Deed of Trust And Security Agreement

Exhibit 10.74


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SFHI, LLC, as Grantor
(Borrower)


to


Russell R. Reno, Jr., as trustee
(Trustee)


for the benefit of


LEHMAN BROTHERS HOLDINGS INC., D/B/A LEHMAN CAPITAL, A DIVISION OF LEHMAN
BROTHERS HOLDINGS INC., as beneficiary
(Lender)


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DEED OF TRUST AND SECURITY AGREEMENT


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Dated: February 28, 2001
Location: Gaithersburg, Maryland


Section: _________
Block: _________
Lot: _________
County: Montgomery


UPON RECORDATION RETURN TO: Stroock & Stroock & Lavan LLP 180 Maiden Lane New York, New York 10038-4982 Attention: Oumar Diop


The undersigned, an attorney admitted to practice before the Court of Appeals (State of Maryland), hereby certifies that the within instrument was prepared by me or under my supervision.


By:_____________________________'
Russell R. Reno, Jr., Esq.
Trustee


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TABLE OF CONTENTS
-----------------


1 - Grants of Security


1.1 Property Granted 1.2 Assignment of Rents 1.3 Security Agreement 1.4 Pledge of Monies Held


2 - Debt and Obligations Secured


2.1 Debt and Obligations Secured


3 - Borrower Covenants


3.1 Payment of Debt 3.2 Insurance 3.3 Payment of Taxes, etc. 3.4 Reserves 3.5 Condemnation 3.6 Leases and Rents 3.7 Maintenance of Property 3.8 Waste 3.9 Compliance with Laws 3.10 Books and Records 3.11 Payment for Labor and Materials 3.12 Management 3.13 Performance of Other Agreements 3.14 Change of Name, Identity or Structure 3.15 Existence


4 - Special Covenants


4.1 Single Purpose Entity 4.2 Restoration


5 - Representations and Warranties


5.1 Warranty of Title 5.2 Authority 5.3 Legal Status and Authority 5.4 Validity of Documents 5.5 Litigation 5.6 Status of Property 5.7 No Foreign Person 5.8 Separate Tax Lot 5.9 Erisa Compliance 5.10 Leases 5.11 Financial Condition 5.12 Business Purposes 5.13 Taxes 5.14 Mailing Address 5.15 No Change in Facts or Circumstances 5.16 Disclosure 5.17 Third Party Representations 5.18 Illegal Activity


6 - Obligations and Reliances


6.1 Relationship of Borrower and Lender 6.2 No Lender Obligations


7 - Further Assurances


7.1 Recording of Security Instrument, etc. 7.2 Further Acts, etc. 7.3 Changes in Tax, Debt, Credit and Documentary Stamp Laws 7.4 Estoppel Certificates 7.5 Replacement Documents


8 - Due on Sale/Encumbrance


8.1 Lender Reliance 8.2 No Sale/Encumbrance 8.3 Sale/Encumbrance Defined 8.4 Lender's Rights


9 - Default


9.1 Events of Default


10 - Rights and Remedies


10.1 Remedies 10.2 Application of Proceeds 10.3 Right to Cure Defaults 10.4 Actions and Proceedings 10.5 Recovery of Sums Required to be Paid 10.6 Examination of Books and Records 10.7 Other Rights, etc. 10.8 Right to Release any Portion of the Property 10.9 Violation of Law 10.10 Recourse and Choice of Remedies 10.11 Right of Entry 10.12 Default Interest and Late Charges


11 - Indemnification


11.1 General Indemnification 11.2 Mortgage and/or Intangible Tax 11.3 Erisa Indemnification 11.4 Duty to Defend; Attorneys' Fees and Other Fees and Expenses


12 - Waivers


12.1 Waiver of Counterclaim 12.2 Marshalling and Other Matters 12.3 Waiver of Notice 12.4 Sole Discretion of Lender 12.5 Survival 12.6 Waiver of Trial by Jury


13 - Exculpation


13.1 Exculpation 13.2 Reservation of Certain Rights 13.3 Exceptions to Exculpation 13.4 Recourse


13.5 Bankruptcy Claims


14 - Notices


14.1 Notices


15 - Applicable Law


15.1 Choice of Law 15.2 Usury Laws 15.3 Provisions Subject to Applicable Law


16 - Secondary Market


16.1 Transfer of Loan


17 - Costs


17.1 Performance at Borrower's Expense 17.2 Attorney's Fees for Enforcement


18 - Definitions


18.1 General Definitions


19 - Miscellaneous Provisions


19.1 No Oral Change 19.2 Liability 19.3 Inapplicable Provisions 19.4 Headings, etc. 19.5 Duplicate Originals; Counterparts 19.6 Number and Gender 19.7 Subrogation 19.8 Entire Agreement


20 - State Specific Provisions


THIS DEED OF TRUST AND SECURITY AGREEMENT (this "Security Instrument") is made as of the ____ day of February, 2001, by SFHI, LLC, a Delaware limited liability company, having its principal place of business at 4336 Losee Road, #9, North Las Vegas, Nevada 89030, as trustor ("Borrower") to RUSSELL R. RENO, JR., having an office at 1800 Mercantile Bank & Trust Building, 2 Hopkins Plaza, Baltimore, Maryland 21201-2978, as trustee ("Trustee") for the benefit of LEHMAN BROTHERS HOLDINGS INC., D/B/A LEHMAN CAPITAL, A DIVISION OF LEHMAN BROTHERS HOLDINGS INC., a Delaware corporation, having an address at Three World Financial Center, 200 Vesey Street, New York, New York 10285, as beneficiary ("Lender").


RECITALS:


Borrower by its promissory note of even date herewith given to Lender is indebted to Lender in the principal sum of FIFTY-FIVE MILLION FOUR HUNDRED THIRTY FOUR THOUSAND SIX AND 00/100 ($55,434,006.00) DOLLARS in lawful money of the United States of America (the note together with all extensions, renewals, modifications, substitutions and amendments thereof shall collectively be referred to as the "Note"), with interest from the date thereof at the rates set forth in the Note, principal and interest to be payable in accordance with the terms and conditions provided in the Note.


Borrower desires to secure the payment and performance of the Obligations (as defined in Section 2.1 hereof).


1 - GRANTS OF SECURITY


1.1 PROPERTY GRANTED. Borrower, for and in consideration of the sum
----------------- of Ten ($10.00) Dollars and other valuable consideration in hand paid, the receipt of which hereby is acknowledged, and the further consideration, uses, purposes and trusts herein set forth and declared, has granted, bargained, transferred, assigned, set-over and conveyed and by these presents does grant, bargain, transfer, assign, set over and convey unto Trustee, and unto his or its successors in the trust hereby created and his or its assigns, forever, all of the Borrower's right, title and interest in and to the following (collectively, the "Property"): (a) the real property described in Exhibit A attached hereto and made a part hereof (the "Land"); (b) all additional lands, estates and development rights hereafter acquired by Borrower for use in connection with the Land and the development of the Land and all additional lands and estates therein which may, from time to time, by supplemental mortgage or otherwise be expressly made subject to the lien of this Security Instrument; (c) the buildings, structures, fixtures, additions, enlargements, extensions, modifications, repairs, replacements and improvements now or hereafter erected or located on the Land (the "Improvements"); (d) all easements, rights-of-way or use, rights, strips and gores of land, streets, ways, alleys, passages, sewer rights, water, water courses, water rights and powers, air rights and development rights, and all estates, rights, titles, interests, privileges, liberties, servitudes, tenements, hereditaments and appurtenances of any nature whatsoever, in any way now or hereafter belonging, relating or pertaining to the Land and the Improvements and the reversion and reversions, remainder 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 of, in and to the Land and the Improvements and every part and parcel thereof, with the appurtenances thereto; (e) all furnishings, machinery, equipment, fixtures (including, but not limited to, all heating, air conditioning, plumbing, lighting, communications and elevator fixtures) and other property of every kind and nature whatsoever owned by Borrower or in which Borrower has or shall have an interest, now or hereafter located upon the Land and the Improvements, or appurtenant thereto, and usable in connection with the present or future operation and occupancy of the Land and the Improvements and all building equipment, materials and supplies of any nature whatsoever owned by Borrower, or in which Borrower has or shall have an interest, now or hereafter located upon the Land and the Improvements, or appurtenant thereto, or usable in connection with the present or future operation and occupancy of the Land and the Improvements (collectively, the "Personal Property"), and the right, title and interest of Borrower 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 Security Instrument and all proceeds and products of the above; (f) all leases and other agreements heretofore or hereafter entered into affecting the use, enjoyment or occupancy of the Land and the Improvements including, without


limitation, that certain lease (the "Net Lease") dated as of January 29, 1999, between REII -- Gaithersburg, Maryland, L.L.C. as landlord, and GE Information Services, Inc. as tenant (the "Net Lease Tenant"), whether before or after the filing by or against Borrower of any petition for relief under 11 U.S.C. (S) 101 et seq., as the same may be amended from time to time (the "Bankruptcy Code") (the "Leases") and all right, title and interest of Borrower, its 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 (including, but not limited to, any payment made by or on behalf of any tenant under the Leases in connection with the termination of any Lease), issues and profits (including all oil and gas or other mineral royalties and bonuses) from the Land and the Improvements whether paid or accruing before or after the filing by or against Borrower of any petition for relief under the Bankruptcy Code (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 (as hereinafter defined); (g) any and all lease guaranties (including, without limitation, that certain Guaranty of General Electric Company (the "Net Lease Guarantor") dated as of January 29, 1999 with respect to the Net Lease (the "Net Lease Guaranty"), 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 (individually, a "Lease Guarantor" and collectively, the "Lease Guarantors"); (h) all rights, powers, privileges, options and other benefits of Borrower as lessor under the Leases and beneficiary under the Lease Guaranties including without limitation the immediate and continuing right to make claim for, receive, collect and receipt for all Rents payable or receivable under the Leases and all sums payable under the Lease Guaranties or pursuant thereto (and to apply the same to the payment of the Debt (as hereinafter defined)), and to do all other things which Borrower or any lessor is or may become entitled to do under the Leases or the Lease Guaranties; (i) 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; (j) all proceeds of and any unearned premiums on 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; (k) all of Borrower's claims and rights to the payment of damages arising from any rejection by a lessee of any lease or cancellation by a Lease Guarantor of its Lease Guaranty under the Bankruptcy Code; (l) all refunds, rebates or credits in connection with a reduction in real estate taxes and assessments charged against the Property as a result of tax certiorari or any applications or proceedings for reduction; (m) 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; (n) the right, in the name and on behalf of Borrower, 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; (o) all agreements, contracts, certificates, instruments, franchises, permits, licenses, plans, specifications and other documents, now or hereafter entered into, and all rights therein and thereto, respecting or pertaining to the use, occupation, construction, management or operation of the Land and any part thereof and any Improvements or respecting any business or activity conducted on the Land and any part thereof and all right, title and interest of Borrower therein and thereunder, including, without limitation, the right, upon the happening of any default hereunder, to receive and collect any sums payable to Borrower thereunder; (p) all tradenames, 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; and (q) any and all other rights of Borrower in and to the items set forth in Subsections (a) through (p) above.


CONDITIONS TO GRANT


TO HAVE AND TO HOLD the above granted and described Property unto Trustee, as trustee for the benefit of Lender, to its successors in the trust created by this Security Instrument and to its or their respective assigns, forever, in trust, upon the terms and conditions set forth herein;


IN TRUST, WITH THE POWER OF SALE, to secure payment to Lender of the Debt at the time and in the manner provided for its payment in the Note and in this Security Instrument;


PROVIDED, HOWEVER, these presents are upon the express condition that, if Borrower shall well and truly pay to Lender the Debt at the time and in the manner provided in the Note and this Security Instrument, shall well and truly perform the Other Obligations (as defined in Section 2.1 hereof) as set forth in this Security Instrument and shall well and truly abide by and comply with


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each and every covenant and condition set forth herein and in the Note, these presents and the estate hereby granted shall cease, terminate and be void.


1.2 ASSIGNMENT OF RENTS. (a) Borrower hereby absolutely and
------------------- unconditionally assigns to Lender Borrower's right, title and interest in and to all current and future Leases and Rents thereunder; it being intended by Borrower that this assignment constitutes a present, absolute assignment and not an assignment for additional security only.


(b) Without limitation to Section 1.2(a), Borrower hereby absolutely and unconditionally assigns to Lender (i) Borrower's right, title and interest in and Borrower's right pursuant to the Net Lease to accept or reject any offers to purchase the Property and receive the purchase proceeds of any such sale, and (ii) Borrower's right, title and interest in and Borrower's right to accept or reject any offers to terminate the Net Lease or to receive any termination payments payable with respect to the Net Lease (if any), for which purposes Borrower hereby irrevocably makes, constitutes and appoints Lender its attorney- in-fact with full power to appoint substitutes or a trustee to accomplish such purpose (which power of attorney for so long as any part of Debt (as hereinafter defined) is outstanding, shall be deemed to be coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof). Borrower hereby acknowledges and agrees that any and all such payments shall be paid directly to Lender, and Lender may apply any such sums to the payment of the Debt (including, but not limited to, any prepayment consideration payable under the Note as a result of such payment) in such order of priority as Lender shall in its sole discretion determine. In connection with the purchase of the Property by the tenant under the Net Lease pursuant to an offer made by the tenant under the Net Lease pursuant to Article 17 of the Net Lease which offer has not been rejected by Lender, Lender shall release the lien of this Security Instrument and the other Loan Documents, provided no Event of Default (as hereinafter defined) exists and Lender has received an amount sufficient to pay the outstanding principal balance under the Note together with all accrued interest thereon and all interest which would have accrued on the principal balance of the Note to and including the last day of the then existing Accrual Period (as defined in the Note).


1.3 SECURITY AGREEMENT. This Security Instrument is both a real
------------------ property mortgage and a "security agreement" within the meaning of the Uniform Commercial Code. The Property includes both real and personal property and all other rights and interests, whether tangible or intangible in nature, of Borrower in the Property. By executing and delivering this Security Instrument, Borrower hereby grants to Lender, as security for the Obligations, a security interest in the Property to the full extent that the Property may be subject to the Uniform Commercial Code.


1.4 PLEDGE OF MONIES HELD. Borrower hereby pledges to Lender any and
--------------------- all monies now or hereafter held by Lender, including, without limitation, any sums deposited in the Escrow Fund (as defined in Section 3.4), the Deferred Maintenance Deposit (as defined on Exhibit B attached hereto and made a part hereof), the Reserve (as defined on Exhibit B), Net Proceeds (as defined in Section 4.2) and condemnation awards or payments described in Section 3.5 (collectively, "Deposits"), as additional security for the Obligations until expended or applied as provided in this Security Instrument.


2 - DEBT AND OBLIGATIONS SECURED


2.1 DEBT AND OBLIGATIONS SECURED. This Security Instrument and the
---------------------------- grants, assignments and transfers made in Article 1 are given for the purpose of securing the payment of the Debt and the performance of the Other Obligations, in such order of priority as Lender may determine in its sole discretion. For purposes hereof, the term "Debt" shall mean the aggregate of the indebtedness evidenced by the Note in lawful money of the United States of America, interest, default interest, late charges, prepayment premiums and other sums, as provided in the Note, this Security Instrument or the other Loan Documents (defined below), all other moneys agreed or provided to be paid by Borrower in the Note, this Security Instrument or the other Loan Documents and all sums advanced pursuant to this Security Instrument to protect and preserve the Property and the lien and the security interest created hereby. For purposes hereof, the term "Other Obligations" shall mean the obligations of Borrower (other than the obligation to repay the Debt) contained in this Security Instrument, the Note and the other Loan Documents (as hereinafter defined). For purposes hereof, the term "Loan Documents" shall mean the Note, this Security Instrument and any other documents or instruments which now or shall hereafter wholly or partially secure or guarantee payment of the Note or which have otherwise been executed or are hereafter executed by Borrower and/or any other person or entity in connection with the loan (the "Loan") evidenced by the Note and any renewal, extension, amendment, modification, consolidation, change of, or substitution or replacement for, all or any part thereof. Borrower's obligations for the


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payment of the Debt and the performance of the Other Obligations shall be referred to collectively below as the "Obligations." All the covenants, conditions and agreements contained in the Note and the other Loan Documents are hereby made a part of this Security Instrument to the same extent and with the same force as if fully set forth herein.


3 - BORROWER COVENANTS


Borrower covenants and agrees that:


3.1 PAYMENT OF DEBT. Borrower will pay the Debt at the time and in
--------------- the manner provided in the Note, this Security Instrument and the other Loan Documents.


3.2 INSURANCE.
---------


(a) Borrower shall obtain and maintain, or cause to be maintained, insurance for Borrower and the Property providing at least the coverages set forth herein:


(i) comprehensive all risk insurance on the Improvements and the
Personal Property, in each case (A) in an amount equal to 100% of the "Full
Replacement Cost," which for purposes of this Security Instrument shall
mean actual replacement value (exclusive of costs of excavations,
foundations, underground utilities and footings) with a waiver of
depreciation; (B) containing either an agreed amount endorsement or a
waiver of all co-insurance provisions; (C) providing for a deductible of
not greater than $10,000; and (D) if any of the Improvements or the use of
the Property shall at any time constitute a legal non-conforming structure
or use, Borrower shall obtain an "Ordinance or Law Coverage" or
"Enforcement" endorsement, which shall include sufficient coverage for (1)
costs to comply with building and zoning codes and ordinances, (2)
demolition costs, and (3) increased costs of construction. If any portion
of the Improvements is currently or at any time in the future located in a
federally designated "special flood hazard area", Borrower shall obtain
flood hazard insurance in such an amount as Lender shall require, but in no
event less than the maximum amount of such insurance available under the
National Flood Insurance Act of 1968, the Flood Disaster Protection Act of
1973 or the National Flood Insurance Reform Act of 1994, as each may be
amended. In addition, in the event the Property is located in an area with
a high degree of seismic activity, Borrower shall obtain earthquake
insurance in amounts and in form and substance satisfactory to Lender;


(ii) commercial general liability insurance against claims for
personal injury, bodily injury, death or property damage occurring upon, in
or about the Property, such insurance (A) to be on the "occurrence" form
with a combined single limit (including "umbrella" coverage in place) of
not less than $3,000,000 or, if any of the Improvements contain elevators,
$5,000,000; (B) to continue at not less than the aforesaid limit until
required to be changed by Lender in writing by reason of changed economic
conditions making such protection inadequate; and (C) to cover at least the
following hazards: (1) premises and operations; (2) products and completed
operations on an "if any" basis; (3) independent contractors; and (4)
blanket contractual liability for all written and oral contracts, including
this Security Instrument and all other Loan Documents, to the extent the
same is available;


(iii) intentionally deleted;


(iv) (A) at all times during which structural construction, material
repairs or alterations are being made with respect to the Improvements,
owner's contingent or protective liability insurance covering claims not
covered by or under the terms or provisions of the above mentioned
commercial general liability insurance policy; and (B) during new
construction, the insurance provided for in Subsection 3.2(a)(i) written in
a so-called builder's risk completed value form on a non-reporting basis;


(v) if Borrower has employees, workers' compensation, subject to
the statutory limits of the state in which the Property is located, and
employer's liability insurance with a limit of at least $1,000,000 per
accident and per disease per employee, and $1,000,000 aggregate coverage
for disease in respect of any work or operations on or about the Property,
or in connection with the Property or its operation;


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(vi) if the Property contains HVAC or other equipment not covered by
the comprehensive all risk insurance, comprehensive boiler and machinery
insurance, in amounts as shall be reasonably required by Lender;


(vii) any insurance required by Lender with respect to the rights of
the tenant under the Net Lease to terminate the Net Lease or abate Rents as
a result of any casualty or condemnation affecting the Property;


(viii) without limitation to the foregoing, any insurance which
Borrower is required to provide and maintain pursuant to the terms and
conditions of the Net Lease;


(ix) at all times, maintain in full force and effect residual value
insurance acceptable to Lender in all respects; and


(x) such other insurance and in such amounts as Lender from time to
time may reasonably request against such other insurable hazards which at
the time are commonly insured against for property similar to the Property
or subject to leases similar to the Net Lease located in or around the
region in which the Property is located.


(b) All insurance provided for in Subsection 3.2(a) hereof shall be obtained under valid and enforceable policies (the "Policies" or in the singular, the "Policy"), and shall be subject to the approval of Lender as to insurance companies, amounts, forms, deductibles, loss payees and insureds. The insurance companies must be approved, authorized or licensed to provide insurance in the state in which the Property is located and have a rating of "A" or better for claims paying ability assigned by Moody's Investors Service, Inc. and Standard & Poor's Rating Group or a general policy rating of "A-" or better and a financial class of VIII or better assigned by A.M. Best Company, Inc. Each such insurer shall be referre ...