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DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING

Lease Assignment Agreement

DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING | Document Parties: FELCOR LODGING TRUST INC | Bingham McCutchen LLP You are currently viewing:
This Lease Assignment Agreement involves

FELCOR LODGING TRUST INC | Bingham McCutchen LLP

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Title: DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING
Governing Law: New York     Date: 8/6/2009
Industry: Real Estate Operations     Law Firm: Bingham McCutchen     Sector: Services

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Exhibit 10.2

 

THIS INSTRUMENT IS PREPARED BY:

 

Bingham McCutchen LLP

One Federal Street

Boston, MA 02110-1726

Attention: Maurice H. Sullivan, III, Esq.

 

 

(Space above this line for recording purposes only.)

FelCor/JPM Hospitality (SPE), L.L.C. and

DJONT/JPM Hospitality Leasing (SPE), L.L.C. ,

together, as grantor

to

William L. Rosenberg ,
as trustee

 

for the benefit of

JPMORGAN CHASE BANK, N.A. ,
as Administrative Agent, as beneficiary

 

 

DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING

 

Maximum Principal Indebtedness For ______________ Recording Tax Purposes is $___________

 

 

COLLATERAL IS OR INCLUDES FIXTURES

Dated:               As of June ___, 2009

Location:         [_________________]

                          [_________________]

County:            [_________________]

 

 

 

 


DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,

SECURITY AGREEMENT AND FIXTURE FILING

     THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this “ Security Instrument ”) is made as of June ___, 2009 (the “ Effective Date ”), by FELCOR/JPM HOSPITALITY (SPE), L.L.C., a Delaware limited liability company (“ Owner ”), and DJONT/JPM HOSPITALITY LEASING (SPE), L.L.C., a Delaware limited liability company (“ Operator ”) (Owner and Operator are collectively and together with their permitted successors and assigns, individually or collectively (as the context requires) referred to herein as “ Grantor ”), whose address is c/o FelCor Lodging Trust Incorporated, 545 E. John Carpenter Freeway, Suite 1300, Irving, Texas 75062, Attention: General Counsel, as grantor, to ______________ (together with its successors and assigns, “ Trustee ”), whose address is ______________, as trustee, for the benefit of JPMORGAN CHASE BANK, N.A. (“ Agent ”), as Administrative Agent for the benefit of the Lenders (defined below) from time to time parties to the Loan Agreement (defined below) (Agent, in such capacity, together with its successors and assigns, “ Grantee ”), whose address is 270 Park Avenue, New York, New York 10017, Attention: Joseph Geoghan, as beneficiary. All capitalized terms not defined herein shall have the respective meanings set forth in the Loan Agreement (defined below).

RECITALS:

          A.        Owner and Operator, as borrower, and Agent, as administrative agent for the banks and other financial institutions from time to time party thereto as lenders (Agent and/or such banks or such other financial institutions, collectively or individually together with each of their respective successors and assigns, “ Lenders ”) have entered into that certain Term Loan Agreement dated as of the date hereof (as the same may be amended, restated, replaced, supplemented or otherwise modified and in effect from time to time, the “ Loan Agreement ”).

 

          B.        Under the terms of the Loan Agreement, the Lenders have agreed to make a loan to and for the account of Grantor (whether one or more, collectively, the “ Loan ”), which Loan is evidenced by, among other things, certain promissory notes executed in connection with the Loan Agreement (such promissory note or promissory notes, together with all extensions, renewals, replacements, restatements or other modifications thereof, whether one or more being hereinafter collectively referred to as the “ Notes ”). The Loan Agreement, the Notes and the other documents now or hereafter executed in connection with, or to guaranty, evidence or secure, in whole or in part, the indebtedness and obligations evidenced thereby, as they may from time to time be amended, restated, replaced or otherwise modified and in effect from time to time, to be referred to herein as the “ Loan Documents ”).

 

          C.        Grantor is required by the Loan Agreement to grant to Trustee and Grantee, as security for the payment and performance of the indebtedness and obligations evidenced by the Loan Documents (collectively, the “ Obligations ”) a valid, enforceable, first priority lien and security interest in the Property (as defined below).

 

          D.        Lenders’ commitments under the Loan Agreement and the Notes to make advances of the Loan shall be in the aggregate maximum amount of $200,800,000, and it is the intention of Grantor and Grantee that this Security Instrument secure the payment of all such amounts and that all such amounts be included in the Obligations secured hereby.

 

 

E.

This Security Instrument secures the Obligations.

 

 

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          F.             It is in the best interest of Grantor to execute this Security Instrument inasmuch as Grantor will derive substantial direct and indirect benefits from the Loan.

 

ARTICLE 1. GRANTS OF SECURITY

Section 1.1.       PROPERTY MORTGAGED . Pursuant to the terms of Section 1.3 and Section 1.5 below, Grantor does hereby irrevocably MORTGAGE, GRANT, BARGAIN, SELL, PLEDGE, ASSIGN, WARRANT, TRANSFER and CONVEY, subject to the Permitted Liens, to Trustee, in trust, with power of sale, and grant a security interest in and to the following property, rights, interests, and estates now owned or hereafter acquired by Grantor (collectively, the “ Property ”):

(a)        Land . The real property described in Exhibit A attached hereto and made a part hereof (collectively, the “ Land ”);

(b)        Additional Land . All additional lands, estates and development rights hereafter acquired by Grantor for use in connection with the Land and the development of the Land and all additional lands and estates therein which may, from time to time, by supplemental mortgage or otherwise be expressly made subject to the Lien of this Security Instrument;

(c)        Improvements . The buildings, structures, fixtures, additions, enlargements, extensions, modifications, repairs, replacements and improvements now or hereafter erected or located on the Land (collectively, the “ Improvements ”);

(d)        Easements . All easements, rights-of-way or use, rights, strips and gores of land, streets, ways, alleys, passages, sewer rights, water, water courses, water rights and powers, air rights and development rights, and all estates, rights, titles, interests, privileges, liberties, servitudes, tenements, hereditaments and appurtenances of any nature whatsoever, in any way now or hereafter belonging, relating or pertaining to the Land and the Improvements including, but not limited to the reversions and remainders, and all land lying in the bed of any street, road or avenue, opened or proposed, in front of or adjoining the Land, to the center line thereof and all the estates, rights, titles, interests, dower and rights of dower, curtesy and rights of curtesy, property, possession, claim and demand whatsoever, both at law and in equity, of Grantor of, in and to the Land and the Improvements, and every part and parcel thereof, with the appurtenances thereto;

(e)        Fixtures and Personal Property . All machinery, equipment, fixtures (including, but not limited to, all heating, air-conditioning, plumbing, lighting, communications and elevator fixtures, inventory and goods), inventory and articles of personal property and accessions thereof and renewals, replacements thereof and substitutions therefor (including, but not limited to, beds, bureaus, chiffonniers, chests, chairs, desks, lamps, mirrors, bookcases, tables, rugs, carpeting, drapes, draperies, curtains, shades, venetian blinds, screens, paintings, hangings, pictures, divans, couches, luggage carts, luggage racks, stools, sofas, chinaware, linens, pillows, blankets, glassware, silverware, food carts, cookware, dry cleaning facilities, dining room wagons, keys or other entry systems, bars, bar fixtures, liquor and other drink dispensers, icemakers, radios, television sets, intercom and paging equipment, electric and electronic equipment, dictating equipment, private telephone systems, medical equipment, potted plants, heating, lighting and plumbing fixtures, fire prevention and extinguishing apparatus, cooling and air-conditioning systems, elevators, escalators, fittings, plants, apparatus, stoves, ranges, refrigerators, laundry machines, tools, machinery, engines, dynamos, motors, boilers, incinerators, switchboards, conduits, compressors, vacuum cleaning systems, floor cleaning, waxing and polishing equipment, call systems, brackets, electrical signs, bulbs, bells, ash and fuel, conveyors, cabinets,

 

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lockers, shelving, spotlighting equipment, dishwashers, garbage disposals, washers and dryers), other customary hotel equipment and other tangible property of every kind and nature whatsoever owned by Grantor, or in which Grantor has or shall have an interest, now or hereafter located upon the Land and the Improvements, or appurtenant thereto, or usable in connection with the present or future operation and occupancy of the Land and the Improvements and all building equipment, materials and supplies of any nature whatsoever owned by Grantor, or in which Grantor has or shall have an interest, now or hereafter located upon the Land or the Improvements, or appurtenant thereto, or usable in connection with the present or future operation and occupancy of the Land and the Improvements (hereinafter collectively called the “ Personal Property ”), and the right, title and interest of Grantor in and to any of the Personal Property which may be subject to any security interests, as defined in the Uniform Commercial Code, as adopted and enacted by the state or states where any of the Property is located (the “ Uniform Commercial Code ”), or equipment leases superior in priority to the Lien of this Security Instrument and all proceeds andproducts of all of the above;

(f)         Operating Lease . That certain Lease Agreement dated as of July 28, 1994 between FelCor Suites Limited Partnership (“ Lessor ”) and DJONT Operations, L.L.C. (“ Original Lessee ”), as amended by that certain Amendment to Lease Agreement, dated as of October [__] 1996, as further amended by that certain Omnibus Lease Amendment Agreement, dated as of June 30, 1998, among FelCor Lodging Trust Incorporated (f/k/a FelCor Suite Hotels, Inc.), FelCor Lodging Limited Partnership (f/k/a FelCor Suites Limited Partnership), and the other lessors and lessees party thereto, as further amended by that certain Third Amendment to Lease Agreement, dated as of December 22, 1998, as assigned by Original Lessee to DJONT/JPM ________ Leasing, L.L.C. in that certain Assignment and Assumption of Agreements, dated as of July [__], 2003, as further amended and extended by that certain Agreement for Amendment and Extension of Lease, dated as of January 1, 2005, between Lessor and Original Lessee, as assigned to Owner and Operator (as amended, assigned, and extended and in effect from time to time, the “ Operating Lease ”), and the leasehold estate created thereby, including all assignments, modifications, extensions and renewals of the Operating Lease and all credits, deposits, options, privileges and rights of Operator as tenant under the Operating Lease, including but not limited to, rights of first refusal, if any, and the right, if any, to renew or extend the Operating Lease for a succeeding term or terms, and also including all the right title, claim or demand whatsoever of Operator either in law or in equity, in possession or expectancy, of, in and to Operator’s rights, as tenant under the Operating Lease, to elect under Section 365(h)(1) of the Bankruptcy Code, Title 11 U.S.C.A. §101 et seq. (the “ Bankruptcy Code ”) to terminate or treat the Operating Lease as terminated in the event (i) of the bankruptcy, reorganization or insolvency of the lessor thereunder, and (ii) the rejection of the Operating Lease by the lessor thereunder, as debtor in possession, or by a trustee for the lessor thereunder, pursuant to Section 365 of the Bankruptcy Code;

(g)        Leases and Rents . All leases, subleases, rental agreements, registration cards and agreements, if any, and other agreements whether or not in writing affecting the use, enjoyment or occupancy of the Land and/or the Improvements heretofore or hereafter entered into (including, without limitation, the Operating Lease) and all extensions, amendments and modifications thereto, whether before or after the filing by or against Grantor of any petition for relief under Creditor’s Rights Laws (defined below) (collectively, the “ Leases ”), and all right, title and interest of Grantor, its successors and assigns therein and thereunder, including, without limitation, any guaranties of the lessees’ obligations thereunder, cash or securities deposited thereunder to secure the performance by the lessees of their obligations thereunder and all rents, additional rents, revenues, issues, registration fees, if any, and profits (including all oil and gas or other mineral royalties and bonuses and all rents, revenues, bonus money, royalties, rights and

 

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benefits accruing to Grantor under all present and future oil, gas and mineral leases on any parts of the Land and the Improvements) from the Land and the Improvements, all income, rents, room rates, issues, profits, revenues, deposits, accounts and other benefits from the operation of the hotel on the Land and/or the Improvements, including, without limitation, all revenues and credit card receipts collected from guest rooms, restaurants, bars, mini-bars, meeting rooms, banquet rooms and recreational facilities and otherwise, all receivables, customer obligations, installment payment obligations and other obligations now existing or hereafter arising or created out of sale, lease, sublease, license, concession or other grant of the right of the possession, use or occupancy of all or any portion of the Land and/or Improvements, or personalty located thereon, or rendering of services by Grantor or any operator or manager of the hotel or the commercial space located in the Improvements or acquired from others including, without limitation, from the rental of any office space, retail space, commercial space, guest room or other space, halls, stores or offices, including any deposits securing reservations of such space, exhibit or sales space of every kind, license, lease, sublease and concession fees and rentals, health club membership fees, food and beverage wholesale and retail sales, service charges, vending machine sales and proceeds, if any, from business interruption or other loss of income insurance relating to the use, enjoyment or occupancy of the Land and/or the Improvements whether paid or accruing before or after the filing by or against Grantor of any petition for relief under Creditors Rights Laws (the “ Rents ”), and all proceeds from the sale or other disposition of the Leases and the right to receive and apply the Rents to the payment of the Obligations. As used herein, the term “ Creditors Rights Laws ” shall mean any existing or future Laws of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, conservatorship, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to its debts or debtors;

(h)        Insurance Proceeds . All insurance proceeds in respect of the Property under any insurance policies covering the Property whether required by this Security Instrument or the Loan Agreement or not, including, without limitation, the right to receive and apply the proceeds of any insurance, judgments, or settlements made in lieu thereof, for damage to the Property (collectively, the “ Insurance Proceeds ”);

(i)         Condemnation Awards . All condemnation awards, including interest thereon, which may heretofore and hereafter be made with respect to the Property by reason of any taking or condemnation, whether from the exercise of the right of eminent domain (including, but not limited to, any transfer made in lieu of or in anticipation of the exercise of the right), or for a change of grade, or for any other injury to or decrease in the value of the Property (collectively, the “ Awards ”);

(j)         Tax Certiorari . All refunds, rebates or credits in connection with reduction in real estate taxes and assessments charged against the Property as a result of tax certiorari or any applications or proceedings for reduction;

(k)        Rights . The right, in the name and on behalf of Grantor, to appear in and defend any action or proceeding brought with respect to the Property and to commence any action or proceeding to protect the interest of Grantee or Lenders in the Property;

(l)         Agreements . All other agreements, management agreements, operating agreements, franchise agreements, license agreements, contracts, certificates, chattel paper (whether tangible or electronic), instruments, franchises, permits, licenses, plans, specifications and other documents (including electronic documents), now or hereafter entered into, and all rights therein and thereto, respecting or pertaining to the use, occupation, construction, management or operation of any part of the Land and Improvements or any business or activity

 

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conducted on any part of the Land and Improvements including, but not limited to, the Management Agreement and Franchise Agreement and any and all agreements executed in connection therewith, and all right, title and interest of Grantor therein and thereunder, including, without limitation, the right, during the occurrence of any Event of Default, to receive and collect any sums payable to Grantor thereunder;

(m)       Intangibles . All trade names, trademarks, service marks, logos, copyrights, goodwill, books and records, tenant or guest lists, advertising materials, telephone exchange numbers identified in such materials, and all other general intangibles relating to or used in connection with the operation of the Land, the Improvements and the Personal Property;

(n)        Grantor Accounts . All right, title and interest of Grantor, if any, arising from the operation of the Land and the Improvements in and to all payments for goods or property sold, leased or occupied or for services rendered, whether or not yet earned by performance, and not evidenced by an instrument or chattel paper (hereinafter referred to as “ Accounts Receivable ”) including, without limiting the generality of the foregoing, (i) all accounts, contract rights, book debts, and notes arising from the operation of a hotel on the Land and the Improvements or arising from the sale, lease or exchange of goods or other property and/or the performance of services, (ii) Grantor’s rights to payment from any consumer credit/charge card organization or entities which sponsor and administer such cards as the American Express Card, the Visa Card and the MasterCard or other similar credit cards, (iii) Grantor’s rights in, to and under all purchase orders for goods, services or other property, (iv) Grantor’s rights to any goods, services or other property represented by any of the foregoing, (v) monies due to or to become due to Grantor under all contracts for the sale, lease or exchange of goods or other property and/or the performance of services including the right to payment of any interest or finance charges in respect thereto (whether or not yet earned by performance on the part of Grantor) and (vi) all collateral security and guaranties of any kind given by any Person with respect to any of the foregoing. Accounts Receivable shall include those now existing or hereafter created, substitutions therefor, proceeds (whether cash or non-cash, movable or immovable, tangible or intangible) received upon the sale, exchange, transfer, collection or other disposition or substitution thereof and any and all of the foregoing and proceeds therefrom;

(o)        Reserve Accounts . All Accounts, Account Collateral, reserves, working capital, escrows and deposit accounts required under the Loan Agreement, the other Loan Documents, the Operating Lease, any management agreement or any other agreement assigned or collaterally assigned to Grantee, or otherwise maintained by Grantor, and all cash, checks, drafts, certificates, securities, investment property, financial assets, instruments and other property held therein from time to time and all proceeds, products, distributions or dividends or substitutions thereon and thereof;

(p)        Causes of Action . All causes of action and claims (including, without limitation, all causes of action or claims arising in tort, by contract, by fraud or by concealment of material fact) against any Person for damages or injury to the Property or in connection with any transactions financed in whole or in part by the proceeds of the Loan (“ Cause of Action ”);

(q)        Security Interests . All right, title and interest of the lessor or lessee under the Operating Lease as secured party in the personal property and collateral pursuant to any security interest granted by lessees or by operation of Laws thereunder;

(r)         Miscellaneous . To the extent not set forth in this Section 1.1 , the Collateral defined in Section 1.3 below;

 

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(s)         Proceeds . All proceeds of any of the foregoing items set forth in subsections (a) through (r) above including, without limitation, Insurance Proceeds and Awards and Causes of Action which may at any time be converted into cash or liquidation claims; and

(t)         Other Rights . Any and all other rights of Grantor in and to the items set forth in subsections (a) through (s) above.

Section 1.2.       ASSIGNMENT OF RENTS . Grantor hereby absolutely and unconditionally assigns to Grantee and Trustee all of Grantor’s right, title and interest in and to all current and future Leases and Rents; it being intended by Grantor that this assignment constitutes a present, absolute assignment and not an assignment for additional security only. Nevertheless, subject to the terms of the Loan Agreement and Section 8.1(h) of this Security Instrument, Grantee grants to Grantor a revocable license to (i) collect, receive, use and enjoy the Rents and Grantor shall hold the Rents, or a portion thereof sufficient to discharge all current sums due on the Obligations, for use in the payment of such sums, and (ii) enforce the terms of the Leases.

Section 1.3.       SECURITY AGREEMENT . This Security Instrument is both a real property mortgage and a “security agreement” within the meaning of the Uniform Commercial Code. The Property includes both real and personal property and all other rights and interests, whether tangible or intangible in nature, of Grantor in the Property. By executing and delivering this Security Instrument, Grantor hereby grants to Grantee and Trustee, as security for the Obligations, a security interest in the following properties, assets and rights of Grantor, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof (all of the same being hereinafter called the “ Collateral ”): all personal and fixture property of every kind and nature including all goods (including inventory, equipment and any accessions thereto), instruments (including promissory notes), documents (including, if applicable, electronic documents), accounts, chattel paper (whether tangible or electronic), deposit accounts, letter-of-credit rights (whether or not the letter of credit is evidenced by a writing), commercial tort claims, securities and all other investment property, supporting obligations, any other contract rights or rights to the payment of money, insurance claims and proceeds, and all general intangibles (including all payment intangibles) (as each of the foregoing terms is defined in the Uniform Commercial Code) to the full extent that the Collateral may be subject to the Uniform Commercial Code.

Section 1.4.       FIXTURE FILING . Without in any manner limiting the generality of any of the other provisions of this Security Instrument: (a) some portions of the goods described or to which reference is made herein are or are to become fixtures on the Land described or to which reference is made herein or on Exhibit A attached to this Security Instrument; (b) this Security Instrument is to be filed of record in the real estate records as a financing statement and shall constitute a “fixture filing” for purposes of the Uniform Commercial Code; and (c) Owner is the record owner of the real estate or interests in the real estate constituting the Property hereunder, subject to the Permitted Liens. Information concerning the security interest herein granted may be obtained at the addresses set forth on the first page hereof. This Security Instrument shall be effective as a financing statement filed as a fixture filing with respect to all fixtures included within the Property and is to be filed for record in the real property or other applicable records in the office of the Recorder where the Property (including said fixtures) is situated. This Security Instrument shall also be effective as a financing statement covering as-extracted minerals or the like (including oil and gas) and accounts subject to the applicable provisions of the Uniform Commercial Code of the State in which the Property is located. The address of the Debtor (Grantor) is set forth on the first page hereof and the address of the Secured Party (Grantee) is set forth below. In that regard, the following information is provided:

 

 

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Name of First Debtor:

FelCor/JPM Hospitality (SPE), L.L.C.

 

Type of Organization:

Limited liability company

 

State:

Delaware

 

Organizational ID Number:

_________________

Name of Secured Party:

 

 

Address of Secured Party:

 

 

Name of Second Debtor:

JPMorgan Chase Bank, N.A., as Administrative Agent

 

270 Park Avenue, New York, New York 10017, Attention: Joseph Geoghan

 

DJONT/JPM Hospitality Leasing (SPE), L.L.C.

 

Type of Organization:

Limited liability company

 

State:

Delaware

 

Organizational ID Number:

_________________

 

 

Name of Secured Party:

JPMorgan Chase Bank, N.A., as Administrative Agent

Address of Secured Party:

270 Park Avenue, New York, New York 10017, Attention: Joseph Geoghan

 

Section 1.5.       CONDITIONS TO GRANT . TO HAVE AND TO HOLD the above granted and described Property unto Trustee for and on behalf of Grantee and to the use and benefit of Grantee and Lenders and their successors and assigns, forever; IN TRUST, WITH POWER OF SALE AND RIGHT OF ENTRY, to secure the Obligations; PROVIDED, HOWEVER, these presents are upon the express condition that, upon final payment and performance of the Obligations or the full and final release of this Security Instrument, these presents and the estate hereby granted shall cease, terminate and be void.

Section 1.6.       GRANTS TO GRANTEE . This Security Instrument and the grants, assignments and transfers made to Grantee in this Article 1 shall inure to Grantee solely in its capacity as Lenders’ administrative agent under the Loan Agreement.

Section 1.7.       HOMESTEAD . None of the Property forms any part of any property owned, used or claimed by Grantor as a residence or business homestead. None of the Property is exempt from forced sale under the Laws of the State of New York and, to the extent applicable, the state in which Land and Improvements are located. Grantor hereby disclaims and renounces each and every claim to the Property as a homestead.

ARTICLE 2. OBLIGATIONS SECURED

Section 2.1.       OBLIGATIONS . This Security Instrument and the grants, assignments and transfers made in Article 1 are given for the purpose of securing the Obligations, including any advances made by Grantee or any Lender for the construction, improvement, operation, repair, maintenance,

 

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preservation or operation of the Property and the security for payment of the Obligations, whether such future advances are obligatory or are made at Grantee’s or such Lender’s option, for any purpose.

Section 2.2.       PAYMENT OF OBLIGATIONS . Grantor will pay and perform the Obligations at the time and in the manner provided in the Loan Agreement and the other Loan Documents, subject to and as required by the terms and provisions thereof including, without limitation, any non-recourse provisions expressly set forth therein.

Section 2.3.       INCORPORATION BY REFERENCE . All the covenants, conditions and agreements contained in (a) the Loan Agreement (including, without limitation, the exculpatory provisions set forth in Section 12.09 thereof), (b) the Notes and (c) all and any of the other Loan Documents, are hereby made a part of this Security Instrument to the same extent and with the same force as if fully set forth herein.

ARTICLE 3. PROPERTY REPRESENTATIONS AND COVENANTS

Grantor represents, warrants, covenants and agrees as follows:

Section 3.1.       INSURANCE . Grantor shall obtain and maintain, or cause to be obtained and maintained, in full force and effect at all times insurance with respect to Grantor and the Property as required pursuant to the Loan Agreement.

Section 3.2.       TAXES AND OTHER CHARGES . Grantor shall pay all real estate and personal property taxes, assessments, water rates or sewer rents (collectively, “ Taxes ”), ground rents, maintenance charges, impositions (other than Taxes), and any Other Charges now or hereafter levied or assessed or imposed against the Property or any part thereof in accordance with the Loan Agreement.

Section 3.3.       LEASES . Grantor shall not (and shall not permit any other applicable Person to) enter into or modify any Leases for all or any portion of the Property except in accordance with the provisions of the Loan Agreement.

Section 3.4.       WARRANTY OF TITLE . Owner has good and marketable title to the Property, subject only to the Permitted Liens, and has the right to mortgage, grant, bargain, sell, pledge, assign, warrant, transfer and convey the same. Subject to the Permitted Liens, Grantor shall forever warrant, defend and preserve the title and the validity and priority of the Lien of this Security Instrument and shall forever warrant and forever defend the same to Grantee, Lenders and/or Trustee, as applicable, against the claims of all Persons whatsoever. This Security Instrument, when properly recorded in the appropriate records, together with any Uniform Commercial Code financing statements required to be filed in connection therewith, will create (a) a valid, perfected first priority Lien on the Property, subject only to Permitted Liens and the Liens created by the Loan Documents and (b) perfected security interests in and to, and perfected collateral assignments of, all personalty (including the Leases), all in accordance with the terms thereof, in each case subject only to any applicable Permitted Liens.

 

Section 3.5.

PAYMENT FOR LABOR AND MATERIALS .

(a)       Subject to Section 3.5(b) below, Grantor will promptly pay (or cause to be paid) when due all bills and costs for labor, materials, and specifically fabricated materials incurred in connection with the Property (each, a “ Work Charge ”) and never permit to exist beyond the due date thereof in respect of the Property or any part thereof any Lien or security interest other than the Permitted Liens, even though inferior to the Liens and the security interests hereof, and in any event never permit to be created or exist in respect of the Property or any part thereof any other or

 

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additional Lien or security interest other than the Liens or security interests hereof except for the Permitted Liens. Grantor represents there are no claims for payment for work, labor or materials affecting the Property which are or may become a Lien prior to, or of equal priority with, the Liens created by the Loan Documents.

(b)       After prior written notice to Grantee, Grantor, at its own expense, may contest by appropriate legal proceeding, promptly initiated and conducted in good faith and with due diligence, the validity of any Work Charge, the applicability of any Work Charge to Grantor or to the Property or any alleged non-payment of any Work Charge, provided that (i) no Event of Default has occurred and is continuing; (ii) such proceeding shall be permitted under and be conducted in accordance with the provisions of any instrument to which Grantor is subject and shall not constitute a default thereunder and such proceeding shall be conducted in accordance with all applicable Legal Requirements; (iii) neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, terminated, cancelled or lost during the duration of such legal proceeding; (iv) Grantor shall promptly upon final determination thereof pay (or cause to be paid) any such Work Charge determined to be valid, applicable and unpaid; (v) such proceeding shall suspend the collection of such contested Work Charge from the Property or Grantor shall have paid the same (or shall have caused the same to be paid) under protest; and (vi) Grantor shall furnish (or cause to be furnished) such security as may be required in the proceeding by applicable Laws or Legal Requirements, or as may be reasonably requested by Grantee, to insure payment of such Work Charge, together with all interest and penalties payable in connection therewith. Grantee may apply any such security or part thereof, as necessary to pay for such Work Charge at any time when, in the sole but reasonable judgment of Grantee, the validity, applicability and non-payment of such Work Charge is finally established or the Property (or any part thereof or interest therein) shall be in danger of being sold, forfeited, terminated, cancelled or lost during or as a result of such legal proceeding or Work Charge.

Section 3.6.       MAINTENANCE AND USE OF PROPERTY, WASTE, USE . Grantor shall cause the Property to be maintained in a good and safe condition and repair in accordance with the terms of the Loan Agreement. Subject to the terms of the Loan Agreement, the Improvements and the Personal Property shall not be removed, demolished or materially altered or expanded (except for normal replacement of the Personal Property) without the consent of Grantee. Subject to the terms of the Loan Agreement, Grantor shall promptly repair, replace or rebuild any part of the Property which may be destroyed by any casualty, or become damaged, worn or dilapidated or which may be affected by any condemnation and shall complete and pay for any structure at any time in the process of construction or repair on the Land. Subject to the terms of the Loan Agreement, Grantor shall not initiate, join in, acquiesce in, or consent to any change in any private restrictive covenant, zoning law or other public or private restriction, limiting or defining the uses which may be made of the Property or any part thereof. Subject to the provisions of the Loan Agreement with respect thereto, if under applicable zoning provisions the use of all or any portion of the Property is or shall become a nonconforming use, Grantor will not cause or permit the nonconforming use to be discontinued or the nonconforming Improvement to be abandoned without the express written consent of Grantee. Grantor shall not commit or suffer any waste of the Property or make any change in the use of the Property which will in any way materially increase the rise of fire or other hazard arising out of the operation of the Property, or take any action that might invalidate or give cause for cancellation of any policy, or do or permit to be done thereon anything that may in any way impair the value of the Property or the security of this Security Instrument. Grantor will not, without the prior written consent of Lender, permit any drilling or exploration for or extraction, removal, or production of any minerals from the surface or the subsurface of the Land, regardless of the depth thereof or the method of mining or extraction thereof. The Property shall be used only for a hotel and any ancillary uses relating thereto, and for no other uses without the prior written consent of Grantee.

 

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ARTICLE 4. FURTHER ASSURANCES

Section 4.1.       COMPLIANCE WITH LOAN AGREEMENT . Grantor shall comply with all covenants set forth in the Loan Agreement relating to acts or other further assurances to be made on the part of Grantor in order to protect and perfect the Lien or security interest hereof upon, and in the interest of Trustee, Grantee and Lenders in, the Property.

Section 4.2.       AUTHORIZATION TO FILE FINANCING STATEMENTS; POWER OF ATTORNEY . Grantor hereby irrevocably authorizes the Grantee at any time and from time to time to file in any filing office in any Uniform Commercial Code jurisdiction any initial financing statements and amendments thereto and continuations thereof that (a) indicate the Collateral (i) as all assets of the Grantor or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the Uniform Commercial Code of the state of ________ or such jurisdiction, or (ii) as being of an equal or lesser scope or with greater detail, and (b) provide any other information required by part 5 of Article 9 of the Uniform Commercial Code of the state of ___________ or such other jurisdiction for the sufficiency or filing office acceptance of any financing statement or amendment, including (i) whether the Grantor is an organization, the type of organization and any organizational identification number issued to the Grantor and, (ii) in the case of a financing statement filed as a fixture filing or indicating Collateral as as-extracted collateral or timber to be cut, a sufficient description of real property to which the Collateral relates. The Grantor agrees to furnish any such information to the Grantee promptly upon the Grantee’s request. Grantor also ratifies its authorization for Grantee to have filed any like initial financing statements, amendments thereto and continuations thereof, if filed prior to the date of this Security Instrument. Grantor hereby irrevocably constitutes and appoints Grantee and any officer or agent of Grantee, with full power of substitution, as its true and lawful attorneys-in-fact with full irrevocable power and authority in the place and stead of Grantor or in Grantor’s own name to execute in Grantor’s name any such documents and otherwise to carry out the purposes of this Section 4.2 ,to the extent that Grantor’s authorization above is not sufficient and Grantor fails or refuses to promptly execute such documents. To the extent permitted by Laws, Grantor hereby ratifies all acts said attorneys-in-fact have lawfully done in the past or shall lawfully do or cause to be done in the future by virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable until final payment and performance of the Obligations or the full and final release of this Security Instrument.

Section 4.3.       RECORDING OF SECURITY INSTRUMENT ETC . Grantor, upon execution and delivery of this Security Instrument and thereafter, from time to time, will cause this Security Instrument and any of the other Loan Documents creating a Lien or evidencing the Lien hereof upon the Property and each instrument of further assurance to be filed, registered or recorded in such manner and in such places as may be required by any present or future Laws in order to publish notice of and fully to protect and perfect the Lien hereof upon, and the interest of Grantee and Trustee in, the Property. Grantor will pay all taxes, filing, registration or recording fees, and all expenses incident to the preparation, execution, acknowledgment and/or recording of this Security Instrument and the other Loan Documents, including any instrument of further assurance and any modification or amendment of the foregoing documents, and all federal state, county and municipal taxes, duties, imposts, assessments and charges arising out of or in connection with the execution and delivery of this Security Instrument and the other Loan Documents, including any instrument of further assurance and any modification or amendment of the foregoing documents, except where prohibited by Laws so to do.

ARTICLE 5. DUE ON SALE/ENCUMBRANCE

Section 5.1.       NO SALE/ENCUMBRANCE . Except as and to the extent permitted by the Loan Agreement, Grantor shall not cause or permit a sale, conveyance, mortgage, deed, grant, bargain,

 

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encumbrance, pledge, assignment, or grant of any options with respect to, or any other transfer or disposition (directly or indirectly, voluntarily or involuntarily, by operation of Laws or otherwise, and whether or not for consideration or of record) of a legal or beneficial interest in the Property or any Restricted Party or any part thereof or interest therein.

ARTICLE 6. PREPAYMENT; RELEASE OF PROPERTY

Section 6.1.       PREPAYMENT . The Obligations may not be prepaid in whole or in part except in strict accordance with the express terms and conditions of the Notes and the Loan Agreement.

Section 6.2.       RELEASE OF PROPERTY . Grantor shall not be entitled to a release of any portion of the Property from the Lien of this Security Instrument except in accordance with the express terms and conditions of the Loan Agreement.

ARTICLE 7. DEFAULT

Section 7.1.       EVENT OF DEFAULT . The term “ Event of Default ” as used in this Security Instrument shall have the meaning assigned to such term in the Loan Agreement.

ARTICLE 8. RIGHTS AND REMEDIES UPON DEFAULT

Section 8.1.       REMEDIES . Upon the occurrence and during the continuance of any Event of Default, Grantor agrees that Grantee may or acting by or through Trustee (or its successors and substitutes) may take such action, without notice or demand, as it deems advisable to protect and enforce its rights against Grantor, and in and to the Property, including, but not limited to, the following actions, each of which may be pursued alternatively, concurrently or otherwise, at such time and in such order as Grantee may determine, in its sole discretion, without impairing or otherwise affecting the other rights and remedies of Grantee:

(a)       Grantee may, or may direct Trustee (or its successors and substitutes) to, declare the Obligations to be immediately due and payable. Notwithstanding the foregoing, if and to the extent the Loan Agreement provides for automatic acceleration of the Loan upon the occurrence of certain Events of Default, such provisions with respect to automatic acceleration shall govern and control, without any further notice, demand or other action by Lender, Grantee, Trustee or any other Person.

(b)       With respect to foreclosure, judicial or otherwise, with respect to any of the Property:

(i)        Grantee may, or may direct Trustee (or its successors and substitutes) to, institute proceedings, judicial or otherwise, for the complete foreclosure of this Security Instrument under any applicable provision of Laws, in which case the Property or any interest therein may be sold for cash or upon credit in one or more parcels or in several interests or portions and in any order or manner.

(ii)       Grantee may, or may direct Trustee (or its successors and substitutes) to, with or without entry, to the extent permitted and pursuant to the procedures provided by applicable Laws, institute proceedings for the partial foreclosure of this Security Instrument, conducting the sale as herein provided, and without declaring the whole Obligations due, and provided that if sale is made because of default as hereinabove mentioned, such sale may be made subject to the unmatured part of the Notes and/or the

 

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Obligations secured hereby, and it is agreed that such sale, if so made, shall not in any manner affect any other Obligations secured hereby, but as to such other Obligations this Security Instrument and the Liens created hereby shall remain in full force and effect just as though no sale had been made under the provisions of this Section 8.1(b)(ii) .It is further agreed that several sales may be made hereunder without exhausting the right of sale for any remaining Obligations secured hereby, it being the purpose to provide for a foreclosure and sale of the Property for any matured portion of any of the Obligations secured hereby or other


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