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FORM OF
DEED OF TRUST, MORTGAGE AND SECURITY AGREEMENT
MODIFICATION AGREEMENT
between
PAYLESS CASHWAYS, INC.
and
LASALLE NATIONAL BANK, AS TRUSTEE FOR
UBS MORTGAGE FINANCE, INC.
Dated: As of December 2, 1997
After recording, please return to:
FRIED, FRANK, HARRIS, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
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PREPARED BY, RECORDED AT THE )
REQUEST OF AND WHEN RECORDED )
RETURN TO: )
)
▇▇▇▇▇▇ ▇'▇▇▇▇▇▇, Esq. )
Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ )
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ )
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ )
)
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SPACE ABOVE THIS LINE FOR RECORDER'S USE
THIS DEED OF TRUST, MORTGAGE AND SECURITY AGREEMENT MODIFICATION AGREEMENT
(this "Agreement") made as of the 2nd day of December, 1997 by and between
PAYLESS CASHWAYS, INC., a Delaware corporation (successor by merger to Payless
Cashways, Inc., an Iowa corporation ("Former Payless"), having an office at Two
Pershing Square, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Grantor") and
LASALLE NATIONAL BANK, AS TRUSTEE FOR UBS MORTGAGE FINANCE, INC., having an
address at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Beneficiary").
R E C I T A L S:
WHEREAS, Grantor is the owner of each of the premises described in Schedule
I hereto (collectively, the "Premises");
WHEREAS, Ticor Title Insurance Company of California ("Trustee") is the
holder of that certain Deed of Trust, Mortgage and Security Agreement (the
"Mortgage"), dated June 15, 1989 (effective June 20, 1989) described in Schedule
2, made by Former Payless in favor of Trustee for the benefit of The Prudential
Insurance Company of America, a New Jersey corporation (the "Original
Beneficiary"), which Mortgage encumbers the Premises;
WHEREAS, Beneficiary has become the beneficiary under the Mortgage pursuant
to the terms of that certain Assignment of Security Documents and other Loan
Documents dated as of August 29, 1997, whereby the Original Beneficiary assigned
to Beneficiary all of its right, title and interest in and to, among other
things, the Mortgage and the Prior Notes (as hereinafter defined);
WHEREAS, Beneficiary is the holder of, and the Mortgage secures, certain
promissory notes in the original aggregate principal amount of $230,242,500 (the
"Prior Notes"), which Prior Notes evidence that certain loan made by Original
Beneficiary to Former Payless (the "Loan");
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WHEREAS, simultaneously herewith Grantor is executing a Consolidated,
Amended and Restated Promissory Note, dated the date hereof, in favor of
Beneficiary in the aggregate principal amount of $100,809,000 (the "Note"),
which Note modifies the terms of the Prior Notes so as to (i) consolidate into a
single note the outstanding principal amount of the Prior Notes, together with
accrued and unpaid interest thereon at the non-default rate, (ii) modify the
rate of interest on the Loan, (iii) extend the maturity of the Loan, (iv) modify
the amortization of principal of the Loan, and (v) otherwise restate in their
entirety the terms of the Prior Notes.
WHEREAS, Beneficiary and Grantor have agreed to modify and amend the
Mortgage in the manner hereinafter set forth. The Mortgage, as modified hereby,
the Note and the other documents evidencing and/or securing repayment of the
Loan and other obligations evidenced by the Note shall be collectively referred
to herein as the "Loan Documents."
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained, the parties hereto covenant and agree to modify and amend the
Mortgage as follows:
1. Grantor agrees that the principal amount due under the Note is One
Hundred Million Eight Hundred and Nine Thousand Dollars ($100,809,000) and
agrees that such amount, plus interest thereon at the interest rate set forth in
the Amended and Restated Loan Agreement, dated as of December 2, 1997 (the
"Amended Loan Agreement") between Grantor and UBS Mortgage Finance, Inc., shall
be paid pursuant to the terms of such Amended Loan Agreement and of the Note.
2. Grantor warrants, represents and covenants that as of the date hereof
Grantor has no defenses, offsets, claims or deductions relating to the Note or
any sums due under the Mortgage, as modified hereby, or the other Loan
Documents, and the Note, the Mortgage, as modified hereby, and the other Loan
Documents are in full force and effect and are hereby ratified, confirmed and
approved.
3. All references in the Mortgage to "Late Payment Rate" shall mean Default
Rate as such term is defined in the Amended Loan Agreement.
4. All references in the Mortgage to "Loan Agreement" shall mean the
Amended and Restated Loan Agreement, dated December 2, 1997 between Payless
Cashways, Inc. and UBS Mortgage Finance, Inc., as the same may hereafter be
amended, modified, restated, extended, renewed or replaced.
5. All references in the Mortgage to "Prudential" shall mean UBS (as such
term is defined therein).
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6. Notwithstanding anything to the contrary contained in Section 2.1 of the
Mortgage, Grantor shall not be prohibited from entering into an Assignment of
Leases and Rents in connection with, and for the purpose of collaterally
securing the `indebtedness secured by the Permitted Second Lien (as defined in
the Loan Agreement).
7. The following Is hereby added to the end of the first full paragraph of
the Mortgage following the words "set forth in Exhibit "A".
", it being understood that the foregoing property shall not include
inventory, equipment, goods or other tangible personal property which is
not attached or affixed to (or otherwise installed or intended to be
installed the buildings or in the other improvements now erected or
hereafter to be erected on said land or otherwise used in connection with
the operation (i.e. servicing) of the real estate and the improvements"
8. The following is hereby inserted at the end of the third full paragraph
of the Mortgage:
"provided, however, that the term "Collateral" shall not include inventory,
equipment, goods, or other tangible personal property which is not attached
or affixed to (or otherwise installed or intended to be installed in) the
Mortgaged Property, except as specifically stated herein with respect to
all heating and air conditioning equipment, whether or not attached,
affixed, or installed if used in connection with the operation (i.e.
servicing) of the Mortgaged Property."
9. Paragraph 1.1 of the Mortgage is hereby deleted in its entirety and
replaced with the following:
"1.1 Secured Indebtedness. This Deed of Trust, Mortgage and Security
Agreement (hereafter called this "Mortgage") is made to secure and enforce
the payment of: (a) the obligations, indebtedness and liabilities evidenced
by that certain consolidated, Amended and Restated Promissory Note, dated
December 2, 1997 made by Grantor, and payable to the order of LaSalle
National Bank, as Trustee for UBS Mortgage Finance, Inc. ("UBS"), with
interest at the rate or rates therein provided, both principal and interest
being payable as therein provided and all amounts remaining unpaid thereon
being finally due and payable on December 2, 2004, such note containing a
provision for the payment of a reasonable additional amount as attorney's
fees, and all other notes given in substitution therefor or in
modification, increase, renewal or extension thereof, in whole or in part,
being hereinafter collectively called the "Note", and UBS and all
subsequent holders of the Note or any part thereof or any interest therein
or any of the "secured indebtedness" (as hereinafter defined) being
hereinafter called the "Beneficiary"; and (b) all indebtedness incurred or
arising pursuant to the provisions of this Mortgage, that certain Amended
and Restated Loan Agreement (hereinafter called the "Loan Agreement") dated
as of December 2, 1997
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between UBS and Grantor, the Security Documents (as defined in the Loan
Agreement) or any other instrument now or hereafter evidencing, governing
or securing the above described indebtedness or any part thereof. The
indebtedness referred to in this Paragraph -is hereinafter sometimes called
the "secured indebtedness" or the "indebtedness secured hereby.""
10. The second sentence in Paragraph 3.3 of the Mortgage is hereby deleted
and replaced with the following:
"All such costs, expenses and liabilities incurred by the Beneficiary in
collecting such rents and in managing, operating, maintaining, protecting
or preserving the Property, if not paid out of rents as hereinabove
provided, shall constitute a demand obligation owing by Grantor and shall
bear interest from the date of expenditure until paid at the Default Rate
as provided in the Loan Agreement, all of which shall constitute a portion
of the secured indebtedness."
11. The last sentence in Paragraph 3.6 of the Mortgage is hereby deleted
and replaced with the following:
"Any money advanced by the Beneficiary in connection with any such
receivership shall be a demand obligation owing by Grantor to the
Beneficiary and shall bear interest from the date of making such
advancement by the Beneficiary until paid at the Default Rate as provided
in the Loan Agreement and shall be a part of the secured indebtedness and
shall be secured by this Mortgage and by any other instrument securing the
secured indebtedness."
12. The following is hereby inserted after the word "SECOND," and before
the word "THIRD" in Paragraph 3.7 of the Mortgage:
"to the payment in full of remaining secured indebtedness (including
specifically without limitation the principal, interest and attorney's fees
and all in other sums due and unpaid on the Note and the amounts due and
unpaid and owed to the Beneficiary under this Mortgage or any other Loan
Document) in such order as the Beneficiary may elect, and"
13. The address of the Beneficiary on the signature page of the Mortgage is
hereby deleted in its entirety and replaced with the following:
"LaSalle National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Telecopy Number:
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UBS Mortgage Finance, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇"
14. All references in the Mortgage to "the note" or "the Note" shall mean
the Note (as such term is defined in this Agreement). Unless indicated otherwise
by the context thereof, all references in the Mortgage to "this Mortgage",
"herein", "hereof' or terms of similar import shall mean the Mortgage as
modified by this Agreement.
15. Mortgage, as modified hereby, secures the prompt payment in full and
performance when due of all obligations of Grantor now or hereafter e `sting
under the Note, the Mortgage, as modified hereby, and the other Loan Documents.
16. This Agreement shall be governed by the laws of the state in which the
Property (as defined in the Mortgage) is located, without reference to the
conflicts of law principles thereof.
17. GRANTOR AND BENEFICIARY HEREBY CERTIFY THAT THIS AGREEMENT SECURES THE
SAME INDEBTEDNESS SECURED BY THE MORTGAGE AND NO FURTHER INDEBTEDNESS. THIS
AGREEMENT SECURES (AND DOES NOT, AND MAY NOT, SECURE UNDER ANY CONTINGENCY IN
EXCESS OF) THE OUTSTANDING PRINCIPAL BALANCE OF THE NOTE AS OF THE DATE HEREOF
OF ONE HUNDRED MILLION EIGHT HUNDRED AND NINE THOUSAND DOLLARS ($100,809,000)
TOGETHER WITH ANY INTEREST ACCRUED AND NOT ▇▇▇ THEREON AND ANY MONIES ADVANCED
BY BENEFICIARY (INCLUDING INTEREST AND ADDITIONAL INTEREST THEREON AS PROVIDED
IN THIS AGREEMENT) TO PROTECT AND PRESERVE THE LIEN OF THIS AGREEMENT,
INCLUDING, WITHOUT LIMITATION, (I) REAL ESTATE TAXES, (II) WATER AND SEWER
ASSESSMENTS, (III) REASONABLE ATTORNEY'S FEES AND (IV) INSURANCE PREMIUMS.
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18. The terms, conditions and agreements contained in this Agreement shall
bind and inure to the benefit of Grantor, Beneficiary and their respective
heirs, distributees, executors, administrators, successors and permitted
assigns.
19. In the event of any inconsistency between the terms of the Mortgage and
the terms of this Agreement, the terms of this Agreement shall be controlling to
the extent of such inconsistency.
20. Except as otherwise modified or amended hereby, all of the other terms
and conditions of the Mortgage shall remain in full force and effect.
21. This Agreement may be executed in one or more counterparts, each of
which shall constitute an original of this Agreement, and which, when taken
together, shall constitute but one instrument.
22. The terms of this Agreement may not be modified, amended, changed or
terminated orally, but only by an agreement in writing signed by the parties
against whom enforcement of such modification, amendment, change or termination
is sought.
23. Notwithstanding anything to the contrary contained in this Agreement,
the Mortgage, the Note or any other Loan Document, the collateral covered by any
of the Loan Documents, and the term "Collateral" as defined in the Mortgage,
shall not include inventory, equipment, goods or other tangible personal
property which is not attached or affixed to (or otherwise installed or intended
to be installed in) the Mortgaged Property (as defined in the Mortgage), except
with respect to all heating and air conditioning equipment, whether or not
attached, affixed, or installed if used in connection with the operation (i.e.,
servicing) of the Mortgaged Property.
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IN WITNESS WHEREOF, this Agreement has been duly executed by Grantor and
Beneficiary.
GRANTOR:
PAYLESS CASHWAYS, INC., a Delaware
corporation (successor by merger to Payless
Cashways, Inc. Iowa corporation)
By:
---------------------------------------
Name:
Title:
BENEFICIARY:
LASALLE NATIONAL BANK, a Trustee for UBS
Mortgage Finance, Inc., a New York corporation
By:
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Name:
Title:
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SCHEDULE 1
Property Description
