Exhibit 4.24
Recording Requested By and
When Recorded, Mail To:
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Attention: Kenneth R. Kleiner, Esq.
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(Space above this line for recorder's use)
Notice: This instrument contains inter alia obligations which may provide for:
(a) a variable rate of interest and/or
(b) future and/or revolving credit advances or readvances, which when made,
shall have the same priority as advances or readvances made on the date hereof
whether or not (i) any advances or readvances were made on the date hereof and
(ii) any indebtedness is outstanding at the time any advance or readvance is
made.
Notwithstanding anything to the contrary contained herein, the maximum principal
indebtedness secured under any contingency by this instrument shall in no event
exceed $210,000,000.00
LEASEHOLD DEED OF TRUST, ASSIGNMENT OF LEASES
AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING
This Leasehold Deed of Trust, Assignment of Leases and Rents, Security
Agreement and Fixture Filing dated as of June 30, 1997(this "DEED OF TRUST") has
been executed by LEINER HEALTH PRODUCTS INC., a Delaware corporation, as trustor
("LEINER" or the "TRUSTOR"), having an address of 901 East 233rd Street, Carson,
California, in favor of Lawyers Title Company of California, having an address
of 18551 Von Karman Avenue, Irvine, California 92715 as trustee (the "TRUSTEE"),
for the benefit of THE BANK OF NOVA SCOTIA, having an address of One Liberty
Plaza, New York, New York 10006, for itself as a Lender under the Credit
Agreement referred to below and as the collateral agent as beneficiary
(together with its successors and assigns from time to time acting as agent
under such Credit Agreement, the "BENEFICIARY").
W I T N E S S E T H T H A T:
WHEREAS, pursuant to the Encumbered Leases (as hereinafter defined), the
Trustor is on the date of delivery hereof the holder of the leasehold estate in
the parcel of land described in SCHEDULE 1 hereto (collectively, the "LAND") and
of the Improvements (such term and other capitalized terms used in this Deed of
Trust having the respective meanings specified or referred to in ARTICLE IV);
WHEREAS, pursuant to the terms, conditions and provisions of the Credit
Agreement, dated as of June 30, 1997 (as amended, restated, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT"), among Leiner
Health Products Group Inc. ("LHPG" or the "U.S. BORROWER" (prior to the
Assumption)), Vita Health Company (1985) Ltd. (the "CANADIAN BORROWER"), as
Canadian borrower (collectively, the "BORROWERS"), the institutions from time to
time a party thereto which extend a Commitment under the U.S. Facility
(collectively, the "U.S. LENDERS"), the various financial institutions from time
to time a party thereto which extend a Commitment under the Canadian Facility
(collectively, the "CANADIAN LENDERS", and together with the U.S. Lenders, the
"LENDERS"), The Bank of Nova Scotia ("SCOTIABANK"), as agent for the U.S.
Lenders under the U.S. Facility (in such capacity, the "U.S. AGENT"), and
Scotiabank, currently acting through its executive offices in Toronto, Ontario,
as agent for the Canadian Lenders under the Canadian Facility (in such capacity,
the "CANADIAN AGENT", and together with the U.S. Agent, collectively, the
"AGENTS"), the Lenders and the Issuer have agreed to make Loans to, and to issue
Letters of Credit for the account of, the Borrowers in the maximum original
principal amount of TWO HUNDRED TEN MILLION AND 00/100 DOLLARS ($210,000,000.00)
(such Loans and Letters of Credit are hereinafter referred to collectively as
the "CREDIT EXTENSIONS").
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WHEREAS, the Credit Extensions consist of:
(i) from the U.S. Lenders, a Term B Loan Commitment and a Term C Loan
Commitment pursuant to which Borrowings of Term Loans, in a maximum
aggregate principal amount not to exceed $45,000,000 (in the case of Term B
Loans) and $40,000,000 (in the case of Term C Loans), will be made to the
U.S. Borrower in a single Borrowing to occur on the date of the initial
Credit Extensions;
(ii) from the U.S. RL Lenders, a U.S. Revolving Loan Commitment (to
include availability for U.S. Revolving Loans, U.S. Swing Line Loans and
U.S. Letters of Credit) pursuant to which Borrowings of U.S. Revolving
Loans and U.S. Swing Line Loans, in a maximum aggregate principal amount
(together with all U.S. Letter of Credit Outstandings) not to exceed the
then existing U.S. Revolving Loan Commitment Amount, will be made to the
U.S. Borrower from time to time on and subsequent to the date of the
initial Credit Extensions but prior to the U.S. Revolving Loan Commitment
Termination Date;
(iii) from the U.S. Issuers (and participated in by the U.S. RL
Lenders), a U.S. Letter of Credit Commitment pursuant to which the U.S.
Issuers will issue U.S. Letters of Credit for the account of the U.S.
Borrower and, subject to Section 2.1.2 of the Credit Agreement, its U.S.
Subsidiaries from time to time on and subsequent to the date of the initial
Credit Extensions but prior to the U.S. Revolving Loan Commitment
Termination Date in a maximum aggregate Stated Amount at any one time
outstanding not to exceed $35,000,000 (PROVIDED that the aggregate
outstanding principal amount of U.S. Revolving Loans, Swing Line Loans and
U.S. Letter of Credit Outstandings at any time shall not exceed the then
existing U.S. Revolving Loan Commitment Amount);
(iv) from the U.S. Swing Line Lender (and participated in by the U.S.
RL Lenders), a U.S. Swing Line Loan Commitment pursuant to which Borrowings
of U.S. Swing Line Loans in an aggregate outstanding principal amount not
to exceed $15,000,000 will be made on and subsequent to the date of the
initial Credit Extensions but prior to the U.S. Revolving Loan
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Commitment Termination Date (PROVIDED, that the aggregate outstanding
principal amount of such U.S. Swing Line Loans, U.S. Revolving Loans
and U.S. Letter of Credit Outstandings at any time shall not exceed
the then existing U.S. Revolving Loan Commitment Amount);
(v) from the Canadian Lenders, a Canadian Revolving Loan Commitment
(to include availability for Canadian Revolving Loans, Canadian Swing Line
Loans and Canadian Letters of Credit) pursuant to which Borrowings of
Canadian Revolving Loans and Canadian Swing Line Loans, in a maximum
aggregate principal amount (together with all Canadian Letter of Credit
Outstandings) not to exceed the then existing Canadian Revolving Loan
Commitment Amount, will be made to the Canadian Borrower from time to time
on and subsequent to the date of the initial Credit Extensions but prior to
the Canadian Revolving Loan Commitment Termination Date;
(vi) from the Canadian Issuers (and participated in by the Canadian
Lenders), a Canadian Letter of Credit Commitment pursuant to which the
Canadian Issuers will issue Canadian Letters of Credit for the account of
the Canadian Borrower and, subject to Section 3.1.2 of the Credit
Agreement, the Canadian Borrower's Subsidiaries from time to time on and
subsequent to the date of the initial Credit Extensions but prior to the
Canadian Revolving Loan Commitment Termination Date in a maximum aggregate
Stated Amount at any one time outstanding not to exceed Cdn $13,000,000
(PROVIDED that the aggregate outstanding principal amount of Canadian
Revolving Loans and Canadian Letter of Credit Outstandings at any time
shall not exceed the then existing Canadian Revolving Loan Commitment
Amount); and
(vii) from the Canadian Swing Line Lender (and participated in by the
Canadian Lenders), a Canadian Swing Line Loan Commitment pursuant to which
Borrowings of Canadian Swing Line Loans in an aggregate outstanding
principal amount not to exceed the Cdn $1,400,000 will be made on and
subsequent to the date of the initial Credit Extensions but prior to the
Canadian Revolving Loan Commitment Termination Date (PROVIDED that the
aggregate outstanding principal amount of such Canadian Swing Line Loans,
Canadian Revolving Loans and Canadian Letter of Credit
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Outstandings at any time shall not exceed the then existing Canadian
Revolving Loan Commitment Amount.
WHEREAS, as contemplated by the Credit Agreement, immediately following the
making of the initial Credit Extensions, the Trustor and LHPG have delivered the
Assumption Agreement, pursuant to which Trustor has assumed (the "ASSUMPTION")
the rights and obligations of LHPG as (and has become) the U.S. Borrower under
the Credit Agreement;
WHEREAS, as a condition precedent to the making of the Credit Extensions
(including the initial Credit Extension) and the execution and delivery of the
Assumption Agreement (as defined in the Credit Agreement) under the Credit
Agreement, the Trustor is required to execute and deliver this Deed of Trust;
WHEREAS, (i) as a material inducement for the Lenders to enter into the Credit
Agreement and the other Loan Documents, (ii) to secure the payment and
performance of the Trustor's obligations under the Credit Agreement and the
other Loan Documents; and (iii) to secure the payment and performance of the
Secured Obligations, the Trustor is required to execute and deliver this Deed of
Trust to the Beneficiary; and
WHEREAS, the Trustor has duly authorized the execution, delivery and performance
of this Deed of Trust.
G R A N T:
NOW, THEREFORE, for and in consideration of the premises, and of the mutual
covenants herein contained, and in order to induce the Lenders to make the
Credit Extensions pursuant to the Credit Agreement, and in order to secure the
full, timely and proper payment and performance of and compliance with each and
every one of the Secured Obligations (as hereinafter defined), the Trustor
hereby irrevocably grants, bargains, sells, mortgages, warrants, aliens,
demises, releases, hypothecates, pledges, assigns, transfers and conveys to the
Trustee, the successors, successors in trust and assigns of Trustee, IN TRUST,
WITH POWER OF SALE, for the benefit of the Beneficiary and its successors and
assigns, forever, all of the following (the "TRUST PREMISES"):
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(a) REAL ESTATE. The leasehold estate in the Land created by the
Encumbered Lease and all rights, options and other benefits inuring to
Trustor under the Encumbered Lease, together with all and singular the
tenements, rights, easements, hereditaments, rights of way, privileges,
liberties, appendages and appurtenances now or hereafter belonging or in
any way pertaining to the Land and such additional lands and estates
therein (including, without limitation, all rights relating to storm and
sanitary sewer, water, gas, electric, railway and telephone services); all
development rights, air rights, riparian rights, water, water rights, water
stock, all rights in, to and with respect to any and all oil, gas, coal,
minerals and other substances of any kind or character underlying or
relating to the Land and such additional lands and estates therein and any
interest therein; all estate, claim, demand, right, title or interest of
the Trustor in and to any street, road, highway or alley, vacated or other,
adjoining the Land or any part thereof and such additional lands and
estates therein; all strips and gores belonging, adjacent or pertaining to
the Land or such additional lands and estates; and any after-acquired title
to any of the foregoing (herein collectively referred to as the "REAL
ESTATE");
(b) IMPROVEMENTS. All buildings, structures and other improvements
and any additions and alterations thereto or replacements thereof, now or
hereafter built, constructed or located upon the Real Estate; and, to the
extent that any of the following items of property constitutes fixtures
under applicable laws, all furnishings, fixtures, fittings, appliances,
apparatus, equipment, machinery, building and construction materials and
other articles of every kind and nature whatsoever and all replacements
thereof, now or hereafter affixed or attached to, placed upon or used in
any way in connection with the complete and comfortable use, enjoyment,
occupation, operation, development and/or maintenance of the Real Estate or
such buildings, structures and other improvements, including, but not
limited to, partitions, furnaces, boilers, oil burners, radiators and
piping, plumbing and bathroom fixtures, refrigeration, heating,
ventilating, air conditioning and sprinkler systems, other fire prevention
and extinguishing apparatus and materials, vacuum cleaning systems, gas and
electric fixtures, incinerators, compactors, elevators, engines, motors,
generators and all other articles of property
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which are considered fixtures under applicable law (such buildings,
structures and other improvements and such other property are herein
collectively referred to as the "IMPROVEMENTS"; the Real Estate and the
Improvements are herein collectively referred to as the "Property");
(c) GOODS. All building materials, goods, construction materials,
appliances (including, without limitation, stoves, ranges, ovens,
disposals, refrigerators, water fountains and coolers, fans, heaters,
dishwashers, clothes washers and dryers, water heaters, hood and fan
combinations, kitchen equipment, laundry equipment, kitchen cabinets and
other similar equipment), stocks, beds, mattresses, bedding and linens,
supplies, blinds, window shades, drapes, carpets, floor coverings,
manufacturing equipment and machinery, office equipment, growing plants and
shrubberies, control devices, equipment (including window cleaning,
building cleaning, swimming pool, recreational, monitoring, garbage, pest
control and other equipment), motor vehicles, tools, furnishings,
furniture, lighting, non-structural additions to the Real Estate and
Improvements and all other tangible property of any kind or character,
together with all replacements thereof, now or hereafter located on or in
or used or useful in connection with the complete and comfortable use,
enjoyment, occupation, operation, development and/or maintenance of the
Property, regardless of whether or not located on or in the Property or
located elsewhere for purposes of storage, fabrication or otherwise (herein
collectively referred to as the "GOODS");
(d) INTANGIBLES. All goodwill, trademarks, trade names, option
rights, purchase contracts, real and personal property tax refunds, books
and records and general intangibles of the Trustor relating to the
Property, and any other intangible property of the Trustor relating to the
Property (herein collectively referred to as the "INTANGIBLES");
(e) LEASES. All rights of the Trustor in, to and under all leases,
licenses, occupancy agreements, concessions and other arrangements, oral or
written, now existing or hereafter entered into, whereby any Person agrees
to pay money or any other consideration for the use, possession or
occupancy of, or any estate in, the Property or any portion thereof or
interest
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therein (herein collectively referred to as the "LEASES"), and the
right, subject to applicable law, upon the occurrence of any Event of
Default hereunder, to receive and collect the Rents (as hereinafter
defined) paid or payable thereunder;
(f) PLANS. All rights of the Trustor in and to all plans and
specifications, designs, drawings and other information, materials and
matters heretofore or hereafter prepared relating to the Improvements or
any construction on the Real Estate (herein collectively referred to as the
"PLANS");
(g) PERMITS. All rights of the Trustor, to the extent assignable,
in, to and under all permits, franchises, licenses, approvals and other
authorizations respecting the use, occupation and operation of the Property
and every part thereof and respecting any business or other activity
conducted on or from the Property, and any product or proceed thereof or
therefrom, including, without limitation, all building permits,
certificates of occupancy and other licenses, permits and approvals issued
by governmental authorities having jurisdiction (herein collectively
referred to as the "PERMITS");
(h) CONTRACTS. All right, title and interest of the Trustor in and to
all agreements, contracts, certificates, instruments, warranties,
appraisals, engineering, environmental, soils, insurance and other reports
and studies, books, records, correspondence, files and advertising
materials, and other documents, now or hereafter obtained or entered into,
as the case may be, pertaining to the construction, use, occupancy,
possession, operation, management, leasing, maintenance and/or ownership of
the Property and all right, title and interest of the Trustor therein
(herein collectively referred to as the "CONTRACTS");
(i) LEASES OF FURNITURE, FURNISHINGS AND EQUIPMENT. All right, title
and interest of the Trustor as lessee in, to and under any leases of
furniture, furnishings, equipment and any other Goods now or hereafter
installed in or at any time used in connection with the Property;
(j) RENTS. All rents, issues, profits, royalties, avails, income and
other benefits derived or owned, directly or indirectly, by the Trustor
from the
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Property, including, without limitation, all rents and other consideration
payable by tenants, claims against guarantors, and any cash or other
securities deposited to secure performance by tenants under the Leases
(herein collectively referred to as "Rents");
(k) CERTAIN RIGHTS UNDER THE ENCUMBERED LEASES. All rights of the
Trustor as lessee under each Encumbered Lease to exercise (i) any right to
renew the term of any Encumbered Lease, (ii) any right to purchase the
premises demised thereunder, (iii) any right to terminate any Encumbered
Lease as a result of a casualty or the condemnation of all or a portion of
the Land (the foregoing rights are referred to, collectively, as the
"SPECIAL ENCUMBERED LEASE RIGHTS");
(l) PROCEEDS. All proceeds of the conversion, voluntary or
involuntary of any of the foregoing into cash or liquidated claims,
including, without limitation, proceeds of insurance and condemnation
awards (herein collectively referred to as "PROCEEDS"); and
(m) OTHER PROPERTY. All other property and rights of the Trustor of
every kind and character relating to the Property, and all proceeds and
products of any of the foregoing;
AND, without limiting any of the other provisions of this Deed of Trust the
Trustor expressly grants to the Beneficiary, as secured party, a security
interest in all of those portions of the Trust Premises which are or may be
subject to the State Uniform Commercial Code provisions applicable to secured
transactions;
TO HAVE AND TO HOLD the Trust Premises and all parts thereof unto the
Trustee and the successors, successors-in-trust and assigns of the Trustee for
the benefit of the Beneficiary, its successors and assigns, forever.
FURTHER to secure the full, timely and proper payment and performance of
the Secured Obligations, the Trustor hereby covenants and agrees with and
warrants to the Trustee and the Beneficiary as follows:
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ARTICLE I
COVENANTS AND AGREEMENTS OF THE TRUSTOR
SECTION 1.1. PAYMENT OF SECURED OBLIGATIONS. (i) The Trustor agrees that:
(a) it will duly and punctually pay and perform or cause to be paid
and performed each of the Obligations at the time and in accordance with
the terms of the Loan Documents, and
(b) when and as due and payable from time to time in accordance with
the terms hereof or of any other Loan Documents, pay and perform, or cause
to be paid and performed, all other Secured Obligations.
SECTION 1.2. TITLE TO TRUST PREMISES, ETC. The Trustor represents and
warrants to and covenants with the Trustee and the Beneficiary that:
(a) as of the date hereof and at all times hereafter while this Deed
of Trust is outstanding, the Trustor is and shall be the absolute owner and
holder of the leasehold interest in the Property created by each Encumbered
Lease so long as such leasehold estate exists, and the absolute owner of
the legal and beneficial title to all other property included in the Trust
Premises, subject in each case only to this Deed of Trust, the encumbrances
set forth in SCHEDULE 2 hereto (collectively, the "PERMITTED ENCUMBRANCES")
and the terms and conditions of the Encumbered Lease;
(b) the Trustor has good and lawful right, power and authority to
execute this Deed of Trust and to convey, transfer, assign, mortgage and
grant a security interest in the Trust Premises, all as provided herein;
(c) this Deed of Trust has been duly executed, acknowledged and
delivered on behalf of the Trustor, all consents and other actions required
to be taken by the officers, directors, shareholders and partners, as the
case may be, of the Trustor have been duly and fully given and performed
and this Deed of Trust constitutes the legal, valid and binding obligation
of the Trustor, enforceable against the Trustor in accordance with its
terms; and
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(d) the Trustor, at its expense, will warrant and defend the Trustee
and the Beneficiary and any purchaser under the power of sale herein or at
any foreclosure sale Trustor's title to the Trust Premises and the first
deed of trust lien and first priority perfected security interest of this
Deed of Trust thereon and therein against all claims and demands and will
maintain, preserve and protect such lien and security interest and will
keep this Deed of Trust a valid, direct first deed of trust lien of record
on and a first priority perfected security interest in the Trust Premises
so long as the leasehold estate in the Property created by such Encumbered
Lease exists, subject only to the Permitted Encumbrances.
SECTION 1.3. TITLE INSURANCE.
SECTION 1.3.1. TITLE INSURANCE POLICY. Concurrently with the execution
and delivery of this Deed of Trust, the Trustor, at its expense, has obtained
and delivered to the Beneficiary a loan policy or policies of title insurance in
an amount, and in form and substance, satisfactory to the Beneficiary naming the
Beneficiary as the insured, insuring the title to and the first deed of trust
lien of this Deed of Trust on the leasehold interest created by each Encumbered
Lease in the Property with endorsements requested by the Beneficiary. The
Trustor has duly paid in full all premiums and other charges due in connection
with the issuance of such policy or policies of title insurance.
SECTION 1.3.2. TITLE INSURANCE PROCEEDS. All proceeds received by and
payable to the Beneficiary for any loss under the loan policy or policies of
title insurance delivered to the Beneficiary pursuant to SECTION 1.3.1, or under
any policy or policies of title insurance delivered to the Beneficiary in
substitution therefor or replacement thereof, shall be the property of the
Beneficiary and shall be applied by the Beneficiary in accordance with the
provisions of SECTION 2.3.
SECTION 1.4. RECORDATION. The Trustor, at its expense, will at all times
cause this Deed of Trust and any instruments amendatory hereof or supplemental
hereto and any instruments of assignment hereof or thereof (and any appropriate
financing statements or other instruments and
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continuations thereof), and each other instrument delivered in connection
with the Credit Agreement or any other Loan Document and intended thereunder
to be recorded, registered and filed, to be kept recorded, registered and
filed, in such manner and in such places, and will pay all such recording,
registration, filing fees, taxes and other charges, and will comply with all
such statutes and regulations as may be required by law in order to
establish, preserve, perfect and protect the lien and security interest of
this Deed of Trust as a valid, direct first deed of trust lien and first
priority perfected security interest in the Trust Premises, subject only to
the Permitted Encumbrances. The Trustor will pay or cause to be paid, and
will indemnify the Trustee and the Beneficiary in respect of, all taxes
(including interest and penalties) at any time payable in connection with the
filing and recording of this Deed of Trust and any and all supplements and
amendments hereto.
SECTION 1.5. PAYMENT OF IMPOSITIONS, ETC. Subject to SECTION 1.8
(relating to permitted contests), the Trustor will pay or cause to be paid at
least ten (10) days before the same would become delinquent and before any fine,
penalty, interest or cost may be added for non-payment, all taxes, assessments,
water and sewer rates, charges, license fees, inspection fees and other
governmental levies or payments, of every kind and nature whatsoever, general
and special, ordinary and extraordinary, unforeseen as well as foreseen, which
at any time may be assessed, levied, confirmed, imposed or which may become a
lien upon the Trust Premises, or any portion thereof, or which are payable with
respect thereto, or upon the rents, issues, income or profits thereof, or on the
occupancy, operation, use, possession or activities thereof, whether any or all
of the same be levied directly or indirectly or as excise taxes or as income
taxes, and all taxes, assessments or charges which may be levied on the Secured
Obligations, or the interest thereon (collectively, the "IMPOSITIONS"). The
Trustor will deliver to the Trustee and the Beneficiary, upon request, copies of
official receipts or other satisfactory proof evidencing such payments.
SECTION 1.6. INSURANCE AND LEGAL REQUIREMENTS. Subject to SECTION 1.8
(relating to permitted contests), the Trustor, at its expense, will comply in
all material respects, or cause compliance in all material respects with
(a) all provisions of any insurance policy covering or applicable
to the Trust Premises or any part thereof, all requirements of the issuer
of any
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such policy, and all orders, rules, regulations and other requirements
of the National Board of Fire Underwriters (or any other body exercising
similar functions) applicable to or affecting the Trust Premises or any
part thereof or any use or condition of the Trust Premises or any part
thereof (collectively, the "INSURANCE REQUIREMENTS"); and
(b) all laws, including Environmental, Health or Safety Requirements
of Law, statutes, codes, acts, ordinances, orders, judgments, decrees,
injunctions, rules, regulations, permits, licenses, authorizations,
directions and requirements of all governments, departments, commissions,
boards, courts, authorities, agencies, officials and officers, foreseen or
unforeseen, ordinary or extraordinary, which now or at any time hereafter
may be applicable to the Trust Premises or any part thereof, or any of the
adjoining sidewalks, curbs, vaults and vault space, if any, streets or
ways, or any use or condition of the Trust Premises or any part thereof
(collectively, the "LEGAL REQUIREMENTS");
whether or not compliance therewith shall require structural changes in or
interference with the use and enjoyment of the Trust Premises or any part
thereof.
SECTION 1.7. SECURITY INTERESTS, ETC. The Trustor will not directly or
indirectly create or permit or suffer to be created or to remain, and will
promptly discharge or cause to be discharged, any deed of trust, mortgage,
encumbrance or charge on, pledge of, security interest in or conditional sale or
other title retention agreement with respect to or any other lien on or in the
Trust Premises or any part thereof or the interest of the Trustor, the Trustee,
or the Beneficiary therein, or any Proceeds thereof or Rents or other sums
arising therefrom, other than: (a) Permitted Encumbrances; and (b) liens of
mechanics, materialmen, suppliers or vendors or rights thereto incurred in the
ordinary course of the business of the Trustor for sums not yet due or any such
liens or rights thereto which are at the time being contested as permitted by
SECTION 1.8. The Trustor will not postpone the payment of any sums for which
liens of mechanics, materialmen, suppliers or vendors or rights thereto have
been incurred (unless such liens or rights thereto are at the time being
contested as permitted by SECTION 1.8), or enter into any contract under which
payment of such sums is postponable (unless such contract expressly provides for
the legal, binding and effective
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waiver of any such liens or rights thereto), in either case, for more than
sixty (60) days after the completion of the action giving rise to such liens
or rights thereto.
SECTION 1.8. PERMITTED CONTESTS. After prior written notice to the
Beneficiary, the Trustor at its expense may contest, or cause to be contested,
by appropriate legal proceedings conducted in good faith and with due diligence,
the amount or validity or application, in whole or in part, of any Imposition,
Legal Requirement or Insurance Requirement or lien of a mechanic, materialman,
supplier or vendor, PROVIDED THAT, (a) in the case of an unpaid Imposition,
lien, encumbrance or charge, such proceedings shall suspend the collection
thereof from the Trustor, the Trustee, the Beneficiary, and the Trust Premises
(including any rent or other income therefrom) and shall not interfere with the
payment of any such rent or income, (b) neither the Trust Premises nor any rent
or other income therefrom nor any part thereof or interest therein would be in
any danger of being sold, forfeited, lost, impaired or interfered with, (c) in
the case of a Legal Requirement, neither the Trustor, the Trustee nor the
Beneficiary would be in danger of any material civil or criminal liability for
failure to comply therewith, (d) the Trustor shall have furnished such security,
if any, as may be required in the proceedings or as may be reasonably requested
by the Beneficiary, (e) the non-payment of the whole or any part of any
Imposition will not result in the delivery of a tax deed to the Trust Premises
or any part thereof because of such non-payment, (f) the payment of any sums
required to be paid with respect to any of the Notes or under this Deed of Trust
(other than any unpaid Imposition, lien, encumbrance or charge at the time being
contested in accordance with this SECTION 1.8) shall not be interfered with or
otherwise affected, (g) in the case of any Insurance Requirement, the failure of
the Trustor to comply therewith shall not affect the validity of any insurance
required to be maintained by the Trustor under SECTION 2.1, and (h) that
adequate reserves, determined in accordance with GAAP, shall have been set aside
on the Trustor's books.
SECTION 1.9. LEASES. The Trustor represents and warrants to the Trustee
and the Beneficiary that, as of the date hereof, there are no written or oral
leases or other agreements of any kind or nature relating to the occupancy of
any portion of the Property by any Person other than the Trustor. The
Trustor will not enter into any such written or oral lease or other agreement
with respect to any portion
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of the Property without first obtaining the written consent of the Beneficiary.
SECTION 1.10. COMPLIANCE WITH INSTRUMENTS. The Trustor at its expense
will promptly comply with all rights of way or use, privileges, franchises,
servitudes, licenses, easements, tenements, hereditaments and appurtenances
forming a part of the Property and all instruments creating or evidencing the
same, in each case, to the extent compliance therewith is required of the
Trustor under the terms thereof. The Trustor will not take any action which may
result in a forfeiture or termination of the rights afforded to the Trustor
under any such instruments and will not, without the prior written consent of
the Beneficiary, amend any of such instruments.
SECTION 1.11. MAINTENANCE AND REPAIR, ETC. Subject to the provisions of
SECTION 1.12, the Trustor will keep or cause to be kept all presently and
subsequently erected or acquired Improvements and the sidewalks, curbs, vaults
and vault space, if any, located on or adjoining the same, and the streets and
the ways adjoining the same, in good and substantial order and repair and in
such a fashion that neither the value nor utility of the Trust Premises will not
be diminished, and, at its sole cost and expense, will promptly make or cause to
be made all necessary and appropriate repairs, replacements and renewals
thereof, whether interior or exterior, structural or nonstructural, ordinary or
extraordinary, foreseen or unforeseen, so that its business carried on in
connection therewith may be properly conducted at all times. All repairs,
replacements and renewals shall be at least equal in quality, use and value to
the original Improvements. The Trustor at its expense will do or cause to be
done all shoring of foundations and walls of any building or other Improvements
on the Property and (to the extent permitted by law) of the ground adjacent
thereto, and every other act necessary or appropriate for the preservation and
safety of the Property by reason of or in connection with any excavation or
other building operation upon the Property and upon any adjoining property,
whether or not the Trustor shall, by any Legal Requirement, be required to take
such action or be liable for failure to do so.
SECTION 1.12. ALTERATIONS, ADDITIONS, ETC. So long as no Event of Default
shall have occurred and be continuing, the Trustor shall have the right at any
time and from time to time to make or cause to be made reasonable alterations of
and additions to the Property or any part thereof,
15
PROVIDED THAT any alteration or addition: (a) shall not change the general
character or the use of the Property or reduce the fair market value thereof
below its value immediately before such alteration or addition, or impair the
usefulness of the Property; (b) is effected with due diligence, in a good and
workmanlike manner and in compliance with all Legal Requirements and
Insurance Requirements; (c) is promptly and fully paid for, or caused to be
paid for, by the Trustor; (d) is made, in case the estimated cost of such
alteration or addition exceeds U.S. $250,000, (i) only after the Beneficiary
shall have consented thereto and shall have reviewed and approved in writing
the plans and specifications therefor, (ii) under the supervision of a
qualified architect or engineer or another professional approved by the
Beneficiary and (iii) only after the Trustor shall have furnished to the
Beneficiary a performance bond or other security reasonably satisfactory to
the Beneficiary.
SECTION 1.13. ACQUIRED PROPERTY SUBJECT TO LIEN. All property at any time
acquired by the Trustor and provided or required by this Deed of Trust to be or
become subject to the lien and security interest hereof, whether such property
is acquired by exchange, purchase, construction or otherwise, shall forthwith
become subject to the lien and security interest of this Deed of Trust without
further action on the part of the Trustor, the Trustee or the Beneficiary. The
Trustor, at its expense, will execute and deliver to the Trustee and Beneficiary
(and will record and file as provided in SECTION 1.4) an instrument supplemental
to this Deed of Trust satisfactory in substance and form to the Beneficiary,
whenever such an instrument is necessary under applicable law to subject to the
lien and security interest of this Deed of Trust all right, title and interest
of the Trustor in and to all property provided or required by this Deed of Trust
to be subject to the lien and security interest hereof.
SECTION 1.14. ASSIGNMENT OF LEASES, RENTS, PROCEEDS, ETC. The assignment,
grant and conveyance of the Leases, Rents, Proceeds and other rents, income,
proceeds and benefits of the Trust Premises contained in the Granting Clause of
this Deed of Trust shall constitute an absolute, present and irrevocable
assignment, grant and conveyance, PROVIDED, HOWEVER, that permission is hereby
given to the Trustor, so long as no Event of Default has occurred hereunder, to
collect, receive and apply such Rents, Proceeds and other rents, income,
proceeds and benefits as they become due and payable, but not in advance
thereof, and
16
in accordance with all of the other terms, conditions and provisions hereof,
of the Loan Documents, and of the Leases, contracts, agreements and other
instruments with respect to which such payments are made or such other
benefits are conferred. Upon the occurrence of an Event of Default, such
permission shall terminate immediately and automatically, without notice to
the Trustor or any other Person except as required by law, and shall not be
reinstated upon a cure of such Event of Default without the express written
consent of the Beneficiary. Such assignment shall be fully effective without
any further action on the part of the Trustor, the Trustee, or the
Beneficiary, and the Beneficiary shall be entitled, at its option, upon the
occurrence of an Event of Default hereunder, to collect, receive and apply
all Rents, Proceeds and all other rents, income, proceeds and benefits from
the Trust Premises, including all right, title and interest of the Trustor in
any escrowed sums or deposits or any portion thereof or interest therein,
whether or not the Trustee or the Beneficiary takes possession of the Trust
Premises or any part thereof. To the extent not prohibited by the relevant
Encumbered Lease, the Trustor further grants to the Beneficiary the right, at
the Beneficiary's option, upon the occurrence of an Event of Default
hereunder, to:
(a) enter upon and take possession of the Property for the purpose of
collecting Rents, Proceeds and said rents, income, proceeds and other
benefits;
(b) dispossess by the customary summary proceedings any tenant,
purchaser or other Person defaulting in the payment of any amount when and
as due and payable, or in the performance of any other obligation, under
any Lease, contract or other instrument to which said Rents, Proceeds or
other rents, income, proceeds or benefits relate;
(c) let or convey the Trust Premises or any portion thereof or any
interest therein; and
(d) apply Rents, Proceeds and such rents, income, proceeds and other
benefits, after the payment of all necessary fees, charges and expenses, on
account of the Secured Obligations in accordance with SECTION 3.11.
Trustor acknowledges and agrees that the acceptance by Beneficiary of the
assignments of the Leases, Rents and Proceeds with all of the rights, powers,
privileges and authority so created, shall not, prior to entry upon and taking
of possession of the Property by Beneficiary, be
17
deemed or construed to constitute Beneficiary a mortgagee in possession nor
thereafter or at any time or in any event obligate Beneficiary to appear in
or defend any action or proceeding relating to the Leases or to the Property,
or to take any action hereunder, or to expend any money or incur any expenses
or perform or discharge any obligation, duty or liability under the Leases or
other agreements relating to the Trust Premises, or to assume any obligation
or responsibility for any security deposits or other deposits delivered to
Trustor by lessees thereunder and not assigned and delivered to Beneficiary,
nor shall Beneficiary be liable in any way for any injury or damage to person
or property sustained by any person or persons, firm or corporation, in or
about the Property.
Trustor hereby agrees to indemnify and hold Beneficiary harmless of and
from any and all liability, loss, damage or expense that it may or might incur
under or by reason of the assignments contained herein, or for any action taken
by Beneficiary hereunder, or by reason or in defense of any and all claims and
demands whatsoever that may be asserted against Beneficiary arising out of the
Leases, including without limitation any claim by any lessees of credit for
rental paid to and received by Trustor, but not delivered to Beneficiary, for
any period under the Leases more than one (1) month in advance of the due date
thereof. Should Beneficiary incur any such liability, loss, damage or expense,
the amount thereof (including reasonable attorneys' fees) with interest thereon
at the U.S. Alternate Base Rate from time to time in effect plus a margin of 2
1/2% shall be payable by Trustor immediately without demand, shall be secured by
this Deed of Trust, and shall be part of the Secured Obligations.
SECTION 1.15. NO CLAIMS AGAINST THE TRUSTEE OR THE BENEFICIARY. Nothing
contained in this Deed of Trust shall constitute any consent or request by the
Trustee or the Beneficiary, express or implied, for the performance of any labor
or the furnishing of any materials or other property in respect of the Property
or any part thereof, or be construed to permit the making of any claim against
the Trustee or the Beneficiary in respect of labor or services or the furnishing
of any materials or other property or any claim that any lien based on the
performance of such labor or the furnishing of any such materials or other
property is prior to the lien and security interest of this Deed of Trust. ALL
CONTRACTORS, SUBCONTRACTORS, VENDORS AND OTHER PERSONS DEALING WITH THE
PROPERTY, OR WITH ANY PERSONS
18
INTERESTED THEREIN, ARE HEREBY REQUIRED TO TAKE NOTICE OF THE PROVISIONS OF
THIS SECTION.
SECTION 1.16. INDEMNIFICATION. The Trustor will protect, indemnify, save
harmless and defend the Trustee, the Beneficiary, the Lenders, and each of their
respective officers, directors, shareholders, employees, representatives and
agents (collectively, the "INDEMNIFIED PARTIES" and individually, an
"INDEMNIFIED PARTY"), from and against any and all liabilities, obligations,
claims, damages, penalties, causes of action, costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses) imposed upon or
incurred by or asserted against any Indemnified Party by reason of (a) ownership
of an interest in this Deed of Trust, any other Loan Document or the Property,
(b) any accident, injury to or death of persons or loss of or damage to or loss
of the use of property occurring on or about the Property or any part thereof or
the adjoining sidewalks, curbs, vaults and vault spaces, if any, streets, alleys
or ways, (c) any use, non-use or condition of the Property or any part thereof
or the adjoining sidewalks, curbs, vaults and vault spaces, if any, streets,
alleys or ways, (d) any failure on the part of the Trustor to perform or comply
with any of the terms of this Deed of Trust, (e) performance of any labor or
services or the furnishing of any materials or other property in respect of the
Trust Premises or any part thereof made or suffered to be made by or on behalf
of the Trustor, (f) any negligence or tortious act on the part of the Trustor or
any of its agents, contractors, lessees, licensees or invitees, (g) any work in
connection with any alterations, changes, new construction or demolition of or
additions to the Property, or (h) (i) any Hazardous Material (as such term is
defined in the Credit Agreement) on, in, under or affecting all or any portion
of the Property, the groundwater, or any surrounding areas, (ii) any
misrepresentation, inaccuracy or breach of any warranty, covenant or agreement
contained or referred to in SECTIONS 1.20 and 1.21, (iii) any violation or claim
of violation by the Trustor of any Environmental, Health, or Safety Requirements
of Law, or (iv) the imposition of any lien for damages caused by or the recovery
of any costs for the cleanup, release or threatened release of any Hazardous
Material. If any action or proceeding be commenced, to which action or
proceeding any Indemnified Party is made a party by reason of the execution of
this Deed of Trust or any other Loan Document, or in which it becomes necessary
to defend or uphold the lien of this Deed of Trust, all sums paid by the
Indemnified Parties, for the expense of any litigation to prosecute or defend
the rights
19
and lien created hereby or otherwise, shall be paid by the Trustor to such
Indemnified Parties, as the case may be, as hereinafter provided. The
Trustor will pay and save the Indemnified Parties harmless against any and
all liability with respect to any intangible personal property tax or similar
imposition of the State or any subdivision or authority thereof now or
hereafter in effect, to the extent that the same may be payable by the
Indemnified Parties in respect of this Deed of Trust, any Loan Document or
any Secured Obligation. All amounts payable to the Indemnified Parties under
this SECTION 1.16 shall be deemed indebtedness secured by this Deed of Trust
and any such amounts which are not paid within ten (10) days after written
demand therefor by any Indemnified Party shall bear interest at the rate
provided for in Section 5.2.2. of the Credit Agreement from the date of such
demand. In case any action, suit or proceeding is brought against any
Indemnified Party by reason of any such occurrence, the Trustor, upon request
of such Indemnified Party, will, at the Trustor's expense, resist and defend
such action, suit or proceeding or cause the same to be resisted or defended
by counsel designated by the Trustor and approved by such Indemnified Party.
The obligations of the Trustor under this SECTION 1.16 shall survive any
discharge or reconveyance of this Deed of Trust and payment in full of the
Secured Obligations.
SECTION 1.17. NO CREDIT FOR PAYMENT OF TAXES. The Trustor shall not be
entitled to any credit against the Secured Obligations by reason of the payment
of any tax on the Property or any part thereof or by reason of the payment of
any other Imposition, and shall not apply for or claim any deduction from the
taxable value of the Property or any part thereof by reason of this Deed of
Trust.
SECTION 1.18. OFFERING OF THE NOTES; APPLICATION OF PROCEEDS OF LOANS.
Neither the Trustor nor any Person acting on behalf of the Trustor has directly
or indirectly offered the Notes or any portion thereof or any similar security
to, or solicited any offer to buy any of the same from, any Person other than
the Beneficiary. Neither the Trustor nor any Person acting on behalf of the
Trustor has taken or will take any action which would subject the issuance of
the Notes to the provisions of section 5 of the Securities Act of 1933, as
amended. The Trustor (a) will not use or permit to be used any proceeds of the
Loans, directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of "purchasing" or "carrying" any "margin stock" within the meaning of
Regulation U of the Federal Reserve Board, as amended from time to time, and (b)
20
has or will apply all of the proceeds of the Loans that are paid to it by the
Beneficiary to the purposes permitted by the Credit Agreement.
SECTION 1.19. ENCUMBERED LEASE. (a) The Trustor covenants and agrees that
it will promptly perform or cause to be performed all things necessary to
preserve and maintain the rights of the Trustor as lessee under the Encumbered
Lease, and use best efforts to prevent any termination, surrender, cancellation,
forfeiture or impairment thereof. The Trustor shall at all times fully perform
and comply with all agreements, covenants, terms and conditions imposed upon or
assumed by it as lessee under the Encumbered Lease prior to the expiration of
any notice and/or cure period provided in such Encumbered Lease. Upon receipt
by the Beneficiary from the lessor under the Encumbered Lease of any written
notice of default by the lessee thereunder, the Beneficiary may rely thereon and
take any action the Beneficiary deems necessary to prevent or to cure any
default by the Trustor in the performance of or compliance with any of the
agreements, covenants, terms or conditions imposed upon or assumed by the
Trustor as lessee under the Encumbered Lease, even though the existence of such
default or the nature thereof be questioned or denied by the Trustor or by any
party on behalf of the Trustor. Without limiting the generality of any other
provisions hereof, the Trustor hereby expressly grants to the Beneficiary, and
agrees that the Beneficiary shall have, the right to enter in and upon the
Property or any part thereof to such extent and as often as the Beneficiary
deems necessary or desirable for the purposes permitted by the immediately
preceding sentence. Subject to the foregoing, and without limiting
Beneficiary's other remedies under this Deed of Trust, the Beneficiary may pay
and expend such sums of money as the Beneficiary deems necessary for any such
purpose, and, in such event the amount so paid shall be immediately due and
payable, upon demand, together with interest thereon at the interest rate
provided for in the Credit Agreement for overdue payments, from the date of any
such payment by the Beneficiary to the date of repayment to the Beneficiary in
good and immediately available funds. If the Beneficiary takes any such action
to cure any such default by the Trustor, the Beneficiary shall notify the
Trustor thereof, provided however, that any failure by the Beneficiary so to
notify the Trustor shall not entitle the Trustor to challenge or otherwise
affect the validity of the Beneficiary's action or entitle the Trustor to any
claim for damages or any other claims, offsets or setoffs against the
Beneficiary.
21
(b) The Trustor further covenants and agrees that:
(i) It shall not surrender any leasehold estate and interest
hereinabove described, nor terminate or cancel the Encumbered Lease prior
to the expiration of its term, and that it shall not without the express
written consent of the Beneficiary, which shall not be unreasonably
withheld, modify, change, supplement, alter or amend the Encumbered Lease
either orally or in writing, except if such modification, change,
supplement, alteration or amendment reduces the term, increases the rent,
materially increases Trustor's obligations under the Encumbered Lease,
materially decreases the Trustor's rights under the Encumbered Lease or
shall materially impair the Trustee's security interest in the Property or
the rights and remedies of the Trustee under this Deed of Trust, in which
cases the Beneficiary's consent may be withheld in its sole and absolute
discretion. As further security for the repayment of the indebtedness
secured hereby and for the performance of the covenants herein and in the
Encumbered Lease contained, the Trustor hereby assigns to the Beneficiary
all of its rights, privileges and prerogatives as lessee under the
Encumbered Lease to terminate, cancel, modify, change, supplement, alter or
amend the Encumbered Lease, and any termination, cancellation,
modification, change, supplement, alteration or amendment of the Encumbered
Lease without the prior written consent thereto by the Beneficiary, as set
forth above and pursuant to the conditions set forth herein, shall be void
and of no force and effect.
(ii) No release or forbearance of any of the Trustor's obligations
under the Encumbered Lease, pursuant to the Encumbered Lease or otherwise,
shall release the Trustor from any of its obligations under this Deed of
Trust, including, without limitation, its obligations with respect to the
payment of rent as provided for in the Encumbered Lease and the performance
of all of the terms, provisions, covenants, conditions and agreements
contained in the Encumbered Lease, to be kept, performed and complied with
by the lessee therein.
(iii) Unless the Beneficiary shall otherwise expressly consent in
writing, the fee title to the Land, the Trustor's interest in the
improvements on the Land and the leasehold estate created by the Encumbered
Lease shall not merge and shall always remain separate
22
and distinct, notwithstanding the union of said estates either in the
lessor or in the lessee, or in a third party by purchase or otherwise. If
notwithstanding the foregoing a merger of such fee and leasehold estate
is deemed to have occurred, then this Deed of Trust shall nonetheless
remain in full force and effect in accordance with the terms hereof and
shall encumber the entire merged fee and leasehold estate.
(iv) The Trustor will not appoint or consent to the appointment of an
arbitrator pursuant to any provision of the Encumbered Lease so providing
without the prior written consent of the Beneficiary, except to the extent
the Encumbered Lease shall provide for such appointment. The Trustor shall
promptly notify the Beneficiary in writing of any request made by the
Trustor, as lessee under the Encumbered Lease, or the lessor thereunder,
for arbitration proceedings pursuant to the Encumbered Lease and of the
institution of any arbitration proceedings, as well as all proceedings
thereunder. In addition, the Trustor shall promptly deliver to the
Beneficiary a copy of the determination of the arbitrators in each such
arbitration proceeding. The Beneficiary shall have the right to
participate with the Trustor or on its own behalf as an interested party in
accordance with the terms of the Encumbered Lease.
(v) The Trustor shall not consent to the subordination of the
Encumbered Lease to any mortgage, deed of trust or other lien on the fee
interest of the lessor under the Encumbered Lease.
(vi) If the Trustor acquires fee simple title or any other estate,
title or interest in the Land, the Trustor shall promptly notify the
Beneficiary of such acquisition and, upon receipt of a written request by
the Beneficiary, shall cause to be executed and recorded all such other and
further assurances or other instruments in writing as may in the opinion of
the Beneficiary be required or desirable to carry out the intent and
meaning of CLAUSE (III) above.
(vii) Within ten (10) days after the Trustor's receipt of any notice
of any motion, application or effort to reject the Encumbered Lease by the
lessor thereunder or any trustee arising from or in connection with any
case, proceeding or other action commenced or pending by or against such
lessor under the Bankruptcy
23
Code or any comparable provisions contained in any present or future
Federal, state, local, foreign or other statute, law, rule or regulation
("COMPARABLE PROVISIONS"), the Trustor shall give notice thereof to the
Beneficiary. The Trustor hereby (A) assigns to the Beneficiary any and
all of the Trustor's rights as lessee under Section 365(h) of the
Bankruptcy Code or any Comparable Provisions, and (B) covenants that it
shall not elect to treat the Encumbered Lease as terminated pursuant to
Section 365(h) of the Bankruptcy Code without first obtaining the prior
written consent of the Beneficiary, and (C) agrees that any such election
by the Trustor without such consent shall be null and void.
(viii) Without limiting the generality of the foregoing, the Trustor
hereby assigns, transfers and sets over to the Beneficiary all of the
Trustor's claims and rights to the payment of damages arising from any
rejection by the lessor under the Encumbered Lease under the Bankruptcy
Code or any Comparable Provision. The Beneficiary shall have the right to
proceed in its own name or in the name of the Trustor in respect of any
claim, suit, action or proceeding relating to the rejection of the
Encumbered Lease, including, without limitation, the right to file and
prosecute, to the exclusion of the Trustor, any proofs of claim,
complaints, motions, applications, notices and other documents, in any case
in respect of the lessor thereunder under the Bankruptcy Code or any
Comparable Provision. This assignment constitutes a present and
irrevocable assignment of the foregoing claims, rights and remedies, and
shall continue in effect until all of the indebtedness shall have been
satisfied and discharged in full. Any amounts received by the Beneficiary
in damages arising out of the rejection of the Encumbered Lease as
aforesaid shall be applied first to all reasonable costs and expenses of
the Beneficiary (including, without limitation, reasonable attorneys' fees
and disbursements), incurred in connection with the exercise of any of its
rights or remedies under this SECTION 1.19.
(ix) If there shall be filed by or against the Trustor a petition
under the Bankruptcy Code or any Comparable Provision and the Trustor, as
lessee under the Encumbered Lease, shall determine to reject the Encumbered
Lease, the Trustor shall give the Beneficiary not less than thirty (30)
days prior notice
24
of the date on which the Trustor shall apply to the United States
Bankruptcy Court or other judicial body with appropriate jurisdiction for
authority to reject the Encumbered Lease; the Beneficiary shall have the
right, but not the obligation, to serve upon the Trustor within such thirty
(30) day period a notice stating that (a) the Beneficiary demands that the
Trustor assume and assign the Encumbered Lease to the Beneficiary pursuant
to Section 365 of the Bankruptcy Code or any Comparable Provision and
(b) the Beneficiary covenants to cure or provide adequate assurance of
prompt cure of all defaults and provide adequate assurance of future
performance under the Encumbered Lease. If the Beneficiary serves upon the
Trustor the notice described in the preceding sentence, the Trustor shall
not seek to reject the Encumbered Lease and shall comply with the demand
provided for in subclause (a) of the preceding clause within thirty (30)
days after the notice shall have been given subject to the performance by
the Beneficiary of the covenant provided for in subclause (b) of the
preceding clause. Effective upon the entry of an order for relief in
respect of the Trustor under Chapter 7 of the Bankruptcy Code or any
Comparable Provision, the Trustor hereby assigns and transfers to the
Beneficiary a non-exclusive right to apply to the Bankruptcy Court or
other judicial body with appropriate jurisdiction for an order extending
the period during which the Encumbered Lease may be rejected or assumed.
(x) The Trustor shall promptly give to the Beneficiary copies of (A)
all notices of default or (B) any other communications or notices with
respect to events which relate to the likely impairment of the security of
this Deed of Trust which it shall give or receive under the Encumbered
Lease and shall promptly notify the Beneficiary of any default under the
Encumbered Lease on the part of the lessor or the Trustor thereunder.
(xi) The Trustor shall notify the Beneficiary within ten (10) business
days after the Trustor becomes aware of the transfer of the fee interest in
the Land or any portion thereof.
(c) The Trustor hereby represents and warrants that (i) to the best of its
knowledge, the Encumbered Lease is in full force and effect, (ii) all rent and
additional rent payable under the Encumbered Lease has been paid to the
25
extent they were due and payable to the date hereof, and (iii) it has not
received any written notices that any event of default has occurred under the
Encumbered Lease and has no knowledge that any event has occurred which, with
the giving of notice, the passage of time, or both, would constitute an event
of default under the Encumbered Lease.
(d) The Trustor hereby acknowledges that if the Encumbered Lease shall be
terminated prior to the expiration of its term due to default by the lessee
thereunder, and if the Beneficiary or its designee shall acquire from the lessor
thereunder a new lease of the Real Estate or any portion thereof, the Trustor
shall have no right, title or interest in or to such lease or the leasehold
estate created thereby, or the options therein contained, if any.
(e) None of the rights and privileges granted to the Trustor hereunder or
under any other Loan Document is in any way intended to diminish or lessen the
Trustor's obligations under subparagraph (a) of this SECTION 1.19.
(f) Without the prior written consent of the Beneficiary, except as
hereafter provided, the Trustor will not exercise or waive any of the Special
Encumbered Lease Rights. Upon receipt of a reasonable and written request made
by the Beneficiary, the Trustor will exercise any or all of the Special
Encumbered Lease Rights. The Trustor hereby grants and assigns to the
Beneficiary the right to exercise at any time any or all of the Special
Encumbered Lease Rights by and on behalf of the Trustor and, upon request made
by the Beneficiary, the Trustor will promptly (and in any event within ten (10)
days after request) take such actions and execute such instruments as are
requested by the Beneficiary to evidence to any third party the Beneficiary's
rights to so exercise the Special Encumbered Lease Rights. Notwithstanding the
assignment of the Special Encumbered Lease Rights to the Beneficiary, the
Trustor shall retain the nonexclusive right to exercise, without the concurrence
of the Beneficiary, any of the Special Encumbered Lease Rights other than the
right to terminate the Encumbered Lease as a result of condemnation of the Land.
SECTION 1.20. SECURITY AGREEMENT. With respect to the items of personal
property and fixtures referred to and described in the Granting Clause of this
Deed of Trust and included as part of the Trust Premises, this Deed of Trust is
hereby made and declared to be a security agreement encumbering each and every
item of personal property and
26
fixtures now or hereafter owned by Trustor and included herein as a part of
the Trust Premises, in compliance with the provisions of the Uniform
Commercial Code as enacted in the State. In this respect (and
notwithstanding the conveyance to the Trustee rather than directly to the
Beneficiary as provided in this Deed of Trust), Trustor, as "Debtor",
expressly grants to Beneficiary, as "Secured Party", a security interest in
and to all of the property now or hereafter owned by Trustor which
constitutes the personal property and fixtures hereinabove referred to and
described in this Deed of Trust, including all extensions, accessions,
additions, improvements, betterments, renewals, replacements and
substitutions thereof or thereto, and all proceeds from the sale or other
disposition thereof. Trustor agrees that Beneficiary may file this Deed of
Trust, or a reproduction thereof, in the real estate records or other
appropriate index, as, and this Deed of Trust shall be deemed to be, a
financing statement filed as a fixture filing in accordance with California
Uniform Commercial Code Section 9402. Any reproduction of this Deed of
Trust or of any other security agreement or financing statement shall be
sufficient as a financing statement. In addition, Trustor agrees to execute
and deliver to Beneficiary, upon Beneficiary's request, any other security
agreement and financing statements, as well as extensions, renewals, and
amendments thereof, and reproductions of this Deed of Trust, in such form as
Beneficiary may require to perfect a security interest with respect to said
items. Trustor shall pay all costs of filing such financing statements and
any extensions, renewals, amendments and releases thereof, and shall pay all
reasonable costs and expenses of any record searches for financing statements
Beneficiary may reasonably require. Without the prior written consent of
Beneficiary, Trustor shall not create or suffer to be created pursuant to the
Uniform Commercial Code any other security interest in the above-described
personal property and fixtures, including any replacements and additions
thereto. Upon the occurrence of an Event of Default under this Deed of
Trust, or any other violation of the covenants, terms and conditions of the
security agreement contained herein, the Beneficiary shall have and shall be
entitled to exercise any and all of the rights and remedies (i) as prescribed
in this Deed of Trust, or (ii) as prescribed by general law, or (iii) as
prescribed by the specific statutory provisions now or hereafter enacted and
specified in said Uniform Commercial Code, all at Beneficiary's sole
election. Trustor and Beneficiary agree that the filing of any financing
statements in the records normally having to do with personal property shall
not in any way affect the
27
agreement of Trustor and Beneficiary that everything located in, on or about,
or used or intended to be used with or in connection with the use, operation
or enjoyment of, the Trust Premises, which is described or reflected as a
fixture in this Deed of Trust, is, and at all times and for all purposes and
in all proceedings, both legal and equitable, shall be, regarded as part of
the Real Estate conveyed hereby. Trustor warrants that Trustor's name,
identity and address are as set forth herein. The mailing address of the
Beneficiary from which information may be obtained concerning the security
interest created herein is also set forth herein. This information hereof is
provided in order that this Deed of Trust shall comply with the requirements
of the Uniform Commercial Code as enacted in the State for instruments to be
filed as financing statements. In accordance with California Uniform
Commercial Code Section 9402, this Deed of Trust shall remain effective as a
fixture filing until this Deed of Trust is released or satisfied of record or
its effectiveness otherwise terminates as to the Trust Premises.
SECTION 1.21. REPRESENTATIONS AND WARRANTIES. In order to induce the
Beneficiary to enter into this Deed of Trust, the Credit Agreement and the other
Loan Documents, the Trustor agrees that all of the representations and
warranties set forth in the Credit Agreement are incorporated into this Deed of
Trust by reference as if fully set forth herein.
SECTION 1.22. TRUSTOR'S COVENANTS. In order to induce the Beneficiary to
enter into this Deed of Trust, the Credit Agreement and the other Loan
Documents, the Trustor agrees that all of the covenants set forth in the Credit
Agreement are incorporated into this Deed of Trust by reference as if fully set
forth.
ARTICLE II
INSURANCE; DAMAGE, DESTRUCTION OR TAKING, ETC.
SECTION 2.1. INSURANCE.
SECTION 2.1.1. RISKS TO BE INSURED. The Trustor will, at its expense,
maintain or cause to be maintained by insurance carriers that meet the standards
set forth below: (a) insurance with respect to the Improvements against loss or
damage by fire, lightning and such other risks as are included in standard
"all-risk" policies, in amounts
28
sufficient to prevent the Trustor, the Trustee and the Beneficiary from
becoming a co-insurer of any partial loss under the applicable policies, but
in any event in amounts not less than the then full insurable value (actual
replacement value) of the Improvements, as determined by the Trustor in
accordance with generally accepted insurance practice and reasonably approved
by the Beneficiary or, at the request of the Beneficiary, as determined at
the Trustor's expense by the insurer or insurers or by an expert reasonably
approved by the Beneficiary, (b) comprehensive public liability, including
bodily injury and product liability and property damage insurance, with
personal injury endorsements, applicable to the Property in such amounts as
are usually carried by Persons of comparable size engaged in the same or
similar business and similarly situated in the same general locality, but in
any event with a combined single limit of not less than Twenty Million
Dollars ($20,000,000) per occurrence, (c) explosion insurance in respect of
any steam and pressure boilers and similar apparatus located in the Property
in such amounts as are usually carried by Persons of comparable size engaged
in the same or a similar business and similarly situated the same general
locality, but in any event in an amount not less than Twenty Million Dollars
($20,000,000), (d) business interruption insurance (including added expense
coverage) against all insurable perils for a period of not fewer than twelve
(12) months (subject to a reasonable aggregate deductible not exceeding five
(5) days per annum), and (e) worker's compensation insurance to the full
extent required by applicable law for all employees of the Trustor engaged in
any work on or about the Property and employer's liability insurance with a
limit of not less than Ten Million Dollars ($10,000,000) for each occurrence.
All such insurance shall be provided (i) by insurers authorized by Lloyds
of London to underwrite such risks, (ii) by insurers having an A.M. Best
policyholders rating of not less than A- (except with respect to insurers
providing workers compensation insurance, in which case such insurers shall have
an A.M. Best policyholders rating of not less than B+) or (iii) by such other
insurers as the Beneficiary may approve in writing; PROVIDED, HOWEVER, that if
the rating of any of the insurers providing insurance hereunder is downgraded,
the Trustor shall only be required to obtain replacement insurance with an
insurer satisfying the requirements hereof at the stated expiration of the
insurance policy maintained with the insurer whose rating was so downgraded.
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SECTION 2.1.2. POLICY PROVISIONS. All insurance maintained by the Trustor
pursuant to SECTION 2.1.1 shall (a) (except for worker's compensation insurance)
name the Trustor as the insured with the Beneficiary named as mortgagee and loss
payee, (b) (except for worker's compensation and public liability insurance)
provide that the proceeds for any losses shall be adjusted by the Trustor
subject to the reasonable approval of the Beneficiary in the event the proceeds
shall exceed Two Hundred Fifty Thousand Dollars ($250,000), and shall be
payable to the Beneficiary, to be held and applied as provided in SECTION 2.3,
(c) include effective waivers by the insurer of all rights of subrogation
against any named insured, the indebtedness secured by this Deed of Trust and
the Property and all claims for insurance premiums against the Trustee and the
Beneficiary, (d) provide that any losses shall be payable notwithstanding
(i) any act, failure to act or negligence of or violation of warranties,
declarations or conditions contained in such policy by any named insured,
(ii) the occupation or use of the Property for purposes more hazardous than
permitted by the terms thereof, (iii) any foreclosure or other action or
proceeding taken by the Beneficiary pursuant to any provision of this Deed of
Trust, or (iv) any change in title or ownership of the Property, (e) provide
that no cancellation, reduction in amount or material change in coverage thereof
or any portion thereof shall be effective until at least ten (10) days after
receipt by the Beneficiary of written notice thereof, (f) provide that any
notice under such policies shall be simultaneously delivered to the Beneficiary,
and (g) be reasonably satisfactory in all other material respects to the
Beneficiary. Any insurance maintained pursuant to this SECTION 2.1 may be
evidenced by blanket insurance policies covering the Property and other
properties or assets of the Trustor, and shall in all other respects comply with
the requirements of this SECTION 2.1.
SECTION 2.1.3. DELIVERY OF POLICIES, ETC. The Trustor will deliver to the
Beneficiary, promptly upon request: (a) certified copies of all policies
evidencing all insurance required to be maintained under SECTION 2.1.1 (or, in
the case of blanket policies, certificates thereof by the insurers together with
a copy of each blanket policy), and (b) evidence, in the form of receipted
bills, as to the payment of all premiums due thereon (with respect to public
liability insurance policies, all installments for the current year due thereon
to such date), PROVIDED THAT the Beneficiary shall not be deemed by reason of
its custody of such policies to have knowledge of the contents thereof.
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The Trustor will also deliver to the Beneficiary not later than thirty (30)
days prior to the expiration of any policy a binder or certificate of the
insurer evidencing the replacement thereof. In the event the Trustor shall
fail to effect or maintain any insurance required to be effected or
maintained pursuant to the provisions of this SECTION 2.1, the Trustor will
indemnify the Trustee and the Beneficiary against damage, loss or liability
resulting from all risks for which such insurance should have been effected
or maintained.
SECTION 2.1.4. SEPARATE INSURANCE. The Trustor will not take out separate
insurance concurrent in form or contributing in the event of loss with that
required to be maintained pursuant to this SECTION 2.1.
SECTION 2.2. DAMAGE, DESTRUCTION OR TAKING; TRUSTOR TO GIVE NOTICE;
ASSIGNMENT OF AWARDS. In case of
(a) any damage to or destruction of the Trust Premises or any part
thereof, or
(b) any taking, whether for permanent or temporary use, of all or any
part of the Trust Premises or any interest therein or right accruing
thereto, as the result of or in anticipation of the exercise of the right
of condemnation or eminent domain, or a change of grade affecting the Trust
Premises or any portion thereof (a "TAKING"), or the commencement of any
proceedings or negotiations which may result in a Taking,
the Trustor will promptly give written notice thereof to the Trustee and the
Beneficiary, generally describing the nature and extent of such damage or
destruction and the Trustor's best estimate of the cost of restoring the Trust
Premises, or the nature of such proceedings or negotiations and the nature and
extent of the Taking which might result therefrom, as the case may be. Subject
to Section 2.3, the Beneficiary shall be entitled to all insurance proceeds
payable on account of such damage or destruction and to all awards or payments
allocable to the Trust Premises on account of such Taking and the Trustor hereby
irrevocably assigns, transfers and sets over to the Beneficiary all rights of
the Trustor to any such proceeds, awards or payments and irrevocably authorizes
and empowers the Beneficiary, at its option, in the name of the Trustor or
otherwise, to file and prosecute what would otherwise be the Trustor's claim for
any such proceeds, award or payment and
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to collect, receipt for and retain the same for disposition in accordance
with SECTION 2.3. The Trustor will pay all reasonable costs and expenses
incurred by the Trustee or the Beneficiary in connection with any such
damage, destruction or Taking and seeking and obtaining any insurance
proceeds, awards or payments in respect thereof.
SECTION 2.3. APPLICATION OF PROCEEDS AND AWARDS. The Beneficiary may, at
its option, apply all amounts recovered under any insurance policy required to
be maintained by the Trustor hereunder and all awards received by it on account
of any Taking in any one or more of the following ways:
(a) to the payment of the reasonable costs and expenses incurred by
the Trustee, or the Beneficiary, in obtaining any such insurance proceeds
or awards, including the fees and expenses of attorneys and insurance and
other experts and consultants, the costs of litigation, arbitration,
mediation, investigations and other judicial, administrative or other
proceedings and all other out-of-pocket expenses;
(b) to the payment of the principal of the Credit Extensions and any
interest (including post-petition interest payable in any proceedings for
bankruptcy under applicable law ("POST PETITION INTEREST") to the extent
such interest is a Secured Obligation) accrued and unpaid thereon, without
regard to whether any portion or all of such amounts shall be matured or
unmatured, together with interest at the rate provided for in the Credit
Agreement on any overdue principal and (to the extent permitted by
applicable law) interest; and, in case such amount shall be insufficient to
pay in full all such amounts, then such amount shall be applied, FIRST, to
the payment of all amounts of interest (including Post-Petition Interest to
the extent such interest is a Secured Obligation) accrued on the Credit
Extensions and unpaid, SECOND, to the payment of all amounts of principal
at the time outstanding;
(c) to the payment of, or the application to, any Secured Obligation
(other than as provided in clause (b) above);
(d) to fulfill any of the other covenants contained herein, in the
Credit Agreement, or in any other Loan Document, as the Beneficiary may
determine in its sole discretion;
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(e) to the Trustor for application to the cost of restoring the Trust
Premises and the replacement of Goods destroyed, damaged or taken; or
(f) to the Trustor.
Notwithstanding the foregoing provisions of this SECTION 2.3 to the
contrary (but subject to the provisions of SECTION 2.4), and if each of the
following conditions is satisfied, the Beneficiary, upon request of the Trustor,
shall apply insurance proceeds or condemnation awards received by it to the
restoration or replacement of the Trust Premises, to the extent necessary for
the restoration or replacement thereof:
(i) there shall then exist no uncured Default of which Trustor
has received notice thereof;
(ii) the Trustor shall furnish to the Beneficiary a certificate
of an architect or engineer reasonably acceptable to the Beneficiary
stating (x) that the Trust Premises is capable of being restored,
prior to the maturity of the Credit Agreement, to substantially the
same condition as existed prior to the casualty or Taking, (y) the
aggregate estimated direct and indirect costs of such restoration and
(z) as to any Taking, that the property taken in such Taking, or sold
under threat thereof, is not necessary to the Trustor's customary use
or occupancy of the Property; and
(iii) in the event that the estimated cost of restoration set
forth in the certificate of such architect or engineer (and such
revisions to such estimate as are from time to time made) exceeds the
net insurance proceeds or condemnation awards actually received from
time to time, the Trustor shall deposit the amount of such excess with
the Beneficiary.
In the event that such insurance proceeds or condemnation awards are to be
utilized in the restoration of the Trust Premises, the Beneficiary shall
disburse such Proceeds and the additional amounts deposited by the Trustor for
such restoration after receipt of a written request for disbursement, on not
fewer than five (5) nor more than twelve (12) Business Days notice and, to the
extent
33
applicable, in accordance with customary construction loan procedures and
conditions. In the event that such insurance or condemnation awards are to
be utilized to replace the Trust Premises so destroyed or taken, the
Beneficiary shall disburse such Proceeds after receipt of a written request
for disbursement, on not fewer than five (5) Business Days nor more than
twelve (12) Business Days notice simultaneously with the acquisition of such
replacement property by the Trustor. In the event that, after the
restoration or replacement of the Trust Premises, any insurance or
condemnation awards shall remain, such amount shall be paid to the Trustor.
Insurance proceeds and condemnation awards shall be invested in the manner
reasonably requested by the Trustor and approved by the Beneficiary, and all
interest earned thereon shall be applied as provided in this SECTION 2.3.
If, prior to the receipt by the Beneficiary of such insurance proceeds or
condemnation awards, the Trust Premises shall have been sold on foreclosure,
the Beneficiary shall have the right to receive said insurance proceeds or
condemnation awards to the extent of any deficiency found to be due upon such
sale, with legal interest thereon, whether or not a deficiency judgment shall
have been sought or recovered or denied, and the reasonable attorneys' fees,
costs and disbursements incurred by the Beneficiary in connection with the
collection of such award or payment.
SECTION 2.4 TOTAL TAKING AND TOTAL DESTRUCTION. In the event of a Total
Destruction or a Total Taking, the Beneficiary shall apply all amounts recovered
under any insurance policy referred to in SECTION 2.1.1 and all awards received
by it on account of any such Taking as follows:
(a) first, to the payment of the reasonable costs and expenses
incurred by the Beneficiary in obtaining any such insurance proceeds or
awards, including the fees and expenses of attorneys and insurance and
other experts and consultants, the costs of litigation, arbitration,
mediation, investigations and other judicial, administrative or other
proceedings and all other out-of-pocket expenses;
(b) second, to the payment of the principal of the Credit Extensions
and any interest (including Post-Petition Interest to the extent such
interest is a Secured Obligation) accrued and unpaid thereon, without
regard to whether any portion or all of such amounts shall be matured or
unmatured, together with interest at the rate provided for in the Credit
Agreement on any
34
overdue principal and (to the extent permitted by applicable law) interest;
and, in case such amount shall be insufficient to pay in full all such
amounts, then such amount shall be applied, FIRST, to the payment of all
amounts of interest (including Post-Petition Interest to the extent such
interest is a Secured Obligation) accrued on the Credit Extensions and
unpaid, and SECOND, to the payment of all amounts of principal at the
time outstanding;
(c) third, to the payment of, or the application to, any Secured
Obligation (other than as provided in CLAUSE (B) above);
(d) fourth, to fulfill any of the other covenants contained herein as
the Beneficiary may determine; and
(e) fifth, the balance, if any, to the Trustor.
ARTICLE III
EVENTS OF DEFAULT; REMEDIES, ETC.
SECTION 3.1. EVENTS OF DEFAULT; ACCELERATION. If an "Event of Default"
(pursuant to and as defined in the Credit Agreement) shall have occurred, then
and in any such event the Beneficiary may at any time thereafter (unless all
Events of Default shall theretofore have been remedied and all costs and
expenses, including, without limitation, attorneys' fees and expenses incurred
by or on behalf of the Beneficiary, shall have been paid in full by the Trustor)
declare, by written notice to the Trustor, the Loans and all other Secured
Obligations to be due and payable immediately or on a date specified in such
notice, (provided that, upon the occurrence of any Event of Default described in
Section 10.1.9. of the Credit Agreement, the Loans and all other Secured
Obligations shall automatically become due and payable), and on such date the
same shall be and become due and payable, together with interest accrued
thereon, without presentment, demand, protest or notice, all of which the
Trustor hereby waives. The Trustor will pay on demand all costs and expenses,
including without limitation, attorneys' fees and expenses, incurred by or on
behalf of the Beneficiary in enforcing this Deed of Trust, or any other Loan
Document, or occasioned by any default hereunder or thereunder.
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SECTION 3.2. LEGAL PROCEEDINGS; FORECLOSURE. If an Event of Default shall
have occurred, the Trustee at any time may, at its election, proceed at law or
in equity or otherwise to enforce the payment and performance of the Secured
Obligations in accordance with the terms hereof and thereof and to foreclose the
lien of this Deed of Trust as against all or any part of the Trust Premises and
to have the same sold under the judgment or decree of a court of competent
jurisdiction. The Beneficiary shall be entitled to recover in such proceedings
all costs incident thereto, including the Trustee's fees and attorneys' fees and
expenses in such amounts as may be fixed by the court.
SECTION 3.3. POWER OF SALE. If an Event of Default shall have occurred,
the Trustee may grant, bargain, sell, assign, transfer, convey and deliver the
whole or, from time to time, any part of the Trust Premises, or any interest in
any part thereof, at any private sale or at public auction, with or without
demand, advertisement or notice, for cash, on credit or for other property, for
immediate or future delivery, and for such price or prices and on such terms as
the Trustee in its uncontrolled discretion may determine, or as may be required
by law, and upon such sale the Trustee may execute and deliver to the
purchaser(s) instruments of conveyance pursuant to the terms hereof and to
applicable laws. Without limiting the authority granted in this SECTION 3.3,
the Trustee shall, without demand on the Trustor, after the lapse of such time
as may then be required by law, and notice of default and notice of sale having
been given as then required by law, sell the Trust Premises on the date and at
the time and place designated in the notice of sale, either as a whole or in
separate parcels and in such order as the Trustee may determine, but subject to
any statutory right of the Trustor to direct the order in which such property,
if consisting of several known lots, parcels or interests, shall be sold, at
public auction to the highest bidder, the purchase price payable in lawful money
of the United States at the time of sale. The Person conducting the sale may,
for any cause deemed expedient, postpone the sale from time to time until it
shall be completed and, in every such case, notice of postponement shall be
given by public declaration thereof by such Person at the time and place last
appointed for the sale. The Trustee shall execute and deliver to the purchaser
at any such sale a trustee's deed conveying the property so sold, but without
any covenant or warranty, express or implied. The recitals in such trustee's
deed of any matters or facts shall be conclusive proof of the truthfulness
thereof. Any Person, including the Trustee or Beneficiary, may bid at the
36
sale. The Trustee shall apply the proceeds of the sale, to the extent
consistent with this Deed of Trust, to the payment of (a) the costs and
expenses of exercising the power of sale and of the sale, including the
payment of attorneys' fees and costs, (b) the cost of any evidence of title
procured in connection with such sale, (c) all sums expended under the terms
hereof in conjunction with any default provision hereof, not then repaid,
with accrued interest at the rate provided for in the Credit Agreement from
the date of incurrence, (d) outstanding principal and interest under the
Credit Agreement, (e) all Secured Obligations (other than as provided in
clause (d) above). The Trustee shall give the remainder, if any, of the
proceeds of the sale to the Person or Persons legally entitled thereto, or
the Trustee, in the Trustee's discretion, may deposit the balance of such
proceeds with any court or public official authorized to receive such
proceeds.
SECTION 3.4. UNIFORM COMMERCIAL CODE REMEDIES. If an Event of Default
shall have occurred, the Beneficiary may exercise from time to time and at any
time any rights and remedies available to it under applicable law upon default
in the payment of indebtedness, including, without limitation, any right or
remedy available to it as a secured party under the Uniform Commercial Code of
the State. The Trustor shall, promptly upon request by the Trustee or the
Beneficiary, assemble the Trust Premises, or any portion thereof generally
described in such request, and make it available to the Trustee or the
Beneficiary, at such place or places designated by the Trustee or the
Beneficiary, and reasonably convenient to the Trustee or the Beneficiary. If
the Beneficiary elects to proceed under the Uniform Commercial Code of the State
to dispose of portions of the Trust Premises, the Trustee or the Beneficiary, at
their respective option, may give the Trustor notice of the time and place of
any public sale of any such property, or of the date after which any private
sale or other disposition thereof is to be made, by sending notice by registered
or certified first class mail, postage prepaid, to the Trustor at least ten (10)
days before the time of the sale or other disposition. If any notice of any
proposed sale, assignment or transfer by the Beneficiary of any portion of the
Trust Premises or any interest therein is required by law, the Trustor
conclusively agrees that ten (10) days notice to the Trustor of the date, time
and place (and, in the case of a private sale, the terms) thereof is reasonable.
37
SECTION 3.5. TRUSTEE AND BENEFICIARY AUTHORIZED TO EXECUTE DEEDS, ETC.
The Trustor irrevocably appoints the Trustee and the Beneficiary (which
appointment is coupled with an interest) the true and lawful attorney of the
Trustor, in its name and stead and on its behalf, for the purpose of
effectuating any sale, assignment, transfer or delivery for the enforcement
hereof, whether pursuant to power of sale, foreclosure or otherwise, to execute
and deliver all such deeds, bills of sale, assignments, assignments of
Encumbered Lease, releases and other instruments as may designated in any such
request.
SECTION 3.6. PURCHASE OF TRUST PREMISES BY BENEFICIARY. The Beneficiary
may be a purchaser of the Trust Premises or of any part thereof or of any
interest therein at any sale thereof, whether pursuant to power of sale,
foreclosure or otherwise, and the Beneficiary may apply upon the purchase price
thereof the indebtedness secured hereby owing to the Beneficiary. Such
purchaser shall, upon any such purchase, acquire good title to the properties so
purchased, free of the security interest and lien of this Deed of Trust and free
of all rights of redemption in the Trustor.
SECTION 3.7. RECEIPT A SUFFICIENT DISCHARGE TO PURCHASER. Upon any sale
of the Trust Premises or any part thereof or any interest therein, whether
pursuant to power of sale, foreclosure or otherwise, the receipt of the Trustee
or the officer making the sale under judicial proceedings shall be a sufficient
discharge to the purchaser for the purchase money, and such purchaser shall not
be obliged to see to the application thereof.
SECTION 3.8. WAIVER OF APPRAISEMENT, VALUATION, ETC. The Trustor hereby
waives, to the fullest extent it may lawfully do so, the benefit of all
appraisement, valuation, stay, extension and redemption laws now or hereafter in
force and all rights of marshaling in the event of any sale of the Trust
Premises or any part thereof or any interest therein.
SECTION 3.9. SALE A BAR AGAINST TRUSTOR. Any sale of the Trust Premises
or any part thereof or any interest therein under or by virtue of this Deed of
Trust, whether pursuant to power of sale, foreclosure or otherwise, shall
forever be a bar, against the Trustor.
SECTION 3.10. SECURED OBLIGATIONS TO BECOME DUE ON SALE. Upon any sale of
the Trust Premises or any portion
38
thereof or interest therein by virtue of the exercise of any remedy by the
Trustee or the Beneficiary under or by virtue of this Deed of Trust, whether
pursuant to power of sale, foreclosure or otherwise in accordance with this
Deed of Trust or by virtue of any other remedy available at law or in equity
or by statute or otherwise, at the option of the Trustee or the Beneficiary
any sums or monies due and payable pursuant to the Credit Agreement, the Loan
Documents and in connection with the Loans and/or the Secured Obligations,
shall, if not previously declared due and payable, immediately become due and
payable, together with interest accrued thereon, and all other indebtedness
which this Deed of Trust by its terms secures.
SECTION 3.11. APPLICATION OF PROCEEDS OF SALE AND OTHER MONEYS. The
proceeds of any sale of the Trust Premises or any part thereof or any interest
therein under or by virtue of this Deed of Trust, whether pursuant to power of
sale, foreclosure or otherwise, and all other moneys at any time held by the
Trustee or the Beneficiary as part of the Trust Premises, shall be applied in
such order of priority as the Beneficiary shall determine in its sole and
absolute discretion including, without limitation, as follows:
(a) first, to the payment of the reasonable costs and expenses of such
sale (including, without limitation, the cost of evidence of title and the
costs and expenses, if any, of taking possession of, retaining custody
over, repairing, managing, operating, maintaining and preserving the Trust
Premises or any part thereof prior to such sale), all reasonable costs and
expenses incurred by the Trustee, the Beneficiary, or any other Person in
obtaining or collecting any insurance proceeds, condemnation awards or
other amounts received by the Beneficiary, all reasonable costs and
expenses of any receiver of the Trust Premises or any part thereof, and any
Impositions or other charges or expenses prior to the security interest or
lien of this Deed of Trust, which the Trustee or the Beneficiary may
consider it necessary or desirable to pay;
(b) second, to the payment of any Secured Obligation (other than those
set forth in Section 3.11(c) below);
(c) third, to the payment of all amounts of principal of and interest
(including Post-Petition
39
Interest to the extent such interest is a Secured Obligation) at the time
due and payable under the Credit Agreement at the time outstanding
(whether due by reason of maturity or by reason of any prepayment
requirement or by declaration or acceleration or otherwise), including
interest at the rate provided for in the Credit Agreement on any overdue
principal and (to the extent permitted under applicable law) on any
overdue interest; and, in case such moneys shall be insufficient to pay in
full such principal and interest, then, FIRST, to the payment of all
amounts of interest (including Post-Petition Interest to the extent such
interest is a Secured Obligation) at the time due and payable and, SECOND,
to the payment of all amounts of principal at the time due and payable
under the Credit Agreement; and
(d) fourth, the balance, if any, held by the Trustee or the
Beneficiary after payment in full of all amounts referred to in
subdivisions SECTIONS 3.11 (A), (B) and (C) above, shall, unless a court of
competent jurisdiction may otherwise direct by final order not subject to
appeal, be paid to or upon the direction of the Trustor.
SECTION 3.12. APPOINTMENT OF RECEIVER. If an Event of Default shall have
occurred, the Beneficiary shall, as a matter of right, without notice, and
without regard to the adequacy of any security for the indebtedness secured
hereby or the solvency of the Trustor, be entitled to the appointment of a
receiver for all or any part of the Trust Premises, whether such receivership be
incidental to a proposed sale of the Trust Premises or otherwise, and the
Trustor hereby consents to the appointment of such a receiver and will not
oppose any such appointment.
SECTION 3.13. POSSESSION, MANAGEMENT AND INCOME. If an Event of Default
shall have occurred, in addition to, and not in limitation of, the rights and
remedies provided in SECTION 1.14, the Trustee or the Beneficiary upon five (5)
days notice to the Trustor, may enter upon and take possession of the Trust
Premises or any part thereof by force, summary proceeding, ejectment or
otherwise and may remove the Trustor and all other Persons and any and all
property therefrom and may hold, operate, maintain, repair, preserve and manage
the same and receive all earnings, income, Rents, issues and Proceeds accruing
with respect thereto or any part thereof. The Trustee and the Beneficiary shall
be under no liability for or by reason of
40
any such taking of possession, entry, removal or holding, operation or
management, except that any amounts so received by the Trustee or the
Beneficiary shall be applied to pay all costs and expenses of so entering
upon, taking possession of, holding, operating, maintaining, repairing,
preserving and managing the Trust Premises or any part thereof, and any
Impositions or other charges prior to the lien and security interest of this
Deed of Trust which the Trustee or the Beneficiary may consider it necessary
or desirable to pay, and any balance of such amounts shall be applied as
provided in Section 3.11.
SECTION 3.14. RIGHT OF TRUSTEE AND THE BENEFICIARY TO PERFORM TRUSTOR'S
COVENANTS, ETC. If the Trustor shall fail to make any payment or perform any
act required to be made or performed hereunder or under the Credit Agreement or
any other Loan Document, the Beneficiary, subject to twenty (20) days' prior
written notice to the Trustor (except that no prior notice shall be required in
the case of an emergency or where the failure to make such payment or perform
such obligation could affect the priority of the lien of this Deed of Trust)
without waiving or releasing any obligation or Default, may (but shall be under
no obligation to) at any time thereafter make such payment or perform such act
for the account and at the expense of the Trustor, and may enter upon the Trust
Premises for such purpose and take all such action thereon as, in either the
Trustee's or the Beneficiary's opinion, may be necessary or appropriate
therefor. No such entry and no such action shall be deemed an eviction of any
lessee of the Property or any part thereof. All sums so paid by the Trustee or
the Beneficiary, and all costs and expenses (including, without limitation,
attorneys' fees and expenses) so incurred, together with interest thereon at the
rate provided for in Section 5.2.2. of the Credit Agreement from the date of
payment or incurring, shall constitute additional indebtedness under the Credit
Agreement secured by this Deed of Trust and shall be paid by the Trustor to the
Trustee or the Beneficiary, as the case may be, on demand.
SECTION 3.15. SUBROGATION. To the extent that either of the Trustee or
the Beneficiary, on or after the date hereof, pays any sum due under any
provision of any Legal Requirement or any instrument creating any lien prior or
superior to the lien of this Deed of Trust, or the Trustor or any other Person
pays any such sum with the proceeds of the loan evidenced by the Credit
Agreement, the Trustee and/or the Beneficiary shall have and be entitled to a
lien on the Trust Premises equal in priority to the lien
41
discharged, and the Trustee and/or the Beneficiary shall be subrogated to,
and receive and enjoy all rights and liens possessed, held or enjoyed by, the
holder of such lien, which shall remain in existence and benefit the
Beneficiary in securing the Secured Obligations.
SECTION 3.16. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of
the Trustee and/or the Beneficiary provided for in this Deed of Trust, the
Credit Agreement, or any other Loan Document, or now or hereafter existing at
law or in equity or by statute or otherwise shall be cumulative and concurrent
and shall be in addition to every other right, power or remedy provided for in
this Deed of Trust, the Credit Agreement or any other Loan Document, or now or
hereafter existing at law or in equity or by statute or otherwise, and the
exercise or beginning of the exercise by the Trustee or the Beneficiary of any
one or more of the rights, powers or remedies provided for in this Deed of
Trust, the Credit Agreement, or any other Loan Document, or now or hereafter
existing at law or in equity or by statute or otherwise shall not preclude the
simultaneous or later exercise by the Trustee or the Beneficiary of any or all
such other rights, powers or remedies.
SECTION 3.17. PROVISIONS SUBJECT TO APPLICABLE LAW. All rights, powers
and remedies provided in this Deed of Trust may be exercised only to the extent
that the exercise thereof does not violate any applicable provisions of law and
are intended to be limited to the extent necessary so that they will not render
this Deed of Trust invalid, unenforceable or not entitled to be recorded,
registered or filed under the provisions of any applicable law. If any term of
this Deed of Trust or any application thereof shall be invalid or unenforceable,
the remainder of this Deed of Trust and any other application of such term shall
not be affected thereby.
SECTION 3.18. NO WAIVER, ETC. No failure by the Trustee or the
Beneficiary to insist upon the strict performance of any term hereof or of the
Credit Agreement, or of any other Loan Document, or to exercise any right, power
or remedy consequent upon a breach hereof or thereof, shall constitute a waiver
of any such term or of any such breach. No waiver of any breach shall affect or
alter this Deed of Trust, which shall continue in full force and effect with
respect to any other then existing or subsequent breach. By accepting payment
or performance of any amount or other Secured Obligations secured hereby before
or after its due date, neither the Trustee nor the Beneficiary shall
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be deemed to have waived its right either to require prompt payment or
performance when due of all other amounts and Secured Obligations payable
hereunder or to declare a default for failure to effect such prompt payment.
SECTION 3.19. COMPROMISE OF ACTIONS, ETC. Any action, suit or proceeding
brought by the Trustee or the Beneficiary pursuant to any of the terms of this
Deed of Trust, the Credit Agreement, any other Loan Document, or otherwise, and
any claim made by the Trustee or the Beneficiary hereunder or thereunder, may be
compromised, withdrawn or otherwise dealt with by the Trustee or the Beneficiary
without any notice to or approval of the Trustor.
ARTICLE IV
DEFINITIONS
SECTION 4.1. TERMS DEFINED IN THIS DEED OF TRUST. When used herein the
following terms have the following meanings:
"AGENT" shall have the meaning set forth in the Credit Agreement.
"BANKRUPTCY CODE" means Title 11 of the United States Code (11 U.S.C.
Sections 101 ET SEQ.), as amended from time to time, and any successor statute.
"BENEFICIARY" shall have the meaning set forth in the PREAMBLE.
"BORROWERS" shall have the meaning set forth in the second recital.
"BORROWING" shall have the meaning set forth in the Credit Agreement.
"CANADIAN AGENT" shall have the meaning set forth in the Credit Agreement.
"CANADIAN BORROWER" shall have the meaning set forth in the second recital.
"CANADIAN FACILITY" shall have the meaning set forth in the Credit
Agreement.
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"CANADIAN ISSUERS" shall have the meaning set forth in the Credit
Agreement.
"CANADIAN LENDERS" shall have the meaning set forth in the Credit
Agreement.
"CANADIAN LETTER OF CREDIT" shall have the meaning set forth in the Credit
Agreement.
"CANADIAN LETTER OF CREDIT OUTSTANDINGS" shall have the meaning set forth
in the Credit Agreement.
"CANADIAN REVOLVING LOAN" shall have the meaning set forth in the Credit
Agreement.
"CANADIAN REVOLVING LOAN COMMITMENT" shall have the meaning set forth in
the Credit Agreement.
"CANADIAN REVOLVING LOAN COMMITMENT AMOUNT" shall have the meaning set
forth in the Credit Agreement.
"CANADIAN REVOLVING LOAN COMMITMENT TERMINATION DATE" shall have the
meaning set forth in the Credit Agreement.
"CANADIAN SUBSIDIARY" shall have the meaning set forth in the Credit
Agreement.
"CANADIAN SWING LINE LENDER" shall have the meaning set forth in the Credit
Agreement.
"CANADIAN SWING LINE LOAN" shall have the meaning set forth in the Credit
Agreement.
"CANADIAN SWING LINE LOAN COMMITMENT" shall have the meaning set forth in
the Credit Agreement.
"CDN $" shall have the meaning set forth in the Credit Agreement.
"COMMITMENT" shall have the meaning set forth in the Credit Agreement.
"COMPARABLE PROVISIONS" shall have the meaning set forth in SECTION
1.19(B).
"CONTRACTS" shall have the meaning set forth in CLAUSE (H) of the GRANTING
CLAUSE.
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"CREDIT AGREEMENT" shall have the meaning set forth in the SECOND RECITAL.
"CREDIT EXTENSIONS" shall have the meaning set forth in the the SECOND
RECITAL.
"DEED OF TRUST" shall have the meaning set forth in the PREAMBLE.
"DEFAULT" means any Event of Default or any condition or event which, after
notice or lapse of time, or both, would constitute an Event of Default.
"ENCUMBERED LEASE" means, individually, the lease described on Schedule 3
annexed hereto and made a part hereof, as each such lease may be amended,
restated or otherwise modified from time to time.
"ENVIRONMENTAL, HEALTH OR SAFETY REQUIREMENTS OF LAW" means all valid and
enforceable Requirements of Law derived from or relating to federal, state and
local laws or regulations relating to or addressing the environment, health or
safety, including but not limited to any law, regulation, or order relating to
the use, handling, or disposal of any Hazardous Material, any law, regulation,
or order relating to Remedial Action, and any law, regulation, or order relating
to workplace or worker safety and health, as such Requirements of Law are
promulgated by the specifically authorized agency responsible for administrating
such Requirements of Law.
"EVENT OF DEFAULT" shall mean (i) an "Event of Default" as defined in the
Credit Agreement or (ii) a termination, cancellation or surrender of any
Encumbered Lease prior to its stated expiration date.
"GOODS" shall have the meaning set forth in CLAUSE (C) of the GRANTING
CLAUSE.
"HAZARDOUS MATERIAL" shall have the meaning set forth in the Credit
Agreement.
"HEREIN", "HEREOF", "HERETO", and "HEREUNDER" and similar terms refer to
this Deed of Trust and not to any particular Section, paragraph or provision of
this Deed of Trust.
"IMPOSITIONS" shall have the meaning set forth in SECTION 1.5.
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"IMPROVEMENTS" shall have the meaning set forth in CLAUSE (B) of the
GRANTING CLAUSE.
"INDEMNIFIED PARTIES" shall have the meaning set forth in SECTION 1.16.
"INSURANCE REQUIREMENTS" shall have the meaning set forth in PARAGRAPH (A)
of SECTION 1.6.
"INTANGIBLES" shall have the meaning set forth in CLAUSE (D) of the
GRANTING CLAUSE.
"ISSUER" shall have the meaning set forth in the Credit Agreement.
"LAND" shall have the meaning set forth in the FIRST RECITAL.
"LEASES" shall have the meaning set forth in CLAUSE (E) of the GRANTING
CLAUSE.
"LEGAL REQUIREMENTS" shall have the meaning set forth in PARAGRAPH (B) of
SECTION 1.6.
"LEINER" shall have the meaning set forth in the PREAMBLE.
"LENDERS" shall have the meaning set forth in the Credit Agreement.
"LETTER OF CREDIT" shall have the meaning set forth in the Credit
Agreement.
"LHPG" shall have the meaning set forth in the SECOND RECITAL.
"LOAN DOCUMENTS" shall have the meaning set forth in the Credit Agreement.
"LOANS" shall have the meaning set forth in the Credit Agreement.
"NOTES" shall have the meaning set forth in the Credit Agreement.
"OBLIGATIONS" shall have the meaning set forth in the Credit Agreement.
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"OBLIGOR" shall mean each Person having any liabilities, obligations,
duties or responsibilities under the Credit Agreement or any Loan Document.
"OTHER OBLIGATIONS" shall have the meaning set forth in clause (k) of
Section 5.17.
"OTHER PARTIES" shall have the meaning set forth in clause (k) of Section
5.17.
"PERMITS" shall have the meaning set forth in CLAUSE (G) of the GRANTING
CLAUSE.
"PERMITTED ENCUMBRANCES" shall have the meaning set forth in SECTION 1.2.
"PERSON" means a corporation, an association, a partnership, an
organization, a business, an individual, a government or political subdivision
thereof or a governmental agency or officer.
"PLANS" shall have the meaning set forth in CLAUSE (F) of the GRANTING
CLAUSE.
"POST-PETITION INTEREST" shall have the meaning set forth in SECTION 2.3.
"PROCEEDS" shall have the meaning set forth in CLAUSE (K) of the GRANTING
CLAUSE.
"PROPERTY" shall have the meaning set forth in CLAUSE (B) of the GRANTING
CLAUSE.
"REAL ESTATE" shall have the meaning set forth in CLAUSE (A) of the
GRANTING CLAUSE.
"RELEASE" means release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment or into or out of any Property, including the movement of
Hazardous Material through or in the air, soil, surface water, groundwater or
Property.
"REMEDIAL ACTION" means actions required to (i) clean up, remove, treat or
in any other way address Hazardous Material in the indoor or outdoor
environment; (ii) prevent the Release or threat of Release or minimize the
further Release of Hazardous Material; or (iii) investigate and determine if a
remedial response is needed and to design
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such a response and post-remedial investigation, monitoring, operation and
maintenance and care.
"RENTS" shall have the meaning set forth in CLAUSE (J) of the GRANTING
CLAUSE.
"RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR TRUSTEE"
"SCOTIABANK" shall have the meaning set forth in the SECOND RECITAL.
"SECURED OBLIGATIONS" means all Obligations now or hereafter existing under
the Credit Agreement, and all obligations (monetary or otherwise) arising under
or in connection with the Notes and each other Loan Document, whether for
principal, interest, costs, fees, expenses or otherwise, and all other
obligations of the Trustor and each Obligor under any Loan Document, including,
without limitation, any Subsidiary Guaranty, howsoever created, arising or now
or hereafter existing or due or to become due.
"SPECIAL ENCUMBERED LEASE RIGHTS" shall have the meaning set forth in
CLAUSE (K) of the GRANTING CLAUSE.
"STATE" means the State of California.
"STATED AMOUNT" shall have the meaning set forth in the Credit Agreement.
"SUBSIDIARY GUARANTY" shall have the meaning set forth in the Credit
Agreement.
"SWING BANKS" shall have the meaning set forth in the Credit Agreement
"TAKING" shall have the meaning set forth in CLAUSE (B) of SECTION 2.2.
"TERM LOAN" shall have the meaning set forth in the Credit Agreement.
"TERM B LOAN" shall have the meaning set forth in the Credit Agreement.
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"TERM B LOAN COMMITMENT" shall have the meaning set forth in the Credit
Agreement.
"TERM C LOAN" shall have the meaning set forth in the Credit Agreement.
"TERM C LOAN COMMITMENT" shall have the meaning set forth in the Credit
Agreement.
"TOTAL DESTRUCTION" means any damage to or destruction of the Improvements
or any part thereof which, in the reasonable estimation of the Beneficiary shall
require the expenditure of an amount in excess of fifty percent (50%) of the
replacement value of the Property to restore the Improvements to substantially
the same condition of the Improvements immediately prior to such damage or
destruction.
"TOTAL TAKING" means a Taking, whether permanent or for temporary use,
which, in the good faith judgment of the Beneficiary, shall substantially
interfere with the normal operation of the Property by the Trustor.
"TRUSTEE" shall have the meaning set forth in the preamble.
"TRUSTOR" shall have the meaning set forth in the PREAMBLE.
"TRUST PREMISES" shall have the meaning set forth in the GRANTING CLAUSE.
"U.S. AGENT" shall have the meaning set forth in the Credit Agreement.
"U.S. ALTERNATE BASE RATE" shall have the meaning set forth in the Credit
Agreement.
"U.S. BORROWER" shall have the meaning set forth in the SECOND RECITAL.
"U.S. FACILITY" shall have the meaning set forth in the Credit Agreement.
"U.S. ISSUERS" shall have the meaning set forth in the Credit Agreement.
"U.S. LENDERS" shall have the meaning set forth in the Credit Agreement.
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"U.S. LETTER OF CREDIT" shall have the meaning set forth in the Credit
Agreement.
"U.S. LETTER OF CREDIT OUTSTANDINGS" shall have the meaning set forth in
the Credit Agreement.
"U.S. REVOLVING LOAN" shall have the meaning set forth in the Credit
Agreement.
"U.S. REVOLVING LOAN COMMITMENT" shall have the meaning set forth in the
Credit Agreement.
"U.S. REVOLVING LOAN COMMITMENT AMOUNT" shall have the meaning set forth in
the Credit Agreement.
"U.S. REVOLVING LOAN COMMITMENT TERMINATION DATE" shall have the meaning
set forth in the Credit Agreement.
"U.S. RL LENDERS" shall have the meaning set forth in the Credit Agreement.
"U.S. SUBSIDIARY" shall have the meaning set forth in the Credit Agreement.
"U.S. SWING LINE LENDER" shall have the meaning set forth in the Credit
Agreement.
"U.S. SWING LINE LOAN" shall have the meaning set forth in the Credit
Agreement.
"U.S. SWING LINE LOAN COMMITMENT" shall have the meaning set forth in the
Credit Agreement.
SECTION 4.2. USE OF DEFINED TERMS. Terms for which meanings are provided
in this Deed of Trust shall, unless otherwise defined or the context otherwise
requires, have such meanings when used in any certificate and any opinion,
notice or other communication delivered from time to time in connection with
this Deed of Trust or pursuant hereto.
SECTION 4.3. CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined
herein or the context otherwise requires, terms used in this Deed of Trust,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
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ARTICLE I
MISCELLANEOUS
SECTION 5.1. FURTHER ASSURANCES; Financing Statements.
SECTION 5.1.1. FURTHER ASSURANCES. The Trustor, at its expense, will
execute, acknowledge and deliver all such instruments and take all such other
action as the Trustee or the Beneficiary from time to time may reasonably
request:
(a) better to subject to the lien and security interest of this Deed
of Trust all or any portion of the Trust Premises,
(b) to perfect, publish notice or protect the validity of the lien
and security interest of this Deed of Trust,
(c) to preserve and defend the title to the Trust Premises and the
rights of the Trustee or the Beneficiary therein against the claims of all
Persons as long as this Deed of Trust shall remain undischarged,
(d) to better subject to the lien and security interest of this Deed
of Trust or to maintain or preserve the lien and security interest of this
Deed of Trust with respect to any replacement or substitution for any Trust
Premises or any other after-acquired property, or
(e) in order to further effectuate the purposes of this Deed of Trust
and to carry out the terms hereof and to better assure and confirm to the
Trustee and the Beneficiary their rights, powers and remedies hereunder.
SECTION 5.1.2. FINANCING STATEMENTS. Notwithstanding any other provision
of this Deed of Trust, the Trustor hereby agrees that, without notice to or the
consent of the Trustor, the Beneficiary may file with the appropriate public
officials such financing statements, continuation statements, amendments and
similar documents as are or may become necessary to perfect, preserve or protect
the security interest granted by this Deed of Trust.
SECTION 5.2. ADDITIONAL SECURITY. Without notice to or consent of the
Trustor, and without impairment of the
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security interest and lien of and rights created by this Deed of Trust, the
Trustee or the Beneficiary and the Lenders may accept from the Trustor or any
other Person 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 Trustee or the Beneficiary from resorting first to
such additional security, or first to the security created by this Deed of
Trust, or concurrently to both, in any case without affecting the Trustee's
or the Beneficiary's lien and rights under this Deed of Trust.
SECTION 5.3. DEFEASANCE, PARTIAL RELEASE, ETC.
SECTION 5.3.1. DEFEASANCE. If the Loans and all other amounts owing
pursuant to the Credit Agreement and the other Loan Documents shall be repaid in
full in accordance with the terms thereof, and if the Trustor shall pay, in
full, the principal of and premium, if any, and interest on the Secured
Obligations in accordance with the terms thereof and hereof and all other sums
payable hereunder by the Trustor and shall comply with all the terms, conditions
and requirements hereof and of the Secured Obligations, which by their nature
are capable of being complied with during the term hereof, then on such date,
Beneficiary shall release the lien of this Deed of Trust and the Beneficiary
shall, upon the request of the Trustor and at the Trustor's sole cost and
expense, execute and deliver such instruments, in form and substance reasonably
satisfactory to the Beneficiary, as may be necessary to reconvey, release and
discharge this Deed of Trust without further action on the part of the Trustor,
the Trustee, or the Beneficiary.
SECTION 5.3.2. PARTIAL RELEASE, ETC. The Trustee may, at the direction of
the Beneficiary, at any time and from time to time, without liability therefor,
and without prior notice to the Trustor, release or reconvey any part of the
Trust Premises, consent to the making of any map or plat of the Property, join
in granting any easement thereon or join in any extension agreement or agreement
subordinating the lien of this Deed of Trust or enter into any other agreement
in connection with the Trust Premises.
SECTION 5.4. NOTICES, ETC. All notices and other communications provided
to any of the parties hereto shall be in writing and addressed, delivered or
transmitted to such party as set forth in the Credit Agreement.
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SECTION 5.5. WAIVERS, AMENDMENTS, ETC. The provisions of this Deed of
Trust may be amended, discharged or terminated and the observance or performance
of any provision of this Deed of Trust may be waived, either generally or in a
particular instance and either retroactively or prospectively, only by an
instrument in writing executed by the Trustor and the Beneficiary.
SECTION 5.6. CROSS-REFERENCES. References in this Deed of Trust and in
each instrument executed pursuant hereto to any Section or Article are, unless
otherwise specified, to such Section or Article of this Deed of Trust or such
instrument, as the case may be, and references in any Section, Article or
definition to any clause are, unless otherwise specified, to such clause of such
Section, Article or definition.
SECTION 5.7. HEADINGS. The various headings of this Deed of Trust and of
each instrument executed pursuant hereto are inserted for convenience only and
shall not affect the meaning or interpretation of this Deed of Trust or such
instrument or any provisions hereof or thereof.
SECTION 5.8. CURRENCY. Unless otherwise expressly stated, all references
to any currency or money, or any dollar amount, or amounts denominated in
"Dollars" herein will be deemed to refer to the lawful currency of the United
States.
SECTION 5.9. GOVERNING LAW. THIS DEED OF TRUST SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE.
SECTION 5.10. SUCCESSORS AND ASSIGNS, ETC. This Deed of Trust shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors, successors-in-time and assigns.
SECTION 5.11. CONCERNING THE TRUSTEE.
SECTION 5.11.1. ACCEPTANCE OF TRUSTS; CERTAIN TERMS OF THE TRUSTS. The
Trustee, for itself and its successors, hereby accepts the trusts of this Deed
of Trust, but only upon the terms herein set forth, including the following:
(a) The recitals in this Deed of Trust and in any supplement hereto
which may hereafter be executed by the Trustor and the Trustee shall be
taken as the statements of the Trustor and shall not be considered
53
as made by, or imposing any obligation or liability upon, the Trustee.
(b) The Trustee may execute any of the trusts or powers hereof and
perform any duty hereunder either directly or through its agents or
attorneys, and the Trustee shall not be responsible for the acts of any
agent or attorney appointed by it in good faith and without negligence.
(c) The Trustee may, at the expense of the Trustor, consult with
legal counsel to be selected by it, and the Trustee shall not be liable for
any action taken, suffered or omitted to be taken by it in good faith in
accordance with the advice of counsel.
(d) The Trustor will pay to the Trustee from time to time, on demand,
compensation for all services rendered hereunder (which shall not be
limited to the compensation of trustees of any express trust as provided by
law) and also all reasonable expenses, charges, counsel fees and other
disbursements and those of its agents and attorneys, made or incurred in
the administration of the trusts hereby created and any other duties hereby
imposed. The Trustor agrees to indemnify and save harmless the Trustee
against and from any liability or damages which it may incur or sustain, in
good faith, in the exercise and performance of any of its powers and duties
hereunder.
(e) The Trustee shall not be liable, in case of taking possession of
the Trust Premises, for debts contracted or liability or damages incurred
in the management or operation of the Trust Premises, for the salaries of
employees of the Trustor or for nonfulfillment of contracts by the Trustor.
(f) The Trustee shall be protected in acting upon any notice,
resolution, request, consent, order, certificate, report, opinion,
statement, obligation, appraisal or other document believed by it to be
genuine and to have been signed by the proper party or parties or by a
person or persons authorized to act on his or their behalf.
(g) The Trustee shall not be responsible for the validity or
genuineness of any securities, personal property, notes or deeds of trust
at any time pledged and deposited hereunder.
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SECTION 5.11.2. DUTIES AND RESPONSIBILITY OF TRUSTEE; IN CASE OF DEFAULT;
PRIOR TO DEFAULT; WHEN ACTING UNDER DIRECTION OF BENEFICIARY. If an Event of
Default shall have occurred and shall be continuing to the actual knowledge of
the Trustee, or if the Trustee shall have received notice thereof from the
Beneficiary, the Trustee, only if so directed by the Beneficiary, shall exercise
such of the rights and powers vested in it by this Deed of Trust, and in so
doing shall use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs. None of the provisions of this Deed of Trust shall be construed as
relieving the Trustee from liability for its own negligent action, own negligent
failure to act, or own willful misconduct, except that,
(a) so long as no Event of Default shall have occurred and be
continuing,
(1) the Trustee shall not be liable except for the performance
of such duties as are specifically set forth in this Deed of Trust,
and no implied covenants or obligations shall be read into this Deed
of Trust against the Trustee, whose duties and obligations shall be
determined solely by the express provisions of this Deed of Trust, and
(2) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of opinions expressed therein, upon certificates or
opinions conforming to the requirements of this Deed of Trust;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by an officer or officers of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts;
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with provisions of
applicable law and the direction of the Beneficiary, relating to the time,
method, and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred upon the Trustee
under this Deed of Trust;
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(d) the Trustee shall not be liable for any action taken or omitted by
it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Deed of Trust;
(e) if an Event of Default shall have occurred and shall be
continuing, the Trustee shall not exercise any of the powers granted to it
hereunder unless and until specifically requested to do so by the
Beneficiary; and
(f) none of the provisions contained in this Deed of Trust shall
require the Trustee to advance or use its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers.
SECTION 5.11.3. NOTICE OF DEFAULT. The Trustee shall, within ten days
after it has actual knowledge thereof, give to the Beneficiary notice of any
Default.
SECTION 5.11.4. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR TRUSTEE.
(a) The Trustee may resign and be discharged from the trusts hereby
created by giving written notice thereof to the Trustor and to the
Beneficiary. Such resignation shall become effective upon the appointment
of its successor and such successor's acceptance of such appointment,
PROVIDED THAT, if a successor Trustee has not been so appointed, or, if so
appointed, has not accepted the appointment within thirty (30) days after
the date of such written notice of resignation, the Trustee may apply to
any court of competent jurisdiction for the appointment of a successor
Trustee.
(b) The Trustee may be removed at any time by an instrument or
instruments signed by the Beneficiary and filed with the Trustor and the
Trustee.
(c) The Beneficiary may appoint a successor Trustee at any time by
filing for record in the office of the County Recorder of the County in
which the Property is located a substitution of Trustee. From the time the
substitution is filed for record, the successor Trustee shall succeed to
all of the powers, duties, authority and title of the Trustee without the
56
necessity of any conveyance from the Trustee originally herein named or any
successor. Each such substitution shall be executed and acknowledged, and
notice thereof shall be given and proof thereof made in accordance with
applicable law. The Trustor agrees to accept and confirm any such
successor Trustee hereunder by executing and delivering a supplemental Deed
of Trust and security agreement or any other appropriate agreement.
SECTION 5.12. WAIVER OF JURY TRIAL; SUBMISSION TO JURISDICTION. (A) EACH
OF THE TRUSTOR, THE TRUSTEE AND THE BENEFICIARY HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
DEED OF TRUST, THE CREDIT AGREEMENT, ANY LOAN DOCUMENT OR ANY OTHER RELATED
INSTRUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN), OR ACTIONS OF THE TRUSTOR, THE TRUSTEE, OR THE BENEFICIARY.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE TRUSTEE AND THE BENEFICIARY AND
THE LENDERS TO ENTER INTO THE TRANSACTIONS PROVIDED FOR IN THE CREDIT AGREEMENT
AND TO MAKE THE CREDIT EXTENSIONS.
(b) FOR THE PURPOSE OF ANY ACTION OR PROCEEDING INVOLVING THIS DEED OF
TRUST, THE CREDIT AGREEMENT, OR ANY OTHER LOAN DOCUMENT, THE TRUSTOR HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ALL
FEDERAL AND STATE COURTS LOCATED IN THE STATE AND CONSENTS THAT IT MAY BE SERVED
WITH ANY PROCESS OR PAPER BY REGISTERED MAIL OR BY PERSONAL SERVICE WITHIN OR
WITHOUT THE STATE IN ACCORDANCE WITH APPLICABLE LAW, PROVIDED A REASONABLE TIME
FOR APPEARANCE IS ALLOWED. THE TRUSTOR EXPRESSLY WAIVES, TO THE EXTENT IT MAY
LAWFULLY DO SO, ANY OBJECTION, CLAIM OR DEFENSE WHICH IT MAY HAVE AT ANY TIME TO
THE LAYING OF VENUE OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS DEED
OF TRUST, THE CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY SUCH COURT,
IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND FURTHER IRREVOCABLY
WAIVES THE RIGHT TO OBJECT, WITH RESPECT TO ANY SUCH CLAIM, SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT, THAT SUCH COURT DOES NOT HAVE JURISDICTION
OVER THE PERSON OF THE TRUSTOR. NOTHING CONTAINED HEREIN WILL BE DEEMED TO
PRECLUDE EITHER OF THE TRUSTEE OR THE BENEFICIARY FROM BRINGING AN ACTION
AGAINST THE TRUSTOR IN ANY OTHER JURISDICTION.
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SECTION 5.13. SEVERABILITY. Any provision of this Deed of Trust, the
Credit Agreement, or any other Loan Document, which is prohibited or
unenforceable in any jurisdiction shall as to such provision and such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Deed of
Trust, the Credit Agreement, or such Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 5.14. LOAN DOCUMENT. This Deed of Trust is a Loan Document
executed pursuant to the Credit Agreement and, unless otherwise expressly
indicated herein, shall be construed, administered and applied in accordance
with the terms and provisions thereof.
SECTION 5.15. USURY SAVINGS CLAUSE. It is the intention of the Trustor,
the Trustee and the Beneficiary to conform strictly to the usury laws governing
the Loan Documents, and any interest payable under the Loan Documents shall be
subject to reduction to the amount not in excess of the maximum non-usurious
amount allowed under such laws, as construed by the courts having jurisdiction
over such matters. In the event the maturity of the Secured Obligations is
accelerated by reason of any provision of the Loan Documents, or by reason of an
election by the Beneficiary resulting from an Event of Default, then interest
may never include more than the maximum amount permitted by law, computed from
the dates of each advance of loan proceeds under the Credit Agreement until
payment, and any interest in excess of the maximum amount permitted by law shall
be canceled automatically or, if theretofore paid, at the option of the
Beneficiary, shall be rebated to the Trustor, or shall be credited on the
principal amount of the Secured Obligations or, if all principal has been
repaid, then the excess shall be rebated to the Trustor. If any interest is
canceled, credited against principal or rebated to the Trustor in accordance
with the foregoing sentence and, if thereafter the interest payable hereunder is
less than the maximum amount permitted by applicable law, the rate hereunder
shall automatically be increased to the maximum extent possible to permit
repayment to the Beneficiary and the Lenders as soon as possible of any interest
in excess of the maximum amount permitted by law which was earlier canceled,
credited against principal or rebated to the Trustor or the Beneficiary pursuant
to the provisions of the foregoing sentence.
58
SECTION 5.16. FUTURE ADVANCES. This Deed of Trust secures "future
advances" under California law. Any and all future advances under this Deed of
Trust and the Loan Documents shall have the same priority as if the future
advance was made on the date that this Deed of Trust was recorded. This Deed of
Trust shall secure the Secured Obligations, whenever incurred, such Secured
Obligations to be due at the times provided in the Loan Documents. Notice is
hereby given that the Secured Obligations may INCREASE as a result of any
defaults hereunder by Trustor due to, for example, and without limitation,
unpaid interest or late charges, unpaid taxes or insurance premiums which the
Beneficiary elects to advance, defaults under leases that the Beneficiary elects
to cure, attorney fees or costs incurred in enforcing the Loan Documents or
other expenses incurred by the Beneficiary in protecting the Trust Premises, the
security of this Deed of Trust or the Beneficiary's rights and interests.
SECTION 5.17. SPECIAL PROVISIONS MODIFYING OR AFFECTING THIS DEED OF TRUST
BY REASON OF THE STATE IN WHICH THE LAND IS LOCATED. By virtue of the fact that
the said real estate is located in the State of California, the provisions set
forth below shall be applicable to this Deed of Trust, and to the extent
applicable, shall modify, affect and supplement the other provisions hereof.
(a) Foreclosure by Power of Sale. Should Beneficiary elect to foreclose
by exercise of the power of sale herein contained, Beneficiary shall notify
Trustee and shall deposit with Trustee this Deed of Trust and such receipts and
evidence of expenditures made and secured hereby as Trustee may require.
(i) Upon receipt of such notice from Beneficiary, Trustee shall cause
to be recorded, mailed or delivered to Trustor such notice of default and
election to sell as is then required by law and by this Deed of Trust. Trustee
shall, without demand on Trustor, after lapse of such time as may then be
required by law and after recordation of such notice of default and after notice
of sale has been given as required by law, sell the Property at time and place
of sale fixed by it in said notice of sale, either as a whole, or in separate
lots or parcels or items as Trustee shall deem expedient, and in such order as
it may determine, at public auction, to the highest bidder for cash in lawful
money of the United States payable at the time of sale. Trustee shall deliver
to such purchaser or purchasers thereof its
60
good and sufficient deed or deeds conveying the property so sold, but without
any covenant or warranty, express or implied. The recitals in such deed of
any matters or facts shall be conclusive proof of the truthfulness thereof.
Any person, including without limitation Trustor, Trustee or Beneficiary, may
purchase at such sale and Trustor hereby covenants to warrant and defend the
title of such purchaser or purchasers. If allowed by law, Beneficiary, if it
is the purchaser, may credit bid the outstanding amount of the indebtedness
secured hereby toward payment of the purchase price. Trustor hereby
expressly waives any right of redemption after sale that Trustor may have at
the time of sale or that may apply to the sale.
(ii) After deducting all costs, fees and expenses of Trustee and of
this Deed of Trust, including costs of evidence of title in connection with sale
and reasonable Trustee's and attorneys' fees for conducting the sale, Trustee
shall apply the proceeds of sale to payment of all sums expended under the terms
hereof and not then repaid (with accrued interest at the U.S. Alternate Base
Rate from time to time in effect plus 2 1/2%), and to all other sums then
secured hereby in accordance with the Loan Documents, and the remainder, if any,
to the person or persons legally entitled thereto.
(iii) Trustee may postpone sale of all or any portion of the Property
by public announcement at such time and place of sale, and from time to time
thereafter may postpone such sale by public announcement at the time fixed by
the preceding postponement or by subsequently noticed sale, and without further
notice make such sale at the time fixed by the last postponement; or Trustee
may, in its discretion, give a new notice of sale. Beneficiary may rescind any
such notice of default at any time before Trustee's sale by executing a notice
of rescission and recording the same. The recordation of such notice shall
constitute a cancellation of any prior declaration of default and demand for
sale and of any acceleration of maturity of the indebtedness secured hereby
effected by any prior declaration or notice of default. The exercise by
Beneficiary of the right of rescission shall not constitute a waiver of any
default and demand for sale, or notices of default and of election to cause the
said real estate to be sold, nor otherwise affect any of the Loan Documents or
this Deed of Trust, or any of the rights, obligations or remedies of Beneficiary
or Trustee hereunder.
60
(b) Full Reconveyance. Upon written request of Beneficiary stating that
all sums secured hereby have been paid, and upon surrender of this Deed of Trust
to Trustee for cancellation and retention and upon payment by Trustor of
Trustee's fees, Trustee shall reconvey to Trustor, or the person or persons
legally entitled thereto, without warranty, any portion of the Property then
held hereunder. The recitals in such reconveyance of any matters or facts shall
be conclusive proof of the truthfulness thereof. The grantee in any
reconveyance may be described as "the person or persons legally entitled
thereto."
(c) Trustee. The following provisions apply to Trustee:
(i) Trustee accepts this trust when this Deed of Trust, duly executed
and acknowledged, is made a public record as provided by law, and by its
acceptance hereof, Trustee covenants faithfully to perform and fulfill the
trusts herein created, being liable, however, only for willful negligence or
misconduct, and Trustee hereby waives any statutory fee and agrees to accept
reasonable compensation, in lieu thereof, for any services rendered by it in
accordance with the terms hereof.
(ii) At any time and from time to time, without liability therefor and
without notice, upon written request of Beneficiary, Trustee shall (1) consent
in writing to the making of any map or plat of the said real estate, (2) join in
granting any easement thereon, (3) join in any extension agreement or any
agreement subordinating the lien or charge hereof.
(iii) Trustee may resign at any time upon giving thirty (30) days'
notice in writing to Trustor and to Beneficiary.
(iv) Beneficiary may, from time to time, by written instrument
executed and acknowledged by Beneficiary, mailed to Trustor and recorded in the
county in which the said real estate is located, and by otherwise complying with
the provisions of the applicable law of the State of California, substitute a
successor or successors to the person or persons then named herein or acting
hereunder as Trustee.
(d) Beneficiary Statements. Trustor agrees to pay Beneficiary for each
statement of Beneficiary as to the Secured Obligations secured hereby, furnished
at Trustor's
61
request, the maximum fee allowed by law, or if there be no maximum
fee, then such reasonable fee as is charged by Beneficiary as of the time said
statement is furnished. Trustor further agrees to pay the charges of
Beneficiary for any other service rendered Trustor, or on its behalf, in
connection with this Deed of Trust or the Secured Obligations secured hereby,
including without limitation the delivery to an escrow holder of a request for
full or partial reconveyance of this Deed of Trust, transmitting records
pertaining to this Deed of Trust and the Secured Obligations secured hereby to
show a new owner of the said real estate, and replacing an existing policy of
insurance held hereunder with another such policy.
(e) Actions Affecting the Trust Premises. Trustor, at Trustor's expense,
shall appear in and contest any action or proceeding purporting to affect the
Trust Premises or the security hereof or the rights or powers of Beneficiary or
Trustee. Trustor shall pay all costs and expenses incurred by Beneficiary or
Trustee, including the cost of evidence of title and attorneys' fees, in any
such action or proceeding in which Beneficiary or Trustee may appear.
(f) Insurance Losses and Proceeds. In the event of loss, Trustor shall
give immediate written notice to the insurance carrier and Beneficiary. Trustor
hereby authorizes and empowers Beneficiary, at Beneficiary's option and in
Beneficiary's sole discretion as attorney-in-fact for Trustor, to pay premiums,
to make proof of loss, to adjust and compromise any claim under insurance
policies, to appear in and prosecute any action arising from such insurance
policies, to collect and receive insurance proceeds, and to deduct therefrom
Beneficiary's expenses in the collection of such proceeds. Trustor further
authorizes Beneficiary, at Beneficiary's option (1) to hold the balance of such
proceeds to be used for the cost of reconstruction, restoration or repair
(hereinafter in this subsection referred to as "reconstruction") of the said
real estate, or (2) to apply the balance of such proceeds to the payment of the
sums secured by this Deed of Trust, whether or not then due; provided, however,
that Beneficiary shall hold the balance of any proceeds actually received by
Beneficiary and make such proceeds available to Trustor for the costs of
reconstruction of the said real estate if all of the following conditions are
satisfied within sixty (60) days from the date of the damage or destruction:
62
(i) Trustor is not in default hereunder and no event has occurred and
no fact exists which with notice and/or lapse of time would constitute an Event
of Default.
(ii) Trustor satisfies Beneficiary that after the reconstruction is
completed, the value of the Trust Premises, as determined by Beneficiary in its
reasonable discretion, will be not less than the value of the Property
(including land and improvements) determined by Beneficiary at the time of the
recording of this Deed of Trust.
(iii) Beneficiary has been given satisfactory proof that expenditure
of such proceeds (and, where applicable, the additional funds referred to in
clause (iv) below) will fully restore the Improvements free and clear of all
liens other than this Deed of Trust and any other liens or encumbrances
permitted by Beneficiary under this Deed of Trust.
(iv) If such proceeds shall be insufficient to restore or rebuild the
Improvements, Trustor shall have deposited with Beneficiary funds which,
together with such insurance proceeds, shall be sufficient to complete the
reconstruction of the Improvements.
(v) Trustor has delivered to Beneficiary the plans and specifications
and a construction contract for the work of reconstruction in form and content
acceptable to Beneficiary with an architect and a contractor acceptable to
Beneficiary.
(vi) If Trustor shall fail within a reasonable time, subject to delays
beyond its control, to complete reconstruction of the Improvements, then
Beneficiary, at its option, may complete such reconstruction for or on behalf of
Trustor, and for such purpose Beneficiary may do all necessary acts.
(vii) Such damage or destruction has not resulted in an impairment of
the security interest created by this Deed of Trust that will continue after the
completion of reconstruction or, if there is such an impairment of the security
interest created hereunder, said insurance proceeds shall be applied towards the
Secured Obligations and any other sums secured hereby to the extent of the
impairment of the security interest created hereunder.
(viii) If the insurance proceeds are held by Beneficiary to be used to
reimburse Trustor for the cost of
63
reconstruction of the said real estate, then (1) the said real estate shall
be promptly and diligently restored by Trustor to the equivalent of its
condition immediately prior to the casualty in accordance with the original
plans and specifications or to such other condition as Beneficiary may
approve in writing, (2) disbursements of such insurance proceeds shall be in
accordance with disbursement procedures acceptable to Beneficiary, and (3)
any proceeds actually received by Beneficiary and not required to reconstruct
the said real estate or satisfy the conditions set forth in subparagraphs (i)
through (viii) of this subsection shall be applied towards the Secured
Obligations secured hereby. Beneficiary may commingle any such award or
settlement held by it with its other general funds. Beneficiary shall not be
obligated to pay interest in respect of any such award or settlement held by
it nor shall Trustor be entitled to a credit against any of the Secured
Obligations, except and to the extent the award or settlement are applied
thereto pursuant to this subsection. Without limitation of the foregoing,
Beneficiary shall have the right at all times to apply such insurance
proceeds to the cure of any Event of Default or the performance of any
obligations of Trustor under the Loan Documents.
(ix) If the insurance proceeds are applied to the payment of the
Secured Obligations secured by this Deed of Trust, any such application shall be
in such order as set forth in SECTION 3.11 of this Deed of Trust and shall
constitute a voluntary prepayment subject to any prepayment premiums or fees
provided in any of the other Loan Documents. Beneficiary may apply such
insurance proceeds to such prepayment premiums or fees. Nothing herein
contained shall be deemed to excuse Trustor from repairing or maintaining the
said real estate as provided herein or restoring all damage or destruction to
the said real estate, regardless of whether or not there are insurance proceeds
available to Trustor or whether any such proceeds are sufficient in amount, and
the application or release by Beneficiary of any insurance proceeds shall not
cure or waive any default or notice of default under this Deed of Trust or
invalidate any act done pursuant to such notice.
(g) Copies of Notices. Trustor hereby requests that a copy of any notice
of default and any notice of sale hereunder be mailed to it at the address set
forth on the first page of this Deed of Trust.
64
(h) CCP Section 736. Beneficiary shall have all of the rights, privileges
and remedies of a secured lender under California Code of Civil Procedure
Section 736.
(i) Attorneys' Fees. If any Event of Default occurs, Trustor shall pay
all costs of enforcement and collection, including but not limited to,
reasonable attorneys' fees, whether or not such enforcement and collection
includes the filing of a lawsuit. As used in this Deed of Trust and in the
other Loan Documents, the term "attorneys' fees" or "attorneys' fees and costs"
shall mean the fees and expenses of counsel to the parties hereto, which may
include printing, photostating, duplicating and other expenses, air freight
charges, and fees billed for law clerks, paralegals, librarians and others not
admitted to the bar but performing services under the supervision of an
attorney. The terms "attorneys' fees" or "attorneys' fees and costs" shall also
include, without limitation, all such fees and expenses incurred with respect to
appeals, arbitrations, bankruptcy proceedings and any post-judgment proceedings
to collect any judgment, and whether or not any action or proceeding is brought
with respect to the matter for which said fees and expenses were incurred. The
provisions allowing for the recovery of post-judgment fees, costs and expenses
are separate and several and shall survive the merger of the applicable Loan
Document into any judgment.
(j) This Deed of Trust is both a real property lien and also a "security
agreement" and a "financing statement" within the meaning of the State Uniform
Commercial Code. The Trust Premises includes both real and personal property
and all of Trustor's other right, title and interest, whether tangible or
intangible, in the Trust Premises. By executing and delivering this Deed of
Trust, Trustor grants to Trustee for the benefit of Beneficiary, as security for
the Secured Obligations secured hereby, a security interest in the Trust
Premises to the full extent that any of the Trust Premises may be subject to the
State Uniform Commercial Code. Notwithstanding the grant of such security
interest to Trustee, the beneficial owner and holder of such security interest
is Beneficiary, Beneficiary will be deemed the "secured party" with respect to
such security interest for all purposes of the Uniform Commercial Code and will
be so identified on all financing statements filed in connection therewith, and
Beneficiary shall be entitled upon the occurrence of an Event of Default to
exercise all the remedies of a secured party under the Uniform Commercial Code
as well as all other rights and remedies available at law or in equity.
65
(k) Accommodation Provisions. Insofar as this Deed of Trust secures
obligations (the "OTHER OBLIGATIONS") of other Obligors other than Trustor (the
"OTHER PARTIES") in favor of Beneficiary, Trustor has executed and delivered
this Deed of Trust as an accommodation instrument with the intent of subjecting
its interests in the Property to the lien of this Deed of Trust as security for
the Other Obligations and in order to induce Beneficiary to enter into the Loan
Documents. Trustor hereby agrees, to the fullest extent permitted by law, not
to assert or take advantage of:
(i) Any right to require Beneficiary to proceed against the Other Parties
or any other person or to proceed against or exhaust any other security held by
Beneficiary at any time or to pursue any other remedy in Beneficiary's power
before exercising any right or remedy under this Deed of Trust.
(ii) Any defense that may arise by reason of:
(a) Beneficiary's failure to proceed against the Other Parties'
property, or any other party against whom Beneficiary might assert a claim,
before proceeding against Trustor under this Deed of Trust; or
(b) The release, suspension, discharge or impairment of any of
Beneficiary's rights against the Other Parties or any other party against
whom Beneficiary might assert a claim, whether such release, suspension,
discharge or impairment is explicit, tacit or inadvertent; or
(c) Beneficiary's failure to pursue any other remedies available
to Beneficiary that would reduce the burden of the indebtedness secured
hereby on Trustor's interests in the Property; or
(d) Any extension of the time for the payment or performance of
any of the Other Obligations or this Deed of Trust; or
(e) Any amendment of this Deed of Trust or the Other
Obligations, whether or not such amendment materially affects the risk that
Trustor has assumed by executing this Deed of Trust; or
(f) The incapacity, lack of authority, death or disability of
the Other Parties or any other person or persons; or
66
(g) The failure of Beneficiary to file or enforce a claim
against the estate (in either administration, bankruptcy or any other
proceedings) of the Other Parties or any other person or persons.
(iii) Demand, protest and notice of any kind, including, without
limitation, the following notices:
(a) Notice of the evidence, creation or incurring of any new or
additional indebtedness or obligation (provided that such indebtedness or
obligation is not secured by this Deed of Trust); or
(b) Notice of any action or non-action on the part of the Other
Parties or Beneficiary in connection with any obligation or evidence of
indebtedness held by Beneficiary as collateral; or
(c) Notice of payment or non-payment by the Other Parties of the
indebtedness secured by this Deed of Trust.
(iv) Any right to assert against the Beneficiary any defense arising by
reason of any claim or defense based upon an election of remedies by the
Beneficiary to foreclose, either by judicial foreclosure or by exercise of the
power of sale, under any other deed of trust securing the Other Obligations,
which in any manner impairs, reduces, releases, destroys or extinguishes
Trustor's subrogation rights, rights to proceed against the Other Parties for
reimbursement, or any other rights of Trustor to proceed against any other
person or security. Trustor waives all rights and defenses to enforcement of
all or any part of the indebtedness secured hereby which defenses are based on
an election of remedies by Beneficiary, even though the election of remedies,
such as nonjudicial foreclosure with respect to any
such other deed of trust, will destroy Trustor's rights of subrogation and
reimbursement against the Other Parties by operation of Section 580d of the
California Code of Civil Procedure. This means, among other things:
(a) The Beneficiary may collect from the Trustor without first
foreclosing on any real or personal property collateral pledged by the
Other Parties.
(b) If the Beneficiary forecloses on any real property
collateral pledged by the Other Parties:
67
(c) The amount of the debt may be reduced only by the price for
which that collateral is sold at the foreclosure sale, even if the
collateral is worth more than the sale price.
(ii) The Beneficiary may collect from the Trustor even if the
Beneficiary, by foreclosing on the other real property collateral, has
destroyed any right the Trustor may have to collect from the Other
Parties.
This is an unconditional and irrevocable waiver of any rights and defenses the
Trustor may have because the debtor's debt is secured by real property. These
rights and defenses include, but are not limited to, any rights or defenses
based upon Section 580a, 580b, 580d, or 726 of the California Code of Civil
Procedure.
(v) Any rights arising because of Trustor's payment or satisfaction
of the indebtedness secured hereby (i) against the Other Parties, by way of
subrogation to the rights of Beneficiary or otherwise, or (ii) against any other
guarantor or any Other Party obligated to pay any of the indebtedness secured
hereby, by way of contribution or reimbursement or otherwise.
(vi) Any duty on the part of Beneficiary to disclose to Trustor any
default under the Other Obligations.
(vii) Any duty on the part of Beneficiary to disclose to Trustor any
facts Beneficiary may now know or may hereafter know about the Other Parties or
any successors in interest (if any) regardless of whether Beneficiary (i) has
reason to believe that any such facts materially increase the risk beyond the
risk which Trustor intends to assume by executing this Deed of Trust, (ii) has
reason to believe that these facts are unknown to Trustor, or (iii) has a
reasonable opportunity to communicate such facts to Trustor, it being understood
and agreed that Trustor is fully responsible for being and keeping informed of
the financial condition of the Other Parties or any successor in interest of the
Other Parties and of all circumstances bearing on the risk of non-payment of any
indebtedness of the Other Parties to Beneficiary that is secured hereby.
(viii) Any right to object to the release of any portions of the
Property from the lien of this Deed of Trust notwithstanding the fact that such
releases may be made
68
without Beneficiary's having received any or adequate consideration therefor.
Trustor further agrees that with respect to any Secured Obligation secured
hereby Beneficiary may, in such manner and upon such terms and at such times as
Beneficiary deems best and without demand or notice to or consent of Trustor (i)
release any party now or hereafter liable for the performance of any such
Secured Obligation, (ii) extend the time for the performance of any such Secured
Obligation, (iii) accept additional security therefor, and (iv) alter,
substitute or release any property securing such performance.
Before executing this Deed of Trust, Trustor has made such independent
legal and factual inquiries and investigations as Trustor deemed necessary or
desirable with respect to the ability of the Other Parties to honor all of the
Other Parties' covenants and agreements with Beneficiary, and Trustor has relied
solely on said independent inquiries and investigations preparatory to entering
into this Deed of Trust.
(l) Controlling Provisions. In the event of any conflict between
Section 5.17 and any other provisions of this Deed of Trust, the provisions of
this Section 5.17 shall control.
69
IN WITNESS WHEREOF, the Trustor has caused this Deed of Trust to be duly
executed as of the day and year first above written.
TRUSTOR:
LEINER HEALTH PRODUCTS INC., a
Delaware corporation
By: /s/ William B. Towne
------------------------------------
Name: William B. Towne
Title: Executive Vice President-Finance
70
ACKNOWLEDGMENT OF TRUSTOR
STATE OF New York )
)SS.:
COUNTY OF New York )
On June 27, 1997, before me,Caron Gelineau, a Notary Public in and for said
State, personally appeared William Towne and _________________________,
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/she executed the same in his/her authorized
capacity, and that by his/her/ signature on the instrument the person, or the
entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Signature /s/ Caron F. Gelineau (Seal)
---------------------------------------
Caron F. Gelineau
Notary Public, State of New York
No. 31-5009056
Qualified in New York County
Commission Expires March 8, 1999
1
SCHEDULE 1
LEGAL DESCRIPTION OF THE LAND
(attached hereto)
That portion of Lot 11 in Section 26, Township 4 South, Range 11 West of the J.
W. Bixby and Company's Subdivision, in the City of Garden Grove, County of
Orange, State of California, as shown on a map recorded in Book 7, Page 51 of
Miscellaneous Records of Los Angeles County, described as follows:
Parcel 1 on Lot Line Adjustment filed in Book 12691, Page 1992 of Official
Records of said Orange County.
Except any rights to oil, gas or other hydrocarbon products without the right of
surface entry as set forth in an instrument recorded February 24, 1943 in Book
1177, Page 540 Official Records.
Also except all oil, oil rights, minerals, mineral rights, natural gas, natural
gas rights, and other hydrocarbons by whatsoever name known, geothermal steam
and all products derived from any of the foregoing, that may be within or under
the parcel of land hereinabove described, together with the perpetual right of
drilling, mining, exploring and operating therefor and storing in and removing
the same from said land or any other land, including the right to whipstock or
directionally drill and mine from lands other than those hereinabove described,
oil or gas wells, tunnels and shafts into, through or across the subsurface of
the land hereinabove described and to bottom such whipstocked or directionally
drilled wells, tunnels, and shafts under and beneath or beyond the exterior
limits thereof, and to redrill, retunnel, equip, maintain, repair, deepen and
operate any such wells or mines, without however, the right to drill, mine,
store, explore and operate through the surface or the upper five hundred (500)
feet of the subsurface of the land hereinabove described, as reserved in the
deed from The Irvine Company, a Michigan corporation, successors by merger with
Irvine Industrial Complex, a corporation, recorded June 30, 1978 in Book 12739,
Page 1281, Official Records.
1
SCHEDULE 2
PERMITTED ENCUMBRANCES
Those exceptions to title listed
in Lawyers Title Insurance
Corporation marked-up commitment
#9707008-44 dated June 30, 1997.
1
SCHEDULE 3
ENCUMBERED LEASE
Standard Industrial Lease dated February 19, 1988 by and between Richard F.
Burns, J. Grant Monahon, and Lawrence W. Doyle, as Trustees of AEW #113 Trust
established by Declaration of Trust dated January 19, 1988, predecessor in
interest to Fujita Corporation USA, as landlord, and Vita-Fresh Vitamin Co.,
predecessor Inc., in interest to Leiner Health Products Inc., as tenant, and as
such Lease has been amended, restated or otherwise modified from time to time.
2
TABLE OF CONTENTS
-----------------
Section Page
- ------- ----
ARTICLE I
COVENANTS AND AGREEMENTS OF THE TRUSTOR
SECTION 1.1. Payment of Secured Obligations...............................10
SECTION 1.2. Title to Trust Premises, etc.................................11
SECTION 1.3. Title Insurance..............................................12
SECTION 1.3.1. Title Insurance Policy.............................12
SECTION 1.3.2. Title Insurance Proceeds...........................12
SECTION 1.4. Recordation..................................................12
SECTION 1.5. Payment of Impositions, etc..................................13
SECTION 1.6. Insurance and Legal Requirements.............................13
SECTION 1.7. Security Interests, etc......................................14
SECTION 1.8. Permitted Contests...........................................15
SECTION 1.9. Leases.......................................................15
SECTION 1.10. Compliance with Instruments.................................16
SECTION 1.11. Maintenance and Repair, etc.................................16
SECTION 1.12. Alterations, Additions, etc.................................16
SECTION 1.13. Acquired Property Subject to Lien...........................17
SECTION 1.14. Assignment of Leases, Rents, Proceeds, etc..................17
SECTION 1.15. No Claims Against the Trustee or the Beneficiary............20
SECTION 1.16. Indemnification.............................................20
SECTION 1.17. No Credit for Payment of Taxes..............................22
SECTION 1.18. Offering of the Notes; Application of Proceeds of Loans.....22
SECTION 1.19. Encumbered Lease............................................22
SECTION 1.20. Security Agreement..........................................28
SECTION 1.21. Representations and Warranties..............................30
SECTION 1.22. Trustor's Covenants.........................................30
ARTICLE II
INSURANCE; DAMAGE, DESTRUCTION OR TAKING, ETC..
SECTION 2.1. Insurance....................................................30
SECTION 2.1.1. Risks to be Insured.....................................31
SECTION 2.1.2. Policy Provisions.......................................32
SECTION 2.1.3. Delivery of Policies, etc...............................33
SECTION 2.1.4. Separate Insurance......................................33
SECTION 2.2. Damage, Destruction or Taking; Trustor to Give
Notice; Assignment of Awards................................33
SECTION 2.3. Application of Proceeds and Awards...........................34
i
Section Page
- ------- ----
SECTION 2.4 Total Taking and Total Destruction............................37
ARTICLE III
EVENTS OF DEFAULT; REMEDIES, ETC.
SECTION 3.1. Events of Default; Acceleration..............................38
SECTION 3.2. Legal Proceedings; Foreclosure...............................38
SECTION 3.3. Power of Sale................................................39
SECTION 3.4. Uniform Commercial Code Remedies.............................40
SECTION 3.5. Trustee and Beneficiary Authorized to Execute Deeds, etc.....40
SECTION 3.6. Purchase of Trust Premises by Beneficiary....................41
SECTION 3.7. Receipt a Sufficient Discharge to Purchaser..................41
SECTION 3.8. Waiver of Appraisement, Valuation, etc.......................41
SECTION 3.9. Sale a Bar Against Trustor...................................41
SECTION 3.10. Secured Obligations to Become Due on Sale...................41
SECTION 3.11. Application of Proceeds of Sale and Other Moneys............42
SECTION 3.12. Appointment of Receiver.....................................43
SECTION 3.13. Possession, Management and Income...........................43
SECTION 3.14. Right of Trustee and the Beneficiary to Perform
Trustor's Covenants, etc ..................................44
SECTION 3.15. Subrogation.................................................44
SECTION 3.16. Remedies, etc., Cumulative..................................45
SECTION 3.17. Provisions Subject to Applicable Law........................45
SECTION 3.18. No Waiver, etc..............................................45
SECTION 3.19. Compromise of Actions, etc..................................46
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ARTICLE IV
DEFINITIONS
SECTION 4.1. Terms Defined in this Deed of Trust..........................46
SECTION 4.2. Use of Defined Terms.........................................54
SECTION 4.3. Credit Agreement Definitions.................................55
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Further Assurances; Financing Statements.....................55
SECTION 5.1.1. Further Assurances......................................55
SECTION 5.1.2. Financing Statements....................................55
SECTION 5.2. Additional Security..........................................56
SECTION 5.3. Defeasance, Partial Release, etc.............................56
SECTION 5.3.1. Defeasance..............................................56
SECTION 5.3.2. Partial Release, etc....................................56
SECTION 5.4. Notices, etc.................................................57
SECTION 5.5. Waivers, Amendments, etc.....................................57
SECTION 5.6. Cross-References.............................................57
SECTION 5.7. Headings.....................................................57
SECTION 5.8. Currency.....................................................57
SECTION 5.9. Governing Law................................................57
SECTION 5.10. Successors and Assigns, etc.................................58
SECTION 5.11. Concerning the Trustee......................................58
SECTION 5.11.1. Acceptance of Trusts; Certain Terms of the Trusts......58
SECTION 5.12. Waiver of Jury Trial; Submission to Jurisdiction............61
SECTION 5.13. Severability................................................62
SECTION 5.14. Loan Document...............................................62
SECTION 5.15. Usury Savings Clause........................................63
SECTION 5.16. Future Advances.............................................63
SECTION 5.17. SPECIAL PROVISIONS MODIFYING OR AFFECTING THIS
DEED OF TRUST BY REASON OF THE STATE IN WHICH THE
LAND IS LOCATED...................................................64
Execution Page..............................................................63
Acknowledgments.............................................................64
Schedule 1--Legal Description of the Land
Schedule 2--Permitted Encumbrances
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Schedule 3--Encumbered Lease
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