 5.09. Except as
permitted hereunder or under the other Loan Documents in connection with a
Release or otherwise, the Borrower will not convey, sell, transfer or otherwise
dispose of the Mortgaged Property without the prior written consent of the
Beneficiary (which consent shall be given upon written confirmation from the
Rating Agency that such action would not result in a qualification, downgrading
or withdrawal of the then current ratings on the Bonds). Except as expressly
provided in the Partnership Agreement, the Borrower will not convey, sell,
lease, transfer or otherwise dispose of, in one transaction or a series of
transactions, all or a substantial part of its business or assets, whether now
owned or hereafter acquired (including receivables and leasehold interests, but
excluding (i) any inventory or other assets sold or disposed of in the ordinary
course of business, or (ii) obsolete or worn-out FF&E or other property no
longer used or useful in its business). The Borrower will not replace or permit
the replacement of the General Partner without the prior written consent of the
Beneficiary; provided, that transfers aggregating more than 49% of the
partnership interests in the Borrower shall require written confirmation from
the Rating Agency that such transfers will not cause a qualification, withdrawal
or downgrading of the ratings then maintained by the Rating Agency with respect
to the Bonds. The Borrower shall not become a Person other than a limited
partnership and shall not become a general or limited partner in any general or
limited partnership. The Borrower shall not permit the General Partner to pledge
or encumber its partnership interest in the Borrower without the prior written
consent of the Beneficiary.
SECTION 5.05. NEITHER A FOREIGN PERSON NOR AN INVESTMENT COMPANY. The
Borrower will not, throughout the term of the Bonds, become a "foreign person"
within the meaning of Sections 1445 and 7701 of the Code (26 USC ss.ss. 1445,
7701) and the related Treasury Department regulations, including, without
limitation, temporary regulations. The Borrower will conduct its operations at
all times so as not to be subject to, or shall comply with, the Investment
Company Act.
SECTION 5.06. ERISA.
(a) The Borrower shall not engage in any transaction which would cause
any obligation, or action taken or to be taken, hereunder (or the exercise by
the Beneficiary of any of its rights under the Bonds, this Deed of Trust and the
other Loan Documents) to be a non-exempt (under a statutory or administrative
class exemption) prohibited transaction under the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").
(b) The Borrower further covenants and agrees to deliver to the
Beneficiary such certifications or other evidence from time to time throughout
the term of the Deed of Trust, as
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requested by the Beneficiary in its sole discretion, that (i) the Borrower is
not an "employee benefit plan" as defined in Section 3(3) of ERISA, which is
subject to Title I of ERISA, or a "governmental plan" within the meaning of
Section 3(3) of ERISA; and (ii) the Borrower is not subject to state statutes
regulating investments and fiduciary obligations with respect to governmental
plans.
SECTION 5.07. LIMITATION ON LIENS. The Borrower will not create, incur,
assume or suffer to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired, except Permitted Liens. The Borrower
shall discharge, by payment, by procurement of a surety bond or otherwise as
approved by the Servicer, any Lien that is not a Permitted Lien within 30 days
after the Borrower receives written notice of the filing of such Lien (subject
to the Borrower's right to contest certain Liens as provided in Section 5.19(b)
hereof).
SECTION 5.08. INDEBTEDNESS. The Borrower will not create, incur or
suffer to exist any Indebtedness except:
(a) Indebtedness to the Beneficiary under the Loan Documents;
(b) Indebtedness not secured by the Mortgaged Properties consisting of
trade accounts payable (other than for borrowed money) incurred in the ordinary
course of business, including purchase money Indebtedness and capitalized lease
obligations for the purchase of FF&E Replacements;
(c) Indebtedness secured by Permitted Liens;
(d) the pledge or assignment of funds released to the Issuer from the
lien of the Indenture; and
(e) other Indebtedness, with the written consent of the Beneficiary,
which consent shall not be withheld if (i) such Indebtedness is expressly
subordinated to the Bonds, (ii) the term of such Indebtedness exceeds the latest
Stated Maturity of the Bonds, (iii) such Indebtedness provides that no remedies
for defaults with respect to such Indebtedness may be exercised until the Bonds
are no longer outstanding, (iv) no Event of Default has occurred and is
continuing and (v) written confirmation is received from the Rating Agency that
such Indebtedness will not cause a qualification, withdrawal or downgrading of
the ratings then maintained by the Rating Agency with respect to the Bonds.
SECTION 5.09. INVESTMENTS. The Borrower will not make or permit to
remain outstanding any Investments other than operating deposit accounts with
banks and Permitted Investments.
SECTION 5.10. DIVIDEND PAYMENTS. The Borrower will not declare or make
any Dividend Payment at any time that an Event of Default shall have occurred
and be continuing.
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SECTION 5.11. PARTNERSHIP ACTIVITIES; BOOKS AND RECORDS.
(a) The Borrower shall not purchase any real properties other than the
Mortgaged Properties, conduct any business other than that permitted under the
Partnership Agreement or charter and by-laws of the General Partner, have any
assets or liabilities other than assets or liabilities derived from or related
to the Mortgaged Properties or otherwise related to a business that is permitted
under the Partnership Agreement, violate any of the provisions of the
Partnership Agreement, nor shall the Borrower amend the Partnership Agreement
without confirmation from the Rating Agency that such amendment will not cause a
qualification, withdrawal or downgrading of the ratings then maintained by the
Rating Agency with respect to the Bonds.
(b) The Borrower shall comply with the "separateness provisions" of the
Partnership Agreement, which provisions are described in Section 3.11(b).
Section 5.12. Payment for Labor and Materials. The Borrower will pay
promptly or cause to be paid when due all bills and costs for labor, materials,
and specifically fabricated materials incurred in connection with the Mortgaged
Property and never permit to exist beyond the due date thereof in respect of the
Mortgaged Property or any part thereof any lien or security interest, even
though inferior to the liens and the security interests hereof, and in any event
never permit to be created or exist in respect of the Mortgaged Property or any
part thereof any other or additional lien or security interest other than the
liens or security interests hereof, except for the Permitted Liens.
SECTION 5.13. MODIFICATIONS OF LEASE. The Borrower will not consent to
any modification, supplement or waiver of the provisions of the Lease or
terminate the Lease (except a termination in connection with a Lease Event of
Default or a termination otherwise permitted under the Lease) without the prior
written consent of the Beneficiary, which consent shall be granted if the Rating
Agency confirms in writing that such action will not cause a qualification,
withdrawal or downgrading of the ratings then maintained by the Rating Agency
with respect to the Bonds. The Borrower will not consent to any modification,
supplement or waiver of any provision of a service contract that would have a
Material Adverse Effect on the value, utility, operation or legality of any
Mortgaged Property or terminate any service contract if such termination would
have a Material Adverse Effect on the value, utility, operation or legality of
any Mortgaged Property, without the consent of the Beneficiary, which consent
shall be granted if the Rating Agency confirms in writing that such action will
not cause a qualification, withdrawal or downgrading of the ratings then
maintained by the Rating Agency with respect to the Bonds.
SECTION 5.14. [RESERVED].
SECTION 5.15. PERFORMANCE OF OTHER AGREEMENTS. The Borrower shall
observe and perform each and every term to be observed or performed by the
Borrower pursuant to the terms of any agreement or recorded instrument affecting
or pertaining to the Mortgaged Property.
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SECTION 5.16. OPERATION OF THE MORTGAGED PROPERTIES. The Borrower shall
comply in all material respects with the terms of the Lease. The Lessee shall be
permitted to employ a manager for each of the Mortgaged Properties pursuant to
the terms of the related Lease. Notwithstanding the foregoing, in the event that
a Lease Event of Default shall have occurred under a Lease, the Beneficiary or
the Servicer may instruct the Borrower to (i) terminate the Lease with respect
to any or all of the Mortgaged Properties and/or (ii) cause the Lessee to
terminate the management agreement (to the extent permitted thereunder) with
respect to any or all of the Mortgaged Properties, and may designate either a
replacement lessee or a property manager, as the case may be, reasonably
acceptable to the Beneficiary and willing to operate the Mortgaged Properties
pursuant to terms and conditions and pursuant to a Lease or property management
agreement approved by the Beneficiary, and the Borrower shall so terminate the
Lease(s) and/or cause the Lessee to terminate the management agreement(s) and
appoint or cause the appointment of such replacement lessee or property manager.
After the Closing Date, the Borrower shall not enter into any lease or property
management agreement in respect of any Mortgaged Property unless the following
conditions are met:
(a) except in connection with hiring an Affiliate of the Lessee to act
as property Manager, the Borrower obtains the Beneficiary's prior written
consent, which consent shall be granted if the Rating Agency confirms in writing
that such action will not cause a qualification, withdrawal or downgrading of
the ratings then maintained by the Rating Agency with respect to the Bonds; and
(b) such replacement lessee or manager executes an agreement
substantially similar to the Subordination Agreement.
SECTION 5.17. ENVIRONMENTAL MATTERS.
(a) The Borrower shall, at its sole cost and expense, comply in all
material respects with and shall cause the Lessee of the Mortgaged Property to
comply in all material respects with all Environmental Laws applicable to the
Mortgaged Property and shall ensure that all operations, businesses and
activities conducted thereon are in material compliance with all Environmental
Laws.
(b) If the Borrower shall receive any notice or other communication
relating to the Mortgaged Property from any governmental authority concerning
any actual, alleged, suspected or threatened violation of or liability under any
Environmental Laws or any Environmental Condition, or that any representation or
warranty herein relating to Hazardous Materials is not or is no longer accurate
in any material respect, including any notice or other communication from any
governmental authority concerning any actual or threatened Environmental Claim,
then the Borrower shall deliver to the Beneficiary, within ten (10) days after
receipt of such notice or communication, a written description of such
violation, liability, or actual or threatened event or condition. Receipt of
such notice shall not be deemed to create any obligation on the part of the
Beneficiary to defend or otherwise respond to such notification. The Borrower
shall
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promptly take all actions necessary to defend such notification of Environmental
Claim or clean up or remedy such Environmental Condition in compliance with all
Environmental Laws.
(c) Upon the Beneficiary's or the Servicer's reasonable request, the
Borrower shall, at its sole cost and expense, take all actions or cause the
Lessee to take all actions necessary to ensure that there is no Hazardous
Material at, on or under the Mortgaged Property in quantities or concentrations
other than those permitted by applicable Environmental Laws; provided that the
Borrower shall not be required to obtain environmental site assessments or audit
reports or updates thereto more often than once per year. The Borrower shall
reasonably promptly provide to the Beneficiary copies of all environmental site
assessments or environmental audit reports, or updates of such assessments or
reports that are generated in connection with the above activities.
(d) Following and during the continuance of an Event of Default, the
Borrower shall permit the Beneficiary to enter upon the Mortgaged Property at
any reasonable time to conduct, at the Borrower's sole cost and expense, a
reasonable inspection of Mortgaged Property, to determine compliance with all
applicable Environmental Laws and to take any and all other actions required by
any governmental agency, including the removal or cleanup of any Hazardous
Materials in quantities or concentrations which violate applicable Environmental
Laws at, on or under the Mortgaged Property. During the continuance of an Event
of Default, the Borrower grants the Beneficiary and its employees, contractors
and agents an irrevocable and nonexclusive license to enter upon the Mortgaged
Property and to perform such tests on the Mortgaged Property necessary to
conduct such reviews and investigations in accordance with the preceding
sentence. All reasonable costs and expenses incurred by the Beneficiary
(including the costs of its agents and contractors) under this subsection shall
be due and payable by the Borrower on demand.
SECTION 5.18. INSURANCE; CASUALTY.
(a) The Borrower, at its sole cost and expense, will keep the Mortgaged
Property insured during the entire term of this Deed of Trust for the mutual
benefit of the Borrower, the Beneficiary and the Servicer against loss or damage
by fire and against loss or damage by other risks embraced by coverage of the
type known as "fire and extended coverage," in an amount sufficient to prevent
the Borrower or the Beneficiary from becoming a co-insurer, but in any case in
an amount not less than the then full replacement value of the Improvements and
Equipment, covering physical loss or damage to such Improvements and Equipment,
without considering depreciation and exclusive of excavations and foundations.
The policy of insurance carried in accordance with this Section shall contain a
"Replacement Cost Endorsement."
(b) The Borrower, at its sole cost and expense, for the mutual benefit
of the Borrower and the Beneficiary, shall also obtain and maintain during the
entire term of this Deed of Trust the following policies of insurance:
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(1) Flood insurance if any part of the Mortgaged Property is
located in an area identified by the Secretary of Housing and Urban
Development as an area having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance
Act of 1968 or the Flood Disaster Protection Act of 1973, or the
National Flood Insurance Reform Act of 1994, as each may be amended
(and any successor act thereto), in an amount at least equal to the
value of the Mortgaged Property as reasonably determined by the
Beneficiary from time to time or the maximum limit of coverage
available with respect to the Improvements and Equipment under said
Act, whichever is less.
(2) Comprehensive public liability insurance with the
coverages and in the amounts required under the Lease (as in effect on
the date hereof).
(3) Loss of income insurance with the coverages and in the
amounts required under the Lease (as in effect on the date hereof).
(4) Insurance against loss or damage (and loss of occupancy or
use) from explosion or breakdown of steam boilers, air conditioning
equipment, high pressure piping, machinery and equipment, pressure
vessels or similar apparatus and elevator and escalator equipment now
or hereafter installed in the Improvements with the coverages and in
the amounts required under the Lease (as in effect on the date hereof).
(5) During the course of any construction or repair of
Improvements on the Mortgaged Property, builder's completed value risk
insurance against "all risks of physical loss," during such
construction with a deductible not to exceed $10,000, in non-reporting
form, covering the total value of work performed and equipment,
supplies and materials furnished.
(6) Worker's compensation and other statutory coverages, as
applicable.
(7) Such other insurance as may from time to time be
reasonably required by the Beneficiary or the Servicer in order to
protect the Beneficiary's interests, to the extent that such insurance
is generally available on commercial reasonable terms and is generally
required by institutional lenders on loans secured by similar
properties.
(c) All policies of insurance (the "Required Insurance Policies")
required pursuant to this Section 5.18 (i) shall be issued by an insurer that is
then rated "A-" or better in claims-paying ability by the Rating Agency, if
rated by the Rating Agency, or, if not rated by the Rating Agency, an equivalent
rating from any other nationally recognized statistical rating organization or
A. M. Best, or is otherwise acceptable to the Rating Agency, (ii) shall contain
the standard New York (or local equivalent) non-contribution clause naming the
Beneficiary as the person to which all payments over $100,000 made by such
insurance company shall be paid, (iii) shall be maintained throughout the term
of this Deed of Trust without cost to the Beneficiary, (iv) shall contain such
provisions as the Beneficiary or the Servicer deems
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reasonably necessary or desirable to protect the Beneficiary's interest
including, without limitation, endorsements providing that neither the Borrower,
the Beneficiary nor any other party shall be a co-insurer under said Policies
and that the Beneficiary shall receive at least thirty (30) days prior written
notice of any modification or cancellation and (v) shall list the Beneficiary
and the Servicer, where applicable, as loss payees or additional insureds.
Notwithstanding the foregoing, workers' compensation insurance may be provided
by any state approved and regulated employer's self-insurance fund and need not
name the Beneficiary or the Servicer as additional insureds or loss payees. The
Borrower shall deliver duplicate counterparts of each of the Required Insurance
Policies to the Servicer. Not later than fifteen (15) days prior to the
expiration date of each of the Required Insurance Policies, the Borrower will
deliver to the Servicer satisfactory evidence of the renewal of each of the
Required Insurance Policies.
(d) The Required Insurance Policies with respect to the Mortgaged
Property may, at the option of the Borrower, be effected by blanket or umbrella
policies issued to the Borrower and its affiliates (including, without
limitation, the direct and indirect partners in the Borrower) covering the
Mortgaged Properties and properties owned by such affiliates, provided that the
policies otherwise comply with the provisions of this Deed of Trust and
specifically allocate to the Mortgaged Property the coverages required hereby,
without possibility of reduction or coinsurance by reason of, or damage to,
another premises named therein, and if the insurance required by this Deed of
Trust shall be effected by any such blanket or umbrella policies, the Borrower
shall furnish to the Servicer copies of such policies in place of the originals,
and in addition, within thirty (30) days after the filing thereof with any
insurance ratemaking body, copies of the schedule of all improvements affected
by any such blanket or umbrella policy of insurance.
(e) If the Mortgaged Property shall be damaged or destroyed, in whole
or in part, by fire or other casualty, the Borrower shall give prompt written
notice thereof to the Beneficiary and the Servicer prior to the making of any
repairs thereto; provided, however, that if the loss or damage is $100,000 or
less and no Event of Default shall have occurred and be continuing, the Borrower
shall have no obligation to provide notice. Following the occurrence of fire or
other casualty, the Borrower, regardless of whether insurance proceeds are
payable under the Required Insurance Policies, shall proceed promptly with the
repair, alteration, restoration, replacement or rebuilding of the same as near
as possible to their value, utility, condition and character prior to such
damage or destruction (the "Restoration"), provided that if the Borrower and the
Servicer determine that (i) the Mortgaged Property cannot be restored to
substantially the same condition as existed before the casualty, or (ii)
restoration cannot reasonably be expected to be completed within one year from
the date of casualty, the Borrower may choose, in its sole discretion, not to
proceed with Restoration but to prepay the Bonds in accordance with the
Indenture in an amount equal to the lesser of (x) the Insurance Proceeds or (y)
the Allocated Loan Amount, plus accrued interest through the related Accounting
Date for the Special Payment Date on which such Prepayment is applied on the
Bonds in accordance with the Loan Documents, in each case without payment of a
Yield Maintenance Premium. In that event, any excess of the Insurance Proceeds
over the Allocated Loan Amount shall be deposited into the Central Account for
application (or release to the Borrower) in accordance with the
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Servicing Agreement. In the event that the Borrower proceeds with the
Restoration, and the Insurance Proceeds exceed the costs of Restoration, such
excess proceeds shall be deposited into the Central Account for application (or
release to the Borrower) in accordance with the Servicing Agreement. The
Restoration shall be performed in accordance with the following provisions:
(1) The Borrower shall procure and pay for, and shall furnish
to the Servicer true copies of, all required governmental permits,
certificates and approvals with respect to the Restoration.
(2) The Borrower shall furnish the Servicer, within thirty
(30) days of the casualty, evidence reasonably satisfactory to the
Servicer of the cost to complete the Restoration.
(3) If the Restoration involves structural work or the
estimated cost to complete the Restoration exceeds $250,000, the
Restoration shall be conducted under the supervision of an architect
(the "Architect") selected by the Borrower and approved by the Servicer
(which approval shall not be unreasonably withheld or delayed), and no
such Restoration shall be made except in accordance with detailed plans
and specifications, detailed cost estimates and detailed work schedules
approved in writing by the Servicer (which approval shall not be
unreasonably withheld or delayed).
(4) The Restoration shall be prosecuted to completion with all
due diligence and in an expeditious and good and workmanlike manner and
in compliance with all laws and other governmental requirements, all
permits, certificates and approvals, all requirements of fire
underwriters and all insurance policies then in force with respect to
the Mortgaged Property. The Restoration shall be performed under a
general contract or construction management agreement approved by the
Servicer, with all construction contracts and architect's agreements
assigned to the Beneficiary.
(5) At all times when any work is in progress, the Borrower
shall maintain all insurance then required by law or customary with
respect to such work, and, prior to the commencement of any work, shall
furnish to the Servicer duplicate originals or certificates of the
policies therefor.
(6) Upon completion of the Restoration, the Borrower shall
obtain (A) any occupancy permit which may be required for the
Improvements and (B) all other governmental permits, certificates and
approvals and all permits, certificates and approvals of fire
underwriters which are required for or with respect to the Restoration,
and shall furnish true copies thereof to the Servicer.
(7) An Event of Default shall be deemed to have occurred under
this Deed of Trust if the Borrower, after having commenced demolition
or construction of any Improvements, shall abandon such demolition or
the construction work or shall fail to complete such demolition and
construction within a reasonable time after the
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commencement thereof (subject to events beyond the reasonable control
of the Borrower).
(f) The Borrower and the Servicer shall jointly adjust and settle all
insurance claims of $100,000 or more and, provided no Event of Default shall
exist and be continuing, the Borrower shall adjust and settle all insurance
claims less than $100,000. In the event any insured loss with respect to which
the insurance proceeds exceed $100,000 (other than proceeds under public
liability or workers' compensation insurance), the payment for such loss shall
be made directly to a segregated account maintained by the Servicer (the "Loss
Proceeds Account").
(g) If money in the Loss Proceeds Account is to be used for the
Restoration, then such money shall be disbursed in accordance with the following
provisions:
(1) Each request for an advance of Insurance Proceeds shall be
made on at least five days' prior notice to the Servicer and shall be
accompanied by a certificate of the Architect, if required under
Section 5.18(e)(3) above, otherwise by an executive officer or managing
general partner of the Borrower, stating (A) that all work completed to
date has been performed in compliance with the approved plans and
specifications, if any, and in accordance with all provisions of law;
(B) the sum requested is properly required to reimburse the Borrower
for payments by the Borrower to, or is properly due to, the contractor,
subcontractors, materialmen, laborers, engineers, architects or other
persons rendering services or materials for the Restoration (giving a
brief description of such services and materials), and that when added
to all sums, if any, previously disbursed by the Servicer does not
exceed the value of the work done to the date of such certificate; and
(c) that the amount of such proceeds remaining in the hands of the
Beneficiary or the Servicer will be sufficient on completion of the
work to pay the same in full (giving in such reasonable detail as the
Servicer may require an estimate of the cost of such completion);
(2) Each request for an advance of Insurance Proceeds shall be
accompanied by, if the estimated cost to complete the Restoration
exceeds $250,000, or if otherwise requested by the Servicer, waivers of
liens satisfactory to the Servicer covering that part of the
Restoration previously paid for, if any;
(3) No advance of Insurance Proceeds shall be made if there is
an Event of Default or other material default continuing on the part of
the Borrower (or any of its affiliates) under this Deed of Trust or any
other Loan Document;
(4) The request for an advance of Insurance Proceeds after the
Restoration has been completed shall be accompanied by a copy of any
certificate or certificates required by law for occupancy of the
Mortgaged Property that have not theretofore been delivered to the
Beneficiary or the Servicer; and
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(5) If the Servicer reasonably believes at any time that the
cost of the Restoration at any time shall exceed the amount of the
Insurance Proceeds available therefor, Insurance Proceeds shall not be
advanced until the Borrower shall deposit the full amount of the
deficiency with the Servicer (or make or provide other arrangements or
assurances reasonably satisfactory to the Servicer) and any amount so
deposited shall first be applied toward the cost of the Restoration
before any portion of the Insurance Proceeds is disbursed for such
purpose.
Upon notice to the Beneficiary by the Servicer of the failure on the
part of the Borrower promptly to commence or diligently to continue the
Restoration, or at any time upon request by the Borrower, the Beneficiary shall
apply the amount of any such proceeds then or thereafter in the hands of the
Beneficiary or the Servicer to the payment of the Secured Obligations by
prepaying the Bonds; provided, however, that notwithstanding anything herein
contained, the Beneficiary shall first apply such proceeds to the curing of any
default that has not been cured within the applicable cure period under this
Deed of Trust or any other Loan Document.
(h) Insurance Proceeds and any additional funds deposited by the
Borrower with the Beneficiary or Servicer shall constitute additional security
for the Secured Obligations. The Borrower shall execute, deliver, file and/or
record, at its own expense, such documents and instruments as the Beneficiary or
Servicer deems necessary or advisable to grant to the Beneficiary a perfected,
first priority security interest in the Insurance Proceeds and such additional
funds. If the Borrower elects to have the Insurance Proceeds applied to
Restoration, (i) the Insurance Proceeds shall be, at the Servicer's election,
disbursed in installments by the Servicer, and (ii) the Borrower shall upon
demand by the Servicer from time to time deposit with the Servicer, in a
mutually acceptable interest-bearing account, the amount of any deductible under
such insurance coverage and such amounts as reasonably determined by the
Servicer in excess of the amount from time to time on deposit as may be
necessary to complete the Restoration.
SECTION 5.19. PAYMENT OF IMPOSITIONS, LIENS AND UTILITIES.
(a) The Borrower shall pay or cause to be paid all Impositions as they
become due and payable. The Borrower will deliver to the Servicer an Officer's
Certificate certifying that the real estate taxes, assessments and similar items
with respect to the Mortgaged Property have been so paid and are not then
delinquent, which delivery shall occur promptly following such payment and, at
the request of the Servicer, the Borrower will deliver evidence satisfactory to
the Servicer with respect to the payment of such real estate taxes or any other
Impositions. The Borrower shall not suffer or permit any lien or charge
(including without limitation any mechanic's lien) against all or any part of
the Mortgaged Property (other than inchoate liens for real estate taxes and
other assessments not yet due and payable) and the Borrower shall promptly cause
to be paid and discharged any lien or charge whatsoever which may be or become a
lien or charge against the Mortgaged Property. The Borrower shall promptly pay
or cause to be paid all bills for utility services provided to the Mortgaged
Property.
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(b) Notwithstanding the provisions of subsection (a) of this Section
5.19, the Borrower shall have the right to contest in good faith the amount or
validity of any such lien or charge (including, without limitation, tax liens
and mechanics' liens) referred to in subsection (a) above by appropriate legal
proceedings and in accordance with all applicable law, after notice to, but
without cost or expense to, the Beneficiary or Servicer, provided that: (i) the
Borrower pays all Impositions as same become due and payable, unless the
Borrower delivers evidence satisfactory to the Servicer that, as a result of the
Borrower's contest, the Borrower's obligation to pay such Impositions has been
deferred by the appropriate governmental authority, in which event the Borrower
may defer such payment of such Impositions until the date specified by such
governmental authority; (ii) such contest shall be promptly and diligently
prosecuted by and at the expense of the Borrower; (iii) the Beneficiary shall
not thereby suffer any civil penalty, or be subjected to any criminal penalties
or sanctions; (iv) such contest shall be discontinued and such lien or charge
promptly paid if at any time all or any part of the Mortgaged Property shall be
in imminent danger of being foreclosed, sold, forfeited, or otherwise lost or if
the lien of this Deed of Trust or the priority thereof shall be in imminent
danger of being impaired; and (v) during such contest the Borrower shall
indemnify and protect the Beneficiary against any liability, loss or injury by
reason of such contest, and shall post a deposit with the Servicer representing
125% of the contested amount.
SECTION 5.20. CONDEMNATION. The Borrower shall promptly give the
Beneficiary and the Servicer written notice of the actual or (to the Borrower's
knowledge) threatened commencement of any condemnation or eminent domain
proceeding and shall deliver to the Servicer copies of any and all papers served
in connection with such proceedings. The Servicer may participate in any such
proceeding and the Borrower will deliver to the Servicer all instruments
requested by the Servicer to permit such participation.
Notwithstanding any taking by any public or quasi-public authority
through eminent domain or otherwise (including but not limited to any transfer
made in lieu of or in anticipation of the exercise of such taking), the Borrower
shall continue to pay the Secured Obligations at the time and in the manner
provided for in the Indenture, in this Deed of Trust and the other Loan
Documents, and the Secured Obligations shall not be otherwise reduced, until any
award or payment therefor shall have been actually received and applied by the
Beneficiary or Servicer (after expenses of collection) to the discharge of the
Secured Obligations. The Beneficiary shall not be limited to the interest paid
on the award by the condemning authority but shall be entitled to receive out of
the award interest on the Secured Obligations at the rate or rates provided in
the Loan Documents.
If there exists no Event of Default, the Borrower will be entitled to
receive payment of Condemnation Proceeds up to $100,000 to be applied to the
Restoration of such Mortgaged Property, if Restoration is required. Condemnation
Proceeds of more than $100,000 will be deposited into the Loss Proceeds Account
maintained by the Servicer. Once Condemnation Proceeds are received, the
Borrower shall proceed promptly with the Restoration of the Mortgaged Property;
provided that if a condemnation or eminent domain proceeding of any Mortgaged
Property is of such a nature that the Borrower and the Servicer determine that
(i) the
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Mortgaged Property can no longer be operated on an economically feasible basis,
or (ii) restoration cannot reasonably be expected to be completed within a
period of one year from the date of the condemnation, then the Borrower may, in
its sole discretion, choose not to proceed with Restoration, and prepay the
Bonds in accordance with the Indenture in an amount equal to the lesser of (x)
the amount of the Condemnation Proceeds and (y) the Allocated Loan Amount, plus
accrued interest through the Accounting Date for the Special Payment Date on
which such Prepayment is applied on the Bonds in accordance with the Loan
Documents, in each case without a Yield Maintenance Premium. In that event, any
excess of the Condemnation Proceeds over the Allocated Loan Amount shall be
deposited into the Central Account for application (or release to the Borrower)
in accordance with the Servicing Agreement. In the event that the Borrower
proceeds with the Restoration, and the Condemnation Proceeds exceed the costs of
Restoration, such excess proceeds shall be deposited into the Central Account
for application (or release to the Borrower) in accordance with the Servicing
Agreement. If the Borrower elects to proceed with Restoration, then the net
proceeds of such award or payment shall be treated for purposes of this Section
5.20 as Insurance Proceeds resulting from damage to the Mortgaged Property and
shall be made available to the Borrower to construct such additional
improvements subject to the terms and conditions of Sections 5.18(e), (f), (g)
and (h). If the Mortgaged Property is sold, through foreclosure or otherwise,
prior to the receipt by the Beneficiary or the Servicer of such award or
payment, the Beneficiary shall have the right, whether or not a deficiency
judgment on the Bonds shall have been sought, recovered or denied, to receive
such award or payment, or a portion thereof sufficient to pay the Secured
Obligations (by prepaying the Bonds in such manner and order of priority as set
forth in the Indenture).
SECTION 5.21. LEASES AND RENTS.
(a) The Beneficiary acknowledges that the Borrower is a party to a
lease agreement (the "Lease") with Lessee, pursuant to which the entire
Mortgaged Property has been leased to the Lessee, and this Deed of Trust is
subject to the terms of that Lease, which, inter alia, requires the Beneficiary
to (i) give the Lessee the same notice, if any, given to the Borrower of any
Default or acceleration of the Bonds or any foreclosure sale hereunder, (ii)
permit the Lessee to cure Defaults during applicable cure periods on the
Borrower's behalf and (iii) permit the Lessee to appear and to bid at any
foreclosure sale. The Borrower represents and warrants that it has entered into
no lease or occupancy agreement of any kind or nature with respect to the
Mortgaged Property other than the Lease. The Borrower shall not amend or modify
the Lease or cancel or terminate the Lease (except in connection with a Lease
Event of Default or a termination otherwise permitted under the Lease) without
the prior written consent of the Beneficiary, which consent will be given upon
confirmation from the Rating Agency that such action will not cause a
qualification, withdrawal or downgrading of the ratings then maintained by the
Rating Agency with respect to the Bonds. To the extent any obligation of the
Borrower hereunder is an obligation to be performed by the Lessee under the
Lease, the Borrower shall fulfill such obligation by causing the Lessee to
perform such obligation.
(b) Section 3.1(c) of the Lease provides that if the Percentage Rent
due for a Fiscal Year is less than that paid for such Fiscal Year, the Borrower,
at its option, may reimburse the
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excess or may credit such amount to the next month's Base Rent. As long as the
Bonds are Outstanding, the Borrower shall not credit any such amounts to future
Base Rent.
(c) The Borrower hereby grants and assigns to the Beneficiary all the
Rents from the Mortgaged Property and the right to enter the Mortgaged Property
for the purpose of enforcing its interest in the Lease and the Rents, this Deed
of Trust constituting a present, absolute assignment thereof. The Beneficiary
grants to the Borrower a revocable license to operate and manage the Mortgaged
Property and to collect the Rents; provided, however, the Beneficiary may revoke
such license upon and during the continuation of an Event of Default.
(d) Any future Lease on the Mortgaged Property shall be subordinate to
this Deed of Trust, subject to non-disturbance provisions similar to those in
the Subordination Agreement.
(e) Without the prior written consent of the Beneficiary, which shall
be given upon confirmation from the Rating Agency that the action will not cause
a qualification, withdrawal or downgrading of the ratings then maintained by the
Rating Agency with respect to the Bonds, the Borrower shall not (i) lease all or
any part of the Mortgaged Property other than to the Lessee pursuant to the
Lease (or a lease substantially similar to the Lease), (ii) consent to any
assignment of the Lease or a sublet of all or part of the Mortgaged Property
(other than a sublet of any retail or restaurant portion of such Mortgaged
Property in accordance with the Lease) or (iii) further assign the whole or any
part of the Lease or the Rents.
(f) With respect to the Lease, the Borrower shall (i) timely fulfill or
perform in all material respects each and every provision thereof on the
Borrower's part to be fulfilled or performed, (ii) promptly send copies to the
Servicer of all notices of default that the Borrower (and/or any person in
possession under the Borrower) shall send or receive thereunder, and (iii)
diligently enforce all of the terms, covenants and conditions contained in such
Lease upon the lessee's part to be performed. Upon the occurrence of any Event
of Default under this Deed of Trust, the Borrower (and/or any person in
possession under the Borrower other than the Lessee) shall pay monthly in
advance to the Beneficiary, or any receiver appointed to collect the Rents, the
fair and reasonable rental value for the use and occupation of the Mortgaged
Property or part of the Mortgaged Property as may be occupied by the Borrower
(or such person) and upon default in any such payment the Borrower (or such
person) shall vacate and surrender possession of the Mortgaged Property to the
Beneficiary or to such receiver and, in default thereof, the Borrower (or such
person) may be evicted by summary proceedings or otherwise.
(g) Neither this assignment nor any action taken pursuant hereto shall
operate to place any obligations or liability for the control, care, management
or repair of the Mortgaged Property upon the Beneficiary or Servicer, or for the
carrying out of any of the terms and conditions of the Lease; nor shall either
operate to make the Beneficiary or Servicer responsible or liable for any waste
committed on the Mortgaged Property by the tenants or any other parties, or for
any dangerous or defective condition of the Mortgaged Property, or for any
negligence in the management, upkeep, repair or control of the Mortgaged
Property resulting in loss or
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injury or death to any tenant, licensee, employee or stranger; nor shall it make
the Beneficiary a "mortgagee in possession."
SECTION 5.22. MAINTENANCE OF MORTGAGED PROPERTY; WASTE. The Borrower
shall maintain the Mortgaged Property in good and clean order and condition such
that the utility and operation of the Mortgaged Property will not be affected in
any materially adverse way, subject to ordinary wear and tear and casualty.
Subject to the provisions herein regarding casualty and condemnation, the
Borrower shall make or cause to be made all necessary or appropriate repairs,
replacements and renewals to the Mortgaged Properties. The Borrower shall not
commit or suffer any waste of the Mortgaged Property or make any change in the
use of the Mortgaged Property that will in any way materially increase the risk
of fire or other hazard arising out of the operation of the Mortgaged Property,
or take any action that might invalidate or give cause for cancellation of any
Required Insurance Policy, or do or permit to be done thereon anything that may
in any way impair the value of the Mortgaged Property or the security of this
Deed of Trust.
SECTION 5.23. ALTERATIONS. The Borrower shall not make or permit to be
made any Alterations to the Mortgaged Property unless such Alterations could not
reasonably be expected to decrease the value of the Mortgaged Property or to
affect adversely the ability of the Borrower to make payments under the Loan
Documents when due.
SECTION 5.24. COMPLIANCE WITH APPLICABLE LAW.
(a) The Borrower shall promptly comply with all existing and future
federal, state and local laws, orders, ordinances, governmental rules and
regulations or court orders affecting the Mortgaged Property, or the use thereof
("Applicable Law").
(b) Notwithstanding any provisions set forth herein or in any document
regarding the approval of Alterations of the Mortgaged Property by the
Beneficiary or the Servicer, the Borrower shall not alter the Mortgaged Property
in any manner which would materially increase the Borrower's responsibilities
for compliance with Applicable Laws without the prior written approval of the
Servicer. The Servicer's approval of the plans, specifications, or working
drawings for alterations of the Mortgaged Property shall create no
responsibility or liability on behalf of the Servicer for their completeness,
design, sufficiency or their compliance with Applicable Laws. The Servicer may
condition any such approval upon receipt of a certificate of compliance with
Applicable Laws from an independent architect, engineer, or other Person
acceptable to the Servicer.
(c) The Borrower shall give prompt notice to the Servicer of the
receipt by the Borrower of any notice related to a violation of any Applicable
Laws and of the commencement of any proceedings or investigations that relate to
compliance with Applicable Laws.
(d) After prior written notice to the Servicer, the Borrower, at its
own expense, may contest by appropriate legal proceeding, promptly initiated and
conducted in good faith and with
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due diligence, the Applicable Laws affecting the Mortgaged Property, provided
that (i) no Event of Default has occurred and is continuing under the Loan
Documents; (ii) the Borrower is permitted to do so under the provisions of any
other mortgage, deed of trust or deed to secure debt affecting the Mortgaged
Property; (iii) such proceeding shall be permitted under and be conducted in
accordance with the provisions of any other instrument to which the Borrower is
subject and shall not constitute a default thereunder; (iv) neither the
Mortgaged Property nor any part thereof or interest therein nor any of the
tenants or occupants thereof shall be affected in any material adverse way as a
result of such proceeding; and (v) the Borrower shall have furnished to the
Servicer all other items reasonably requested by the Servicer.
SECTION 5.25. TRANSFER OR ENCUMBRANCE OF THE MORTGAGED PROPERTY. Except
for the Permitted Liens and the granting of customary easements and similar
rights in the ordinary course of business and except as otherwise expressly
provided in the Loan Documents, the Borrower, without the prior written consent
of the Servicer, shall not sell, convey, alienate, mortgage, encumber or
otherwise transfer the Mortgaged Property or any part thereof or any interest
therein, nor incur any additional indebtedness, nor permit or suffer the
divestiture of its title or any interest therein, nor permit or suffer any
merger, consolidation or dissolution or syndication affecting the Borrower, nor
permit or suffer the pledge, assignment, encumbrance or transfer of any
partnership interest in the Borrower.
SECTION 5.26. ESTOPPEL CERTIFICATES. The Borrower, within ten (10)
Business Days after written request by the Servicer, shall furnish the Servicer
from time to time with a statement, setting forth (i) the then unpaid principal
amount of the Secured Obligations, (ii) the rate of interest then payable on the
Secured Obligations, (iii) the date through which all installments of interest,
principal and other amounts secured by this Deed of Trust have been paid, (iv)
any offsets or defenses to the payment of the Secured Obligations, and (v) that
no default or Event of Default has occurred on the part of the Borrower or, to
the Borrower's knowledge, the Beneficiary under this Deed of Trust, the Bonds or
any other Loan Document which is then continuing, or if any such default or
Event of Default has occurred, giving the particulars thereof.
SECTION 5.27. OPERATING OF HOTEL. The Borrower shall operate (or cause
to be operated) the Mortgaged Property as a hotel and may permit related uses.
SECTION 5.28. CHANGES IN THE LAWS REGARDING TAXATION. If any law is
enacted or adopted or amended after the date of this Deed of Trust which deducts
the Secured Obligations or any portion thereof from the value of the Mortgaged
Property for the purpose of taxation and which imposes a tax, either directly or
indirectly, on the principal amount of the Bonds or the Beneficiary's interest
in the Mortgaged Property, the Borrower will pay such tax, with interest and
penalties thereon, if any. In the event the Beneficiary is advised by counsel
chosen by it that the payment of such tax or interest and penalties by the
Borrower would be unlawful or taxable to the Beneficiary or unenforceable or
provide the basis for a defense of usury, then in any such event, the
Beneficiary shall have the option, by written notice of not less than thirty
days, to
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require the Borrower to prepay immediately thereafter all principal and accrued
interest then due and payable under the Bonds.
SECTION 5.29. NO CREDITS ON ACCOUNT OF THE SECURED OBLIGATION. The
Borrower will not claim or demand or be entitled to any credit or credits on
account of the Secured Obligations for any part of the Impositions assessed
against the Mortgaged Property or any part thereof and no deduction shall
otherwise be made or claimed from the taxable value of the Mortgaged Property,
or any part thereof, by reason of this Deed of Trust or the Secured Obligations.
In the event such claim, credit or deduction shall be required by law, the
Beneficiary shall have the option, by written notice of not less than thirty
days, to require the Borrower to prepay immediately thereafter all principal and
accrued interest then due and payable under the Bonds.
SECTION 5.30. DOCUMENTARY STAMPS. If at any time the United States of
America, any State thereof or any subdivision of any such State shall require
revenue or other stamps to be affixed to the Bonds or this Deed of Trust, or
impose any other tax or charge on the same, the Borrower will pay for the same,
with interest and penalties thereon, if any.
SECTION 5.31. RIGHT OF ENTRY. Subject to the rights of the Lessee under
the Lease and any other requirements of the Lease, the Beneficiary and its
agents shall have the right to enter and inspect the Mortgaged Property at any
time during regular business hours upon reasonable advance notice to the
Borrower.
SECTION 5.32. PERFORMANCE OF OTHER AGREEMENTS. The Borrower shall
observe and perform each and every term to be observed or performed by the
Borrower pursuant to the terms of any agreement or recorded instrument affecting
or pertaining to the Mortgaged Property, which the failure of the Borrower to
perform or observe would have a Material Adverse Effect on the Borrower's
operation of the Mortgaged Property or the Borrower's ability to perform its
obligations under the Loan Documents.
SECTION 6. RIGHTS AND REMEDIES.
SECTION 6.01. APPRAISALS. If an Event of Default occurs and is
continuing, the Servicer shall be entitled at any time to request an appraisal
to be performed by an appraiser satisfactory to the Servicer and/or a market
study to be performed by an MAI satisfactory to the Servicer with respect to the
Mortgaged Property or all the Mortgaged Properties. The Borrower shall pay all
reasonable fees for any appraisals and market studies performed pursuant to this
Section 6.01.
SECTION 6.02. EVENTS OF DEFAULT.
Upon the occurrence of any Event of Default, the Secured Obligations,
upon notice to the Borrower, shall immediately become due at the option of the
Beneficiary (or certain Bondholders as provided in the Indenture) and the
provisions of Section 6.03 shall apply.
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SECTION 6.03. REMEDIES.
(a) The Beneficiary may, to the extent permitted under applicable law,
elect to treat the fixtures included in the Mortgaged Property either as real
property or as personal property, or both, and proceed to exercise such rights
as apply thereto. With respect to any sale of real property included in the
Mortgaged Property made under the powers of sale herein granted and conferred,
the Beneficiary may, to the extent permitted by applicable law, include in such
sale any fixtures included in the Mortgaged Property and relating to such real
property.
(b) Upon the occurrence of any Event of Default, the Beneficiary may
take such action, without notice or demand, as it deems advisable to protect and
enforce its rights against the Borrower and in and to the Mortgaged Property or
any part thereof or interest therein, including, but not limited to, the
following actions, each of which may be pursued concurrently or otherwise, at
such time and in such order as the Beneficiary may determine, in its sole
discretion, without impairing or otherwise affecting the other rights and
remedies of the Beneficiary: (i) enter into or upon the Premises, either
personally or by its agents, nominees or attorneys, and dispossess the Borrower
and its agents and servants therefrom, and thereupon the Beneficiary may (A)
use, operate, manage, lease, control, insure, maintain, repair, restore and
otherwise deal with all and every part of the Mortgaged Property and conduct the
business thereat; (B) complete any construction on the Mortgaged Property in
such manner and form as the Beneficiary deems advisable; (C) make alterations,
additions, renewals, replacements and improvements to or on the Mortgaged
Property; (D) exercise all rights and powers of the Borrower with respect to the
Mortgaged Property, whether in the name of the Borrower or otherwise, including,
without limitation, the right to make, cancel, enforce or modify leases, obtain
and evict tenants, and demand, sue for, collect and receive all earnings,
revenues, rents, issues, profits and other income of the Mortgaged Property and
every part thereof; and (E) apply the receipts from the Mortgaged Property to
the payment of the Secured Obligations (in such manner and order of priority as
the Beneficiary shall elect in its sole and absolute discretion), after
deducting therefrom all expenses (including reasonable attorneys' fees and
expenses) incurred in connection with the aforesaid operations and all amounts
necessary to pay the taxes, assessments, insurance and other charges in
connection with the Mortgaged Property, as well as just and reasonable
compensation for the services of the Beneficiary, its counsel, agents and
employees in connection with the aforesaid operations; (ii) institute
proceedings for the complete foreclosure of this Deed of Trust, in which case
the Mortgaged Property may be sold for cash or upon credit in one or more
parcels; (iii) with or without entry, to the extent permitted and pursuant to
the procedures provided by applicable law, institute proceedings for the partial
foreclosure of this Deed of Trust for the portion of the Secured Obligations
then due and payable, subject to the continuing lien of this Deed of Trust for
the balance of the Secured Obligations not then due; (iv) sell for cash or upon
credit the Mortgaged Property or any part thereof and all or any part of any
estate, claim, demand, right, title and interest of the Borrower therein and
rights of redemption thereof, pursuant to power of sale or otherwise, at one or
more sales, as an entity or in parcels, at such time and place, upon such terms
and after such notice thereof as may be required or pertained by law, and in the
event of a sale, by foreclosure or otherwise, of less than all of the Mortgaged
Property, this Deed of Trust shall continue as a lien
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on the remaining portion of or estate in the Mortgaged Property; (v) institute
an action, suit or proceeding in equity for the specific performance of any
covenant, condition or agreement contained herein or any other Loan Document or
for mandatory or prohibitory injunctive relief, or other equitable relief
requiring the Borrower to cure or refrain from repeating any default; (vi)
recover judgment on the Bonds or any other Loan Document either before, during
or after any proceedings for the enforcement of this Deed of Trust; (vii) apply
for the appointment of a trustee, receiver, liquidator or conservator of the
Mortgaged Property upon ex parte application to any court of competent
jurisdiction, without regard for the adequacy of the security for the Secured
Obligations and without regard for the solvency of the Borrower or of any
person, firm or other entity liable for the payment of the Secured Obligations;
(viii) with or without accelerating the maturity of the Secured Obligations, the
Beneficiary may sue from time to time for any payment due under any Loan
Documents; and/or (ix) pursue such other remedies as the Beneficiary may have
under applicable law, in equity or under this Deed of Trust or any other Loan
Document.
(c) The purchase money proceeds or avails of any sale made under or by
virtue of this Section 6.03, together with any other sums which then may be held
by the Beneficiary under this Deed of Trust, whether under the provisions of
this Section 6.03 or otherwise, shall be applied as follows:
First: To the payment of the costs and expenses of any such
sale, including cost of evidence of title in connection with the sale
and reasonable compensation to the Trustee, its agents and counsel, and
of any judicial proceedings wherein the same may be made, and of all
expenses, liabilities and advances made or incurred by the Trustee
under this Deed of Trust, together with interest as provided herein on
all advances made by the Trustee and all taxes or assessments, except
any taxes, assessments or other charges subject to which the Mortgaged
Property shall have been sold.
Second: To the payment of the whole amount of the Secured
Obligations then due, owing or unpaid together with any and all
applicable interest, fees and late charges, in such manner and order of
priority as provided in the Indenture.
Third: To the payment of any other sums required to be paid by
the Borrower pursuant to any provision of this Deed of Trust, the Bonds
or any other Loan Document.
Fourth: To the payment of the surplus, if any, to whomsoever
may be lawfully entitled to receive the same.
The Beneficiary and any receiver of the Mortgaged Property, or any part
thereof, shall be liable to account for only those proceeds of sale, rents,
issues and profits actually received by it.
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In the event that the proceeds of any such sale, collection or
realization are insufficient to pay all amounts of the Secured Obligations to
which the Beneficiary is legally entitled, the Borrower shall be liable for the
deficiency (subject to Section 11.01), together with interest thereon at the
Default Rate until such amounts are paid in full, together with the costs of
collection and the reasonable fees and disbursements of any attorneys employed
by the Beneficiary to collect such deficiency.
(d) Any receiver appointed after an Event of Default and his agents
shall be empowered (i) to take possession of the Mortgaged Property and any of
the Borrower's business assets used in connection therewith, (ii) to exclude the
Borrower and the Borrower's agents, servants, and employees from the Premises,
(iii) to collect the Rents, (iv) to complete any construction which may be in
progress, (v) to do such maintenance and make such repairs and alterations as
the receiver deems necessary, (vi) to use all stores of materials, supplies, and
maintenance equipment on the Mortgaged Property and replace such items at the
expense of the receivership estate, (vii) to pay all taxes and assessments
against the Mortgaged Property, all premiums for insurance thereon, all utility
and other operating expenses, and all sums due under any prior or subsequent
encumbrance, and (viii) generally to do anything which the Borrower could
legally do if the Borrower were in possession of the Mortgaged Property. All
reasonable expenses incurred by the receiver or his agents shall constitute a
part of the Secured Obligations. Any revenues collected by the receiver shall be
applied first to the expenses of the receivership, including reasonable
attorneys' fees and disbursements incurred by the receiver and the Beneficiary,
together with interest thereon at the Default Rate from the date incurred until
repaid, then to the payment of the whole amount of the Secured Obligations then
due, owing or unpaid, together with any and all applicable interest, fees and
late charges (in such manner and order of priority as the Beneficiary shall
elect in its sole and absolute discretion), and the balance to the payment of
any other sums required to be paid by the Borrower pursuant to any provision of
this Deed of Trust, the Bonds or the other Loan Documents or in such other
manner as the court may direct. Unless sooner terminated with the express
consent of the Beneficiary, any such receivership will continue until the
Secured Obligations have been discharged in full, or until title to the
Mortgaged Property has passed after foreclosure sale and all applicable periods
of redemption have expired.
(e) In the case of a foreclosure under this Deed of Trust, the said
Mortgaged Property, real, personal and mixed, may be sold in one parcel or more
than one parcel to the extent permitted by law.
(f) At the Beneficiary's request, Trustee may adjourn from time to time
any sale to be made 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, Trustee,
at the Beneficiary's request, without further notice or publication, may make
such sale at the time and place to which the same shall be so adjourned.
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(g) Upon the completion of any sale or sales under or by virtue of this
Section 6.03, and the period of redemption (if any), the Trustee or an officer
of any court empowered to do so, shall execute and deliver to the accepted
purchaser or purchasers a good and sufficient instrument, or good and sufficient
instruments, conveying, assigning and transferring all estate, right, title and
interest in and to the property and rights sold. The Trustee is hereby
irrevocably appointed the true and lawful attorney of the Borrower, in its name
and stead, to make all necessary conveyances, assignments, transfers and
deliveries of the Mortgaged Property and rights so sold and for that purpose the
Trustee may execute all necessary instruments of conveyance, assignment and
transfer, and may substitute one or more persons with like power, the Borrower
hereby ratifying and confirming all that its said attorney or such substitute or
substitutes shall lawfully do by virtue hereof, it being agreed that such power
of attorney shall be coupled with an interest. Any such sale or sales made under
or by virtue of this Section 6.03, whether made under the power of sale herein
granted or under or by virtue of judicial proceedings or of a judgment or decree
of foreclosure and sale, shall operate to divest all the estate, right, title,
interest, claim and demand whatsoever, whether at law or in equity, of the
Borrower in and to the properties and rights so sold, and shall be a perpetual
bar both at law and in equity against the Borrower and against any and all
persons claiming or who may claim the same, or any part thereof from, through or
under the Borrower.
(h) In the event of any sale made under or by virtue of this Section
6.03 (whether made under the power of sale herein granted or under or by virtue
of judicial proceedings or of a judgment or decree of foreclosure and sale) the
entire Secured Obligations, if not previously due and payable, immediately
thereupon shall, anything in the Bonds, this Deed of Trust or the other Loan
Documents to the contrary notwithstanding, become due and payable.
(i) Upon any sale made under or by virtue of this (whether made under
the power of sale herein granted or under or by virtue of judicial proceedings
or of a judgment or decree of foreclosure and sale), the Beneficiary may bid for
and acquire the Mortgaged Property or any part thereof and in lieu of paying
cash therefor may make settlement for the purchase price by crediting upon the
Secured Obligations the net sales price after deducting therefrom the expenses
of the sale and the costs of the action and any other sums which the Beneficiary
is authorized to deduct under this Deed of Trust.
(j) No recovery of any judgment by the Beneficiary and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of the Borrower shall affect in any manner or to any extent, the lien
of this Deed of Trust upon the Mortgaged Property or any part thereof, or any
liens, rights, powers or remedies of the Beneficiary hereunder, but such liens,
rights, powers and remedies of the Beneficiary shall continue unimpaired as
before.
(k) So long as the Secured Obligations, or any part thereof, remain
unpaid, the Borrower agrees that possession of the Mortgaged Property by the
Borrower, or any person claiming under the Borrower, shall be as tenant, and, in
case of a sale under power or upon foreclosure as provided in this Deed of
Trust, the Borrower and any person in possession under
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the Borrower, as to whose interest such sale was not made subject, shall, at the
option of the purchaser at such sale, then become and be tenants holding over,
and shall forthwith deliver possession to such purchaser, or be summarily
dispossessed in accordance with the laws applicable to tenants holding over. If
the Borrower (or such person) is permitted to remain or otherwise remains in
possession, the possession shall be as a month-to-month tenant of the
Beneficiary and, on demand, the Borrower (or such person) will pay to the
Beneficiary (or any receiver of the Mortgaged Property) monthly, in advance, the
fair and reasonable rental value for the space so occupied and in default
thereof the Borrower (or such person) may be dispossessed by the usual summary
proceedings or otherwise.
(l) No remedy conferred upon or reserved to the Beneficiary by this
Deed of Trust is intended to be exclusive of any other remedy or remedies
available to the Beneficiary under the Loan Documents, at law, in equity or
otherwise, and each and every such remedy hereunder and/or under any other Loan
Documents, at law or in equity, shall be cumulative and shall be in addition to
every other remedy given under this Deed of Trust and/or under any other Loan
Document or now or hereafter existing at law or in equity. Any delay or omission
of the Beneficiary to exercise any right or power accruing upon the occurrence
of any Event of Default shall not impair any such right or power and shall not
be construed to be a waiver of or acquiescence in any such Event of Default.
Every power and remedy given by this Deed of Trust and/or under any other Loan
Document and/or at law or in equity may be exercised from time to time
concurrently or independently, when and as often as may be deemed expedient by
the Beneficiary in such order and manner as the Beneficiary, in its sole and
absolute discretion, may elect. If the Beneficiary accepts any moneys required
to be paid by the Borrower under this Deed of Trust after the same become due,
such acceptance shall not constitute a waiver of the right either to require
prompt payment, when due, of all other sums secured by this Deed of Trust or to
declare an Event of Default with regard to subsequent defaults. If the
Beneficiary accepts any moneys required to be paid by the Borrower under this
Deed of Trust in an amount less than the sum then due, such acceptance shall be
deemed an acceptance on account only and on the condition that it shall not
constitute a waiver of the obligation of the Borrower to pay the entire sum then
due, and the Borrower's failure to pay the entire sum then due shall be and
continue to be a default hereunder notwithstanding acceptance of such amount on
account.
(m) The state-specific provisions of Annex I are hereby incorporated by
reference herein as though set forth in full herein.
Section 6.04. Right to Cure Defaults. Upon the occurrence of any Event
of Default or if the Borrower fails to make any payment or to do any act as
herein provided, the Beneficiary may, but without any obligation to do so and
without notice, except as otherwise provided herein, to or demand on the
Borrower and without releasing the Borrower from any obligation hereunder, make
or do the same in such manner and to such extent as the Beneficiary may
reasonably deem necessary to protect the security hereof. The Beneficiary is
authorized to enter upon the Mortgaged Property for such purposes, or appear in,
defend, or bring any action or proceeding to protect its interest in the
Mortgaged Property or to foreclose this Deed of Trust or collect the Secured
Obligations, and the cost and expense thereof (including, without
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limitation, reasonable attorneys' fees and disbursements to the extent permitted
by law), with interest as provided in this Section 6.04, shall be immediately
due and payable to the Beneficiary upon demand by the Beneficiary therefor. All
such costs and expenses incurred by the Beneficiary in remedying such Event of
Default or failure of the Borrower or in appearing in, defending, or bringing
any such action or proceeding shall bear interest at the Default Rate, for the
period from the date that such cost or expense was incurred to the date of
payment to the Beneficiary, and such costs, expenses and interest shall be added
to the Secured Obligations and shall be secured by this Deed of Trust.
Section 6.05. Appointment of Receiver. The Beneficiary, upon the
occurrence of an Event of Default or in any action to foreclose this Deed of
Trust or upon the actual or threatened waste to any part of the Mortgaged
Property, shall be entitled forthwith as a matter of right, concurrently or
independently of any other right or remedy hereunder, either before or after
declaring the Secured Obligations (or any part thereof) to be due and payable,
to the appointment of a receiver or other custodian ex parte and without notice
and without regard to the value of the Mortgaged Property as security for the
Secured Obligations, or the solvency or insolvency of any person liable for the
payment of the Secured Obligations, and whether or not foreclosure proceedings
have been commenced.
SECTION 7. WAIVER.
SECTION 7.01. WAIVER OF COUNTERCLAIM. To the fullest extent permitted
by applicable law, the Borrower hereby waives the right to assert a claim or
counterclaim, other than a compulsory counterclaim, in any action or proceeding
brought against it by the Beneficiary with respect to any Event of Default.
SECTION 7.02. SOLE DISCRETION OF THE BENEFICIARY. Wherever pursuant to
this Deed of Trust, the Beneficiary or its agents exercise any right given to
them to approve or disapprove, or any arrangement or term is to be satisfactory
to the Beneficiary or its agents, the decision of the Beneficiary or its agents
to approve or disapprove or to decide that such arrangements or terms are
satisfactory or not satisfactory shall be in the sole discretion of the
Beneficiary or its agents and shall be final and conclusive, except as may be
otherwise specifically provided herein.
SECTION 7.03. WAIVER OF NOTICE. The Borrower shall not be entitled to
any notices of any nature whatsoever from the Beneficiary except with respect to
matters for which this Deed of Trust or the other Loan Documents specifically
and expressly provide for the giving of notice by the Beneficiary to the
Borrower and except with respect to matters for which the Beneficiary is
required by applicable law to give notice, and the Borrower hereby expressly
waives the right to receive any notice from the Beneficiary with respect to any
matter for which this Deed of Trust or other Loan Documents do not specifically
and expressly provide for the giving of notice by the Beneficiary to the
Borrower.
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SECTION 7.04. OTHER MORTGAGES; NO ELECTION OF REMEDIES.
(a) This Deed of Trust is made contemporaneously with other Mortgages
of even date herewith (the "Other Mortgages") given by the Borrower to or for
the benefit of the Beneficiary and that cover other property (the "Other
Mortgaged Properties"). The Other Mortgages secure the Secured Obligations and
the performance of the other covenants and agreements of the Borrower set forth
in the Loan Documents. Upon the occurrence of an Event of Default, the
Beneficiary may proceed under this Deed of Trust and/or the Other Mortgages
against any of the Mortgaged Property and/or the Other Mortgaged Properties in
one or more parcels and in such manner and order as the Beneficiary shall elect.
The Borrower hereby irrevocably waives and releases, to the extent permitted by
law, and whether now or hereafter in force, any right to have the Mortgaged
Property and/or the Other Mortgaged Properties marshalled upon any foreclosure
of this Deed of Trust or the Other Mortgages.
(b) Without limiting the generality of the foregoing, and without
limitation as to any other right or remedy provided to the Beneficiary in this
Deed of Trust or the other Loan Documents, and to the extent permitted by law,
in the case of an Event of Default (i) the Beneficiary shall have the right to
pursue all of its rights and remedies under this Deed of Trust and the Loan
Documents, at law and/or in equity, in one proceeding, or separately and
independently in separate proceedings from time to time, as the Beneficiary, in
its sole and absolute discretion, shall determine from time to time, (ii) the
Beneficiary shall not be required to either marshall assets, sell Mortgaged
Property and/or Other Mortgaged Properties in any particular order of alienation
(and may sell the same simultaneously and together or separately), or be subject
to any "one action" or "election of remedies" law or rule with respect to the
Mortgaged Property and the Other Mortgaged Properties, (iii) the exercise by the
Beneficiary of any remedies against any one item of Mortgaged Property and/or
Other Mortgaged Properties will not impede the Beneficiary from subsequently or
simultaneously exercising remedies against any other item of Mortgaged Property
and/or Other Mortgaged Properties, (iv) all liens and other rights, remedies or
privileges provided to the Beneficiary herein shall remain in full force and
effect until the Beneficiary has exhausted all of its remedies against the
Mortgaged Property and all Mortgaged Properties have been foreclosed, sold
and/or otherwise realized upon in satisfaction of the Secured Obligations, and
(v) the Beneficiary may resort for the payment of the Secured Obligations to any
security held by the Beneficiary in such order and manner as the Beneficiary, in
its discretion, may elect and the Beneficiary may take action to recover the
Secured Obligations, or any portion thereof, or to enforce any covenant hereof
without prejudice to the right of the Beneficiary thereafter to foreclose this
Deed of Trust.
(c) Without notice to or consent of the Borrower and without impairment
of the lien and rights created by this Deed of Trust, the Beneficiary may, at
any time (in its sole and absolute discretion, but the Beneficiary shall have no
obligation to), execute and deliver to the Borrower a written instrument
releasing all or a portion of the lien of this Deed of Trust as security for any
or all of the obligations of the Borrower now existing or hereafter arising
under or in respect of the Indenture and each of the other Loan Documents,
whereupon following the
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execution and delivery by the Beneficiary to the Borrower of any such written
instrument of release, this Deed of Trust shall no longer secure such
obligations of the Borrower so released.
SECTION 7.05. NOTICES. Any notice, demand, statement, request or
consent made hereunder shall be effective and valid only if in writing,
referring to this Deed of Trust, signed by the party giving such notice, and
delivered either personally to such other party, or sent by telecopy, by
nationally recognized overnight courier delivery service or by certified mail of
the United States Postal Service, postage prepaid, return receipt requested,
addressed to the other party, as follows (or to such other address or person as
either party or person entitled to notice may by notice to the other party
specify):
To the Beneficiary:
LaSalle National Bank,
as Indenture Trustee
135 South LaSalle Street, 17th Floor,
Chicago, Illinois 60674-4107,
Attention: Asset-Backed Securities Trust Services Group
Reference: RFS Financing Partnership, L.P.,
Commercial Mortgage Bonds, Series 1996-1
Telecopy No.: (312) 904-2084
and a copy concurrently to:
Weil, Gotshal & Manges
767 Fifth Avenue
New York, NY 10153
Attention: Paul Cohn, Esq.
Telecopy No.: (212) 310-8000
To the Servicer:
Midland Loan Services, L.P.
210 West Tenth Street
Kansas City, MO 64105
Attention: Lawrence D. Ashley
Telecopy No.: 816-435-2326
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To the Borrower:
RFS Financing Partnership, L.P.
889 Ridge Lake Boulevard, Suite 100
Memphis, Shelby County, Tennessee 38120
Attention: Michael J. Pascal
Telecopy No.: (901) 767-5156
and with a copy concurrently to:
Hunton & Williams
2000 Riverview Tower
900 South Gay Street
Knoxville, Tennessee 37902
Attention: David C. Wright, Esq.
Telecopy No. (423) 549-7704
Unless otherwise specified, notices shall be deemed given as follows:
(i) if delivered personally, when delivered, (ii) if delivered by telecopy, when
transmitted and receipt confirmed, (iii) if delivered by nationally recognized
overnight courier delivery service, on the day following the day such material
is sent, or (iv) if delivered by certified mail, on the third day after the same
is deposited with the United States Postal Service as provided above.
SECTION 7.06. NON-WAIVER. The failure of the Beneficiary to insist upon
strict performance of any term hereof shall not be deemed to be a waiver of any
term of this Deed of Trust. The Borrower shall not be relieved of the Borrower's
obligations hereunder by reason of (a) failure of the Beneficiary to comply with
any request of the Borrower to take any action to foreclose this Deed of Trust
or otherwise enforce any of the provisions hereof or the other Loan Documents,
(b) the release, regardless of consideration, of the whole or any part of the
Mortgaged Property, or of any person liable for the Secured Obligations or
portion thereof, or (c) any agreement or stipulation by the Beneficiary
extending the time of payment or otherwise modifying or supplementing the terms
of this Deed of Trust or the other Loan Documents.
SECTION 8. SECURITY AGREEMENT RECORDATION.
SECTION 8.01. SECURITY AGREEMENT.
(a) This Deed of Trust is both a real property Deed of Trust and a
"security agreement" within the meaning of the Uniform Commercial Code. The
Mortgaged Property includes both real and personal property and all other rights
and interests, whether tangible or intangible in nature, of the Borrower in the
Mortgaged Property. The Borrower, by executing and delivering this Deed of
Trust, has granted to the Beneficiary, as security for the Secured Obligations,
a security interest in the Mortgaged Property to the full extent that the
Mortgaged Property may be subject to the Uniform Commercial Code of the State in
which the Mortgaged
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Property is located (said portion of the Mortgaged Property so subject to the
Uniform Commercial Code being called in this Section 8.01 the "UCC Collateral").
If an Event of Default shall occur, the Beneficiary, in addition to any other
rights and remedies which it may have, shall have and may exercise immediately
and without demand, any and all rights and remedies granted to a secured party
upon default under the Uniform Commercial Code, including, without limiting the
generality of the foregoing, the right to take possession of the UCC Collateral
or any part thereof, and to take such other measures as the Beneficiary may deem
necessary for the care, protection and preservation of the UCC Collateral. Upon
request or demand of the Beneficiary, the Borrower shall at its expense assemble
the UCC Collateral and make it available to the Beneficiary at a convenient
place acceptable to the Beneficiary. The Borrower shall pay to the Beneficiary
on demand any and all expenses, including legal expenses and attorneys' fees and
disbursements, incurred or paid by the Beneficiary in protecting its interest in
the UCC Collateral and in enforcing its rights hereunder with respect to the UCC
Collateral. Any notice of sale, disposition or other intended action by the
Beneficiary with respect to the UCC Collateral sent to the Borrower in
accordance with the provisions hereof at least ten (10) days prior to such
action, shall constitute reasonable notice to the Borrower. The proceeds of any
disposition of the UCC Collateral, or any part thereof, may be applied by the
Beneficiary to the payment of the Secured Obligations in such priority and
proportions as the Beneficiary in its sole and absolute discretion shall deem
proper.
(b) Except as provided for in the Lease, that portion of the Mortgaged
Property consisting of personal property and equipment shall be owned by the
Borrower and shall not be the subject matter of any lease or other transaction
whereby the ownership or any beneficial interest in any of such property is held
by any person or entity other than the Borrower nor shall the Borrower create or
suffer to be created any security interest covering any such property as it may
from time to time be replaced, other than the security interest created herein
and as set forth in the Permitted Liens.
SECTION 8.02. RECORDING OF DEED OF TRUST, ETC. The Borrower forthwith,
upon the execution and delivery of this Deed of Trust, will cause this Deed of
Trust, and any security instrument creating a lien or security interest or
evidencing the lien hereof upon the Mortgaged Property (including any assignment
of leases and rents), to be filed, registered or recorded, and thereafter from
time to time, each such other instrument of further assurance to be filed,
registered or recorded, all 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 or security interest hereof upon, and the interest of the Beneficiary
in, the Mortgaged Property. The Borrower will pay (a) all filing, registration
and recording fees and taxes (including, without limitation, mortgage recording
taxes, intangible taxes and documentary stamps), and all other expenses
(including, without limitation, attorneys' fees and disbursements), incident to
or arising in connection with the Secured Obligations and/or the preparation,
execution, acknowledgment, enforcement, delivery and/or recording of this Deed
of Trust, any mortgage supplemental hereto, any security instrument with respect
to the Mortgaged Property (including, without limitation, any assignment of
leases and rents) and any instrument of further assurance (including, without
limitation, any fees and taxes due in connection with any future advances,
re-advances or re-loans under the
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Bonds), and (b) all federal, state, county and municipal, taxes, duties,
imposts, assessments and charges arising out of or in connection with the
Secured Obligations and/or the making, execution, enforcement, delivery and/or
recording of this Deed of Trust, any mortgage supplemental hereto, any security
instrument with respect to the Mortgaged Property (including any assignment of
leases and rents), and/or any instrument of further assurance (including,
without limitation, any such fees and taxes due in connection with any future
advances, re-advances or re-loans under the Bonds), except where prohibited by
law so to do. In default thereof, the Beneficiary may advance the same and the
amount so advanced shall be payable by the Borrower to the Beneficiary within
ten (10) days after demand therefor, together with interest thereon at the
Default Rate from the date of the advance thereof until such amount(s) are
repaid in full. The Borrower shall hold harmless and indemnify the Beneficiary,
its successors and assigns, against any liability incurred by reason of the
imposition of any tax on the making, execution, delivery and/or recording of
this Deed of Trust, any mortgage supplemental hereto, any security instrument
with respect to the Mortgaged Property or any instrument of further assurance.
SECTION 9. RIGHTS OF THE BENEFICIARY.
SECTION 9.01. FURTHER ACTS, ETC. The Borrower will, at the sole cost of
the Borrower, and without expense to the Beneficiary, do, execute, acknowledge
and deliver all and every such further acts, deeds, conveyances, deeds of trust,
assignments, notices of assignments, transfers and assurances as the Servicer
shall, from time to time, reasonably require, for the better assuring,
conveying, assigning, transferring, and confirming unto the Beneficiary the
property and rights hereby granted, bargained, sold, and conveyed or intended
now or hereafter so to be, or which the Borrower may be or may hereafter become
bound to grant, convey, bargain or sell or assign to the Beneficiary, or for
carrying out the intention or facilitating the performance of the terms of this
Deed of Trust or for filing, registering or recording this Deed of Trust and, on
demand, will execute and deliver within five (5) business days after request of
the Servicer, and if the Borrower fails to so deliver, hereby authorizes the
Servicer thereafter to execute in the name of the Borrower or without the
signature of the Borrower to the extent the Servicer may lawfully do so, one or
more financing statements, chattel mortgages or comparable security instruments,
to evidence more effectively the lien hereof upon the Mortgaged Property. The
Borrower grants to the Servicer an irrevocable power of attorney coupled with an
interest for the purpose of exercising and perfecting any and all rights and
remedies available to the Beneficiary at law and in equity, including, without
limitation, such rights and remedies available to the Beneficiary pursuant to
this Section 9.01.
SECTION 9.02. RECOVERY OF SUMS REQUIRED TO BE PAID. The Beneficiary
shall have the right from time to time to take action to recover any sum or sums
which constitute a part of the Secured Obligations as the same become due,
without regard to whether or not the balance of the Secured Obligations shall be
due, and without prejudice to the right of the Beneficiary thereafter to bring
an action of foreclosure, or any other action, for a default or defaults by the
Borrower existing at the time such earlier action was commenced.
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SECTION 9.03. COSTS OF DEFENDING AND UPHOLDING THE LIEN. In addition
to, and not in limitation of, Sections 9.04 and 11.03, if any action or
proceeding is commenced to which action or proceeding the Beneficiary is made a
party or in which it becomes necessary to defend or uphold the lien of this Deed
of Trust or the Beneficiary's rights under any assignment of leases and rents,
the Borrower shall, on demand, reimburse the Beneficiary for all expenses
(including, without limitation, reasonable attorneys' fees and reasonable
appellate attorneys' fees) incurred by the Beneficiary in any such action or
proceeding, together with interest at the Default Rate, and all such amounts
shall be secured hereby and be a part of the Secured Obligations. In any action
or proceeding to foreclose this Deed of Trust or to recover or collect the
Secured Obligations, the provisions of law relating to the recovering of costs,
disbursements and allowances shall prevail unaffected by this covenant.
SECTION 9.04. ADDITIONAL ACTIONS. In addition to, and not in limitation
of, the provisions of Sections 9.03 and 11.03, the Beneficiary shall have the
right to appear in and defend any action or proceeding, in the name and on
behalf of the Borrower, which the Beneficiary in its discretion, feels may
adversely affect the Mortgaged Property or this Deed of Trust, and the
Beneficiary shall also have the right to institute any action or proceeding
which the Beneficiary, in its discretion, feels should be brought to protect its
interest in the Mortgaged Property or its rights hereunder or the Beneficiary's
rights under any assignment of leases and rents. All costs and expenses incurred
by the Beneficiary in connection with such actions or proceedings, including,
without limitation, reasonable attorneys' fees, and appellate attorneys' fees,
together with interest at the Default Rate, shall be paid by the Borrower, on
demand, and shall be secured hereby and shall be a part of the Secured
Obligations.
SECTION 9.05. ADDITIONAL SECURITY. Without notice to or consent of the
Borrower and without impairment of the lien and rights created by this Deed of
Trust, the Beneficiary may accept (but the Borrower shall not be obligated to
furnish except as otherwise provided in the Loan Documents) from the Borrower or
from any other person or persons, additional security for the Secured
Obligations. Neither the giving of this Deed of Trust nor the acceptance of any
such additional security shall prevent the Beneficiary from resorting, first, to
such additional security, and, second, to the security created by this Deed of
Trust and the other Loan Documents without affecting the Beneficiary's lien and
rights under this Deed of Trust.
SECTION 10. APPLICABLE LAWS.
SECTION 10.01. USURY LAWS. This Deed of Trust and the other Loan
Documents are subject to the express condition that at no time shall the
Borrower be obligated or required to pay interest (inclusive of fees and charges
which are or could be in the nature of interest) on the Secured Obligations at a
rate which could subject the Beneficiary to either civil or criminal liability
as a result of being in excess of the maximum interest rate which the Borrower
is permitted by law to contract or agree to pay. If by the terms of this Deed of
Trust or the other Loan Documents, the Borrower is at any time required or
obligated to pay interest (inclusive of any such fees and charges) on the
Secured Obligations at a rate in excess of such maximum rate, the rate of
interest (inclusive of any such fees and charges) on the Secured Obligations
shall be
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deemed to be immediately reduced to such maximum rate and the interest
(inclusive of any such fees and charges) payable shall be computed at such
maximum rate and all prior interest payments (inclusive of any such fees and
charges) in excess of such maximum rate shall be applied and shall be deemed to
have been payments in reduction of the principal balance of the Secured
Obligations and the principal balance of the Secured Obligations shall be
reduced by such amount in such manner and order of priority as the Beneficiary
shall elect in its sole and absolute discretion.
SECTION 10.02. GOVERNING LAW; JURISDICTION; WAIVER OF TRIAL BY JURY.
THIS DEED OF TRUST SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW
OF THE STATE IN WHICH THE MORTGAGED PROPERTY IS LOCATED WITHOUT REGARD TO
CONFLICT OF LAW PROVISIONS THEREOF. EACH BORROWER AND EACH ENDORSER HEREBY
SUBMITS TO PERSONAL JURISDICTION IN SAID STATE AND IN THE STATE OF NEW YORK AND
THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN SAID STATE AND IN
THE STATE OF NEW YORK (AND ANY APPELLATE COURTS TAKING APPEALS THEREFROM) FOR
THE ENFORCEMENT OF SUCH BORROWER'S OBLIGATIONS HEREUNDER AND WAIVES ANY AND ALL
PERSONAL RIGHTS UNDER THE LAW OF ANY OTHER STATE TO OBJECT TO JURISDICTION
WITHIN SUCH STATE FOR THE PURPOSES OF SUCH ACTION, SUIT, PROCEEDING OR
LITIGATION TO ENFORCE SUCH OBLIGATIONS OF SUCH BORROWER OR ENDORSER. EACH
BORROWER AND EACH ENDORSER HEREBY WAIVES AND AGREES NOT TO ASSERT, AS A DEFENSE
IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS DEED OF
TRUST (A) THAT IT IS NOT SUBJECT TO SUCH JURISDICTION OR THAT SUCH ACTION, SUIT
OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN THOSE COURTS OR THAT
THIS DEED OF TRUST MAY NOT BE ENFORCED IN OR BY THOSE COURTS OR THAT IT IS
EXEMPT OR IMMUNE FROM EXECUTION, (B) THAT THE ACTION, SUIT OR PROCEEDING IS
BROUGHT IN AN INCONVENIENT FORUM OR (C) THAT THE VENUE OF THE ACTION, SUIT OR
PROCEEDING IS IMPROPER. IN THE EVENT ANY SUCH ACTION, SUIT, PROCEEDING OR
LITIGATION IS COMMENCED, THE BORROWER AND ENDORSER AGREE THAT SERVICE OF PROCESS
MAY BE MADE, AND PERSONAL JURISDICTION OVER SUCH BORROWER OR ENDORSER OBTAINED,
BY SERVICE OF A COPY OF THE SUMMONS, COMPLAINT AND OTHER PLEADINGS REQUIRED TO
COMMENCE SUCH LITIGATION BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED UPON SUCH
BORROWER OR ENDORSER AT RFS FINANCING PARTNERSHIP, L.P., 889 RIDGE LAKE
BOULEVARD, SUITE 100, MEMPHIS, SHELBY COUNTY, TENNESSEE 38120, ATTENTION:
MICHAEL J. PASCAL.
THE BORROWER HEREBY EXPRESSLY WAIVES ANY AND ALL RIGHTS TO TRIAL
BY JURY IN ANY ACTION OR PROCEEDING RELATED TO THE ENFORCEMENT OF
THIS DEED OF TRUST.
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SECTION 11. MISCELLANEOUS.
SECTION 11.01. EXCULPATION. Notwithstanding anything herein or in any
other Loan Document to the contrary, except as otherwise set forth in this
Section 11.01 to the contrary, the Beneficiary shall not enforce the liability
and obligation of the Borrower to perform and observe the obligations contained
in this Deed of Trust, the Bonds or any of the other Loan Documents executed and
delivered by the Borrower by any action or proceeding wherein a money judgment
shall be sought against the Borrower or its partners. The provisions of this
Section 11.01 shall not, however, (a) impair the validity of the Indebtedness
evidenced by the Bonds or in any way affect or impair the Liens of the Mortgages
or any of the other Loan Documents or the right of the Beneficiary to foreclose
the Mortgages following an Event of Default; (b) impair the right of the
Beneficiary to name the Borrower as a party defendant in any action or suit for
judicial foreclosure and sale under any of the Mortgages; (c) affect the
validity or enforceability of the Bonds or the other Loan Documents; (d) impair
the right of the Beneficiary to obtain the appointment of a receiver; (e) impair
the right of the Beneficiary to bring suit for actual damages, losses and costs
resulting from fraud or intentional misrepresentation by the Borrower in
connection with this Deed of Trust, the Bonds or the other Loan Documents; (f)
impair the right of the Beneficiary to bring suit with respect to the Borrower's
misappropriation of Rents collected more than one month in advance; (g) impair
the right of the Beneficiary to obtain Insurance Proceeds or Condemnation
Proceeds due to the Beneficiary pursuant to the Mortgages; (h) impair the right
of the Beneficiary to enforce Section 5.17 (the environmental covenants) of this
Deed of Trust even after repayment in full of the Indebtedness; (i) prevent or
in any way hinder the Beneficiary from exercising, or constitute a defense, or
counterclaim, or other basis for relief in respect of the exercise of, any other
remedy against any or all of the collateral securing the Bonds as provided in
the Loan Documents; or (j) impair the right of the Beneficiary to bring suit
with respect to any misapplication of any funds. Notwithstanding the foregoing,
in the event a Mortgaged Property is released from the lien created by the
Mortgages, the Borrower shall be released in all respects from any further
liability with respect to the Bonds other than any further liability for
breaches of Section 5.17.
SECTION 11.02. DUPLICATE ORIGINALS. 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.
SECTION 11.03. INDEMNITY AND THE BENEFICIARY'S COSTS. The Borrower
agrees to pay all costs, including, without limitation, reasonable attorneys'
fees and expenses, incurred by the Beneficiary in enforcing the terms hereof or
of any assignment of leases and rents whether or not suit is filed and waives to
the full extent permitted by law all right to plead any statute of limitations
as a defense to any action under this Deed of Trust or any assignment of leases
and rents. The Borrower agrees to indemnify and hold the Beneficiary harmless
from any and all liability, loss, damage or expense (including, without
limitation, attorneys' fees and disbursements) that it may or might incur under
this Deed of Trust or any assignment of leases and rents or in connection with
the enforcement of any of the Beneficiary's rights or remedies under this Deed
of Trust or any assignment of leases and rents, any action taken by the
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Beneficiary under this Deed of Trust or any assignment of leases and rents, or
by reason or in defense of any and all claims and demands whatsoever that may be
asserted against the Beneficiary arising out of the Mortgaged Property (except
to the extent that such liability, loss, damage or expense is the result of the
gross negligence or the intentional misconduct of the Beneficiary, the Indenture
Trustee or the Servicer) and should the Beneficiary incur any such liability,
loss, damage or expense, the amount thereof with interest thereon at the Default
Rate shall be payable by the Borrower immediately without demand, shall be
secured by this Deed of Trust, and shall be a part of the Secured Obligations.
The Borrower agrees to pay or reimburse the Beneficiary for paying: (a)
all reasonable costs and expenses of the Beneficiary and the Servicer (including
reasonable counsel fees and expenses) in connection with any Default and any
enforcement or collection proceedings resulting therefrom including in
connection with any bankruptcy, insolvency, liquidation, reorganization,
moratorium or other similar proceedings involving the Borrower; (b) all
transfer, stamp, documentary or other similar taxes, assessments or charges
levied by any governmental or revenue authority in respect of this Deed of
Trust, the other Loan Documents or any other document referred to herein or
therein and all costs, expenses, taxes, assessments and other charges incurred
in connection with any filing, registration, recording or perfection of any
security interest contemplated by this Deed of Trust the other Loan Documents or
any document referred to therein; and (c) all taxes and assessments, recording
fees, registration taxes, title insurance premiums, appraisal fees, costs of
surveys, fees of third-party consultants and all other fees and expenses
reasonably incurred by the Beneficiary and the Servicer in connection with any
Mortgaged Properties (including all Servicing Fees).
The Borrower hereby agrees to indemnify the Beneficiary and the
Servicer and their respective directors, officers, employees and agents
(including the general partner of the Servicer and such general partner's
directors, officers, employees and agents) from, and hold each of them harmless
against, any and all losses, liabilities, claims, damages or expenses incurred
by any of them arising out of or by reason of any claim of any Person relating
to or arising out of any Loan Document or resulting from the ownership or
financing of any Mortgaged Property or any investigation or litigation or other
proceedings (including any threatened investigation or litigation or other
proceedings) relating to any actual or proposed use by the Borrower of the
proceeds of the Bonds, including the reasonable fees and disbursements of
counsel incurred in connection with any such investigation or litigation or
other proceedings (but excluding any such losses, liabilities, claims, damages
or expenses incurred by reason of the gross negligence or willful misconduct of
the Beneficiary or any other Person to be indemnified).
SECTION 11.04. Incorporation by Reference. All of the covenants,
conditions and agreements contained in all and any of the Loan Documents now or
hereafter executed by the Borrower and/or others and by or in favor of the
Beneficiary are hereby made a part of this Deed of Trust to the same extent and
with the same force as if fully set forth herein.
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SECTION 11.05. AMENDMENTS.
(a) This Deed of Trust, and any provisions hereof, may not be modified,
amended, waived, extended, changed, discharged or terminated orally or by any
act or failure to act on the part of the Borrower or the Beneficiary, but only
by an agreement in writing signed by the party against whom enforcement of any
modification, amendment, waiver, extension, change, discharge or termination is
sought.
(b) Moreover, this Deed of Trust may not be modified, amended, waived,
extended, changed, discharged or terminated unless (i) the Beneficiary has
obtained the written consent of Bondholders who hold 66 2/3% of the principal
balance of the Bonds or (ii) the amendment is designed (A) to correct or clarify
the description of any property subject to the lien of the Deed of Trust, (B) to
pledge additional property to the Beneficiary, (C) to add other covenants and
agreements thereafter to be observed by the Borrower or to surrender any right
or power reserved to or conferred on the Borrower by the Deed of Trust or other
Loan Documents, (D) to cure any ambiguity, or to cure, correct or otherwise
supplement any defective or inconsistent provision contained herein or in any
other Loan Document (other than the Indenture), provided that such change does
not adversely affect the interests of any Bondholder in any material respect,
which shall be deemed to be the case upon receipt of written confirmation from
the Rating Agency that such change will not adversely affect the then current
ratings on the Bonds, (E) to evidence any succession and the assumption by any
such successor of the respective covenants herein, or (F) in connection with any
amendment of the Indenture or Servicing Agreement that is approved as provided
therein. No amendment may be made that would impair the Servicer's, the
Trustee's or the Beneficiary's rights hereunder without the consent of such
party.
SECTION 11.06. HEADINGS, ETC. The headings and captions of various
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.
SECTION 11.07. ADDRESSES OF MORTGAGED PROPERTIES. The street addresses
of the Mortgaged Properties are as set forth on Schedule D hereto.
SECTION 11.08. WIRE TRANSFER. All payments of principal and interest
and other amounts due under this Deed of Trust shall be paid to the Beneficiary
by wire transfer of immediately available funds to such bank or place, or in
such manner, as the Beneficiary may from time to time designate.
SECTION 11.09. SEVERABILITY. In the event any one or more of the
provisions contained in this Deed of Trust shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Deed of Trust, but
this Deed of Trust shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein or therein. The
invalidity of any
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provision of this Deed of Trust in any one jurisdiction shall not affect or
impair in any manner the validity of such provision in any other jurisdiction.
SECTION 11.10. COVENANTS TO RUN WITH THE LAND. All of the grants,
covenants, terms, provisions and conditions in this Deed of Trust shall run with
the Mortgaged Property and shall apply to, and bind the successors and assigns
of the Borrower. Without limiting the generality of the foregoing, the
Beneficiary may, at any time and from time to time without the consent of the
Borrower, sell, assign, syndicate or otherwise transfer and/or dispose of all or
any portion of its rights and remedies under this Deed of Trust and any other
security instrument or document affecting the Mortgaged Property (including,
without limitation, any assignment of leases and rents) to any other person or
entity, either separately or together with other property of the Beneficiary for
such purposes and on such terms as the Beneficiary shall elect, and such other
person or entity shall thereupon become vested with all of the rights and
obligations in respect thereof granted to the Beneficiary herein, therein or
otherwise. Each representation and agreement made by the Borrower in this Deed
of Trust and any other security instrument or document affecting the Mortgaged
Property (including, without limitation, any assignment of leases and rents)
shall be deemed to run to the Beneficiary and all of its successors and assigns.
None of the rights or obligations of the Borrower hereunder may be assigned or
otherwise transferred without the prior written consent of the Beneficiary.
SECTION 11.11. TRUSTEE'S DUTIES. Trustee shall not be liable for any
error of judgment or act done by Trustee, or be otherwise responsible or
accountable under any circumstances whatsoever, except if the result of
Trustee's gross negligence or willful misconduct. Trustee shall not be
personally liable in case of entry by him or anyone acting by virtue of the
powers herein granted him upon the Mortgaged Property for debts contracted or
liability or damages or damages incurred in the management or operation of the
Mortgaged Property. Trustee shall have the right to rely on any instrument,
document or signature authorizing or supporting any action taken or proposed to
be taken by him hereunder or believed by him to be genuine. Trustee shall be
entitled to reimbursement for actual expenses incurred by him in the performance
of his duties hereunder and to reasonable compensation for such of his services
hereunder as shall be rendered. The Borrower will, from time to time, reimburse
Trustee for and save and hold him harmless from and against any and all loss,
cost, liability, damage and expense whatsoever incurred by him in the
performance of his duties. All monies received by Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated in any manner from any other monies
(except to the extent required by law) and Trustee shall be under no liability
for interest on any monies received by him hereunder. Trustee may resign by
giving of notice of such resignation in writing to the Beneficiary. If Trustee
shall die, resign or become disqualified from acting in the execution of this
trust or shall fail or refuse to exercise the same when requested by the
Beneficiary or if for any or no reason and without cause the Beneficiary shall
prefer to appoint a substitute trustee to act instead of the original Trustee
named herein, or any prior successor or substitute trustee, the Beneficiary
shall, without any formality or notice to the Borrower or any other person, have
full power to appoint a substitute trustee and, if the Beneficiary so elects,
several substitute trustees in succession who shall succeed to all the estate,
rights, powers and
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duties of the aforenamed Trustee. Any new Trustee appointed pursuant to any of
the provisions hereof shall, without any further act, deed or conveyance, become
vested with all the estates, properties, rights, powers and trusts of its or his
predecessor in the rights hereunder with like effect as if originally named as
Trustee herein; but, nevertheless, upon the written request of the Beneficiary
or his successor trustee, Trustee ceasing to act shall execute and deliver an
instrument transferring to such successor trustee, upon the trust herein
expressed, all the estates, properties, rights, powers and trusts of Trustee so
ceasing to act, and shall duly assign, transfer and deliver any of the property
and monies held by Trustee to the successor trustee so appointed in its or his
place. Trustee may authorize one or more parties to act on his behalf to perform
the ministerial functions required of him hereunder, including without
limitation, the transmittal and posting of any notices.
SECTION 11.12. BUSINESS DAYS. In the event any time period or any date
provided in this Deed of Trust ends or falls on a day other than a Business Day,
then such time period shall be deemed to end and such date shall be deemed to
fall on the next succeeding Business Day, and performance herein may be made on
such Business Day, with the same force and effect as if made on such other day.
SECTION 11.13. RELATIONSHIP. The relationship of the Beneficiary to the
Borrower hereunder is strictly and solely that of the Borrower and the
Beneficiary and nothing contained in the Bonds, this Deed of Trust or any other
Loan Document is intended to create, or shall in any event or under any
circumstance be construed as creating, a partnership, joint venture,
tenancy-in-common, joint tenancy or other relationship of any nature whatsoever
between the Beneficiary and the Borrower other than as mortgagor and the
Beneficiary.
SECTION 11.14. NO MERGER. The rights and estate created by this Deed of
Trust shall not, under any circumstances, be held to have merged into any other
estate or interest now owned or hereafter acquired by the Beneficiary unless the
Beneficiary shall have consented to such merger in writing.
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IN WITNESS WHEREOF, the Borrower has duly executed this Deed of Trust
as of the day and year first above written.
RFS FINANCING PARTNERSHIP L.P.,
a Tennessee limited partnership
By: RFS FINANCING CORPORATION,
a Tennessee corporation, its duly authorized
general partner
Signed and acknowledged in
the presence of:
By:______________________________
Name: Michael J. Pascal
________________________________ Title: Vice President
Name:
[SEAL]
Post Office Address of Individual Signatory:
____________________________________________
____________________________________________
____________________________________________
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STATE OF _________________ )
) ss:
COUNTY OF ________________ )
On this_____ day of ____ , before me ________________________, a Notary
Public in and for said County and State, personally appeared ______________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument he, or the entity upon behalf of which he acted,
executed the instrument.
------------------------------------
Notary Public
My Commission expires: __________________
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LIST OF SCHEDULE AND EXHIBITS
Schedule A Description of Premises
Schedule B Exceptions to Good Condition
Schedule C Environmental Reports
Schedule D Street Address of Mortgaged Properties
Annex I Local Law Provisions
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SCHEDULE A
Description of Premises
[LEGAL DESCRIPTION]
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SCHEDULE D
Street Addresses of the Mortgaged Properties
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
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ANNEX I
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