This Lease Assignment Agreement involves
Title: LEASEHOLD AND FEE DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE
FILING WITH ASSIGNMENT OF RENTS
Governing Law: New York Date: 3/8/2005
Prepared By and Upon
Recordation Return To:
The Bank of New York
101 Barclay Street - 21W
New York, New York 10286
Attention: Corporate Trust Administration
LEASEHOLD AND FEE DEED OF
TRUST, SECURITY AGREEMENT AND
FIXTURE FILING WITH ASSIGNMENT OF RENTS
VIRGIN RIVER CASINO CORPORATION,
CASABLANCA RESORTS, LLC, and
OASIS INTERVALOWNERSHIP, LLC ,
NEVADA TITLE COMPANY,
THE BANK OF NEW YORK,
Dated as of December 16, 2004
LEASEHOLD AND FEE DEED OF TRUST, SECURITY AGREEMENT AND
FIXTURE FILING WITH ASSIGNMENT OF RENTS
THIS LEASEHOLD AND FEE DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING WITH ASSIGNMENT OF RENTS (the “ Deed of Trust ”) is made as of the [ ]th day of December, 2004 by and among Virgin River Casino Corporation, a Nevada corporation (“Virgin River”), RBG, LLC, a Nevada limited-liability company (“RBG”), CasaBlanca Resorts, LLC, a Nevada limited-liability company (“ Resorts ”), and Oasis Interval Ownership, LLC, a Nevada limited-liability company (“ Oasis Interval ” and, collectively with RBG and Virgin River, the “ Trustors ,” which term includes any successors under this Deed of Trust), each of whose principal place of business is located at the location set forth opposite its name on Schedule 4.2(ii) hereto, in favor of Nevada Title Company (“ Trustee ”), for the benefit of The Bank of New York, a New York banking corporation, as Collateral Agent (“ Beneficiary ”), whose principal place of business is located at 101 Barclay Street - 21W, New York, New York 10286, in its capacity as trustee under the Indenture for the ratable benefit of the Holders. Unless the context otherwise requires, all capitalized terms used and not otherwise defined herein shall have the respective meanings set forth in the “Indenture” (as hereinafter defined). Attached hereto as Schedule 1.1 is a list of certain definitions for which reference should be made to the Indenture.
THE MAXIMUM AMOUNT OF PRINCIPAL TO BE SECURED HEREBY IS $120,000,000 OF THE “SECURED OBLIGATIONS” (as hereinafter defined); PROVIDED THAT IN NO EVENT SHALL THE AGGREGATE PRINCIPAL BALANCE SECURED HEREBY, EXCLUSIVE OF INTEREST, FEES AND EXPENSES, FOR THE BENEFIT OF THE HOLDERS EXCEED $120,000,000.
A. Pursuant to that certain Indenture dated as of December [ ], 2004 (as supplemented and otherwise amended from time to time, the “ Indenture ”), by and among Virgin River, RBG, and B & BB, Inc., a Nevada corporation (“ B & BB ” and, collectively, the “ Issuers ”), the Guarantors (as defined therein), and Beneficiary, as trustee thereunder (in such capacity, the “ Indenture Trustee ”), Issuers shall issue [ ]% Senior Secured Notes due 2011 in an aggregate principal amount of up to the maximum amount of $120,000,000 (collectively, the “ Notes ”).
B. Pursuant to a guarantee included in Article XI of the Indenture and endorsed on the Notes (as such guarantee may be amended from time to time, the “ Guarantee ”), the Guarantors (including Resorts and Oasis) have Guaranteed the Obligations of Issuers under the Notes, the Indenture and the other “Indenture Documents” (as hereinafter defined) to which Issuers are a party.
C. Pursuant to the Indenture, the Notes and the Guarantees are required to be secured by, among other things, this Deed of Trust.
D. The parties acknowledge that certain provisions of this Deed of Trust may be subject to the laws, rules and regulations of the Gaming Authorities (“ Applicable Gaming Laws ”).
IN CONSIDERATION OF THE FOREGOING PREMISES AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, EACH TRUSTOR DOES HEREBY IRREVOCABLY GRANT, BARGAIN, SELL, TRANSFER, CONVEY AND ASSIGN to Trustee, its successors and assigns, IN TRUST, WITH POWER OF SALE, for the benefit and security of Beneficiary, as agent and representative for the equal and ratable benefit of the Holders, the following (but excluding in each and every case all Excluded Assets (as hereinafter defined)), whether now owned or hereafter acquired:
GRANTING CLAUSE ONE
All of the right, title and interest of each Trustor in the real property, located in the County of Clark, State of Nevada, described in Exhibit A attached hereto and by this reference incorporated herein (the “ Owned Land ”), together with all and singular the tenements, hereditament, rights, reversions, remainders, development rights, privileges, benefits, easements (in gross or appurtenant), rights-of-way, gores or strips of land, streets, ways, alleys, passages, sewer rights, water courses, water rights and powers, and all appurtenances whatsoever and claims or demands of each Trustor at law or in equity, in any way belonging, benefitting, relating or appertaining to the Owned Land, the airspace over the Owned Land, the “Improvements” (as hereinafter defined), or both, or which hereinafter shall in any way belong, relate or be appurtenant thereto.
To the fullest extent allowed by “Applicable Law” (as hereinafter defined) and the Ground Lease (as hereinafter defined), all of the right, title and interest of each Trustor in the leasehold estate created by those certain lease agreements described in Exhibit B-1 attached hereto and by this reference incorporated herein (“ Ground Lease ”), by and between any Trustor, as lessee, and that certain party referenced on said Exhibit, as lessor (“ Lessor ”), as the same may be amended, restated, renewed or extended from time to time, in that certain real property, located in the County of Clark, State of Nevada and County, described in Exhibit B-2 (the “ Leased Land ”), together with all and singular the tenements, hereditament, rights,
reversions, remainders, development rights, privileges, benefits, easements (in gross or appurtenant), rights-of-way, gores or strips of land, streets, ways, alleys, passages, sewer rights, water courses, water rights and powers, and all appurtenances whatsoever and claims or demands of the Trustors at law or in equity, in any way belonging, benefitting, relating or appertaining to the Leased Land, the airspace over the Leased Land, the “Improvements” (as hereinafter defined), or both, or which hereinafter shall in any way belong, relate or be appurtenant thereto.
The Owned Land and the Leased Land shall collectively be referred to as the “ Land .”
GRANTING CLAUSE TWO
TOGETHER WITH, any and all structures, buildings, facilities and improvements of every nature whatsoever now or hereafter erected on the Land, including, but not limited to, the “Fixtures” (as hereinafter defined) (collectively, the “ Improvements ”) (the Land and Improvements are referred to collectively as the “ Property ”).
For purposes of this Deed of Trust, Fixtures shall be deemed to include, to the full extent allowed by law, fixtures and all other equipment and machinery now or at any time hereafter owned by any Trustor and located or included in or on or appurtenant to the Property and used in connection therewith and which are or become so related to the real property encumbered hereby that an interest arises in them under real estate law which may include, but is not limited to: all docks, piers, barges, vessels, machinery, equipment (including, without limitation, pipes, furnaces, conveyors, drums, fire sprinklers and alarm systems, and air conditioning, heating, refrigerating, electronic monitoring, stoves, ovens, ranges, dishwashers, disposals, food storage, food processing (including restaurant fixtures), trash and garbage removal and maintenance equipment), office equipment, all built-in tables, chairs, mantels, screens, plumbing, bathtubs, sinks, basins, faucets, laundry equipment, planters, desks, sofas, shelves, lockers and cabinets, laundry equipment, all safes, furnishings, appliances (including, without limitation, food warming and holding equipment, iceboxes, refrigerators, fans, heaters, water heaters and incinerators), rugs, carpets and other floor coverings, draperies and drapery rods and brackets, awnings, window shades, venetian blinds, curtains, lamps, chandeliers and other lighting fixtures.
GRANTING CLAUSE THREE
TOGETHER WITH, all rents, income, security or similar deposits, including without limitation, receipts, issues, royalties, earnings, products or proceeds, profits, maintenance, license and concession fees and other revenues to which any Trustor may now or hereafter be entitled, including, without limitation, all rights to payment for hotel room occupancy by hotel guests, which includes any payment or monies received or to be received in whole or in part, whether actual or deemed to be, for the sale of services or products in connection therewith and/or in connection with such occupancy, advance registration fees by hotel guests, tour or junket proceeds and deposits for conventions and/or party reservations (collectively the “ Rents ”), subject to the revocable license hereinafter given to the Trustors to collect and apply such Rents.
GRANTING CLAUSE FOUR
[Leases, Including Deposits and Advance Rentals]
TOGETHER WITH, (a) all estate, right, title and interest of each Trustor in, to and under any and all leases, subleases, lettings, licenses, concessions, operating agreements, management agreement, franchise agreements and all other agreements affecting or covering the Property or any portion thereof now or hereafter existing or entered into, together with all amendments, extensions and renewals of any of the foregoing, (b) all right, title, claim, estate and interest of each Trustor thereunder, including, without limitation, all claims of the lessor thereunder, letters of credit, guarantees or security deposits, advance rentals, and any and all deposits or payments of similar nature and (c) the right to enforce against any tenants thereunder and otherwise any and all remedies under any of the foregoing, including each Trustor’s right to evict from possession any tenant thereunder or to retain, apply, use, draw upon, pursue, enforce or realize upon any guaranty thereof; to terminate, modify, or amend any such agreement; to obtain possession of, use, or occupy, any of the real or personal property subject to any such agreement; and to enforce or exercise, whether at law or in equity or by any other means, all provisions of any such agreement and all obligations of the tenants thereunder based upon (i) any breach by such tenant thereunder (including any claim that any Trustor may have by reason of a termination, rejection, or disaffirmance of such agreement pursuant to any Bankruptcy Law), and (ii) the use and occupancy of the premises demised, whether or not pursuant to the applicable agreement (including any claim for use and occupancy arising under landlord-tenant law of the State of Nevada or any Bankruptcy Law).
GRANTING CLAUSE FIVE
[Options to Purchase, etc.]
TOGETHER WITH, all right, title and interest of each Trustor in and to all options and other rights to purchase or lease the Property or any portion thereof or interest therein, if any, and any greater estate in the Property owned or hereafter acquired by any Trustor.
GRANTING CLAUSE SIX
TOGETHER WITH, all right, title and interest of each Trustor in and to all Tangible Property and Intangible Property (except, with respect to Gaming Licenses, as prohibited by Applicable Gaming Laws) now or at any time hereafter located on or appurtenant to the Property and used or useful in connection with the ownership, management or operation of the Property, including, without limitation, the Personalty.
GRANTING CLAUSE SEVEN
[Condemnation Awards, etc.)
TOGETHER WITH, all the estate, interest, right, title, other claim or demand, which any and each Trustor now has or may hereafter acquire in any and all awards, payments or other consideration made for the taking by eminent domain, or by any proceeding or purchase in lieu thereof, of the whole or any part of the Property, including, without limitation, any awards, payments or other consideration resulting from a change of grade of streets and for severance damages.
GRANTING CLAUSE EIGHT
TOGETHER WITH, all the estate, interest, right, title and other claim or demand which any and each Trustor now has or may hereafter acquire with respect to the proceeds of insurance in effect with respect to all or any part of the Property, together with all interest thereon and the right to collect and receive the same.
GRANTING CLAUSE NINE
[Claims for Damages, etc.]
TOGETHER WITH, all the estate, interest, right, title and other claim or demand which any and each Trustor now has or may hereafter acquire against anyone with respect to any damage to all or any part of the Property, including, without limitation, damage arising from any defect in or with respect to the design or construction of all or any part of the Improvements and damage resulting therefrom.
GRANTING CLAUSE TEN
[Deposits, Advance Payments and Refunds of Insurance, Utilities, etc.]
TOGETHER WITH, all deposits or other security or advance payments including rental payments made by or on behalf of any and each Trustor to others, and all refunds made by others to any and each Trustor, with respect to (i) insurance policies relating to all or any part of the Property, (ii) utility service for all or any part of the Property, (iii) cleaning, maintenance, repair, or similar services for all or any part of the Property, (iv) refuse removal or sewer service for all or any part of the Property, (v) rental of equipment, if any, used in the operation, maintenance or repair by or on behalf of any and each Trustor of all or any part of the Property, (vi) parking or similar services or rights afforded to all or any part of the Property and (vii) the Ground Lease.
GRANTING CLAUSE ELEVEN
[Water Rights, etc.]
TOGETHER WITH, all water rights, water stock, water permits and other rights to the use of water that are now or that may be hereinafter used in connection with the said Property, or any part thereof, or any improvements or appurtenances thereto.
GRANTING CLAUSE TWELVE
TOGETHER WITH, all oil and gas and other mineral rights, if any, in or pertaining to the Land and all royalty, leasehold and other rights of each Trustor pertaining thereto.
GRANTING CLAUSE THIRTEEN
TOGETHER WITH, all extensions, improvements, betterments, renewals, substitutes for and replacements of, and all additions, accessions, and appurtenances to, any of the foregoing that any and each Trustor may subsequently acquire, and all conversions of any of the foregoing; each Trustor agrees that all property hereafter acquired by such Trustor and required by the Indenture, this Deed of Trust or any other Indenture Document to be subject to the Lien and/or security interests created by this Deed of Trust shall forthwith upon the acquisition thereof by such Trustor be subject to the Lien and security interests of this Deed of Trust as if such property were now owned by such Trustor and were specifically described in this Deed of Trust and granted hereby or pursuant hereto, and the Beneficiary is hereby authorized to receive any and all such property as and for additional security for the Secured Obligations.
The entire estate, property and interest hereby conveyed to Trustee (other than Excluded Assets) may hereafter be referred to as the “ Trust Estate .”
FOR THE PURPOSE OF SECURING :
A. the due and punctual payment and performance of any and all present and future liabilities and Obligations (including, without limitation, Guarantee Obligations) of each of the Trustors of every type or description to Beneficiary, arising under or in connection with the Notes, the Guarantees and the other Indenture Documents, whether for principal of or premium, if any, or Interest (or Liquidated Damages, if any) on the Notes, expenses, indemnities or other amounts (including attorneys’ fees and expenses); and
B. the due and punctual payment and performance of any and all present and future obligations and liabilities of each of the Trustors of every type or description to Beneficiary, arising under or in connection with this Deed of Trust or any other Indenture Document, including for reimbursement of amounts permitted to be advanced or expended by Beneficiary (i) to satisfy amounts required to be paid by the Trustors under this Deed of Trust or any other Indenture Documents, together with interest thereon to the extent provided, or (ii) to protect the Trust Estate, together with interest thereon to the extent provided; and
C. all future advances pursuant to the Indenture or any other of the Indenture Documents, as future advances is defined by Nevada Revised Statutes (“ NRS ”) Section 106.320; this Deed of Trust is intended to secure future advances; the maximum amount of principal to be secured is $120,000,000; this instrument is to be governed by the provisions of NRS Section 106.300 et.seq. ; in each case whether due or not due, direct or indirect, joint and/or several, absolute or contingent, voluntary or involuntary, liquidated or unliquidated, determined or undetermined, now or hereafter existing, renewed or restructured, whether or not from time to time
decreased or extinguished and later increased, created or incurred, whether or not arising after the commencement of a proceeding under the Bankruptcy Code (including post-petition interest) and whether or not allowed or allowable as a claim in any such proceeding (all liabilities and other Obligations described herein are collectively referred to herein as the “ Secured Obligations ”).
TO PROTECT THE SECURITY OF THIS DEED OF TRUST, EACH OF THE TRUSTORS HEREBY COVENANTS AND AGREES AS FOLLOWS:
DEFINITIONS AND RELATED MATTERS
Section 1.1. Certain Defined Terms . As used herein, the following terms shall have the following meanings:
“ Accounts ” has the meaning set forth in Section 9.1.2.
“ Applicable Gaming Laws ” has the meaning set forth in the Recitals.
“ Applicable Law ” has the meaning set forth in Section 3.7.
“ Applicable UCC ” means the Uniform Commercial Code (as amended from time to time) as adopted by the State of Nevada.
“ B&BB ” has the meaning set forth in the Recitals.
“ Beneficiary ” has the meaning set forth in the Preamble.
“ Books and Records ” has the meaning set forth in Section 9.1.17.
“ CERCLA ” has the meaning set forth in Section 11.1.2.
“ Chattel Paper ” has the meaning set forth in Section 9.1.1.
“ Collateral Account ” has the meaning set forth in Section 9.1.11.
“ Collateral Agreements ” means this Deed of Trust and all other instruments, documents and agreements delivered by any of the parties to the Indenture Documents pursuant to this Deed of Trust or any other Indenture Document to grant or perfect a Lien in favor of the Beneficiary on any real, personal or mixed property of such party as security for the Secured Obligations.
“ Contracts ” has the meaning set forth in Section 9.1.16.
“ Deed of Trust ” has the meaning set forth in the Preamble.
“ Defaulted Interest ” has the meaning set forth in Section 4.8.1.
“ Distributions ” has the meaning set forth in Section 9.1.13.
“ Documents ” has the meaning set forth in Section 9.1.9.
“ Ella Kay Land ” means the unimproved real property consisting of approximately 34.4 acres, which is owned in fee by RBG and is located southwest of the CasaBlanca Golf Course.
“ Environmental Damages ” means all claims, judgments, damages, losses, penalties, fines, liabilities (including strict liability), encumbrances, Liens, costs and expenses of investigation and defense of any claim, whether or not such is ultimately defeated, and of any settlement or judgment, of whatever kind or nature, contingent or otherwise, matured or unmatured, foreseeable or unforeseeable, including, without limitation, reasonable attorneys’ fees, charges and disbursements (including, without limitation, costs of appeal), and consultants’ fees, any of which are actually incurred at any time as a result of the existence or alleged existence of Hazardous Materials upon, about or beneath the Property or migrating or threatening to migrate to or from the Property, or the existence or alleged existence of a violation of Environmental Requirements pertaining to the Property regardless of whether the existence of such Hazardous Materials or the violation of Environmental Requirements arose prior to the present ownership or operation of the Property, and including, without limitation:
(i) damages for personal injury, or injury to property or natural resources occurring upon or off of the Property, foreseeable or unforeseeable, including, without limitation, lost profits, consequential damages, the cost of demolition and rebuilding of any improvements on real property, interest and penalties including, but not limited to, claims brought by or on behalf of employees of Trustor, with respect to which Trustor waives, for the benefit of Beneficiary only, any immunity to which it may be entitled under any industrial or workers’ compensation laws;
(ii) reasonable fees actually incurred for the services of attorneys, consultants, contractors, experts, laboratories and all other costs incurred in connection with the investigation or remediation of such Hazardous Materials or violation of Environmental Requirements including, but not limited to, the preparation of any feasibility studies or reports or the performance of any cleanup, remedial, removal, abatement, containment, closure, restoration or monitoring work required by any federal, state or local governmental agency or political subdivision, or reasonably necessary to make full economic use of the Property or any other property
or otherwise expended in connection with such conditions, and including, without limitation, any reasonable attorneys’ fees, charges and disbursements (including, without limitation, costs of appeal) actually incurred in enforcing this Deed of Trust or collecting any sums due hereunder; and
(iii) liability to any Person to indemnify such Person for actual costs incurred in good faith in connection with the items referenced in subparagraphs (i) and (ii) hereof.
“ Environmental Requirements ” means the common law and all applicable present and future statutes, regulations, rules, ordinances, codes, licenses, permits, orders, approvals, plans, authorizations, concessions, franchises and similar items, of Governmental Authority or applicable judicial and administrative and regulatory decrees, injunctions, judgments and orders relating to the environment, including, without limitation:
(i) all requirements, including, but not limited to, those relating or pertaining to (A) reporting, licensing, permitting, investigation and remediation of emissions, discharges, releases or threatened releases of Hazardous Materials or other chemical substances, pollutants, contaminants or hazardous or toxic substances, materials or wastes whether solid, liquid or gaseous in nature, into the environment (including, without limitation, ambient air, surface water, groundwater or land surface or subsurface strata), (B) the manufacture, processing, distribution, use, generation, treatment, storage, disposal, transport or handling of chemical substances, materials or wastes, whether solid, liquid or gaseous in nature, including without limitation, Hazardous Materials or (C) underground storage tanks and related piping, and emissions, discharges, releases or threatened releases of Hazardous Materials or other chemical substances, pollutants, contaminants or hazardous or toxic substances, materials or wastes whether solid, liquid or gaseous in nature therefrom; and
(ii) all other requirements pertaining to the protection of the health and safety of employees or the public with respect to Hazardous Materials.
“ Equipment ” has the meaning set forth in Section 9.1.7.
“ Excluded Assets ” means:
(a) assets securing FF&E Financing, Purchase Money Indebtedness or Capitalized Lease Obligations permitted to be incurred under the Indenture;
(b) leasehold estates in real property existing on the Issue Date and any additional leasehold estates in real property acquired by the Issuers or
the Subsidiaries after the Issue Date, unless the Indenture Trustee, as collateral agent (upon request of the Holders of a majority of the outstanding Notes), in its reasonable discretion requests that the Issuers provide the Indenture Trustee, as collateral agent, with a Lien upon and security interest in such leasehold estate so that such leasehold estate shall become additional Collateral (and in the Collateral Agreements the Issuers will agree to notify the Indenture Trustee of the acquisition by it or any of the Subsidiaries of any leasehold estate in real property);
(c) any leases, permits, licenses (including without limitation Gaming Licenses) or other contracts or agreements or other assets or property to the extent that a grant of a Lien thereon under the Collateral Agreements (i) is prohibited by law or would constitute or result in the abandonment, invalidation or unenforceability of any right, title or interest of the grantor therein pursuant to the applicable law, or (ii) would require the consent of third parties and such consent has not been obtained after the Issuers have used commercially reasonable efforts to try to obtain such consent, or (iii) other than as a result of requiring a consent of third parties that has not been obtained, would result in a breach of the provisions thereof, or constitute a default under or result in a termination of, such lease, permit, license, contract or agreement (other than to the extent that any such provisions thereof would be rendered ineffective pursuant to Section 9 406, 9 407 or 9 408 of the Uniform Commercial Code (or any successor provision or provisions) of any relevant jurisdiction (the “ UCC ”) or any other applicable law); provided that, immediately upon the uneffectiveness, lapse or termination of such prohibition, the provisions that would be so breached or such breach, default or termination or immediately upon the obtaining of any such consent, the Excluded Assets shall not include, and the Issuers or the applicable Guarantor, as the case may be, shall be deemed to have granted a security interest in, all such leases, permits, licenses, other contracts and agreements and such other assets and property as if such prohibition, the provisions that would be so breached or such breach, default or termination had never been in effect and as if such consent had not been required;
(d) cash and Cash Equivalents to the extent that a Lien thereon may not be perfected through the filing of a UCC financing statement or that, after the Issuers have used commercially reasonable efforts, the Issuers are unable to cause the Trustee to obtain “control” (as defined in the UCC) for the benefit of the Holders; and
(e) any Capital Stock of an Excluded Foreign Subsidiary, if any, other than a pledge of 65% of the Voting Equity Interests of such Excluded
Foreign Subsidiary held directly by the Issuers or any domestic Subsidiary, 100% of the nonvoting Equity Interests of such Excluded Foreign Subsidiary held directly by the Issuers or any domestic Subsidiary and 100% of any intercompany Indebtedness owed by such Excluded Foreign Subsidiary to any of the Issuers or any of the Guarantors.
“ Fixtures ” has the meaning set forth in Section 9.1.8.
“ General Intangibles ” has the meaning set forth in Section 9.1.10.
“ Governmental Authority ” means any governmental, administrative or regulatory agency, authority, department, commission, board, bureau or instrumentality of the United States, any state of the United States, or any political subdivision thereof, including, without limitation, any Gaming Authority, or any court, arbitrator or quasi-judicial authority.
“ Ground Lease ” has the meaning set forth in Granting Clause One.
“ Guarantee ” has the meaning set forth in the Recitals.
“ Hazardous Materials ” Any chemical, material or substance:
(i) the presence of which requires investigation or remediation under any federal, state or local law, statute, code, regulation, ordinance, order, action or policy; or
(ii) which is or becomes defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous waste,” “restricted hazardous waste” or “toxic substances” or words of similar import under any applicable local, state or federal law or under regulations adopted or publications promulgated pursuant thereto, including, but not limited to, any such laws or regulations promulgated by Governmental Authorities of the State of Nevada; the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601, et seq.; the Hazardous Materials Transportation Act, as amended, 49 U.S.C. § 1801, et seq.; the Resource Conservation and Recovery Act, as amended, 42 U.S.C. § 6901, et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. § 1251, et seq.; or
(iii) which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous and is or a becomes regulated by any Governmental Authority; or
(iv) the presence of which on the Property causes or threatens to pose a hazard to the Property or to the health or safety of Persons on or about the Property; or
(v) without limitation, which contains gasoline, crude oil, diesel fuel or other petroleum hydrocarbons in violation of applicable Environmental Requirements; or
(vi) without limitation, which contains “PCBs” (as hereinafter defined) or asbestos or urea formaldehyde foam insulation or radon gas.
“ Hedging Agreements ” has the meaning set forth in Section 9.1.17.
“ Holders ” has the meaning set forth in the Indenture.
“ Impositions ” Any and all (i) real estate and personal property taxes and other taxes and assessments, water and sewer rates and charges levied or assessed upon or with respect to the Property, and any and all other governmental charges (including any penalties and other charges imposed by any Gaming Authorities) and any interest or costs or penalties with respect thereto, in each case whether general, special, ordinary or extraordinary, foreseen or unforeseen, of any kind and nature whatsoever that at any time prior to or after the execution hereof may be assessed, levied, imposed, or become a Lien upon the Property or the Rents, but excluding taxes on any and each Trustor’s income or operating revenues; (ii) charges for any easement or agreement maintained for the benefit of the Property and (iii) other charges, expenses, payments or assessments of any nature, if any, which are or may be assessed, levied, imposed or become a Lien upon the Property or the Rents, including mechanics and other Permitted Liens.
“ Impound Account ” The account that Trustors may be required to maintain pursuant to Section 4.6.2. of this Deed of Trust for the deposit of amounts required to pay Impositions and insurance premiums.
“ Improvements ” has the meaning set forth in Granting Clause Two.
“ Indemnitees ” has the meaning set forth in Section 11.2.7.
“ Indenture ” has the meaning set forth in the Recitals.
“ Indenture Document ” means any of the Indenture, the Notes, the Guarantees, the Collateral Agreements, the Registration Rights Agreement and any other agreement, document or instrument entered into or issued in connection with any of the foregoing.
“ Indenture Trustee ” has the meaning set forth in the Recitals.
“ Instruments ” has the meaning set forth in Section 9.1.14.
“ Intangible Property ” means any and all intangible personal property, including, without limitation, (a) the rights to use all names and all derivations thereof now or hereafter used by any and each of the Trustors in connection with the Land, or the Improvements, including, without limitation, the names “RBG, LLC,” “Virgin River Casino Corporation,” “B & BB, Inc.,” “Oasis Hotel & Casino,” “Casablanca Hotel & Casino,” “Mesquite Star Hotel & Casino,” “Virgin River Convention Center,” “Virgin River Hotel & Casino,” “Oasis Recreational Properties, Inc.,” “Oasis Interval Ownership, LLC,” “Casablanca Golf Club,” “CasaBlanca Golf Course” and “Palms Golf Course” and any variations thereof, together with the goodwill associated therewith, and all names, logos, and designs used by any of the Trustors, or in connection with the Land or the Improvements or in which any of the Trustors has rights, with the exclusive right to use such names, logos and designs wherever they are now or hereafter used in connection with the Land or the Improvements, and any and all other trade names, trademarks or service marks, whether or not registered, now or hereafter used in the operation of the Land or the Improvements, including, without limitation, any interest as a licensee or franchisee, and, in each case, together with the goodwill associated therewith; (b) maps, plans, specifications, surveys, studies, tests, reports, data and drawings relating to the development of the Land or the Improvements and the construction of the Improvements, including, without limitation, all marketing plans, feasibility studies, soils tests, design contracts and all contracts and agreements of any and each of the Trustors relating thereto and all architectural, structural, mechanical and engineering plans and specifications, studies, data and drawings prepared for or relating to the development of the Land or the Property or the construction, renovation or restoration of any of the Improvements or the extraction of minerals, sand, gravel or other valuable substances from the Land; (c) any and all books, records, customer lists (including lists or information derived from or related to the Player Tracking System described within the definition of “Tangible Property”), concession agreements, supply or service contracts, licenses, permits, governmental approvals (to the extent such licenses, permits and approvals may be pledged under applicable law), signs, goodwill, casino and hotel credit and charge records, supplier lists, checking accounts, safe deposit boxes (excluding the contents of such deposit boxes owned by Persons other than any of the Trustors or any of their Subsidiaries), cash, instruments, Chattel Papers, documents, unearned premiums, deposits, refunds, including but not limited to income tax refunds, prepaid expenses, rebates, tax and insurance escrow and impound accounts, if any, actions and rights in action, and all other claims, and all other contract rights and general intangibles resulting from or used in connection with the operation of the Trust Estate and in which any of the Trustors now or hereafter has rights; (d) all of the Trustors’ documents, instruments, contract rights, and general intangibles including, without limitation, all insurance policies, permits, licenses, franchises and agreements required for the use, occupancy or operation of the Land, or any of the Improvements (to the extent such licenses, permits and approvals are
not prohibited from being pledged under applicable law); (e) general intangibles, vacation license resort agreements or other time share license or right to use agreements with respect to the Land, the Improvements and/or the business being conducted thereon, including, without limitation, all rents, issues, profits, income and maintenance fees resulting therefrom; whether any of the foregoing is now owned or hereafter acquired and (f) any and all licenses, permits, variances, special permits, franchises, certificates, rulings, certifications, validations, exemptions, filings, registrations, authorizations, consents, approvals, waivers, orders, rights and agreements (including options, option rights and contract rights) now or hereafter obtained by any of the Trustors from any Governmental Authority having or claiming jurisdiction over the Land, the Tangible Property, the Property or any other element of the Trust Estate or providing access thereto, or the operation of any business on, at, or from the Land, including, without limitation, any Gaming Licenses.
“ Intellectual Property Collateral ” has the meaning set forth in Section 9.1.15.
“ Inventory ” has the meaning set forth in Section 9.1.6.
“ Land ” has the meaning set forth in Granting Clause One.
“ Land Behind Mesquite Star ” means the unimproved real property consisting of approximately 24.45 acres, which is owned in fee by Virgin River and is located to the southwest and west of the Virgin River Convention Center, formerly known as the “Mesquite Star Hotel & Casino.”
“ Leased Land ” has the meaning set forth in Granting Clause One.
“ Leases ” Any and all leases, subleases, lettings, licenses, concessions, operating agreements, management agreements and all other agreements affecting or covering the Property or any portion thereof now or hereafter existing or entered into, together with all amendments, extensions and renewals of any of the foregoing, but excluding the Ground Lease.
“ Lessor ” has the meaning set forth in Granting Clause One.
“ Material Adverse Effect ” means a material adverse effect on (A) the properties, business, prospects, operations, earnings, assets, liabilities or condition (financial or otherwise) of the Issuers and the Guarantors, taken as a whole, (B) the ability of any of the Issuers or Guarantors to perform its obligations under any of the Transaction Documents (as defined in the Purchase Agreement), (C) the enforceability of any of the Collateral Agreements or the attachment, perfection or priority of any of the security interests intended to be created thereby in any portion of the Collateral or (D) the validity of any of the Transaction Documents or the consummation of any of the Transactions (as defined in the Purchase Agreement).
“ Motor Vehicles ” has the meaning set forth in Section 9.1.18.
“ Notes ” has the meaning set forth in the Recitals.
“ Oasis Interval ” has the meaning set forth in the Preamble.
“ Oasis Interval Management ” means Oasis Interval Management, LLC, a Nevada limited-liability company.
“ Offering Circular ” means the Offering Circular, dated December [ ], 2004, relating to the offer and sale of the Notes.
“ Oasis Recreational Properties ” means Oasis Recreational Properties, Inc., a Nevada corporation.
“ Owned Land ” has the meaning set forth in Granting Clause One.
“ PCBs ” means polychlorinated biphenyls.
“ Personalty ” means the Intangible Property and the Tangible Property.
“ Pledged Securities ” has the meaning set forth in Section 9.1.12.
“ Proceeds ” has the meaning set forth in Section 9.1.23.
“ Property ” has the meaning set forth in Granting Clause Two.
“ Public Waters ” means any river, lake, stream, sea, ocean, gulf, bay or other public body of water.
“ Purchase Agreement ” means the Purchase Agreement, dated December [ ], 2004, among (i) the Trustors, Oasis Interval Management and Oasis Recreational Properties, (ii) solely with respect to Sections 6(p), 6(s) and 6(bb) thereof, Robert R. Black, Sr. and R. Black, Inc., a Nevada corporation, and (iii) Jefferies & Company, Inc., as Initial Purchaser, relating to the issuance and sale by the Issuers to the Initial Purchaser of the Notes.
“ Receiver ” means any trustee, receiver, custodian, fiscal agent, liquidator or similar officer.
“ Rents ” has the meaning set forth in Granting Clause Three.
“ Resorts ” has the meaning set forth in the Preamble.
“ Secured Obligations ” has the meaning set forth above under the caption “FOR THE PURPOSE OF SECURING.”
“ Senior Secured Note Security Agreement ” means the Senior Secured Note Security Agreement, dated as of December [ ], 2004, among the Trustors, Oasis Recreational Properties and Oasis Interval Management, as Grantors, and The Bank of New York, as Collateral Agent.
“ Tangible Property ” means any and all tangible personal property, including, without limitation, all goods, equipment, supplies, building and other materials of every nature whatsoever and all other tangible personal property constituting a part or portion of the Property and/or used in the operation of any hotel, casino, restaurant, store, parking facility, special events arena, theme park, and any other commercial operations on the Property, including but not limited to Inventory, communication systems, visual and electronic surveillance systems and transportation systems and not constituting a part of the real property subject to the Liens of this Deed of Trust and including all property and materials stored on all or any portion of the Property in which any and each of the Trustors has an interest and all tools, utensils, food and beverage, liquor, uniforms, linens, housekeeping and maintenance supplies, vehicles, fuel, advertising and promotional material, blueprints, surveys, plans and other documents relating to the Land or the Improvements, and all construction materials and all Fixtures, including, but not limited to, all gaming equipment and devices which are used in connection with the operation of the Property and those items of Fixtures which are purchased or leased by any and each of the Trustors, machinery and any other item of personal property in which any of the Trustors now or hereafter owns or acquires an interest or right, and which are used or useful in the construction, operation, use and occupancy of the Property; to the extent permitted by the applicable contract or applicable law, all financial equipment, computer equipment, Player Tracking Systems (including all computer hardware, operating software programs and all right, title and interest in and to any applicable license therefore), calculators, adding machines, video game and slot machines, and any other electronic equipment of every nature used or located on any part of the Property, and all present and future right, title and interest of any of the Trustors in and to any casino operator’s agreement, license agreement or sublease agreement used in connection with the Property.
“ Title Policy ” means the title insurance policy or policies in favor of Beneficiary insuring the Liens of this Deed of Trust.
“ Trademarks ” means trademarks, servicemarks and trade names, all registrations and applications to register such trademarks, servicemarks and trade names and all renewals thereof, and the goodwill of the business associated with or relating to such trademarks, servicemarks and trade names, including without limitation any and all licenses and rights granted to use any trademark, servicemark
or trade name owned by any other Person.
“ Truck Parking ” means the improved real property consisting of approximately 4.61 acres (7.73 acres at such time as the truck parking land owned by Rock Springs is deeded to Virgin River Casino Corporation, which is scheduled to occur before the Issue Date) on which truck parking for Virgin River is located. The Truck Parking is owned in fee by Virgin River and is situated to the east of the Virgin River Casino.
“ Trust Estate ” has the meaning set forth in Granting Clause Thirteen.
“ Trustee ” has the meaning set forth in the Preamble.
“ Trustor ” has the meaning set forth in the Preamble.
“ UCC ” means the Uniform Commercial Code (as amended from time to time) as adopted by the State of Nevada.
“ Virgin River ” has the meaning set forth in the Preamble.
Section 1.2. Related Matters .
1.2.1. Terms Used in the UCC . Unless the context clearly otherwise requires, all lower-case terms used in Section 9 of this Deed of Trust and not otherwise defined herein that are used or defined in Article 9 (or any equivalent subpart) of the UCC have the same meanings herein.
1.2.2. Construction . Unless the context of this Deed of Trust clearly requires otherwise, references to the plural include the singular, the singular includes the plural, the part includes the whole, and “including” is not limiting. The words “hereof,” “herein,” “hereby,” “hereunder” and similar terms in this Deed of Trust refer to this Deed of Trust as a whole (including the Preamble, the Recitals and all Schedules and Exhibits, but subject to Section 1.2.5.) and not to any particular provision of this Deed of Trust. Article, section, subsection, exhibit, recital, preamble and schedule references in this Deed of Trust are to this Deed of Trust unless otherwise specified. References in this Deed of Trust to any agreement, other document or law “as amended” or “as may be amended from time to time” or similar phrases, or to amendments of any document or law, shall include any amendments, supplements, replacements, renewals or other modifications.
1.2.3. Determinations. Any determination or calculation contemplated by this Deed of Trust that is made by Beneficiary shall be final and conclusive and binding upon any of the Trustors, in the absence of manifest error. References in this Deed of Trust to “determination” by Beneficiary include good faith estimates (in the case of quantitative determinations) and good faith beliefs (in the case of qualitative
determinations). All references herein to “discretion” of Beneficiary (or terms of similar import) shall mean “absolute and sole discretion.” All consents and other actions of Beneficiary contemplated by this Deed of Trust may be given, taken, withheld or not taken in Beneficiary’s discretion (whether or not so expressed), except as otherwise expressly provided herein. No approval or consent of Beneficiary shall be effective unless the express written approval or consent of Beneficiary is received by the Trustors.
1.2.4. Governing Law . THIS DEED OF TRUST SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE LAWS AND RULES 327(B), EXCEPT THAT WITH RESPECT TO THE EXERCISE OF REMEDIES HEREUNDER AND THE CREATION, PERFECTION AND ENFORCEMENT OF THE LIEN CREATED BY THIS DEED OF TRUST, THE LAWS OF THE JURISDICTION IN WHICH THE PROPERTY IS LOCATED SHALL GOVERN, WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH JURISDICTION.
1.2.5. Headings . The article, section and subsection headings used in this Deed of Trust are for convenience of reference only and shall not affect the construction hereof.
1.2.6. Severability . If any provision of this Deed of Trust or any Lien or other right hereunder conflicts with, or shall be held to be invalid, illegal or unenforceable under, Applicable Law in any jurisdiction, such provision, Lien or other right shall be ineffective only to the extent of such invalidity, illegality or unenforceability, which shall not affect any other provisions herein or any other Lien or right granted hereby or the validity, legality or enforceability of such provision, Lien or right in any other jurisdiction, and to this end, the provisions of, and the Liens and rights under, this instrument are declared to be severable.
1.2.7. Exhibits and Schedules . All of the appendices, exhibits and schedules attached to this Deed of Trust shall be deemed incorporated herein by reference.
[ RESERVED ]
REPRESENTATIONS AND WARRANTIES
The Trustors hereby, jointly and severally, represent and warrant to Beneficiary and Trustee that:
Section 3.1. Corporate Existence . Each Trustor (a) is a corporation or limited-liability company, as the case may be, duly incorporated or organized, as the case may be, validly existing and in good standing under the laws of the State of Nevada, and (b) has the corporate power and authority to own its property and assets and to transact the business in which it is engaged or presently proposes to engage, and (c) is duly qualified and is authorized to do business and is in good standing as a foreign corporation in every jurisdiction in which it owns or leases real property or in which the nature of its business requires it to be so qualified.
Section 3.2. Authorization; Approvals . The execution, delivery and performance by each Trustor of this Deed of Trust are within each Trustor’s corporate or limited-liability company, as the case may be, powers and authority, have been duly authorized by all necessary corporate or limited-liability company, as the case may be, action, and do not contravene (a) any Trustor’s charter, by-laws, certificate of formation, operating agreement or other organizational documents, as the case may be or (b) any law or any contractual restriction binding on or affecting any Trustor or the Property. All authorizations or approvals or other actions by, or notice to or filing with, any Governmental Authority required for the due execution, delivery and performance by each Trustor of this Deed of Trust has been duly obtained and are in full force and effect.
Section 3.3. Enforceability . This Deed of Trust has been duly executed and delivered by each Trustor and is the legal, valid and binding obligation of each Trustor, enforceable against each Trustor in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting creditors’ rights generally and general principles of equity.
Section 3.4. Validity and Perfection of Security Interests . The Liens and security interests in the Trust Estate created in accordance with the terms hereof constitute valid security interests, and, (a) upon recordation of this Deed of Trust in the appropriate office in Clark County, Nevada, (b) upon the filing of financing statements naming each Trustor as “Debtor” and Beneficiary as “Secured Party” and describing the Trust Estate in the filing offices of the Secretary of State of Nevada and in the real estate records of Clark County, Nevada, (c) upon the delivery of any instruments and Chattel Paper which are included in the Trust Estate to Beneficiary, (d) to the extent subject to U.S. federal law and not Article 9 of the Applicable UCC, upon recordation of the security interests granted in Patents, Trademarks and Copyrights in the U.S. Patent and Trademark Office and the U.S. Copyright Office, along with the registration of all U.S. Copyrights in the U.S. Copyright Office and, to the extent governed by foreign law, the taking of all steps necessary under applicable foreign law to perfect or record the security interest in all
foreign Intellectual Property Collateral applications and registrations and (e) to the extent ownership of Collateral is represented by a certificate, a notation on the certificate of the Lien granted hereby, the security interests granted to Beneficiary hereunder will constitute perfected security interests therein superior and prior to all Liens, rights or claims of all other Persons other than Permitted Liens.
Section 3.5. Title to and Right to Use Assets . Each Trustor has good and marketable fee simple title in the Land, and enjoys the peaceful and undisturbed possession of any Leased Land and are the legal and beneficial owners of the remainder of the Trust Estate (and as to the Trust Estate whether now existing or hereafter acquired, each Trustor will continue to own each item thereof), free and clear of all Liens except Permitted Liens. Each Trustor has the right to hold, occupy and enjoy its interest in the Trust Estate subject to the terms of the Gaming Licenses and subject to the Permitted Liens, and has valid right, full power and legal authority, subject to Applicable Gaming Laws, to mortgage and pledge the same as provided herein, and each Trustor shall defend the Trust Estate against all claims and demands of all Persons at any time claiming the same or any interest therein adverse to Beneficiary (except for Permitted Liens) and Beneficiary may, subject to Applicable Gaming Laws, at all times peaceably and quietly enter upon, hold, occupy and enjoy the entire Trust Estate in accordance with the terms hereof.
Section 3.6. Non-Contravention . Neither the execution, delivery or performance of this Deed of Trust by any Trustor nor the consummation of the transactions herein contemplated nor the fulfillment of the terms hereof (i) violate the terms of or constitute a default under any agreement, indenture, mortgage, deed of trust, equipment lease, instrument or other document to which any Trustor is a party or by which it or any of its property or assets is bound or to which it may be subject (including, without limitation, the Ground Lease), (ii) conflict with any law, order, rule or regulation applicable to any Trustor of any court or any government, regulatory body or administrative agency or other governmental body or Governmental Authority having jurisdiction over any Trustor or the Trust Estate, or (iii) result in or require the creation or imposition of (or the obligation to create or impose) any Lien (other than the Lien contemplated hereby or by any other Indenture Document), upon or with respect to any of the property or assets now owned or hereafter acquired by any Trustor.
Section 3.7. Contracts . Each material contract which is part of the Trust Estate (each, a “ Contract ”), (i) is the genuine, legal, valid, and binding obligation of each Trustor, (ii) is enforceable against each Trustor party thereto in accordance with its terms, (iii) is in full force and effect and is, to the best knowledge of the Trustors, not subject to any setoffs, defenses, overdue taxes, counterclaims or other claims, nor have any of the foregoing been asserted or alleged as to any Contract, and (iv) is, in all material respects, in compliance with all applicable laws, whether federal, state, local or foreign (“ Applicable Laws ”). None of the Trustors nor, to the best knowledge of the Trustors, any other party to any Contract is in
default in the performance or observance of any of the terms thereof. No party to any Contract is the United States government or an instrumentality thereof.
Section 3.8. Leases . The Trustors have delivered to Beneficiary true, correct and complete copies of all Leases and Ground Leases, including all amendments thereof and modifications thereto. Each Lease and each Ground Lease (i) is the genuine, legal, valid and binding obligation of each Trustor party thereto, (ii) is enforceable against each Trustor party thereto and, to the best knowledge of the Trustors, each other party thereto, in accordance with its terms, (iii) is in full force and effect and is not subject to any setoffs, defenses, taxes, counterclaims or other claims, nor have any of the foregoing been asserted or alleged as to any Lease, and (iv) is in compliance with all Applicable Laws.
Section 3.9. No Other Property . The Trust Estate constitutes all of the property (whether owned, leased or otherwise) currently used by the Trustors in connection with the operation of any properties other than Excluded Assets.
Section 3.10. Compliance with Laws . To the best knowledge of the Trustors, except as otherwise disclosed in writing to Beneficiary, the Trust Estate and the proposed and actual use thereof comply in all material respects with all Applicable Laws, and there is no proceeding pending or, to the best knowledge of the Trustors, threatened before any Governmental Authority relating to the validity of any of the Indenture Documents or the proposed or actual use of the Trust Estate.
Section 3.11. Property Use; Mechanics’ Liens .
The Property is not used principally or primarily for agricultural or grazing purposes. All costs for labor and material for the removal, construction and renovation of the Improvements (including, without limitation, any additions and alterations thereto) have been paid in full or will be paid in accordance with Section 4.15.
Section 3.12. Condemnation . There are no pending or, to the best knowledge of the Trustors, threatened condemnation or eminent domain proceedings against the Trust Estate or any part thereof.
Section 3.13. Litigation . Except as disclosed in writing to Beneficiary on the date hereof, there are no pending or, to the best knowledge of the Trustors, threatened, actions, claims, proceedings, investigations, suits or proceedings before any Governmental Authority.
Section 3.14. Construction of Improvements . All Improvements have been and will be constructed in all material respects in accordance with Applicable Laws and all requirements of Governmental Authorities and governmental approvals. To the best knowledge of the Trustors, the Improvements are free from latent and patent defects, and do not require any material repairs, reconstruction or
replacement on the date hereof (except for any material repairs, reconstruction or replacement that do not have a material adverse effect on the value of the Improvements and do not materially and adversely affect the Trustors’ use and operation of the Improvements).
The Trustors hereby, jointly and severally, covenant to and agree with Beneficiary as follows:
Section 4.1. Secured Obligations of Trustors . Each Trustor shall perform, observe and comply with its Secured Obligations arising under this Deed of Trust and shall continue to be liable for the performance of its Secured Obligations arising under this Deed of Trust until discharged in full, notwithstanding any actions of partial foreclosure that may be brought hereunder to recover any amount or amounts expended by Beneficiary on behalf of any Trustor in order to cure any of the Trustors’ defaults or to satisfy any of the Trustors’ obligations or covenants under any agreement relating to the Trust Estate and to which any Trustor is a party or by which the Trust Estate is bound.
Section 4.2. Compliance with Law; Maintenance of Approvals . Except as expressly permitted by the Indenture, each Trustor shall (i) comply with all requirements of law applicable to the ownership, operation, use and occupancy of all or any portion of the Trust Estate, whether or not such compliance requires work or remedial measures that are ordinary or extraordinary, foreseen or unforeseen, or structural or nonstructural, and (ii) maintain in full force and effect all authorizations, approvals or other actions, including, without limitation, Gaming Licenses, which are necessary or desirable for the performance of the Trustors’ obligations pursuant to this Deed of Trust or for the business conducted by the Trustors on the Property.
Section 4.3. Other Reports . Each Trustor shall provide from time to time such additional information regarding the Trustors or the Trust Estate as are required under the Indenture or as Beneficiary may reasonably request.
Section 4.4. Insurance . Each Trustor, at its sole cost and expense, shall provide, maintain and keep in force the insurance required by Section 4.17 of the Indenture (“ Insurance Policies ”).
Section 4.5. Waste and Repair . Except as expressly permitted by Section 4.17 of the Indenture, each Trustor shall at all times cause the Trust Estate to be maintained in normal working order and condition (reasonable wear and tear excepted). No Trustor shall suffer any waste of the Property or do or permit to be done thereon anything not otherwise permitted in the Indenture that may in any way
impair the security of this Deed of Trust. The Trustors shall not abandon the Property nor leave the Property unprotected or deserted.
Section 4.6. Impositions; Impounds; Taxes; Capital Costs .
4.6.1. Impositions Affecting the Property . Each Trustor shall pay when due all Impositions (or currently payable installments thereof) that are or that may become a Lien on the Property or are assessed against the Property or the Rents; provided , however , that any Trustor may, at its expense, contest the amount or validity or application of any such Impositions by appropriate legal proceedings promptly initiated and conducted in good faith and with due diligence; provided that (i) neither the Property nor any substantial part thereof shall be in danger of being sold, forfeited, terminated, canceled, or lost as a result of such contest, and (ii) except in the case of a Lien junior to the Lien of this Deed of Trust, such Trustor shall have posted such bond or furnished such other security as may be required by law to release such Lien.
4.6.2. Impounds; Impound Account. Upon the occurrence and during the continuance of an Event of Default and at the request of Beneficiary, the Trustors shall pay to Beneficiary monthly an amount equal to one-twelfth (1/12th) of the annual cost (or such greater amount as may be reasonably necessary for Beneficiary to have on hand sufficient funds to pay the next installment prior to delinquency) of Impositions on the Property (but only those Impositions defined in clause (i) of the definition of “ Impositions ”), together with an amount equal to the estimated next hazard and other required insurance premiums in order to accumulate with Beneficiary sufficient funds to pay such Impositions and premiums at least thirty (30) days prior to their respective due dates. Such funds shall be held by Beneficiary on a commingled basis and shall not bear interest. Said accumulated funds shall be paid and applied by Beneficiary with respect to such Impositions and insurance premiums as and when due.
Section 4.7. Further Assurances . Each Trustor shall, at its own expense, perform such acts as may be necessary, or that Beneficiary may request at any time, to execute, acknowledge and deliver all such additional papers and instruments (including, without limitation, a declaration of no setoff) and all such further assurances of title and will do or cause to be done all further acts and things as may be proper or reasonably necessary to carry out the purpose hereof and to subject to the Liens hereof any property intended by the terms hereof to be covered thereby and any renewals, additions, substitutions, replacements or betterments thereto.
Section 4.8. Reimbursement: Waiver of Offsets .
4.8.1. In the event any tax, stamp tax, assessment, water rate, sewer rate, insurance premium, repair, rent charge, debt, claim, inspection, Imposition or Lien having priority over the Lien of this Deed of Trust, or in the event any other
amount required to be paid by any Trustor hereunder shall remain unpaid and no Trustor is contesting such amount pursuant to the terms hereof or the Indenture, Beneficiary shall have the right to pay such amount and shall have the right to declare immediately due and payable any such amount so paid. Any amount so paid by Beneficiary shall bear interest at the default interest rate specified in Sections 2.12 and 4.1 of the Indenture (“ Defaulted Interest ”) from the date of payment by Beneficiary, shall constitute an additional Secured Obligation secured hereby, prior to any right, title or interest in or claim upon the Trust Estate attaching or accruing subsequent to the Lien of this Deed of Trust, shall be secured by this Deed of Trust and shall be payable by the Trustors to Beneficiary within thirty (30) days after receipt by the Trustors of written demand.
4.8.2. Except as otherwise provided herein, in the Indenture or in the other Indenture Documents, all sums payable by the Trustors hereunder or under the other Indenture Documents shall be paid without notice, demand, counterclaim, setoff, deduction or defense and without abatement, suspension, deferment, diminution or reduction, and the obligations and liabilities of the Trustors hereunder shall in no way be released, discharged or otherwise affected by reason of: (i) any damage to or destruction of or any condemnation or similar taking of the Trust Estate or any part thereof; (ii) any restriction or prevention of or interference with any use of the Trust Estate or any part thereof; (iii) any title defect or encumbrance or any eviction from the Property or the Improvements or any part thereof by title paramount or otherwise; (iv) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to Beneficiary, or any action taken with respect to this Deed of Trust by any trustee or receiver of Beneficiary, or by any court, in any such proceeding; (v) any claim which any Trustor has or might have against Beneficiary; (vi) any default or failure on the part of Beneficiary to perform or comply with any of the terms hereof or of any other agreement with any Trustor or (vii) any other occurrence whatsoever, whether similar or dissimilar to the foregoing; whether or not the Trustors shall have notice or knowledge of any of the foregoing. Each Trustor waives all rights now or hereafter conferred by statute or otherwise to any abatement, suspension, deferment, diminution or reduction of any sum secured hereby and payable by the Trustors.
Section 4.9. Litigation . Each Trustor shall, promptly upon obtaining actual knowledge thereof, give notice in writing to Beneficiary of any litigation commenced that is likely to have a material adverse effect on the Property or the Liens created hereby other than unlawful detainer proceedings brought by any Trustor.
Section 4.10. Certain Reports . Each Trustor shall, promptly and in any event within fifteen (15) days after actual receipt by the Trustors thereof, deliver to Beneficiary a copy of any written notice or citation concerning any actual, alleged or suspected violation of Environmental Requirements or liability of any Trustor for
Environmental Damages in connection with the Property or past or present activities of any Person thereon.
Section 4.11. Tax Receipts . Subject to the provisions of Section 4.5 hereof, the Trustors shall provide to Beneficiary, within thirty (30) days after demand made therefor, bills (which shall be receipted from and after the date receipted bills are obtainable) showing the payment to the extent then due of all taxes, assessments (including those payable in periodic installments), water rates, sewer rates, and/or any other Imposition that have become a Lien (other than an inchoate Lien) upon the Trust Estate.
Section 4.12. FIRPTA Affidavit . The Trustors hereby, jointly and severally, represent and warrant to Beneficiary under penalty of perjury:
(i) Each Trustor’s U.S. Taxpayer Identification Number is set forth opposite its name on Schedule 4.12(i) hereto;
(ii) Each Trustor’s business address is set forth opposite its name on Schedule 4.12(ii) hereto; and
(iii) No Trustor is a “foreign person” within the meaning of Code Sections 1445 and 7701 (i.e., no Trustor is a nonresident alien, foreign corporation, foreign partnership, foreign trust or foreign estate as those terms are defined in the Code and regulations promulgated thereunder).
The Trustors, jointly and severally, agree to indemnify, defend, protect and hold Beneficiary and Beneficiary’s agents harmless of, from and against any and all loss, liability, costs, damages, claims or causes of action including reasonable attorneys’ fees, costs and expenses which may be actually incurred by Beneficiary or Beneficiary’s agents by reason of any failure of any representation or warranty made by any Trustor in this Section 4.12 to be true and correct in all respects, including, but not limited to, any liability for failure to withhold any amount required under Code Section 1445 in the event of foreclosure or other transfer of the Property.
Section 4.13. Preservation of Contractual Rights . Except as otherwise expressly permitted by the Indenture, each Trustor shall, prior to delinquency, default or forfeiture, perform all obligations and satisfy all material conditions required on its part to be satisfied to preserve its rights and privileges under any contract, lease, license, permit or other authorization (a) under which it holds any Tangible Property, or (b) which constitutes part of the Intangible Property.
Section 4.14. Tax Service Contract . At any time after the occurrence of an Event of Default (whether or not such Event of Default is cured), at the request of Beneficiary and at the Trustors’ and/or their permitted successors’ sole expense, Beneficiary shall be furnished a tax service contract in form satisfactory to Beneficiary issued by a tax reporting agency satisfactory to Beneficiary, which
contract shall remain in force until indefeasible discharge in full of the Secured Obligations.
Section 4.15. Liens . The Trustors shall pay and promptly discharge, at the Trustors’ cost and expense, all Liens upon the Trust Estate, or any part thereof or interest therein other than the Permitted Liens. The Trustors shall have the right to contest in good faith the validity of any such Lien, provided that the Trustors shall first post such bond or furnish such other security as may be required by law to release such Lien, and provided further that the Trustors shall thereafter diligently proceed to cause such Lien to be removed and discharged. If the Trustors shall fail to discharge any such Lien, then, in addition to any other right or remedy of Beneficiary, Beneficiary may, but shall not be obligated to, discharge the same, either by paying the amount claimed to be due, or by procuring the discharge of such Lien by depositing in court a bond for the amount claimed or otherwise giving security for such Lien, or in such manner as is or may be prescribed by law. Any amount so paid by Beneficiary shall bear interest at the Defaulted Interest rate from the date of payment by Beneficiary, shall constitute an additional Secured Obligation secured hereby, prior to any right, title or interest in or claim upon the Trust Estate attaching or accruing subsequent to the Lien of this Deed of Trust, shall be secured by this Deed of Trust and shall be payable by the Trustors to Beneficiary upon demand.
Section 4.16. Inspection . The Trustors shall permit Beneficiary, upon twenty-four (24) hours’ prior notice, to enter upon and inspect, during normal business hours, the Property and the construction and operation thereof, for such purposes reasonably deemed necessary by Beneficiary, it being agreed by the Trustors that Beneficiary’s good faith belief of the existence of a past or present release or threatened release of any Hazardous Material into, onto, beneath or from the Property shall be conclusively deemed reasonable; provided , however , that no such prior notice shall be necessary and such inspection may occur at any time if (i) Beneficiary reasonably believes that an emergency exists or is imminent or (ii) the giving or delivery of such notice is prohibited or stayed by Applicable Laws.
Section 5.1. Deed of Trust Subject to Ground Lease . This Deed of Trust is made subject to whatever rights and interest the Lessor(s) may have under the Ground Lease and the covenants, conditions and restrictions set forth therein. This Deed of Trust shall not be construed so as to constitute a default under any Ground Lease pursuant to Applicable Law or the terms of such Ground Lease, and this Deed of Trust and the Lien created hereby shall be of no further force and effect if deemed by a court of competent jurisdiction to violate the terms of such Ground Lease or Applicable Law.
Section 5.2. Certain Covenants . The Trustors, jointly and severally, covenant and agree as follows:
5.2.1. The Trustors shall keep and perform, in all material respects, the covenants, agreements and obligations of the lessee set forth in the Ground Lease, and not to commit, suffer or permit any material breach thereof. If any Trustor shall default under any of the Ground Lease, Beneficiary shall have the right, but not the obligation, to take any action necessary or desirable to cure any default by such Trustor in the performance of any of the terms, covenants and conditions of the Ground Lease, Beneficiary being authorized to enter upon the premises for such purposes. Any default by any Trustor as lessee under any of the Ground Lease or breach of an obligation thereunder shall be a default hereunder, provided that such shall not constitute a default hereunder until the expiration of any applicable lessee notice and grace period under the Ground Lease and the failure of the Trustors to cure such default or breach under the Ground Lease within such grace period.
5.2.2. The Trustors shall give prompt notice to Beneficiary of the actual receipt by it of written notice of default served on any of the Trustors from the Lessor, and to furnish to Beneficiary all information that it may reasonably request concerning the performance by any of the Trustors of the covenants of the Ground Lease, including, without limitation, evidence of payment of ground rent, taxes, insurance premiums and operating expenses.
5.2.3. So long as this Deed of Trust is in effect, there shall be no merger of the Ground Lease or any interest therein nor of the leasehold estate created thereby with the fee estate in the Leased Land or any portion thereof by reason of the fact that the Ground Lease or such interest therein or such leasehold estate may be held directly or indirectly by or for the account of any person who shall hold the fee estate in the Leased Land or any portion thereof or any interest of the Lessor. In case any Trustor acquires the fee title or any other estate, title or interest in the Leased Land covered by the Ground Lease, this Deed of Trust shall attach to and cover and be a Lien upon the fee title or such other estate so acquired, and such fee title or other estate shall, without further assignment, mortgage or conveyance, become and be subject to the Lien of and covered by this Deed of Trust. The Trustors shall notify Beneficiary of any such acquisition by any Trustor and, on written request by Beneficiary, shall at its own expense cause to be executed and recorded all such other and further assurances or other instruments in writing as may in the opinion of Beneficiary be required to carry out the intent and meaning hereof.
5.2.4. The Trustors shall not surrender any Ground Lease (except a surrender upon the expiration of the term of the applicable Ground Lease or upon the termination by the Lessor thereunder pursuant to the provisions thereof) to the Lessor thereunder, or any portion thereof or of any interest therein, and no termination of any Ground Lease, by any Trustor as lessee thereunder, shall be valid or effective, and the Ground Lease shall not be surrendered or canceled, amended, other than in
immaterial respects, or subordinated to any fee mortgage, to any lease, or to any other interest, either orally or in writing, without the prior written consent of Beneficiary so long as this Deed of Trust is in effect. Any attempted surrender, amendment (except in immaterial respects) cancellation or termination of any Ground Lease by any of the Trustors without obtaining the prior written consent of Beneficiary shall be null and void and without force and effect on the Ground Lease, and such attempt shall constitute a default hereunder.
5.2.5. If and to the extent required by the terms of the Ground Lease, the Trustors shall, promptly after the execution and delivery of this Deed of Trust or of any instrument or agreement supplemental thereto, notify each Lessor in writing of the execution and delivery thereof and deliver to each such Lessor a copy of each such Deed of Trust, instrument or agreement, as the case may be.
5.2.6. If any Ground Lease is terminated prior to the natural expiration of its term by reason of default of any Trustor, and if, pursuant to any provision of the Ground Lease, or otherwise, Beneficiary or its designee shall acquire from the Lessor thereunder a new lease of the Leased Land, or of any part of the Leased Land, the Trustors shall have no right, title or interest in or to such new lease or the leasehold estate created thereby.
5.2.7. The Trustors hereby, jointly and severally, warrant the quiet and peaceful possession of the Property by Trustee for the benefit of Beneficiary for so long as the Deed of Trust is in effect and further warrants and agrees to defend the leasehold estate created under each Ground Lease for the remainder of the term set forth therein against each and every person claiming the same or any part thereof.
5.2.8. In the event of the termination, rejection, or disaffirmance by the Lessor (or by any receiver, trustee, custodian, or other party that succeeds to the rights of any Lessor) pursuant to any section or chapter of the Bankruptcy Code, or any similar law, whether state, federal or otherwise, relating to insolvency, reorganization or liquidation, or for the relief of debtors (each such law referred to herein as a “ Bankruptcy Law ” and all such laws collectively referred to herein as “ Bankruptcy Laws ”), the Trustors hereby presently, absolutely, and irrevocably grant and assign to Beneficiary the sole and exclusive right to make or refrain from making any election available to lessees under any Bankruptcy Law (including, without limitation, the election available pursuant to Section 365(h) of the Bankruptcy Code or any successor provision), and the Trustors agree that any such election, if made by the Trustors without the prior written consent of Beneficiary (which Beneficiary would not anticipate granting due to the importance of the Ground Lease as security), shall be void and of no force or effect.
5.2.9. In the event there is a termination, rejection, or disaffirmance by any Lessor (or by any receiver, trustee, custodian, or other party that succeeds to the rights of any Lessor) as described in Section 5.2.8 above and Beneficiary elects to
have the Trustors remain in possession under any legal right the Trustors may have to occupy the premises leased pursuant to any Ground Lease then (i) the Trustors shall remain in such possession and shall perform all acts necessary for the Trustors to retain their right to remain in such possession, whether such acts are required under the then existing terms and provisions of the Ground Lease or otherwise, (ii) all of the terms and provisions of this Deed of Trust and the Lien created hereby shall remain in full force and effect and shall be extended automatically to such possession, occupancy, and interest of the Trustors, to all rights of the Trustors to such possession, occupancy, and interest, and to all of the Trustors’ rights and remedies against the Lessor under the Bankruptcy Laws, and (iii) the Trustors hereby agree with Beneficiary that if the Trustors shall seek to offset against the rent reserved in the Ground Lease any damages or other amounts pursuant to any right of offset available to lessees under any Bankruptcy Laws for any damages sustained by reason of the failure by the applicable Lessors to perform their obligations, then not less than thirty (30) days prior to effecting any such offset, the Trustors shall give written notice to Beneficiary of the amount of the proposed offset and the basis therefor, and if Beneficiary objects, within thirty (30) days after receipt of such notice, to the offset on the basis that it may constitute a breach of the Ground Lease, then the Trustors shall not effect the offset of any amounts so objected to by Beneficiary and the Trustors agree that any such election, if made by the Trustors without the prior written consent of Beneficiary, shall be void and of no force or effect.
5.2.10. The Trustors shall use their respective commercially reasonable efforts (not including the payment of any money or other consideration to any third party) to obtain from time to time, promptly after request by Beneficiary, from the Lessor and deliver to Beneficiary, at no cost to Beneficiary, a Lessor’s estoppel certificate thereunder in such form as may reasonably be requested by Beneficiary. Notwithstanding the foregoing, the Trustors’ failure to obtain an estoppel certificate from any Lessor shall not be deemed an Event of Default hereunder, provided that the Trustors have used their respective commercially reasonable efforts (as modified above).
5.2.11. If at any time any Trustor fails to comply in any material respect with any of such Trustor’s material obligations under any Ground Lease and the Lessor notifies Beneficiary thereof, then Beneficiary or Trustee may, but without obligation to do so and after providing reasonable notice to the Trustors ( provided that no notice shall be required in the event of an emergency or if the Ground Lease is in danger of being terminated) and without releasing any Trustor from any obligation hereunder or removing or waiving any default hereunder, perform on behalf of the Trustors any such obligations, and any and all costs and expenses (including, without limitation, attorneys’ fees) incurred by Beneficiary or Trustee in connection therewith shall be repayable upon demand by the Trustors, with interest thereon at the Defaulted Interest rate, and shall be secured hereby; provided that the foregoing shall not be construed to require Beneficiary or Trustee to incur any expense or take
any action with respect to any Trustor’s failure to comply with any of the Trustors’ obligations under any Ground Lease.
5.2.12. The Trustors, promptly upon receiving written notice of a breach by the Lessor (or by any receiver, trustee, custodian, or other party that succeeds the rights of the Lessor) or of any inability of the Lessor to perform the terms and provisions of any Ground Lease (including, without limitation, by reason of a termination, rejection, or disaffirmance by such Lessor pursuant to any Bankruptcy Laws), which would materially impair the value of any Ground Lease, shall notify Beneficiary in writing of any such breach or inability. The Trustors hereby assign to Beneficiary the proceeds of any claims that any Trustor may have against such Lessor for any such breach or inability by such Lessor. So long as no Event of Default has occurred and is continuing, the Trustors shall have the sole right to proceed against such Lessor in the Trustors’ and Beneficiary’s behalf and to receive and retain all proceeds of such claims except as otherwise provided in the Indenture; during the continuance of an Event of Default, Beneficiary shall have the sole right to proceed against Lessor, and the Trustors shall cooperate with Beneficiary in such endeavor. The Trustors shall, at their expense, diligently prosecute any such proceedings, shall deliver to Beneficiary copies of all papers served in connection therewith, and shall consult and cooperate with Beneficiary and its attorneys and agents, in the carrying on and defense of any such proceedings.
5.2.13. Notwithstanding anything to the contrary in this paragraph, if there is an Event of Default which remains uncured, then Beneficiary shall have the right, but not the obligation, to conduct and control, through counsel of Beneficiary’s choosing, all litigation and other proceedings under the Bankruptcy Laws relating to the Lessor; and any expenses incurred by Beneficiary in such litigation and proceedings shall be additional indebtedness of the Trustors secured by this Deed of Trust, shall bear interest at the Defaulted Interest rate and shall be payable by the Trustors upon demand. No settlement of any such proceeding shall be made by the Trustors without Beneficiary’s prior written consent.
5.2.14. In addition to any and all other assignments contained in this Deed of Trust, the Trustors hereby absolutely, presently and unconditionally assign, transfer, and set over to Beneficiary all of the Trustors’ claims and rights to the payment of damages, and any other remedies available to the Trustors, arising from any rejection of any Ground Lease by the Lessor thereunder pursuant to any Bankruptcy Law. This assignment constitutes a present, absolute, irrevocable, and unconditional assignment of the foregoing claims, rights and remedies, and shall continue in effect until all the indebtedness and obligations secured by this Deed of Trust shall have been satisfied and discharged in full.
Notwithstanding the foregoing, so long as no uncured Event of Default has occurred and is continuing, the Trustors shall have an absolute license to
assert and settle any and all such claims, and to receive and apply all proceeds thereof as Trustee shall determine in its discretion.
The Trustors hereby, jointly and severally, covenant to and agree with Beneficiary as follows:
Section 6.1. Restrictive Uses . Each Trustor covenants not to suffer any Liens against the Trust Estate (other than Permitted Liens).
Section 6.2. Transferability . No Trustor shall make any Asset Sale unless the proceeds of such Asset Sale are applied as permitted or required by Section 4.13 of the Indenture.
Section 6.3. No Cooperative or Condominium . No Trustor shall operate or permit the Property to be operated as a cooperative or condominium building or buildings in which the tenants or occupants participate in the ownership, control or management of the Property or any part thereof, as tenant stockholders or otherwise.
CASUALTIES AND CONDEMNATION
Section 7.1. Casualties .
7.1.1. The Trustors shall notify Beneficiary in writing promptly after loss or damage caused by fire, wind or other casualty to the Property (“ Casualty ”).
7.1.2. Any and all Net Cash Proceeds (as defined in the Indenture) from Insurance Policies shall be treated in accordance with Section 4.13 of the Indenture and shall be released to the Trustors or applied to the discharge of the Secured Obligations as set forth in the Indenture.
7.1.3. If the Trustors elect to apply Net Cash Proceeds of insurance to restoration, the Trustors agree promptly and without delay (a) to enter into, and deliver to Beneficiary a certified copy of, one or more architect and building contracts providing for the restoration and reconstruction of the Property to as good or better condition as existed prior to the Casualty and (b) to begin to restore and reconstruct the Property and, thereafter, to proceed diligently therewith in accordance with plans, specifications, architectural standards and design reasonably determined by the Trustors.
7.1.4. Notwithstanding anything to the contrary contained herein, in the event of any uninsured Casualty, the Trustors shall promptly within a reasonable time, at their own cost and expense, restore and reconstruct the Property to as good or better condition as existed prior to the Casualty. The Trustors shall have the sole right to settle any and all losses and claims unless an Event of Default then exists.
Section 7.2. Condemnation . The Trustors, immediately upon obtaining knowledge of the institution of any proceedings for the condemnation of the entire Property or any material portion thereof, shall notify Trustee and Beneficiary of the pendency of such proceedings. Trustee and Beneficiary may participate in any such proceedings and the Trustors from time to time shall deliver to Beneficiary all instruments requested by Beneficiary to permit such participation; provided , however , that the Trustors shall have the sole right to participate in and settle any and all such proceedings unless an Event of Default then exists. In any such condemnation proceedings Beneficiary may be represented by counsel selected by Beneficiary at the sole cost and expense of the Trustors. The Trustors shall cause the Net Cash Proceeds of any award or compensation or payment in lieu or settlement thereof, to be applied as set forth in Section 4.13 of the Indenture.
REMEDIES OF BENEFICIARY
Section 8.1. Event of Default . Subject to any applicable cure period provided for in the Indenture or in this Deed of Trust, or if no cure period has been specified then thirty (30) days after Beneficiary has provided written notice to the Trustors with respect thereto (any such cure periods to run concurrently and not consecutively), any of the following shall be deemed to be an “Event of Default” hereunder:
8.1.1. The occurrence of one or more “Events of Default” (as defined in Section 6.1 of the Indenture) shall constitute an Event of Default under this Deed of Trust.
8.1.2. Failure of the Trustors to perform any of the terms, covenants and conditions in this Deed of Trust or any of the other Indenture Documents.
8.1.3. Any statement, representation or warranty given by any Trustor to Trustee or Beneficiary in any of the Indenture Documents, in connection with the Indenture or in any other document provided by the Trustors, including this Deed of Trust, is found to be materially false or misleading.
8.1.4. A material default under, or the institution of foreclosure or other proceedings to enforce, any Lien or Permitted Lien of any kind upon the Property or any portion thereof.
8.1.5. Any transfer of the Property or any portion thereof in violation of Section 6.2 hereof.
8.1.6. Failure of any Trustor to perform any mat