Exhibit 10.2

 

 

 

 

 

FEE AND LEASEHOLD DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,

SECURITY AGREEMENT AND FIXTURE FILING

([STATE] – [COUNTY])

 

 

[BORROWER] and

[OPERATING LESSEE], collectively, as grantor (collectively, Grantor)

to

[TRUSTEE], as trustee (Trustee),

for the benefit of

MORGAN STANLEY BANK, N.A., BANK OF AMERICA, N.A., CITIGROUP GLOBAL

MARKETS REALTY CORP., AND JPMORGAN CHASE BANK, NATIONAL

ASSOCIATION, collectively, as beneficiary (collectively, Lender)

Dated:                     , 2017

Location: [ADDRESS]

                [CITY], [STATE]

PREPARED BY AND UPON

RECORDATION RETURN TO:

Dechert LLP

Cira Centre

2929 Arch Street

Philadelphia, PA 19104-2808

Attention: David W. Forti, Esq.

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FEE AND LEASEHOLD DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,

SECURITY AGREEMENT AND FIXTURE FILING

THIS FEE AND LEASEHOLD DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY
AGREEMENT AND FIXTURE FILING (this “Deed of Trust”) is made as of             ,
2017, by [PROPERTY OWNER], a [PROPERTY OWNER ENTITY TYPE], as grantor
(“Borrower”), and [OPERATING LESSEE], a [OPERATING LESSEE ENTITY TYPE], as
grantor (“Operator”; and together with Borrower, collectively, “Grantor”), each
having its principal place of business at c/o Blackstone Real Estate Advisors
L.P., 345 Park Avenue, New York, New York 10154 to [TRUSTEE], having an address
at [TRUSTEE ADDRESS], as trustee (“Trustee”) for the benefit of MORGAN STANLEY
BANK, N.A., a national banking association, having an address at 1585 Broadway,
New York, New York 10036, BANK OF AMERICA, N.A., a national banking association,
having an office at c/o Capital Markets Servicing Group, 900 West Trade Street,
Suite 650, Mail Code: NC1-026-06-01, Charlotte, North Carolina 28255, CITIGROUP
GLOBAL MARKETS REALTY CORP., a New York corporation, having an address at 390
Greenwich Street, 7th Floor, New York, New York 10013, and JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION, a national banking association, having an address at 383
Madison Avenue, New York, New York 10179, collectively, as beneficiary
(collectively, together with their successors and/or assigns, “Lender”).

W I T N E S S E T H:

WHEREAS, this Deed of Trust is given to secure a loan (the “Loan”) advanced by
Lender pursuant to that certain Loan Agreement, dated as of the date hereof,
among Borrower, the other entities which are signatories thereto as borrowers
(collectively, “Other Borrowers”) Operator and Lender (as the same may be
amended, restated, replaced, supplemented, renewed, extended or otherwise
modified from time to time, the “Loan Agreement”) and evidenced by those certain
Promissory Notes, dated the date hereof, made by Borrower and Other Borrowers in
favor of Lender (such Promissory Notes, together with all extensions, renewals,
replacements, restatements or modifications thereof being hereinafter referred
to as the “Note”);

WHEREAS, Operator is an Affiliate (as defined in the Loan Agreement) of Borrower
and operates a hotel located on the Land and Improvements (as each such term is
defined below) under and pursuant to the Pledged Lease (as defined below), and
Operator will directly benefit from the making of the Loan by Lender to
Borrower. Furthermore, pursuant to the terms of the Pledged Lease, Operator has
agreed to grant Lender the security interests described herein;

WHEREAS, Borrower desires to secure the payment of the Debt (as defined in the
Loan Agreement) and the performance of all of its obligations under the Note,
the Loan Agreement and the other Loan Documents (as herein defined) and Operator
desires to secure the payment of the Debt by Borrower as its direct Affiliate;
and

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WHEREAS, this Deed of Trust is given pursuant to the Loan Agreement, and
payment, fulfillment, and performance by Grantor of its respective obligations
thereunder and under the other Loan Documents are secured hereby, and each and
every term and provision of the Loan Agreement and the Note, including the
rights, remedies, obligations, covenants, conditions, agreements, indemnities,
representations and warranties of the parties therein, are hereby incorporated
by reference herein as though set forth in full and shall be considered a part
of this Deed of Trust. The Loan Agreement, the Note, this Deed of Trust, and all
other documents evidencing or securing the Debt (including all additional
mortgages, deeds to secure debt and assignments of leases and rents, (if any))
executed or delivered in connection therewith, are hereinafter referred to
collectively as the “Loan Documents.”

NOW THEREFORE, in consideration of the making of the Loan by Lender and the
covenants, agreements, representations and warranties set forth in this Deed of
Trust:

ARTICLE 1 - GRANTS OF SECURITY

Section 1.1 Property Granted. Borrower and Operator each do hereby irrevocably
encumber, grant, bargain, sell, pledge, assign, warrant, transfer and convey to
Trustee, with the power of sale, for the benefit of Lender and its successors
and assigns, all of Borrower’s and Operator’s right, title and interest in and
to the following property, rights, interests and estates whether now owned, or
hereafter acquired by Borrower and Operator, as the case may be (collectively,
the “Property”):

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

(b) Additional Land. All additional lands, estates and development rights (to
the extent assignable) now or hereafter acquired by Borrower or Operator for use
in connection with the Land and the development thereof 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 Deed of Trust;

(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) Pledged Lease. All of Operator’s estate, right, title and interest in, to
and under that certain lease described on Schedule I (as amended, modified and
in effect from time to time, the “Pledged Lease”) and the leasehold estate
created thereby in, inter alia, the Land and Improvements, together with all
appurtenances thereto and any and all (i) extensions, renewals, modifications
and option rights under the Pledged Lease, (ii) credits to and deposits of
Operator under the Pledged Lease and all other options, privileges and rights
granted and demised to Operator under the Pledged Lease, (iii) rights or
privileges of Operator to terminate, cancel, surrender or merge the Pledged
Lease, and (iv) rights of Operator in connection with any rejection by the
lessor or its bankruptcy trustee of the Pledged Lease under Section 365 of the
Bankruptcy Code (as defined below) to (A) possession of any statutory term of
years derived from or incident to the operation of Section 365(h)(1) of the
Bankruptcy Code or (B) elect under Section 365(h)(1) to terminate or treat the
Pledged Lease as terminated;

 

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(e) Easements and Other Interests. 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 (including, without limitation,
adjudicated, conditional, tributary, non-tributary or not non-tributary), water
stock, well rights, irrigation rights, ditch rights, tap rights, air rights,
minerals, mineral rights, right to oil and gas, leases and royalties related
thereto, landscaping, gravel, scoria 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 and
the reversion and 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 Borrower or Operator
of, in and to the Land and the Improvements and every part and parcel thereof,
with the appurtenances thereto;

(f) Equipment. All “goods” and “equipment,” as such terms are defined in Article
9 of the Uniform Commercial Code (as hereinafter defined), now owned or
hereafter acquired by Borrower or Operator, which is used at or in connection
with the Improvements or the Land or is located thereon or therein (including,
but not limited to, all machinery, equipment, furnishings, computers and
electronic data-processing and other office equipment now owned or hereafter
acquired by Borrower or Operator and any and all additions, substitutions and
replacements of any of the foregoing), together with all attachments,
components, parts, equipment and accessories installed thereon or affixed
thereto (collectively, the “Equipment”). Notwithstanding the foregoing,
Equipment shall not include any property belonging to tenants under Leases or
guests or invitees at the Property except to the extent that Borrower or
Operator shall have any right or interest therein;

(g) Fixtures. All Equipment now owned, or the ownership of which is hereafter
acquired, by Borrower or Operator which is so related to the Land and
Improvements forming part of the Property that it is deemed fixtures or real
property under the law of the particular state in which the Equipment is
located, including, without limitation, all building or construction materials
intended for construction, reconstruction, alteration or repair of or
installation on the Property, construction equipment, appliances, machinery,
plant equipment, fittings, apparatuses, fixtures and other items now or
hereafter attached to, installed in or used in connection with (temporarily or
permanently) any of the Improvements or the Land, including, but not limited to,
engines, devices for the operation of pumps, pipes, plumbing, call and sprinkler
systems, fire extinguishing apparatuses and equipment, heating, ventilating,
laundry, incinerating, electrical, air conditioning and air cooling equipment
and systems, gas and electric machinery, appurtenances and equipment, pollution
control equipment, security systems, disposals, dishwashers, refrigerators and
ranges, recreational equipment and facilities of all kinds, and water, gas,
electrical, storm and sanitary sewer facilities, utility lines and equipment
(whether owned individually or jointly with others, and, if owned jointly, to
the extent of Borrower’s or Operator’s interest therein) and all other utilities
whether or not situated in

 

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easements, all water tanks, water supply, water power sites, fuel stations, fuel
tanks, fuel supply, and all other structures, together with all accessions,
appurtenances, additions, replacements, betterments and substitutions for any of
the foregoing and the proceeds thereof (collectively, the “Fixtures”).
Notwithstanding the foregoing, “Fixtures” shall not include any property which
tenants are entitled to remove pursuant to Leases, except to the extent that
Borrower or Operator shall have any right or interest therein;

(h) Personal Property. All furniture, furnishings, objects of art, machinery,
goods, tools, supplies, appliances, (including, but not limited to, beds,
bureaus, chiffoniers, 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, foodcarts,
cookware, dry cleaning facilities, dining room wagons, keys or other entry
systems, 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, lockers, shelving, spotlighting equipment, dishwashers, garbage
disposals, washers and dryers), food and beverages, general intangibles,
contract rights, accounts, accounts receivable, franchises, licenses,
certificates and permits, and all other customary hotel equipment and personal
property of any kind or character whatsoever as defined in and subject to the
provisions of the Uniform Commercial Code, whether tangible or intangible, other
than Fixtures, which are now or hereafter owned by Borrower and/or Operator and
which are located within or about the Land and the Improvements, together with
all accessories, replacements and substitutions thereto or therefor and the
proceeds thereof (collectively, the “Personal Property”), and the right, title
and interest of Borrower and/or Operator 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”), superior in lien to the
lien of this Deed of Trust and all proceeds and products of the above.
Notwithstanding the foregoing, personal property shall not include any property
belonging to tenants under Leases or guests or invitees at the Property except
to the extent that Grantor shall have any right or interest therein;

(i) Leases and Rents. All leases, operating leases, subleases or sub-subleases,
lettings, licenses, concessions or other agreements (whether written or oral and
whether now or hereafter in effect), pursuant to which any Person is granted a
possessory interest in, or right to use or occupy all or any portion of the Land
and the Improvements, and every modification, amendment or other agreement
relating to such leases, subleases, sub-subleases, or other agreements entered
into in connection with such leases, subleases, sub-subleases, or other
agreements and every guarantee of the performance and observance of the
covenants, conditions and agreements to be performed and observed by the other
party thereto, heretofore or hereafter entered into, whether before or after the
filing by or against Borrower or Operator of any petition

 

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for relief under 11 U.S.C. §101 et seq., as the same may be amended from time to
time (the “Bankruptcy Code”), including without limitation, the Pledged Lease,
together with all credits, deposits, options, privileges, right, title and
interest of Borrower and/or Operator and their respective successors and assigns
under any of the aforesaid agreements (collectively, the “Leases”) and all
right, title and interest of Borrower and Operator, and their respective
successors and assigns therein and thereunder, including, without limitation,
cash or securities deposited thereunder to secure the performance by the lessees
of their obligations thereunder and all rents, additional rents, revenues,
issues and profits arising from the Leases and any extension, renewal or
replacement thereof, together with all rents, rent equivalents, income, fees,
receivables, receipts, accounts, deposits, profits (including, but not limited
to, all oil and gas or other mineral royalties and bonuses), charges for
services rendered and any and all payment and consideration of whatever form or
nature received by Borrower, Operator or their respective agents or employees
from any and all sources relating to the use, enjoyment and occupancy of the
Property, including, without limitation, all revenues and credit card receipts
collected from guest rooms, restaurants, room service, bars, meeting rooms,
banquet rooms and recreational facilities, all receivables, customer
obligations, installment payment obligations and other obligations now existing
or hereafter arising from or created out of the sale, lease, sublease, license,
concession or other grant of the right of the use and occupancy of property or
rendering of services by Borrower, Operator or any other 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, guest rooms or other space, halls, stores, and offices, and
deposits securing reservations of such space), 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,
movie rentals, telephone service, if any, from business interruption or other
loss of income insurance from the Land and the Improvements whether paid or
accrued before or after the filing by or against Borrower or Operator of any
petition for relief under the Bankruptcy Code (collectively, the “Rents”) and
all proceeds from the sale or other disposition of the Leases and the right to
receive and apply the Rents to the payment of the Debt. Notwithstanding the
foregoing, “Rents” shall not include (i) Custodial Funds or gratuities collected
by or for the benefit of employees at the Property or (ii) Hotel Taxes or any
other federal, state and municipal excise, sales, hotel, use and similar taxes
collected directly from patrons or guests of the Property as a part of or based
on the sales price of any goods, services or other items, such as room,
admission and cabaret or similar taxes. This assignment of present and future
Leases shall be effective without further or supplemental assignment;

(j) Bankruptcy Claims. To the extent assignable and permitted by law, all of
Borrower’s and Operator’s claims and rights (the “Bankruptcy Claims”) to the
payment of damages arising from any rejection by a lessee of any Lease under the
Bankruptcy Code;

(k) Lease Guaranties. To the extent assignable, all of Borrower’s and Operator’s
right, title and interest in and claims under any and all lease guaranties,
letters of credit and any other credit support (individually, a “Lease
Guaranty,” and collectively, the “Lease Guaranties”) given by any guarantor in
connection with any of the Leases or leasing commissions (individually, a “Lease
Guarantor,” and collectively, the “Lease Guarantors”) to Borrower or Operator;

 

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(l) Proceeds. To the extent assignable and permitted by law, all proceeds from
the sale or other disposition of the Leases, the Rents, the Lease Guaranties and
the Bankruptcy Claims;

(m) Lessor’s Rights. All rights, powers, privileges, options and other benefits
of Borrower and/or Operator under the Leases and/or under any and all Lease
Guaranties (to the extent assignable), including without limitation (i) the
immediate and continuing right to make claim for, receive and collect all Rents
payable or receivable under the Leases and all sums payable under any and all
Lease Guaranties or pursuant thereto (and to apply the same to the payment of
the Debt or the Other Obligations (as herein defined)) and (ii) any and all
rights available to Borrower and/or Operator as the holder of a landlord’s lien
or similar lien on the property and/or assets of the tenant or lessee, and to do
all other things which Borrower, Operator or any lessor is or may become
entitled to do under the Leases or any and all Lease Guaranties;

(n) Entry. The right, at Lender’s option, upon revocation of the license granted
herein to enter upon the Property in person, by agent or by court-appointed
receiver, to collect the Rents;

(o) Power of Attorney. Upon or at any time after the occurrence and during the
continuance of an Event of Default, Borrower’s and Operator’s irrevocable power
of attorney, coupled with an interest, to take any and all of the actions set
forth in Section 7.1(h) of this Deed of Trust and any or all other actions
designated by Lender for the proper management and preservation of the Property
and authorized by the terms of this Deed of Trust;

(p) Condemnation Awards. All awards or payments, including interest thereon,
which may heretofore and hereafter be made with respect to the Property, 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;

(q) Insurance Proceeds. All proceeds in respect of the Property under any
insurance policies covering the Property, 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;

(r) 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 appeals, applications or proceedings for reduction
thereof;

(s) Conversion. All proceeds of the conversion, voluntary or involuntary, of any
of the foregoing including, without limitation, proceeds of insurance and
condemnation awards, into cash or liquidation claims;

 

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(t) Rights. The right, in the name and on behalf of Borrower and Operator, 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
Lender in the Property;

(u) Agreements. All agreements, contracts, certificates, instruments,
franchises, permits, licenses (to the extent permitted by applicable law),
plans, specifications, warranties and other documents, now or hereafter entered
into, and all rights therein and thereto (subject to any restrictions on
assignment), respecting or pertaining to the possession, use, occupation,
construction, management or operation of the Land and any part thereof and any
Improvements or any business or activity conducted on the Land and any part
thereof and all right, title and interest of Borrower and Operator therein and
thereunder, including, without limitation, the right, upon the happening of and
during the continuance of an Event of Default, to receive and collect any sums
payable to Borrower or Operator thereunder, provided that, unless an Event of
Default has occurred and is continuing, Borrower and Operator shall be entitled
to act in connection with any of the foregoing in accordance with the applicable
requirements of the Loan Agreement and other Loan Documents and provided such
actions do not violate any covenant contained herein or therein;

(v) Trademarks. To the extent assignable, all tradenames, patents, trademarks,
servicemarks, logos, copyrights, goodwill, books and records and all other
general intangibles relating to or used in connection with the operation of the
Property;

(w) Accounts. All reserves, escrows and deposit accounts maintained by Borrower
or Operator with respect to the Property, including, without limitation, all
accounts established pursuant to the Cash Management Agreement, including,
without limitation, the Cash Management Account and the Clearing Accounts,
together with all deposits or wire transfers made to the Cash Management Account
and the Clearing Accounts 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;

(x) Letter of Credit. All letter of credit rights (whether or not the letter of
credit is evidenced by a writing) Borrower or Operator now has or hereafter
acquires relating to the properties, rights, titles and interests referred to in
this Section 1.1;

(y) Tort Claims. All commercial tort claims Borrower or Operator now has or
hereafter acquires relating to the properties, rights, titles and interests
referred to in this Section 1.1;

(z) Proceeds. All proceeds (including, without limitation, all “proceeds” as
defined in the Uniform Commercial Code) of any of the foregoing, including,
without limitation, proceeds of insurance and condemnation awards, whether cash,
liquidation or other claims or otherwise; and

 

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(aa) Other Rights. Any and all other rights of Borrower and Operator in and to
the items set forth in Subsections (a) through (z) above, and all amendments,
modifications, replacements, renewals and substitutions thereof.

AND without limiting any of the other provisions of this Deed of Trust, to the
extent permitted by applicable law, Borrower and Operator each expressly grants
to Lender, as secured party, a security interest in the portion of the Property
owned by Borrower or Operator, as applicable, which is or may be subject to the
provisions of the Uniform Commercial Code which are applicable to secured
transactions; it being understood and agreed that the Improvements and Fixtures
are part and parcel of the Land (the Land, the Improvements and the Fixtures
collectively referred to as the “Real Property”) appropriated to the use thereof
and, whether affixed or annexed to the Real Property or not, shall for the
purposes of this Deed of Trust be deemed conclusively to be real estate and
subject to this Deed of Trust.

Section 1.2 Assignment of Leases and Rents. Borrower and Operator each hereby
absolutely and unconditionally assigns to Lender all of Borrower’s and
Operator’s right, title and interest in and to all current and future Leases and
Rents; it being intended by Borrower and Operator that this assignment
constitutes a present, absolute assignment and not an assignment for additional
security only. Nevertheless, subject to the terms of the Cash Management
Agreement, the other Loan Documents and Section 7.1(h) of this Deed of Trust,
Lender grants to Borrower and Operator a revocable license to (and Borrower and
Operator shall have the express right to) (a) collect, receive, use and enjoy
the Rents and Borrower and Operator shall hold such Rents, or a portion thereof
sufficient to discharge all current sums then due on the Debt, in trust for the
benefit of Lender for use in the payment of such sums in accordance with the
terms of the other Loan Documents and (b) otherwise deal with and enjoy the
rights of lessor or lessee, as applicable, under the Leases.

Section 1.3 Security Agreement. This Deed of Trust 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 Deed of Trust, Borrower and Operator
each hereby grants to Lender, as security for the Obligations (hereinafter
defined), a security interest in all Property, including without limitation the
Fixtures, the Equipment, the Personal Property and Rents to the full extent that
such Property, including without limitation the Fixtures, the Equipment, the
Personal Property and Rents may be subject to the Uniform Commercial Code (said
portion of the Property so subject to the Uniform Commercial Code being called
the “Collateral”). If an Event of Default shall occur and be continuing, Lender,
in addition to any other rights and remedies which it may have, shall have and
may exercise immediately and without demand, any and all rights and remedies
granted to a secured party upon default under the Uniform Commercial Code,
including, without limiting the generality of the foregoing, the right to take
possession of the Collateral or any part thereof, and to take such other
measures as Lender may deem necessary for the care, protection and preservation
of the Collateral. Upon request or demand of Lender after the occurrence and
during the continuance of an Event of Default, Borrower and Operator each shall,
at its expense, assemble the Collateral and make it available to Lender at a
convenient place (at the Land if tangible property) reasonably acceptable to
Lender. Borrower and Operator shall pay to Lender

 

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within ten (10) Business Days after written demand therefor, any and all
out-of-pocket expenses, including reasonable legal expenses and attorneys’ fees,
incurred or paid by Lender in protecting its interest in the Collateral and in
enforcing its rights hereunder with respect to the Collateral after the
occurrence and during the continuance of an Event of Default. Any notice of
sale, disposition or other intended action by Lender with respect to the
Collateral sent to Grantor in accordance with Section 10.6 of the Loan Agreement
at least ten (10) Business Days prior to such action, shall, except as otherwise
provided by applicable law, constitute reasonable notice to Grantor. The
proceeds of any disposition of the Collateral, or any part thereof, may, except
as otherwise required by applicable law, be applied by Lender to the payment of
the Debt in such priority and proportions as Lender in its discretion shall deem
proper. The principal place of business of Borrower and Operator (each, debtor)
is as set forth on page one hereof and the address of Lender (secured party) is
as set forth on page one hereof.

Section 1.4 Fixture Filing. Certain of the Property is or will become “fixtures”
(as that term is defined in the Uniform Commercial Code) on the Land, and this
Deed of Trust, upon being filed for record in the real estate records of the
county wherein such fixtures are situated, shall operate also as a financing
statement filed as a fixture filing in accordance with the applicable provisions
of said Uniform Commercial Code upon such of the Property that is or may become
fixtures.

Section 1.5 Pledges of Monies Held. Grantor hereby pledges to Lender all of its
respective right, title and interest in and to any and all monies now or
hereafter held by Lender or on behalf of Lender in connection with the Loan,
including, without limitation, any sums deposited in the Clearing Account, the
Cash Management Account, the Reserve Funds and Net Proceeds, as additional
security for the Obligations until expended or applied or distributed as
provided in this Deed of Trust and the other Loan Documents.

Section 1.6 Notice To Lessees. Each of Borrower and Operator hereby authorizes
and directs the lessees named in the Leases or any other future lessees or
occupants of the Property (and, as applicable, any guarantors under any Lease
Guaranties) to pay over to Lender or to such other party as Lender directs all
Rents and all sums due under any Lease or Lease Guaranties upon receipt from
Lender of written notice to the effect that Lender is then the holder of this
Deed of Trust and that an Event of Default exists and is continuing, and to
continue to do so until otherwise notified by Lender.

Section 1.7 Assignment of Contracts. Grantor hereby absolutely and
unconditionally assigns to Lender all of Grantor’s right, title and interest in
and to the Contracts (defined below), to the extent assignable, it being
intended that this assignment be an absolute assignment from Grantor to Lender
and not merely the granting of a security interest. Until the occurrence of an
Event of Default, Grantor may retain, use and enjoy the benefits of the
Contracts. Upon the occurrence and during the continuance of an Event of Default
(other than the Event of Defaults described in Section 8.1(a)(vi) and
Section 8.1(a)(vii) of the Loan Agreement for which the revocation hereinafter
described shall be automatic and simultaneous with the occurrence of any such
Event of Default), the license described in the preceding sentence shall, upon
Lender’s election, be automatically revoked, and Lender may elect to exercise
any and all of Lender’s rights and remedies hereunder. After such a revocation,
Lender

 

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shall provide Grantor with notice of same. As used herein, “Contracts” means,
collectively, (a) all contracts between Borrower and/or Operator and third
parties in connection with the management, construction, repair, renovation,
use, operation or maintenance of the Property, including without limitation, the
Management Agreement, any franchise agreements, any agreements regarding parking
facilities for the Property, any architect’s agreements, construction contracts,
licensing agreements, subcontracts, service and supply agreements, any other
agreements with design professionals, all agreements, allocations, and rights
with all utility services serving the Property and all development agreements,
reservation agreements, agreements of sale, options to purchase, rights of first
refusal or any other preferential right and permits, which have heretofore been
or will hereafter be executed by or on behalf of Borrower, Operator or Manager,
or which have been or will hereafter be assigned to or acquired by Borrower
and/or Operator, in each case as the same may thereafter from time to time be
supplemented, amended, modified or extended by one or more written agreements
supplemental thereto applicable to the Property (the parties with whom or to
whom any of the foregoing have been or may hereafter be given are hereinafter
collectively referred to as the “Contractors”); and (b) all warranties,
guarantees, and other rights of Borrower, Operator or Manager, direct and
indirect, against manufacturers, dealers, suppliers, Contractors, and others in
connection with the work done or to be done and the materials supplied or to be
supplied to or for the Property.

CONDITIONS TO GRANT

TO HAVE AND TO HOLD the above granted and described Property unto Trustee for
and on behalf of Lender and to the use and benefit of Lender and Trustee for
their successors and assigns, forever, pursuant to the terms and conditions set
forth herein and in the Loan Documents;

IN TRUST, WITH POWER OF SALE, to secure payment to Lender of the Debt at the
time and in the manner provided for its payment in the Loan Agreement, the Note
and in this Deed of Trust;

PROVIDED, HOWEVER, these presents are upon the express condition that, if
Borrower shall pay to Lender the Debt at the time and in the manner provided in
the Note, the Loan Agreement and this Deed of Trust, and Borrower, Other
Borrowers and Operator shall perform the Other Obligations (as herein defined)
as set forth in this Deed of Trust and the other Loan Documents, and if each
Grantor shall abide by and comply with each and every covenant and condition set
forth herein and in the Note, the Loan Agreement and the other Loan Documents,
these presents and the estate hereby granted shall cease, terminate and be void
and Lender will provide, at Grantor’s sole cost and expense, a satisfaction and
cancellation of this Deed of Trust and termination statements for filed
financing statements, if any, to Grantor; provided, however, that Grantor’s
obligation to indemnify and hold harmless Lender pursuant to the provisions
hereof shall survive any such payment or release, except as set forth in the
last sentence of Section 4.2 and Section 10.5.

 

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ARTICLE 2 - DEBT AND OBLIGATIONS SECURED

Section 2.1 Debt. This Deed of Trust and the grants, assignments and transfers
made in Article 1 are given for the purpose of securing the Debt.

Section 2.2 Other Obligations. This Deed of Trust and the grants, assignments
and transfers made in Article 1 are also given for the purpose of securing the
following (the “Other Obligations”):

(a) the performance by Borrower and Operator of their respective obligations
contained herein;

(b) the performance by each of Borrower, Operator and the Other Borrowers of
their respective obligations contained in the Loan Agreement and any other Loan
Document; and

(c) the performance by Borrower, Operator and the Other Borrowers of each of
their respective obligations contained in any renewal, extension, amendment,
modification, consolidation, change of, or substitution or replacement for, all
or any part of the Note, the Loan Agreement or any other Loan Document.

Section 2.3 Debt and Other Obligations. Borrower’s and the Other Borrowers’
obligations for the payment of the Debt and the performance by each of Borrower,
Operator and the Other Borrowers of the Other Obligations that it is obligated
to perform shall be referred to collectively herein as the “Obligations.”

ARTICLE 3 - BORROWER AND OPERATOR COVENANTS

Each of Borrower and Operator covenants and agrees that:

Section 3.1 Payment of Debt. Borrower will pay, or cause to be paid, the Debt at
the time and in the manner provided in the Loan Agreement, the Note and this
Deed of Trust.

Section 3.2 Incorporation by Reference. All the covenants, conditions and
agreements contained in (a) the Loan Agreement, (b) the Note and (c) all and any
of the other Loan Documents, are hereby made a part of this Deed of Trust to the
same extent and with the same force as if fully set forth herein.

Section 3.3 Insurance. Borrower shall obtain and maintain, or cause to be
maintained, in full force and effect at all times insurance with respect to
Borrower, Operator and the Property as required pursuant to the Loan Agreement.

 

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Section 3.4 Maintenance of Property. Borrower and Operator each shall cause the
Property to be maintained in a good and safe condition and repair in all
material respects, normal wear and tear excepted. Except as otherwise provided
in the Loan Agreement, the Improvements, the Fixtures, the Equipment and the
Personal Property shall not be removed, demolished or materially altered (except
for normal replacement of the Fixtures, the Equipment or the Personal Property,
tenant finish and refurbishment of the Improvements) without the consent of
Lender or as otherwise permitted pursuant to the Loan Agreement. Subject to and
in accordance with the terms and conditions of the Loan Agreement, Borrower
shall promptly repair, replace or rebuild, if applicable, 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.

Section 3.5 Waste. Neither Borrower nor Operator shall commit or suffer any
material waste of the Property or make any change in the use of the Property
which may reasonably be expected to materially increase the risk of fire or
other hazard arising out of the operation of the Property, or take any action
that might reasonably be expected to invalidate or allow the cancellation of any
Policy, or do or permit to be done thereon anything that might reasonably be
expected to materially impair the value of the Property or the security of this
Deed of Trust. Neither Borrower nor Operator will, 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.

Section 3.6 Payment for Labor and Materials. (a) Except as otherwise provided in
the Loan Agreement and subject to Section 3.6(b) below, Borrower or Operator
will promptly pay or cause to be paid when due all bills and costs for labor,
materials, and specifically fabricated materials (“Labor and Material Costs”)
incurred in connection with the Property and never permit to exist beyond the
due date thereof in respect of the Property or any part thereof any lien or
security interest, even though inferior to the liens and the security interests
hereof, and in any event not permit to be created or exist in respect of the
Property or any part thereof any other or additional lien or security interest
other than the liens or security interests hereof except for the Permitted
Encumbrances.

(b) After prior written notice to Lender, Grantor, at its own expense, may
contest by appropriate legal proceeding, promptly initiated and conducted in
good faith and with due diligence, the amount or validity or application in
whole or in part of any of the Labor and Material Costs, provided that (i) no
Event of Default has occurred and is continuing under the Loan Agreement, the
Note, this Deed of Trust or any of the other Loan Documents, (ii) Grantor is
permitted to do so under the provisions of any other mortgage, deed of trust or
deed to secure debt affecting the Property, (iii) except with respect to
Permitted Encumbrances or Permitted Indebtedness such proceeding shall suspend
the collection of the Labor and Material Costs from Grantor and from the
Property or Grantor shall have paid all of the Labor and Material Costs under
protest or Grantor shall have furnished security as provided in clause
(vi) below, (iv) such proceeding shall be permitted under and be conducted in
accordance with the provisions of any other instrument to which Grantor is
subject and shall not constitute a default thereunder, (v) neither the Property
nor any part thereof or interest therein will be in danger of being sold,
forfeited, terminated, canceled or lost, and (vi) Grantor shall have furnished
the security as may be required in the proceeding, or as may be required under
the Loan Agreement to insure the payment of any contested Labor and Material
Costs, together with all interest and penalties thereon.

 

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Section 3.7 Performance of Other Agreements. Borrower and Operator each shall
observe and perform each and every term, covenant and provision to be observed
or performed by Borrower or Operator, as applicable, pursuant to the Loan
Agreement, any other Loan Document and any other agreement or recorded
instrument affecting or pertaining to the Property and any amendments,
modifications or changes thereto.

Section 3.8 Title. Borrower has good, marketable and insurable fee simple title
to the real property comprising part of the Property, and good title to the
balance of such Property, free and clear of all Liens (as defined in the Loan
Agreement) whatsoever except the Permitted Encumbrances (as defined in the Loan
Agreement), such other Liens as are permitted pursuant to the Loan Documents and
the Liens created by the Loan Documents. Operator has good, marketable and
insurable leasehold interest to the real property comprising part of the
Property and good title to or a leasehold interest in the balance of such
Property, free and clear of all Liens whatsoever except the Permitted
Encumbrances, such other Liens as are permitted pursuant to the Loan Documents
and the Liens created by the Loan Documents. This Deed of Trust, when properly
recorded in the appropriate records, together with any Uniform Commercial Code
financing statements required to be filed in connection therewith (when filed),
will create (a) a valid, perfected first priority lien on the Property, subject
only to Permitted Encumbrances, such other liens as are permitted pursuant to
the Loan Documents, and the Liens created by the Loan Documents, to the extent a
security interest may be perfected therein by the recording of this Deed of
Trust or by the filing of a Uniform Commercial Code financing statement, 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 Encumbrances,
such other Liens as are permitted pursuant to the Loan Documents and the Liens
created by the Loan Documents. To Borrower’s and Operator’s knowledge and except
as set forth in the schedules to the Loan Agreement, there are no claims for
payment for work, labor or materials affecting the Property which are past due
(unless such claims for payments are being contested in accordance with the
terms and conditions of the Loan Agreement) and no such claims are or may become
a lien prior to, or of equal priority with, the Liens created by the Loan
Documents.

Section 3.9 Letter of Credit Rights. If Borrower or Operator is at any time a
beneficiary under a letter of credit relating to the properties, rights, titles
and interests referenced in Section 1.1 of this Deed of Trust now or hereafter
issued in favor of Borrower or Operator, Borrower or Operator, as applicable,
shall promptly notify Lender thereof and, at the request and option of Lender,
Borrower or Operator shall use commercially reasonable efforts to, either
(i) arrange for the issuer and any confirmer of such letter of credit to consent
to an assignment to Lender of the proceeds of any drawing under the letter of
credit or (ii) arrange for Lender to become the transferee beneficiary of the
letter of credit, with Lender agreeing, in each case, that the proceeds of any
drawing under the letter of credit are to be applied as provided in Section 7.2
of this Deed of Trust.

 

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ARTICLE 4 - OBLIGATIONS AND RELIANCES

Section 4.1 Relationship of Grantor and Lender. The relationship between Grantor
and Lender is solely that of debtor and creditor, and Lender has no fiduciary or
other special relationship with Grantor, and no term or condition of the Loan
Agreement, the Note, this Deed of Trust and the other Loan Documents shall be
construed so as to deem the relationship between Grantor and Lender to be other
than that of debtor and creditor.

Section 4.2 No Lender Obligations. Notwithstanding the provisions of Subsection
1.1(i) and 1.1(k) or Section 1.2 hereof, this Deed of Trust shall not be
construed to bind Lender to the performance of any of the covenants, conditions
or provisions contained in any Lease or any Lease Guaranty or otherwise impose
any obligation upon Lender. Lender shall not be liable for any loss sustained by
Borrower or Operator resulting from Lender’s failure to let the Property after
an Event of Default or from any other act or omission of Lender in managing the
Property after an Event of Default unless such loss is caused by the willful
misconduct, fraud, illegal acts, or gross negligence of Lender. Lender shall not
be obligated to perform or discharge any obligation, duty or liability under the
Leases or any Lease Guaranties or under or by reason of this Deed of Trust, and
each of Borrower and Operator shall, and hereby agrees to, indemnify Lender for,
and to hold Lender harmless from, any and all liability, loss or damage which
may or might be incurred under the Leases, any Lease Guaranty or under or by
reason of this Deed of Trust and from any and all claims and demands whatsoever,
including the defense of any such claims or demands which may be asserted
against Lender by reason of any alleged obligations and undertakings on its part
to perform or discharge any of the terms, covenants or agreements contained in
the Leases or any Lease Guaranty unless such loss is caused by the willful
misconduct, fraud, illegal acts or gross negligence of Lender. Should Lender
incur any such liability, the amount thereof, including Lender’s costs, expenses
and reasonable third party attorneys’ fees, shall be secured by this Deed of
Trust and the other Loan Documents and Borrower and Operator shall reimburse
Lender therefor within ten (10) days after written demand and upon the failure
of Borrower or Operator so to do Lender may, at its option, declare all sums
secured by this Deed of Trust and the other Loan Documents immediately due and
payable. This Deed of Trust shall not operate to place any obligation or
liability for the control, care, management or repair of the Property upon
Lender, nor for the carrying out of any of the terms and conditions of the
Leases or any Lease Guaranties; nor shall it operate to make Lender responsible
or liable for any waste committed on the Property by the tenants or any other
parties, or for any dangerous or defective condition of the Property including,
without limitation, the presence of any Hazardous Substances (as defined in the
Environmental Indemnity), except to the extent arising from Lender’s gross
negligence, fraud, illegal acts or willful misconduct, or for any negligence in
the management, upkeep, repair or control of the Property resulting in loss or
injury or death to any tenant, licensee, employee or stranger, except to the
extent arising from Lender’s gross negligence, fraud, illegal acts or willful
misconduct. Lender is not undertaking the performance of any obligations with
respect to such agreements, contracts, certificates, instruments, franchises,
permits, trademarks, licenses and other documents. Notwithstanding the
provisions of this Section 4.2 to the contrary, the liabilities and obligations
of Borrower and Operator shall not apply to the extent such liability and
obligations arose after any Indemnified Party, or its nominee acquired title to
the Property whether by foreclosure, exercise of power of sale (if applicable
under the law of the particular state in which the Property is located), deed in
lieu of foreclosure or otherwise.

 

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Section 4.3 No Reliance on Lender.

(a) Without limiting Section 9.3 of the Loan Agreement, the general partners,
members, principals and (if Borrower or Operator is a trust) beneficial owners
of Borrower and Operator are experienced in the ownership and operation of
properties similar to the Property, and Grantor and Lender are relying solely
upon such expertise and business plan in connection with the ownership and
operation of the Property. Neither Borrower nor Operator is relying on Lender’s
expertise, business acumen or advice in connection with the Property.

(b) By accepting or approving anything required to be observed, performed or
fulfilled or to be given to Lender pursuant to this Deed of Trust, the Loan
Agreement, the Note or the other Loan Documents, including, without limitation,
any officer’s certificate, balance sheet, statement of profit and loss or other
financial statement, survey, appraisal, or insurance policy, Lender shall not be
deemed to have warranted, consented to, or affirmed the sufficiency, the
legality or effectiveness of same, and such acceptance or approval thereof shall
not constitute any warranty or affirmation with respect thereto by Lender.

Section 4.4 Reliance. Grantor recognizes and acknowledges that in accepting the
Loan Agreement, the Note, this Deed of Trust and the other Loan Documents,
Lender is expressly and primarily relying on the truth and accuracy of the
warranties and representations set forth in Section 4.1 of the Loan Agreement
without any obligation to investigate the Property and notwithstanding any
investigation of the Property by Lender; that such reliance existed on the part
of Lender prior to the date hereof, that the warranties and representations are
a material inducement to Lender in making the Loan; and that Lender would not be
willing to make the Loan and accept this Deed of Trust in the absence of the
warranties and representations as set forth in Section 4.1 of the Loan
Agreement. All representations, warranties, covenants, conditions and agreements
contained in the Loan Agreement and the other Loan Documents as the same may be
modified, renewed, substituted or extended are hereby made a part of this Deed
of Trust to the same extent and with the same force as if fully set forth
herein.

Section 4.5 No Mortgagee in Possession. Nothing herein contained shall be
construed as constituting Lender a “mortgagee in possession” in the absence of
the taking of actual possession of the Property by Lender.

ARTICLE 5 - FURTHER ASSURANCES

Section 5.1 Recording of Deed of Trust, etc. Grantor forthwith upon the
execution and delivery of this Deed of Trust and thereafter, from time to time,
will cause this Deed of Trust and any of the other Loan Documents creating a
Lien or security interest 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 law in
order to publish notice of and fully to protect and perfect the Lien or security
interest hereof upon, and the interest of Lender, in the Property. Borrower will
pay all taxes,

 

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filing, registration or recording fees, and all reasonable out-of-pocket
expenses incident to the preparation, execution, acknowledgment and/or recording
of the Note, this Deed of Trust, the other Loan Documents, any note, deed of
trust or mortgage supplemental hereto, any security instrument with respect to
the Property and 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 Deed of Trust, any deed of
trust or mortgage supplemental hereto, any security instrument with respect to
the Property or any instrument of further assurance, and any modification or
amendment of the foregoing documents, except where prohibited by law so to do.

Section 5.2 Further Acts, etc. Grantor will, at the cost of Grantor, and without
expense to Lender, do, execute, acknowledge and deliver all and every further
acts, deeds, conveyances, deeds of trust, mortgages, assignments, notices of
assignments, transfers and assurances as Lender shall, from time to time,
reasonably require, for the better assuring, conveying, assigning, transferring,
and confirming unto Lender or Trustee the Property and rights hereby mortgaged,
deeded, granted, bargained, sold, conveyed, confirmed, pledged, assigned,
warranted and transferred or intended now or hereafter so to be, or which
Grantor may be or may hereafter become bound to convey or assign to Lender or
Trustee, or for carrying out the intention or facilitating the performance of
the terms of this Deed of Trust or for filing, registering or recording this
Deed of Trust, or for complying with all Legal Requirements. Grantor, on written
demand, will execute and deliver, and in the event it shall fail to so execute
and deliver, hereby authorizes Lender to file in the name of Grantor to the
extent Lender may lawfully do so (or in the case of financing statements,
without the signature of Grantor), one or more financing statements, chattel
mortgages or comparable security instruments to evidence more effectively the
security interest of Lender in the Property and the Collateral. Such financing
statements may describe as the collateral covered thereby “all assets of the
debtor, whether now owned or hereafter acquired” or words to that effect,
notwithstanding that such collateral description may be broader in scope than
the collateral described herein. Lender shall provide Grantor with copies of any
notices and/or instruments of filings executed by Lender in accordance with the
immediately preceding sentence, provided, that failure by Lender to provide such
copies shall not affect the validity thereof. Grantor grants to Lender an
irrevocable power of attorney coupled with an interest for the purpose of
exercising and perfecting any and all rights and remedies available to Lender at
law and in equity upon the occurrence and during the continuance of an Event of
Default, including without limitation, such rights and remedies available to
Lender pursuant to this Section 5.2. Notwithstanding anything to the contrary in
the immediately preceding sentence, Lender shall not execute any documents as
attorney in fact for Grantor unless Grantor shall have failed or refused to
execute the same within five (5) Business Days after receipt of Lender’s request
thereof.

Section 5.3 Changes in Tax, Debt, Credit and Documentary Stamp Laws.

(a) If any law is enacted or adopted or amended after the date of this Deed of
Trust which deducts all or any portion of the Debt from the value of the
Property for the purpose of taxation or which imposes a tax, either directly or
indirectly, on the Debt or Lender’s interest in the Property granted by this
Deed of Trust, Borrower will pay the tax, with interest and

 

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penalties thereon, if any (provided that nothing hereunder shall require
Borrower to pay any income tax imposed on Lender by reason of its interest in
the Property). If the payment of tax by Borrower would be unlawful or taxable to
Lender or unenforceable or provide the basis for a defense of usury then Lender
shall have the option, by written notice of not less than one hundred eighty
(180) days to declare the Debt immediately due and payable; provided, however,
no Spread Maintenance Payment, prepayment premium or penalty shall be due or
payable in connection therewith and provided, further, that Lender shall not
exercise such option if, within such one hundred eighty (180) day period,
Borrower shall prepay the outstanding principal balance of the Loan in an amount
equal to the Adjusted Release Amount for the applicable Property, obtain a
release of the applicable Property and pay all other amounts due pursuant to and
in accordance with Section 2.5.2 of the Loan Agreement.

(b) Borrower will not claim or demand or be entitled to any credit or credits on
account of the Debt for any part of the Taxes or Other Charges assessed against
the Property, or any part thereof, and no deduction shall otherwise be made or
claimed from the assessed value of the Property, or any part thereof, for real
estate tax purposes by reason of this Deed of Trust or the Debt. If such claim,
credit or deduction shall be required by law, Lender shall have the option, by
written notice of not less than one hundred eighty (180) days to declare the
Debt immediately due and payable; provided, however, no Spread Maintenance
Payment, prepayment premium or penalty shall be due or payable in connection
therewith and provided, further, that Lender shall not exercise such option if,
within such one hundred eighty (180) day period, Borrower shall prepay the
outstanding principal balance of the Loan in an amount equal to the Adjusted
Release Amount for the applicable Property, obtain a release of the applicable
Property and pay all other amounts due pursuant to and in accordance with
Section 2.5.2 of the Loan Agreement.

(c) If at any time the United States of America, any State thereof or any
subdivision of any such State shall require revenue or other stamps to be
affixed to the Note, this Deed of Trust, or any of the other Loan Documents or
impose any other tax or charge on the same, Borrower will pay for the same, with
interest and penalties thereon, if any, provided that Grantor shall have the
right to contest such amounts in accordance with the terms and conditions of the
Loan Agreement.

Section 5.4 Severing of Deed of Trust. The provisions of Section 8.2(c) of the
Loan Agreement are hereby incorporated by reference.

Section 5.5 Replacement Documents. Upon receipt of an affidavit of an officer of
Lender as to the loss, theft, destruction or mutilation of the Note or any other
Loan Document which is not of public record, and, in the case of any such
mutilation, upon surrender and cancellation of such Note or other Loan Document,
Borrower or Operator, as applicable, will issue, in lieu thereof, a replacement
Note or other Loan Document to which it was originally a party, dated the date
of such lost, stolen, destroyed or mutilated Note or other Loan Document in the
same principal amount thereof and otherwise of like tenor.

 

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ARTICLE 6 - DUE ON SALE/ENCUMBRANCE

Section 6.1 Lender Reliance. Grantor acknowledges that Lender has examined and
relied on the experience of Grantor and its respective general partners,
members, principals and (if Borrower or Operator is a trust) beneficial owners
in owning and operating properties such as the Property in agreeing to make the
Loan, and will continue to rely on Borrower’s ownership of the Property as a
means of maintaining the value of the Property as security for repayment of the
Debt and the performance of the Other Obligations. Grantor acknowledges that
Lender has a valid interest in maintaining the value of the Property so as to
ensure that, should an Event of Default be continuing with respect to the
repayment of the Debt or the performance of the Other Obligations, beyond any
applicable notice and cure period in the Loan Documents, Lender can recover the
Debt by a sale of the Property.

Section 6.2 No Sale/Encumbrance. Neither Grantor nor any Restricted Party shall
Transfer the Property or any part thereof or any interest therein or permit or
suffer the Property or any part thereof or any interest therein to be
Transferred other than as permitted pursuant to and in accordance with the terms
of the Loan Agreement.

ARTICLE 7 - RIGHTS AND REMEDIES UPON DEFAULT

Section 7.1 Remedies. To the extent and in the manner provided by applicable
law, upon the occurrence and during the continuance of any Event of Default,
Borrower and Operator agree that Lender 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 concurrently or otherwise, at such time
and in such order as Lender may determine, in its sole discretion, without
impairing or otherwise affecting the other rights and remedies of Lender:

(a) declare the entire unpaid Debt to be immediately due and payable;

(b) to the extent permitted by applicable law, institute proceedings, judicial
or otherwise, for the complete foreclosure of this Deed of Trust under any
applicable provision of law, 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;

(c) with or without entry, to the extent permitted and pursuant to the
procedures provided by applicable law, institute proceedings for the partial
foreclosure of this Deed of Trust for the portion of the Debt then due and
payable, subject to the continuing lien and security interest of this Deed of
Trust for the balance of the Debt not then due, unimpaired and without loss of
priority;

(d) sell for cash or upon credit the Property or any part thereof and all
estate, claim, demand, right, title and interest of Grantor therein and rights
of redemption thereof, pursuant to power of sale or otherwise, at one or more
sales, as an entirety or in parcels, at such time and place, upon such terms and
after such notice thereof as may be required or permitted by law;

 

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(e) institute an action, suit or proceeding in equity for the specific
performance of any covenant, condition or agreement contained herein, in the
Note, the Loan Agreement or in the other Loan Documents;

(f) recover judgment on the Note either before, during or after any proceedings
for the enforcement of this Deed of Trust or the other Loan Documents;

(g) apply for the appointment of a receiver, trustee, liquidator or conservator
of the Property, on ex parte application and without notice and without regard
for the adequacy of the security for the Debt and without regard for the
solvency of Grantor, any Guarantor or any Indemnifying Person with respect to
the Loan or of any Person liable for the payment of the Debt;

(h) the license granted to Borrower and Operator under Section 1.2 hereof shall
automatically be revoked, and Lender shall immediately be entitled to possession
of all Rents, whether or not Lender enters upon or takes control of the
Property, and Lender may, at its option, without waiving such Event of Default,
without regard to the adequacy of the security for the Debt, with or without
bringing any action or proceeding, or by a receiver appointed by a court,
subject to applicable law and the rights of any tenant under any Lease, enter
into or upon the Property, either personally or by its agents, nominees or
attorneys and dispossess Grantor and its agents and servants therefrom, without
liability for trespass, damages or otherwise (except for any damages caused by
the gross negligence or willful misconduct of Lender, its agents, nominees or
attorneys) and exclude Grantor and its agents or servants wholly therefrom, and
take possession of the Property and all books, records and accounts relating
thereto and Grantor agrees to surrender possession of the Property and of such
books, records and accounts to Lender upon demand, and thereupon Lender may
subject to applicable law (i) use, lease, operate, manage, control, insure,
maintain, repair, restore and otherwise deal with all and every part of the
Property and conduct the business thereat on such terms and for such period of
time as Lender may deem proper; (ii) complete any construction on the Property
in such manner and form as Lender deems advisable; (iii) make alterations,
additions, renewals, renovations, repairs, replacements and improvements to or
on the Property; (iv) exercise all rights and powers of Grantor with respect to
the Property, whether in the name of Grantor or otherwise, including, without
limitation, the right to make, cancel, enforce or modify Leases, obtain and
evict tenants (subject to any non-disturbance agreements that Lender may have
entered into with such tenants, if any) and demand, sue for, collect and receive
all Rents of the Property and every part thereof and sums due under all Lease
Guaranties, including those past due and unpaid; (v) require Grantor to pay
monthly in advance to Lender, or any receiver appointed to collect the Rents,
the fair and reasonable rental value for the use and occupation of such part of
the Property as may be occupied by Grantor; (vi) require Grantor to vacate and
surrender possession of the Property to Lender or to such receiver and, in
default thereof, Grantor may be evicted by summary proceedings or otherwise; and
(vii) any law, custom or use to the contrary notwithstanding, apply the receipts
from the Property to the payment of the Debt, in such order, priority and
proportions as Lender shall deem appropriate in its sole discretion after
deducting therefrom all expenses (including reasonable third-party attorneys’
fees) incurred in connection with the aforesaid operations and all amounts
necessary to pay the Taxes, Other Charges, Insurance Premiums and other expenses
in connection with the Property, and the cost of all alterations, renovations,
repairs or replacements, and all expenses incident to taking and retaining
possession of the Property, as well as just and reasonable compensation for the
services of Lender, its counsel, agents and employees;

 

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(i) exercise any and all rights and remedies granted to a secured party upon
default under the Uniform Commercial Code, including, without limiting the
generality of the foregoing: (i) the right to take possession of the Fixtures
(to the extent held to be personal property), the Equipment, the Personal
Property or any part thereof, and to take such other measures as Lender may deem
necessary for the care, protection and preservation of the Fixtures, the
Equipment, and the Personal Property, and (ii) request Grantor at its expense to
assemble the Fixtures, the Equipment, and the Personal Property and make it
available to Lender at a convenient place acceptable to Lender. Any notice of
sale, disposition or other intended action by Lender with respect to the
Fixtures, the Equipment, and/or the Personal Property sent to Grantor in
accordance with the provisions hereof at least ten (10) days prior to such
action, shall constitute commercially reasonable notice to Grantor;

(j) apply any sums then deposited or held in escrow or otherwise by or on behalf
of Lender in accordance with the terms of the Loan Agreement, this Deed of Trust
or any other Loan Document (collectively, “Escrow Deposits”) to the payment of
the following items in any order in its sole discretion (but subject to the
express terms of such Loan Documents):

(i) Taxes and Other Charges;

(ii) Insurance Premiums;

(iii) Interest on the unpaid principal balance of the Note;

(iv) Amortization of the unpaid principal balance of the Note; and

(v) All other sums payable pursuant to the Note, the Loan Agreement, this Deed
of Trust and the other Loan Documents, including without limitation advances
made by Lender pursuant to the terms of this Deed of Trust;

provided that any Escrow Deposits remaining on deposit with Lender following
application of the Escrow Deposits by Lender as provided above shall be returned
to Grantor in accordance with and subject to the terms and provisions of the
Loan Agreement and the other Loan Documents;

(k) pursue such other remedies as Lender may have under applicable law; or

(l) apply the undisbursed balance of any Net Proceeds Deficiency deposit,
together with interest thereon, to the payment of the Debt in such order,
priority and proportions as Lender shall deem to be appropriate in its
discretion.

 

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In the event of a sale, under this Section 7.1, by foreclosure, power of sale or
otherwise, of less than all of the Property, this Deed of Trust shall continue
as a lien and security interest on the remaining portion of the Property
unimpaired and without loss of priority.

Section 7.2 Application of Proceeds. Subject to the terms of the Loan Agreement
and applicable law, upon the occurrence and during the continuance of an Event
of Default, the purchase money, proceeds and avails of any disposition of the
Property, and/or any part thereof, or any other sums collected by Lender
pursuant to the Note, this Deed of Trust or the other Loan Documents, may be
applied by Lender to the payment of the Debt in such priority and proportions as
Lender in its discretion shall deem proper.

Section 7.3 Right to Cure Defaults. To the extent and in the manner provided by
applicable law, upon the occurrence and during the continuance of any Event of
Default, Lender may, but without any obligation to do so and without notice to
or demand on Grantor and without releasing Grantor from any obligation
hereunder, make any payment or do any act required of Grantor hereunder in such
manner and to such extent as Lender may deem necessary to protect the security
hereof. Lender is authorized to enter upon the Property for such purposes, or
appear in, defend, or bring any action or proceeding to protect its interest in
the Property or to foreclose this Deed of Trust or collect the Debt, and the
cost and expense thereof (including reasonable third-party attorneys’ fees to
the extent permitted by law), with interest as provided in this Section 7.3,
shall constitute a portion of the Debt and shall be due and payable to Lender
upon written demand. All such costs and expenses incurred by Lender in remedying
such Event of Default or such failed payment or act or in appearing in,
defending, or bringing any such action or proceeding shall bear interest at the
Default Rate, for the period after written notice from Lender to Grantor that
such cost or expense was incurred to the date of payment to Lender. All such
costs and expenses incurred by Lender together with interest thereon calculated
at the Default Rate shall be deemed to constitute a portion of the Debt and be
secured by this Deed of Trust and the other Loan Documents and shall be
immediately due and payable upon written demand by Lender therefor.

Section 7.4 Actions and Proceedings. Lender shall have the right to appear in
and defend any action or proceeding brought with respect to the Property and,
provided that, if no Event of Default has occurred and is continuing, Lender
shall endeavor to cooperate with Grantor and its legal counsel with respect to
any defense by Lender of any such action. Subject to the terms of the Loan
Agreement, Lender shall also have the right to bring any action or proceeding,
in the name and on behalf of Grantor, which Lender, in its discretion, decides
should be brought to protect its interest in the Property, provided that Lender
shall notify Grantor that it intends to bring such action at least ten (10) days
prior to Lender instituting any such action (unless (a) an Event of Default has
occurred and is continuing or (b) the provision of such notice by Lender
reasonably threatens to materially prejudice Lender’s rights or materially
adversely affect Lender’s interest in the Property or Lender’s rights and
remedies under the Loan Documents, in either of which events such notice shall
not be required), and Lender shall endeavor to provide to Grantor and its legal
counsel reasonable periodic status updates as to any such action brought by
Lender.

 

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Section 7.5 Recovery of Sums Required to Be  Paid. Subject to the terms of the
Loan Agreement, Lender shall have the right from time to time to take action to
recover any sum or sums which constitute a part of the Debt as the same become
due, without regard to whether or not the balance of the Debt shall be due, and
without prejudice to the right of Lender thereafter to bring an action of
foreclosure, or any other action, for an Event of Default by Grantor existing at
the time such earlier action was commenced.

Section 7.6 Examination of Books and Records. Except as otherwise provided in
the Loan Documents, at reasonable times and upon reasonable prior notice,
Lender, its agents, accountants and attorneys shall have the right to examine
the records, books, management and other papers of Grantor which reflect upon
its financial condition, at the Property or at any office regularly maintained
by Grantor where the books and records are located. Lender and its agents shall
have the right to make copies and extracts from the foregoing records and other
papers. In addition, at reasonable times and upon reasonable prior notice, but
not more than two (2) times in any calendar year, (provided, that upon the
occurrence and during the continuance of an Event of Default, the foregoing
limitation for examinations per annum shall not apply) Lender, its agents,
accountants and attorneys shall have the right to examine and audit the books
and records of Grantor pertaining to the income, expenses and operation of the
Property during reasonable business hours at any office of Grantor where the
books and records are located. This Section 7.6 shall apply throughout the term
of the Note and without regard to whether an Event of Default has occurred or is
continuing.

Section 7.7 Other Rights, etc.

(a) The failure of Lender to insist upon strict performance of any term hereof
shall not be deemed to be a waiver of any term of this Deed of Trust. Grantor
shall not be relieved of Grantor’s obligations hereunder by reason of (i) the
failure of Lender to comply with any request of Grantor or any Guarantor or any
Indemnifying Person with respect to the Loan to take any action to foreclose
this Deed of Trust or otherwise enforce any of the provisions hereof or of the
Note or the other Loan Documents, upon the occurrence and during the continuance
of an Event of Default, (ii) the release, regardless of consideration, of the
whole or any part of the Property, or of any person liable for the Debt or any
portion thereof except as provided in the Loan Agreement, or (iii) any agreement
or stipulation by Lender extending the time of payment or otherwise modifying or
supplementing the terms of the Note, this Deed of Trust or the other Loan
Documents.

(b) It is agreed that the risk of loss or damage to the Property is on Grantor,
and Lender shall have no liability whatsoever for decline in value of the
Property, except as arising solely from Lender’s gross negligence, willful
misconduct, fraud or illegal acts, or for failure to maintain the Policies, or
for failure to determine whether insurance in force is adequate as to the amount
of risks insured. Possession by Lender shall not be deemed an election of
judicial relief if any such possession is requested or obtained with respect to
any Property or Collateral not in Lender’s possession.

 

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(c) During the continuance of an Event of Default, Lender may resort for the
payment of the Debt to any other security held by Lender in connection with the
Loan in such order and manner as Lender, in its discretion, may elect. During
the continuance of an Event of Default, Lender may take action to recover the
Debt, or any portion thereof, or to enforce any covenant hereof without
prejudice to the right of Lender thereafter to foreclose this Deed of Trust. The
rights of Lender under this Deed of Trust shall be separate, distinct and
cumulative and none shall be given effect to the exclusion of the others. No act
of Lender shall be construed as an election to proceed under any one provision
herein to the exclusion of any other provision. Lender shall not be limited
exclusively to the rights and remedies herein stated but shall be entitled to
every right and remedy now or hereafter afforded at law or in equity.

(d) Nothing contained in this Deed of Trust and no act done or omitted by Lender
pursuant to the power and rights granted to Lender hereunder shall be deemed to
be a waiver by Lender of its rights and remedies under the Loan Agreement, the
Note, or the other Loan Documents and this Deed of Trust is made and accepted
without prejudice to any of the rights and remedies possessed by Lender under
the terms thereof. The right of Lender to collect the Debt and to enforce any
other security therefor held by it may be exercised by Lender either prior to,
simultaneously with, or subsequent to any action taken by it hereunder. Grantor
hereby absolutely, unconditionally and irrevocably waives any and all rights to
assert any setoff of any nature whatsoever with respect to the obligations of
Grantor under this Deed of Trust in any action or proceeding brought by Lender
to collect same, or any portion thereof, or to enforce and realize upon the lien
and security interest created by this Deed of Trust, the Loan Agreement, the
Note, or any of the other Loan Documents, except to the extent arising from
Lender’s gross negligence, fraud, illegal acts or willful misconduct or in
connection with any payments of the Debt previously made by Borrower.

Section 7.8 Right to Release Any Portion of the Property and Other Security.
Subject to the terms and conditions of the Loan Agreement, Lender may release
any portion of the Property from the lien of this Deed of Trust for such
consideration as Lender may require without, as to the remainder of the
Property, in any way impairing or affecting the lien or priority of this Deed of
Trust, or improving the position of any subordinate lienholder with respect
thereto, except to the extent that the obligations hereunder shall have been
reduced by the actual monetary consideration, if any, received by Lender for
such release, and may accept by assignment, pledge or otherwise any other
property in place thereof as Lender may require without being accountable for so
doing to any other lienholder. This Deed of Trust shall continue as a lien and
security interest in the remaining portion of the Property. Subject to the terms
and conditions of the Loan Agreement, Lender may take or release from the liens
created by the Loan Documents other security for the payment of the Debt, may
release any party primarily or secondarily liable therefor and may apply any
other security held by it to the reduction or satisfaction of the Debt without
prejudice to any of its rights under this Deed of Trust.

Section 7.9 Intentionally Omitted.

Section 7.10 Recourse and Choice of Remedies. Notwithstanding any other
provision of this Deed of Trust or the Loan Agreement, other than Section 9.3 of
the Loan Agreement, Lender and the other Indemnified Parties (as hereinafter
defined) are entitled to enforce against Borrower and Operator the obligations
of Borrower and Operator contained in

 

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Sections 9.1, 9.2 and 9.3 herein and Section 9.3 of the Loan Agreement without
first resorting to or exhausting any security or collateral and without first
having recourse to the Note or any of the Property, through foreclosure or
acceptance of a deed in lieu of foreclosure or otherwise, and upon the
occurrence and during the continuance of an Event of Default, in the event
Lender commences a foreclosure action against the Property, subject to
Section 9.3 of the Loan Agreement Lender is entitled to pursue a deficiency
judgment with respect to such obligations against Borrower. The provisions of
Sections 9.1, 9.2 and 9.3 herein and Section 9.3 of the Loan Agreement are,
relative to Borrower and Operator, exceptions to any non-recourse or exculpation
provisions in the Loan Agreement, the Note, this Deed of Trust or the other Loan
Documents, and Borrower and Operator are fully and personally liable for their
respective obligations pursuant to Sections 9.1, 9.2 and 9.3 herein and
Section 9.3 of the Loan Agreement with respect to their respective obligations
set forth in such sections. The liability of Borrower and Operator (but not any
partner, member, shareholder, officer, director or agent of Borrower or
Operator) pursuant to Sections 9.1, 9.2 and 9.3 herein and Section 9.3 of the
Loan Agreement is not limited to the original principal amount of the Note.
Notwithstanding the foregoing, nothing herein shall inhibit or prevent Lender
from foreclosing or exercising any other rights and remedies pursuant to the
Loan Agreement, the Note, this Deed of Trust and the other Loan Documents,
whether simultaneously with foreclosure proceedings or in any other sequence. A
separate action or actions may be brought and prosecuted against Borrower and
Operator pursuant to Sections 9.1, 9.2 and 9.3 herein and Section 9.3 of the
Loan Agreement, whether or not action is brought against any other Person or
whether or not any other Person is joined in the action or actions. In addition,
Lender shall have the right but not the obligation to join and participate in,
as a party if it so elects, any administrative or judicial proceedings or
actions initiated in connection with any matter addressed in Article 9 herein.

Section 7.11 Non-Waiver. The exercise by Lender of any option granted it in
Section 7.1 of this Deed of Trust and the collection of the Rents and sums due
under the Leases and Lease Guaranties and the application thereof as herein
provided shall not be considered a waiver of any default by Borrower or Operator
under the Note, the Loan Agreement, the Leases, this Deed of Trust or the other
Loan Documents to which each is a party. The failure of Lender to insist upon
strict performance of any term hereof shall not be deemed to be a waiver of any
term of this Deed of Trust. Grantor shall not be relieved of Grantor’s
obligations hereunder by reason of (a) the failure of Lender to comply with any
request of Grantor or any other party to take any action to enforce any of the
provisions hereof or of the Loan Agreement, the Note or the other Loan
Documents, (b) the release regardless of consideration, of the whole or any part
of the Property from the liens created by the Loan Documents (except to the
extent expressly set forth in any documents evidencing or effecting such
release), or (c) any agreement or stipulation by Lender extending the time of
payment or otherwise modifying or supplementing the terms of this Deed of Trust,
the Loan Agreement, the Note, or the other Loan Documents (except to the extent
expressly set forth in any such agreement or stipulation). Subject to the terms
of the Loan Agreement, during the continuance of an Event of Default, Lender may
resort for the payment of the Debt to any other security held by Lender in
connection with the Loan in such order and manner as Lender, in its discretion,
may elect. During the continuance of an Event of Default, Lender may take any
action to recover the Debt, or any portion thereof, or to enforce any covenant
hereof without prejudice to the right of Lender thereafter to enforce its rights
under this

 

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Deed of Trust. The rights of Lender under this Deed of Trust shall be separate,
distinct and cumulative and none shall be given effect to the exclusion of the
others. No act of Lender shall be construed as an election to proceed under any
one provision herein to the exclusion of any other provision.

Section 7.12 Right of Entry. Subject to the rights of tenants, upon reasonable
prior written notice to Grantor, Lender and its agents shall have the right to
enter and inspect the Property at all reasonable times on any Business Day.

ARTICLE 8 - PREPAYMENT

Section 8.1 Prepayment. The Debt may not be prepaid in whole or in part except
in accordance with the express terms and conditions of the Loan Agreement and
this Deed of Trust.

ARTICLE 9 - INDEMNIFICATION

Section 9.1 General Indemnification. Except to the extent caused by the gross
negligence, fraud, illegal acts or willful misconduct of the Indemnified
Parties, each of Borrower and Operator shall, at its sole cost and expense,
protect, defend, indemnify, release and hold harmless the Indemnified Parties
from and against any and all claims, suits, liabilities (including, without
limitation, strict liabilities), actions, proceedings, obligations, debts,
damages, losses, actual out-of-pocket costs, expenses, fines, penalties,
charges, fees, expenses, judgments, awards, amounts paid in settlement, punitive
damages and foreseeable consequential damages, of whatever kind or nature
(including but not limited to reasonable third party attorneys’ fees and other
costs of defense) (collectively, the “Losses”) imposed upon or incurred by or
asserted against any Indemnified Parties and directly or indirectly arising out
of or in any way relating to any one or more of the following (without regard to
cause or causes thereof, including pre-existing conditions, strict liability, or
the negligence of any party or parties (including Lender or Trustee) whether
such negligence be sole, joint or concurrent, or passive): (a) ownership of this
Deed of Trust, the Property or any interest therein or receipt of any Rents;
(b) any amendment to, or restructuring of, the Debt, the Note, the Loan
Agreement, this Deed of Trust, or any other Loan Documents (other than in
connection with a securitization pursuant to Section 9.1 of the Loan Agreement),
each to the extent required by Borrower or Operator; (c) any and all lawful
action that may be taken by Lender in connection with the enforcement of the
provisions of this Deed of Trust, the Loan Agreement, the Note or any of the
other Loan Documents, each to the extent required by Borrower or Operator,
whether or not suit is filed in connection with same, or in connection with
Borrower or Operator, any Guarantor or any Indemnifying Person and/or any
partner, joint venturer or shareholder thereof becoming a party to a voluntary
or involuntary federal or state bankruptcy, insolvency or similar proceeding;
(d) any accident, injury to or death of persons or loss of or damage to property
occurring in, on or about the Property or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways;
(e) any use, nonuse or condition in, on or about the Property or any part
thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent
parking areas, streets or ways; (f) performance of any labor or services or the
furnishing of any

 

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materials or other property in respect of the Property or any part thereof;
(g) the failure of any Person to file timely with the Internal Revenue Service
an accurate Form 1099-B, Statement for Recipients of Proceeds from Real Estate,
Broker and Barter Exchange Transactions, which may be required in connection
with this Deed of Trust, or to supply a copy thereof in a timely fashion to the
recipient of the proceeds of the transaction in connection with which this Deed
of Trust is made; (h) any failure of the Property to be in compliance with any
Legal Requirements; (i) the enforcement by any Indemnified Party of the
provisions of this Article 9; (j) any and all claims and demands whatsoever
which may be asserted against Lender by reason of any alleged obligations or
undertakings on its part to perform or discharge any of the terms, covenants, or
agreements contained in any Lease; or (k) the payment of any commission, charge
or brokerage fee to anyone claiming through Borrower or Operator which may be
payable in connection with the funding of the Loan. Any amounts payable to
Lender by reason of the application of this Section 9.1 shall become due and
payable upon Lender’s written demand and delivery of reasonable backup
documentation therefor, and any such amounts that are not paid when due and
shall bear interest at the Default Rate from the date such amounts become due
and payable until paid. For purposes of this Article 9, the term “Indemnified
Parties” has the meaning ascribed to the term “Indemnified Person” in the Loan
Agreement.

Section 9.2 Mortgage and/or Intangible Tax. Each of Borrower and Operator shall,
at its sole cost and expense, protect, defend, indemnify, release and hold
harmless the Indemnified Parties from and against any and all Losses imposed
upon or incurred by or asserted against any Indemnified Parties and directly or
indirectly arising out of or in any way relating to any tax on the making and/or
recording of this Deed of Trust, the Note or any of the other Loan Documents,
but excluding any income, franchise or other similar taxes. Each of Borrower and
Operator hereby agrees that, in the event that it is determined that any
recordation taxes, documentary stamp taxes or intangible personal property taxes
are due hereon or on any security instrument or promissory note executed in
connection herewith (including, without limitation, the Note), each of Borrower
and Operator shall indemnify and hold harmless the Indemnified Parties for all
such recordation taxes, documentary stamp taxes and/or intangible taxes,
including all penalties and interest assessed or charged in connection
therewith.

Section 9.3 ERISA Indemnification. Each of Borrower and Operator shall, at its
sole cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses (including, without
limitation, reasonable third-party attorneys’ fees and reasonable and documented
out-of-pocket costs incurred in the investigation, defense, and settlement of
Losses incurred in correcting any non-exempt prohibited transaction or in the
sale of a prohibited loan, and in obtaining any individual prohibited
transaction exemption under ERISA that may be required, in Lender’s reasonable
discretion) that Lender may incur, directly or indirectly, as a result of a
default under Sections 4.1.9 or 5.2.9 of the Loan Agreement.

Section 9.4 Duty to Defend; Attorneys’ Fees and Other Fees and Expenses. In
connection with any indemnification obligations of Grantor hereunder, upon
written request by any Indemnified Party, each of Borrower and Operator shall
defend such Indemnified Party (if requested by any Indemnified Party, in the
name of the Indemnified Party) by attorneys and other professionals reasonably
approved by the Indemnified Parties (and attorneys and other

 

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professionals selected by Grantor’s insurance carrier shall be deemed approved
by the Indemnified Parties). Notwithstanding the foregoing, if the defendants in
any such claim or proceeding include both Grantor and any Indemnified Party and
Grantor and such Indemnified Party shall have reasonably concluded that there
are any legal defenses available to it and/or other Indemnified Parties that are
different from or additional to those available to Grantor, such Indemnified
Party shall have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such action on behalf of
such Indemnified Party, provided that no compromise or settlement shall be
entered without Grantor’s consent, which consent shall not be unreasonably
withheld. Upon written demand, Grantor shall pay or, in the sole and absolute
discretion of the Indemnified Parties, reimburse, the Indemnified Parties for
the payment of reasonable fees and out-of-pocket disbursements of attorneys,
engineers, environmental consultants, laboratories and other professionals in
connection therewith.

Section 9.5 Environmental Indemnity. Any obligations under the Environmental
Indemnity (as defined in the Loan Agreement) are not part of the Debt and are
not secured by this Deed of Trust.

ARTICLE 10 - WAIVERS

Section 10.1 Waiver of Counterclaim. To the extent permitted by applicable law,
Borrower and Operator each hereby waives the right to assert a counterclaim,
other than a mandatory or compulsory counterclaim, in any action or proceeding
brought against it by Lender arising out of or in any way connected with this
Deed of Trust, the Loan Agreement, the Note, any of the other Loan Documents, or
the Obligations (provided, however, that the foregoing shall not be deemed a
waiver of Borrower’s or Operator’s right to assert any compulsory counterclaim
if such counterclaim is compelled under local law or rule of procedure, nor
shall the foregoing be deemed a waiver of Borrower’s or Operator’s right to
assert any claim which would constitute a defense, setoff, counterclaim or
crossclaim of any nature whatsoever against Lender in any separate action or
proceeding).

Section 10.2 Marshalling and Other Matters. To the extent permitted by
applicable law, Borrower and Operator each hereby waives the benefit of all
appraisement, valuation, stay, extension, reinstatement and redemption laws now
or hereafter in force and all rights of marshalling in the event of any sale
hereunder of the Property or any part thereof or any interest therein. Further,
Borrower and Operator each hereby expressly waives any and all rights of
redemption from sale under any order or decree of foreclosure of this Deed of
Trust on behalf of Borrower or Operator, and on behalf of each and every Person
acquiring any interest in or title to the Property subsequent to the date of
this Deed of Trust and on behalf of all persons to the extent permitted by
applicable law.

Section 10.3 Waiver of Notice. To the extent permitted by applicable law,
neither Borrower nor Operator shall be entitled to any notices of any nature
whatsoever from Lender except with respect to matters for which this Deed of
Trust or any other Loan Documents specifically and expressly provides for the
giving of notice by Lender to Borrower and/or Operator, as applicable, and
except with respect to matters for which Lender is required by

 

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applicable law to give notice, and Borrower and Operator each hereby expressly
waives the right to receive any notice from Lender with respect to any matter
for which this Deed of Trust does not specifically and expressly provide for the
giving of notice by Lender to Borrower and/or Operator.

Section 10.4 Waiver of Statute of Limitations. To the extent permitted by
applicable law, each of Borrower and Operator hereby expressly waives and
releases to the fullest extent permitted by law, the pleading of any statute of
limitations as a defense to payment of the Debt or performance of its Other
Obligations.

Section 10.5 Survival. The indemnifications made pursuant to Sections 9.1, 9.2,
9.3 and 9.4 herein shall continue until the Debt is paid in full force and
effect and shall survive and shall in no way be impaired by any of the
following: any satisfaction or other termination of this Deed of Trust, any
assignment or other transfer of all or any portion of this Deed of Trust or
Lender’s interest in the Property (but, in such case, shall benefit both
Indemnified Parties and any assignee or transferee), any exercise of Lender’s
rights and remedies pursuant hereto including, but not limited to, foreclosure
or acceptance of a deed in lieu of foreclosure, any exercise of any rights and
remedies pursuant to the Loan Agreement, the Note or any of the other Loan
Documents, any transfer of all or any portion of the Property (whether by
Borrower or Operator or by Lender following foreclosure or acceptance of a deed
in lieu of foreclosure or at any other time), any amendment to this Deed of
Trust, the Loan Agreement, the Note or the other Loan Documents, and any act or
omission that might otherwise be construed as a release or discharge of Grantor
from the obligations pursuant hereto. Notwithstanding the provisions of this
Deed of Trust to the contrary, the liabilities and obligations of Grantor shall
not apply to the extent such liability and obligations arose after any
Indemnified Party, or its nominee acquired title to the Property whether by
foreclosure, exercise of power of sale, deed in lieu of foreclosure or
otherwise.

ARTICLE 11 - EXCULPATION

The provisions of Section 9.3 of the Loan Agreement are hereby incorporated by
reference into this Deed of Trust to the same extent and with the same force as
if fully set forth herein.

ARTICLE 12 - NOTICES

Section 12.1 Notices. All notices or other written communications hereunder
shall be delivered in accordance with Section 10.6 of the Loan Agreement.

ARTICLE 13 - APPLICABLE LAW

Section 13.1 Governing Law. THIS DEED OF TRUST SHALL BE GOVERNED IN ACCORDANCE
WITH THE TERMS AND PROVISIONS OF SECTION 10.3 OF THE LOAN AGREEMENT; PROVIDED
THAT ARTICLE 18 AND THE PROVISIONS OF THIS MORTGAGE REGARDING THE CREATION,
PERFECTION AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS HEREIN GRANTED
SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE IN WHICH THE
PROPERTY IS LOCATED.

 

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Section 13.2 Usury Laws. Notwithstanding anything to the contrary contained
herein, (a) all agreements and communications between Borrower and Lender are
hereby and shall automatically be limited so that, after taking into account all
amounts deemed interest, the interest contracted for, charged or received by
Lender shall never exceed the Maximum Legal Rate or amount, (b) in calculating
whether any interest exceeds the Maximum Legal Rate, all such interest shall be
amortized, prorated, allocated and spread over the full amount and term of all
principal indebtedness of Borrower to Lender, and (c) if through any contingency
or event, Lender receives or is deemed to receive interest in excess of the
Maximum Legal Rate, any such excess shall be deemed to have been applied toward
payment of the principal of any and all then outstanding indebtedness of
Borrower to Lender, or if there is no such indebtedness, shall immediately be
returned to Borrower.

Section 13.3 Provisions Subject to Applicable Law. All rights, powers and
remedies provided in this Deed of Trust may be exercised only to the extent that
the exercise thereof does not violate any applicable provisions of law and are
intended to be limited to the extent necessary so that they will not render this
Deed of Trust invalid, unenforceable or not entitled to be recorded, registered
or filed under the provisions of any applicable law. If any term of this Deed of
Trust or any application thereof shall be invalid or unenforceable, the
remainder of this Deed of Trust and any other application of the term shall not
be affected thereby.

ARTICLE 14 - DEFINITIONS

All capitalized terms not defined herein shall have the respective meanings set
forth in the Loan Agreement. Unless the context clearly indicates a contrary
intent or unless otherwise specifically provided herein, words used in this Deed
of Trust may be used interchangeably in singular or plural form and the word
“Borrower” shall mean “each Borrower and any subsequent owner or owners of the
Property or any part thereof or any interest therein”, the word “Lender” shall
mean “Lender and any subsequent holder of the Note”, the word “Grantor” shall
mean “each Grantor and any subsequent owner or owners of the Property or any
part thereof or any interest therein”, the word “Note” shall mean “the Note and
any other evidence of indebtedness secured by this Deed of Trust”, the word
“Operator” shall mean “each Operator and any subsequent operator or operators of
the Property or any part thereof, in each case, pursuant to an operating lease”,
the word “Property” shall include any portion of the Property and any interest
therein, and the phrases “attorneys’ fees”, “legal fees” and “counsel fees”
shall include any and all reasonable third-party attorneys’, paralegal and law
clerk fees and disbursements, including, but not limited to, fees and
disbursements at the pre-trial, trial and appellate levels incurred or paid by
Lender in protecting its interest in the Property, the Leases and the Rents and
enforcing its rights hereunder.

 

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ARTICLE 15 - MISCELLANEOUS PROVISIONS

Section 15.1 No Oral Change. This Deed of Trust, and any provisions hereof, may
not be modified, amended, waived, extended, changed, discharged or terminated
orally or by any act or failure to act on the part of Borrower, Operator or
Lender, but only by an agreement in writing signed by the party against whom
enforcement of any modification, amendment, waiver, extension, change, discharge
or termination is sought or by repayment of the Debt and satisfaction of the
Obligations in full in accordance with the Loan Agreement and the other Loan
Documents.

Section 15.2 Joint and Several Liability; Limitation on Operator’s Liability. To
the extent the obligations set forth herein are expressly stated to be
obligations of the Grantor or of both Borrower and Operator, each of Borrower
and Operator shall be jointly and severally liable for the performance of such
obligations. Nothing contained herein shall in any way alter or modify
Borrower’s obligations as a joint and several obligor (with Other Borrowers) for
the repayment of the Debt and performance of the Obligations. Lender by its
acceptance hereof, and its successors and assigns, agrees that Operator is not
the Borrower and shall under no circumstances whatsoever be liable hereunder or
under any of the other Loan Documents for the repayment of the principal amount
of the Loan or the payment of any interest which may accrue on such amount (at
the Interest Rate or Default Rate), any late charges, or any other portion of
the Debt, except to the extent otherwise expressly provided in this Deed of
Trust or in any of the other Loan Documents to which Operator is a party.

Section 15.3 Successors and Assigns. This Deed of Trust shall be binding upon
and inure to the benefit of Grantor and Lender and their respective successors
and assigns forever.

Section 15.4 Inapplicable Provisions. If any term, covenant or condition of the
Loan Agreement, the Note or this Deed of Trust is held to be invalid, illegal or
unenforceable in any respect, the Loan Agreement, the Note and this Deed of
Trust shall be construed without such provision.

Section 15.5 Headings, etc. The headings and captions of various Sections of
this Deed of Trust are for convenience of reference only and are not to be
construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.

Section 15.6 Number and Gender. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural and vice
versa.

Section 15.7 Subrogation. If any or all of the proceeds of the Note have been
used to extinguish, extend or renew any indebtedness heretofore existing against
the Property, then, to the extent of the funds so used, Lender shall be
subrogated to all of the rights, claims, liens, titles, and interests existing
against the Property heretofore held by, or in favor of, the holder of such
indebtedness and such former rights, claims, liens, titles, and interests, if
any, are not waived but rather are continued in full force and effect in favor
of Lender and are merged

 

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with the lien and security interest created herein as cumulative security for
the repayment of the Debt, the performance and discharge of Grantor’s
obligations hereunder, under the Loan Agreement, the Note and the other Loan
Documents and the performance and discharge of the Other Obligations, except as
otherwise agreed to or accepted by Lender in writing.

Section 15.8 Entire Agreement. The Note, the Loan Agreement, this Deed of Trust
and the other Loan Documents constitute the entire understanding and agreement
between Borrower, Operator and Lender with respect to the transactions arising
in connection with the Debt and supersede all prior written or oral
understandings and agreements between Borrower, Operator and Lender with respect
thereto. Grantor hereby acknowledges that, except as incorporated in writing in
the Note, the Loan Agreement, this Deed of Trust and the other Loan Documents,
there are not, and were not, and no Persons are or were authorized by Lender to
make, any representations, understandings, stipulations, agreements or promises,
oral or written, with respect to the transaction which is the subject of the
Note, the Loan Agreement, this Deed of Trust and the other Loan Documents.

Section 15.9 Limitation on Lender’s Responsibility. No provision of this Deed of
Trust shall operate to place any obligation or liability for the control, care,
management or repair of the Property upon Lender, nor shall it operate to make
Lender responsible or liable for any waste committed on the Property by the
tenants or any other Person, or for any dangerous or defective condition of the
Property, or for any negligence in the management, upkeep, repair or control of
the Property resulting in loss or injury or death to any tenant, licensee,
employee or stranger other than as a result of actions of Lender that constitute
gross negligence or willful misconduct. Nothing herein contained shall be
construed as constituting Lender a “mortgagee in possession.”

Section 15.10 Conflict of Terms. In case of any conflict between the terms of
this Deed of Trust and the terms of the Loan Agreement, the terms of the Loan
Agreement shall prevail.

Section 15.11 Release or Assignment of Deed of Trust. Notwithstanding anything
to the contrary herein, if all of the Debt is indefeasibly paid or as may
otherwise be permitted by the terms of the Loan Agreement, then and in that
event only, all rights, except those indemnifications made pursuant to Sections
9.1, 9.2, 9.3 and 9.4 hereof, under this Deed of Trust shall automatically
terminate and the Property shall become wholly clear of the liens, security
interests, conveyances and assignments evidenced hereby, which shall be promptly
released of record by Lender in due form. To the extent requested by Grantor,
Lender agrees to assign the Note and this Deed of Trust to such party as may be
designated by Grantor upon the repayment (or purchase by another lender
designated by Borrower) in full of the Debt or upon release of the Property as
may otherwise be permitted under the Loan Agreement and Lender will cooperate in
the preparation of all of the necessary documentation to effectuate an
assignment of this Deed of Trust and the indebtedness secured thereby, including
the delivery of originals of the Loan Documents. All reasonable costs incurred
by Lender under this paragraph, including, without limitation, reasonable
third-party attorney’s fees and disbursements, shall promptly be reimbursed by
Grantor.

 

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Section 15.12 Secondary Market. Lender may sell, transfer and deliver the Note
and assign this Deed of Trust and the other Loan Documents to one or more
investors in the secondary mortgage market (“Investors”). In connection with
such sale, Lender may retain or assign responsibility for servicing the Loan,
including the Note, this Deed of Trust or the other Loan Documents, or may
delegate some or all of such responsibility and/or obligations to a servicer,
including, without limitation, any subservicer or master servicer, on behalf of
the Investors. All references to Lender herein shall refer to and include any
such servicer to the extent applicable.

Section 15.13 Cross-Collateralization. In accordance with the terms and
conditions of the Loan Agreement, without limitation to any other right or
remedy provided to Lender in this Deed of Trust or any of the other Loan
Documents, Borrower and Operator each acknowledges and agrees that (i) during
the continuance of an Event of Default, to the fullest extent permitted by law,
Lender shall have the right to pursue all of its rights and remedies in one
proceeding, or separately and independently in separate proceedings which
Lender, in its sole and absolute discretion, shall determine from time to time;
(ii) Lender shall not be required to marshall assets, sell any collateral for
the Loan in any inverse order of alienation, or be subjected to any “one action”
or “election of remedies” law or rule; (iii) the exercise by Lender of any
remedies against any of the collateral for the Loan shall not impede Lender from
subsequently or simultaneously exercising remedies against other collateral for
the Loan; (iv) all Liens and other rights, remedies and privileges provided to
Lender in the Loan Documents or otherwise shall remain in full force and effect
until Lender has exhausted all of its remedies against the collateral for the
Loan and all of the collateral for the Loan has been foreclosed, sold and/or
otherwise realized upon in satisfaction of the Loan; and (v) all of the Property
shall remain security for the performance of all of Borrower’s and Operator’s
obligations hereunder, under the Note and under any of the Loan Documents.
Borrower acknowledges that Borrower shall be jointly and severally liable for
the obligations of the Other Borrowers under the Loan Documents, and Borrower
and Operator each consents and agrees to the terms and conditions of all of the
Loan Documents (including those to which Borrower and Operator are not a party).

ARTICLE 16 - PLEDGED LEASE COVENANTS AND ESTOPPEL

Section 16.1 Pledged Lease Covenants.

(a) In the event that Operator shall be the owner and holder of the fee title to
any portion of the Property while any portion of the Obligations remains unpaid
or unsatisfied, the lien of this Deed of Trust shall be spread to cover such fee
title to such portion of the Property. In such event, Operator agrees, at its
sole cost and expense, including any reasonable attorneys’ fees and
disbursements incurred by Lender in connection therewith, to (i) execute or
cause to be executed any and all documents or instruments necessary to subject
Operator’s fee title to the Property to the lien of this Deed of Trust; and
(ii) provide a title insurance policy, at Operator’s expense, that shall insure
that the lien of this Deed of Trust is a first lien on Operator’s or such
Person’s fee title to the Property.

 

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(b) Without limiting any other provisions contained herein, Operator hereby
agrees that all of its right, title and interest under the Pledged Lease (and
otherwise with respect to the Property) is subject and subordinate to the Loan
and Lender’s security interest in Borrower’s right, title and interest in and to
the Property. In connection therewith, Operator acknowledges and agrees that in
the event Lender shall succeed to the interests of Borrower under the Pledged
Lease, Lender shall have the absolute right (without regard to the
enforceability or perfection of Lender’s security interest in Operator’s
leasehold estate) to terminate the Pledged Lease and in such event (i) the
Pledged Lease and all of Operator’s right, title and interest thereunder shall
automatically terminate and (ii) Operator shall not in any way oppose, impede,
obstruct, challenge, hinder, frustrate, enjoin or otherwise interfere with
Lender’s exercise of any such termination right. Furthermore, in connection with
any termination of the Pledged Lease as referenced in this paragraph or
otherwise upon the exercise of Lender’s remedies hereunder, Operator shall
reasonably cooperate with Lender to transition the operations of the hotel
located on the Property to Lender.

ARTICLE 17 – DEED OF TRUST PROVISIONS

Section 17.1 Concerning the Trustee. To the extent permitted by applicable
Colorado law, Trustee shall be under no duty to take any action hereunder except
as expressly required hereunder or by law, or to perform any act which would
involve Trustee in any expense or liability or to institute or defend any suit
in respect hereof, unless properly indemnified to Trustee’s reasonable
satisfaction.

Section 17.2 Trustee’s Fees. To the extent permitted by applicable Colorado law,
Grantor shall pay all reasonable costs, fees and expenses incurred by Trustee
and Trustee’s agents and counsel in connection with the performance by Trustee
of Trustee’s duties hereunder and all such costs, fees and expenses shall be
secured by this Deed of Trust.

Section 17.3 Certain Rights. To the extent permitted by applicable Colorado law,
with the prior written approval of Lender, Trustee shall have the right to take
any and all of the following actions: (a) to select, employ, and advise with
counsel (who may be, but need not be, counsel for Lender) upon any matters
arising hereunder, including the preparation, execution, and interpretation of
the Loan Agreement, the Note, this Deed of Trust or the other Loan Documents,
and shall be fully protected in relying as to legal matters on the advice of
counsel, (b) to execute any of the trusts and powers hereof and to perform any
duty hereunder either directly or through his/her agents or attorneys, (c) to
select and employ, in and about the execution of his/her duties hereunder,
suitable accountants, engineers and other experts, agents and attorneys-in-fact,
either corporate or individual, not regularly in the employ of Trustee, and
Trustee shall not be answerable for any act, default, negligence, or misconduct
of any such accountant, engineer or other expert, agent or attorney-in-fact, if
selected with reasonable care, or for any error of judgment or act done by
Trustee in good faith, or be otherwise responsible or accountable under any
circumstances whatsoever, except for Trustee’s gross negligence or bad faith and
(d) any and all other lawful action as Lender may instruct Trustee to take to
protect or enforce Lender’s rights hereunder. Trustee shall not be personally
liable in case of entry by Trustee, or anyone entering by virtue of the powers
herein granted to Trustee, upon the Property

 

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for debts contracted for or liability or damages incurred in the management or
operation of the Property. Trustee shall have the right to rely on any
instrument, document, or signature authorizing or supporting an action taken or
proposed to be taken by Trustee hereunder, believed by Trustee in good faith to
be genuine. Trustee shall be entitled to reimbursement for actual out-of-pocket
expenses incurred by Trustee in the performance of Trustee’s duties hereunder
and to reasonable compensation for such of Trustee’s services hereunder as shall
be rendered.

Section 17.4 Retention of Money. To the extent permitted by applicable Colorado
law, all moneys received by Trustee shall, until used or applied as herein
provided, be held in trust for the purposes for which they were received, but
need not be segregated in any manner from any other moneys (except to the extent
required by applicable law) and Trustee shall be under no liability for interest
on any moneys received by Trustee hereunder.

Section 17.5 Perfection of Appointment. To the extent permitted by applicable
Colorado law, should any deed, conveyance, or instrument of any nature be
required from Grantor by any Trustee to more fully and certainly vest in and
confirm to the Trustee such estates rights, powers, and duties, then, upon
reasonable request by the Trustee, any and all such deeds, conveyances and
instruments shall be made, executed, acknowledged, and delivered and shall be
caused to be recorded and/or filed by Grantor.

Section 17.6 Intentionally Omitted.

ARTICLE 18 - STATE-SPECIFIC PROVISIONS

[STATE SPECIFIC PROVISIONS]

[NO FURTHER TEXT ON THIS PAGE]

 

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IN WITNESS WHEREOF, this Deed of Trust has been executed by Borrower and
Operator as of the day and year first above written.

 

BORROWER:

[PROPERTY OWNER], a [Property Owner Entity Type]

By:

 

 

 

Name:

 

Title:

--------------------------------------------------------------------------------

STATE OF                          

  

)

     

)

  

ss.:

COUNTY OF                      

  

)

  

I,                     , a Notary Public for the said County and State of
                    , do hereby certify that                     ,
                     of [PROPERTY OWNER], a [Property Owner Entity Type],
personally appeared before me this day and acknowledged the due execution of the
foregoing instrument on behalf of the limited liability company.

WITNESS my hand and official stamp or seal, this              day of
                    , 2017.

 

 

Notary Public

[SEAL]

My commission expires:

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OPERATOR:

[OPERATING LESSEE], a [Operating Lessee Entity Type]

By:

 

 

 

Name:

 

Title:

 

--------------------------------------------------------------------------------

STATE OF                          

  

)

     

)

  

ss.:

COUNTY OF                     

  

)

  

I,                     , a Notary Public for the said County and State of
                    , do hereby certify that                     ,
                     of [OPERATING LESSEE], a [OPERATING LESSEE ENTITY TYPE],
personally appeared before me this day and acknowledged the due execution of the
foregoing instrument on behalf of the limited liability company.

WITNESS my hand and official stamp or seal, this              day of
                    , 2017.

 

 

Notary Public

[SEAL]

My commission expires:

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EXHIBIT A

LEGAL DESCRIPTION

[LEGAL DESCRIPTION OF PROPERTY]

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SCHEDULE I

PLEDGED LEASE

[DESCRIPTION OF OPERATING LEASE]