Deed of Trust And Security Agreement

DEED OF TRUST AND SECURITY AGREEMENT


THIS DEED OF TRUST AND SECURITY AGREEMENT (the "Deed of Trust"), made this 27th day of December, 1989, by LONDONTOWN CORPORATION, a Delaware corporation having an office at Londontown Boulevard, Eldersburg, Maryland 21784 ("Borrower"), to DANIEL L. WIENEKE and JACK N. ZEMIL, as Trustees ("Trustees"), for the benefit of METLIFE CAPITAL CREDIT CORPORATION, a Delaware corporation having an office at Ten Stamford Forum, Stamford, Connecticut 06904 ("Lender").


WITNESSETH:


WHEREAS, pursuant to the Loan Commitment dated October 16, 1989, between Borrower and Lender, Lender has agreed to loan to Borrower the maximum principal amount of up to $14,000,000.00 (the "Loan") the repayment of which is to be secured by the execution and delivery of this Deed of Trust; and


WHEREAS, to evidence the terms of repayment of the Loan with interest, Borrower has duly executed and delivered a deed of trust note of even date herewith in the principal amount of $14,000,000.00 (the "Note"); and


WHEREAS, this Deed of Trust was executed and delivered to secure: (i) the repayment of the Note and the monies advanced by Lender and evidenced by the Note, with interest thereon in accordance with the terms and conditions of the Note and this Deed of Trust, and (ii) the performance of covenants, agreements and conditions contained in any and all other documents which Borrower has executed and delivered or may hereafter execute and deliver to Lender in connection with the Loan, to evidence or secure any such sums advanced under any of the foregoing documents and including, without limitation, the Assignment of Leases and Rents and the Financing Statements, each of even date herewith which secure the payment and performance of all of the foregoing (which documents, as same may be modified or amended from time to time, are hereafter collectively referred to as the "Loan Documents"); and


WHEREAS, all things necessary to make the Note a valid and binding obligation of Borrower, and to make this Deed of Trust a valid and binding instrument to secure the payment of the Note in accordance with its terms, have been duly performed and the execution and delivery of the Note and this Deed of Trust by Borrower have been duly authorized; and


WHEREAS, Borrower is the fee simple owner of the Property (as hereinafter defined).


NOW, THEREFORE, THIS DEED OF TRUST WITNESSETH:


THAT, in consideration of the premises and of the acceptance by the Trustees of the trusts hereby created; and of the Loan, and the acceptance of the Note by Lender, and of the sum of $1.00 in hand paid by Trustees, at or before the ensealing and delivery of these presents, the receipt and sufficiency of which is hereby acknowledged, and in order to secure the payment of the principal of, and the interest and premiums, if any, on the Note, the payment of all other and further sums due or which may become due


under the Note or the other Loan Documents, including future advances, if any, and the performance of the covenants, agreements, and provisions contained herein and in the other Loan Documents, Borrower has executed and delivered these presents and has irrevocably bargained, sold, granted, conveyed, assigned, transferred and set over, and by these presents does hereby irrevocably bargain, sell, grant, convey, assign, transfer and set over unto Trustees and their and each of their successors and assigns in trust with power of sale and the right of entry and possession, forever, all of its fee simple interest in the land, more particularly described in Exhibit A attached hereto and made a part hereof (the "Land"), and any buildings and improvements (including but not limited to site work, utilities conduits owned by Borrower, paving and landscaping), now or hereafter located thereon (the "Improvements") (the Land and the Improvements are together hereinafter referred to as the "Property").


TOGETHER WITH:


(a) all and singular the rights, alleys, ways, waters, tenements, hereditaments, easements, appurtenances, riparian rights, advantages, accessions and privileges, whether public or private, now or hereafter belonging or appertaining to the Property or any part thereof, including, without limitation, all right, title and interest of Borrower, if any, in and to all streets, roads and public places, opened or proposed, whether presently owned or after-acquired and also all the estate, property, claim, right, title or interest now owned or hereafter acquired by Borrower in or to the Property and/or Collateral (as hereinafter defined) or any part thereof;


(b) all fixtures, fittings, furnishings, appliances, apparatus, equipment, and machinery, and all articles of personal property of every kind and nature whatsoever now or hereafter located in or upon any interest or estate in land herein conveyed or any part thereof and used or usable in connection with any present or future operation of the Property and now owned or hereafter acquired by Borrower including, without limiting the generality of the foregoing, all screens, storm windows and doors, floor coverings, shrubbery, plants, boilers, tanks, machinery, wall racking and rail systems, conveyor systems, wiring, furnaces, radiators, blinds and all heating, lighting and flood lighting, plumbing, power, water, refrigerating, gas, electric, ventilating, air conditioning, fire protection, sprinkler, maintenance and incinerating systems and equipment, elevators and escalators and including all equipment now or hereafter installed and used in the operation of the Property and all building material, supplies and equipment now or hereafter delivered to the Property and now or hereafter installed therein; and all renewals or replacements thereof or articles in substitution thereof; and all proceeds and profits thereof; it being understood and agreed that, all of the estate, right, title and interest of Borrower in and to all property of any nature whatsoever now or hereafter situated on the Property and essential to the utilization and operation of the Property, to the extent permitted by law, shall be deemed to be fixtures and an accession to the freehold and a part of the realty as between the parties hereto, and shall be deemed to be a portion of the security for the indebtedness herein mentioned and secured by this Deed of Trust; provided, however, that notwithstanding the provisions of this subsection (b), furniture, equipment, machinery and personal property (including all replacements thereof) owned by lessees of


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Borrower, if any, shall not be deemed to be subject to the lien of this Deed of Trust and the security interest created hereunder. If the lien of this Deed of Trust on any fixtures or personal property be subject to a lease agreement, conditional sale agreement or chattel mortgage covering such property, then in the event of any Default hereunder all the rights, title and interest of Borrower in and to any and all deposits made thereon or therefor are hereby assigned to Trustees, together with the benefit of any payments now or hereafter made thereon. There is also transferred, set over and assigned by Borrower to Trustees, their successors and assigns, all leases and use agreements of machinery, equipment and other personal property of Borrower in the categories hereinabove set forth, under which Borrower is the lessee of, or entitled to use, such items, and Borrower agrees to execute and deliver to Trustees or Lender specific separate assignments to Trustees or Lender of such leases and agreements when requested by Trustees or Lender; but nothing herein shall obligate Trustees or Lender to perform any obligations of Borrower under such leases or agreements unless they so choose, which obligations Borrower hereby covenants and agrees to punctually perform. The items set forth in this Paragraph (b) and in Paragraphs (c), (d), (e), (f) and (g) hereof are sometimes hereinafter separately referred to as "Collateral";


(c) all right, title and interest of Borrower in and to all rents, incomes, profits, security deposits, contract rights, plans and specifications, rights in action with respect to the Property, general intangibles and benefits under any and all leases or tenancies now existing or hereafter created on or for the Property or any part thereof with the right to receive and apply the same to said indebtedness;


(d) all right, title and interest of Borrower in and to all judgments, awards of damages and settlements hereafter made as a result of or in lieu of any taking of the Property or any part thereof or interest therein under the power of eminent domain, or for any damage (whether caused by such taking or otherwise) to the Property or any part thereof or interest therein, including any award for change of grade of streets;


(e) all proceeds of casualty, rent or business interruption insurance policies covering the Property or the Collateral or both;


(f) all proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or liquidated claims; and


(g) all licenses and permits from any governmental authority necessary for or reasonably appropriate to the use and operation of the Property. To the extent any individuals or corporations other than Borrower are licensees or permittees under any such licenses or permits, Borrower agrees to use reasonable efforts in good faith to cause each such individual or corporation to execute an assignment of such license or permit to Trustees in form and content reasonably satisfactory to Lender and to file such assignment with the appropriate governmental agency. Borrower further agrees that it will not allow any substitution or change in the licensees or permittees under any such license or permit without the prior written consent of Trustees and Lender, such consent not to be unreasonably withheld or delayed if such substitution or change in licensees or permittees is to a subsidiary or affiliate of the Borrower.


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TO HAVE AND TO HOLD the Property and Collateral and all other interests described above unto Trustees, the survivors and the survivor of them and their or his successor or successors in the trust, in fee simple.


BUT IN TRUST, NEVERTHELESS to secure to Lender and to Trustees for the benefit of Lender (a) the payment of all sums of money secured hereby, including all sums of principal and interest due or to become due under the Note, all other moneys now or hereafter advanced or expended by Trustees or Lender as provided for herein or in any other of the Loan Documents and all costs, expenses, commissions, and reasonable attorney's fees now or hereafter chargeable to, or incurred by, or disbursed by Trustees, Lender or Borrower as provided for herein, or in any other of the Loan Documents, or by applicable law, and (b) the performance of, observance of and compliance with, by Borrower, all of the terms, covenants, conditions, stipulations and agreements contained herein or in any of the Loan Documents.


PROVIDED, HOWEVER, that until the occurrence of an Event of Default (as hereinafter defined) hereunder or under any of the other Loan Documents, and subject to any provisions hereof or the Assignment of Leases and Rents to the contrary, Borrower shall have the sole right to remain in peaceful possession of the Property, and to collect, receive and retain the rents, revenues, profits, proceeds, income and royalties therefrom.


PROVIDED FURTHER, HOWEVER, that if Borrower shall pay or cause to be paid to Lender the principal and interest to become due thereupon at the time and in the manner stipulated in the Note, and shall pay or cause to be paid all other sums payable hereunder and under the other Loan Documents and all indebtedness hereby secured, then, in such case, the estate, right, title and interest of Trustees and Lender in the Property shall cease, determine and become void, and upon proof being given to the reasonable satisfaction of Lender that the Note, together with interest thereon have been paid or satisfied, and upon payment of all fees, costs, charges, expenses and liabilities chargeable or incurred or to be incurred by Trustees or Lender under the Loan Documents, and of any other sums as provided thereunder or hereunder, Trustees shall, upon receipt of the written request of Lender cancel, release and discharge this Deed of Trust and cause same to be cancelled and marked satisfied of record.


AND THIS DEED OF TRUST FURTHER WITNESSETH, that Borrower, for itself, its successors and assigns, has covenanted and agreed and does hereby covenant and agree with Trustees, and their and each of their successor or successors in the trust, and each of their assigns, and Lender as follows:


ARTICLE I


Borrower's Covenants


Borrower covenants and agrees with Trustees and Lender that:


1.01 Title.


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(a) Borrower warrants that at the time of the execution and delivery of this Deed of Trust: (i) Borrower is the owner of the fee simple title to the Property and is lawfully seized and possessed of such interest in the Property subject to no liens, charges or encumbrances other than the exceptions to title in Schedule B of Title Commitment No. LTC 14982, issued by Transamerica Title Insurance Company, originally dated November 20, 1989, and redated effective as of the date hereof; (ii) this Deed of Trust is and shall remain a valid and enforceable first lien on Borrower's fee simple interest in the Property, subject only to those exceptions to title in Schedule B of Title Commitment No. LTC 14982, issued by Transamerica Title Insurance Company, originally dated November 20, 1989, and redated effective as of the date hereof; and (iii) Borrower and Borrower's successors and assigns shall warrant specially and defend the same forever against the lawful claims and demands of all persons whomsoever claiming by, through or under Borrower.


(b) Borrower has and shall maintain title to the Collateral including any additions or replacements thereto free of all security interests, liens and encumbrances, other than as disclosed to and accepted by Lender in writing, and has good right to subject the Collateral to the security interest hereunder.


(c) Borrower shall, at the cost of Borrower, and without expense to Lender, execute, acknowledge and deliver all and every such further acts, deeds, conveyances, deeds of trust, 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 Trustees or Lender the Property and rights hereby conveyed or assigned or intended now or hereafter so to be, or which Borrower may be or may hereafter become bound to convey or assign to Trustees or Lender, or for carrying out the intention of facilitating the performance of the terms of this Deed of Trust and, within fifteen (15) days after demand, shall execute and deliver, one or more financing statements, chattel mortgages or comparable security instruments, to evidence more effectively the lien hereof upon the Collateral or the Property.


(d) Borrower forthwith upon the execution and delivery of this Deed of Trust, and thereafter from time to time as reasonably required by Lender, shall cause this Deed of Trust and any security instrument creating a lien or evidencing the lien hereof upon the Collateral 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 the lien hereof upon, and the interest of Trustees or Lender in, the Property and the Collateral.


(e) Borrower shall pay all filing, registration or recording fees, and all reasonable expenses incident to the preparation, execution and acknowledgment of this Deed of Trust, any deed of trust supplemental hereto, any security instrument with respect to the Collateral, and any instrument of further assurance, and all federal, state, county and municipal stamp taxes and other taxes, duties, imposts, assessments and charges arising out of or in connection with the execution and delivery of the Note, this Deed of Trust, any deed of trust supplemental hereto, any security instrument with respect to the Collateral or any instrument of further assurance whether imposed at the


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time of executing the Note or imposed at any time prior to the Note being paid and satisfied in full. In the event of the passage after the date of this Deed of Trust of any law changing in any way the laws for the taxation of deeds of trust or debts secured by deeds of trust, or the manner of collection of any such taxation so as to affect this Deed of Trust, Lender may give thirty (30) days written notice to Borrower requiring the payment of the indebtedness secured hereby. If such notice be given, the indebtedness secured hereby shall become due and payable at the expiration of said thirty (30) days; provided, however, that such requirement of payment shall be ineffective if Borrower is permitted by law to pay the whole of such tax in addition to all other payments required hereunder, without any penalty or charge thereby accruing to Lender, and if Borrower in fact pays such tax prior to the date upon which payment is required by such notice.


(f) Subject to the right of Borrower to contest such laws, as set forth in Paragraph 1.04 hereof, Borrower shall comply with all present and future regulations, rules, ordinances, statutes, orders and decrees of any governmental authority or court applicable to Borrower, to the Property, to the Collateral or any part thereof or to the use or operation thereof.


1.02 Payment of Note and Escrow Account.


(a) Borrower shall promptly and punctually pay all installments of principal and interest, and all other sums to become due under the Note and the other Loan Documents, in the manner provided in the Note, this Deed of Trust and the other Loan Documents.


(b) After the occurrence of an Event of Default as defined in Section 2.01 herein, by Borrower under the Note or any of the other Loan Documents, and upon Lender's demand, Borrower shall pay to Lender together with and in addition to the monthly payments of principal and interest payable under the terms of the Note secured hereby, on the first day of each month, until the Note is fully paid, a sum equal to: (i) the annual taxes, levies, charges, fees and special assessments due on the Property covered by this Deed of Trust; and (ii) the annual premiums for the insurance policies as may be required under Paragraph 1.05 hereof, Borrower agreeing to deliver promptly to Lender all bills and notices thereof, less all sums already paid therefor, divided by the number of months remaining before thirty (30) days prior to the date when such premiums, taxes, levies, charges, fees and special assessments, as the case may be, will become delinquent, such sums to be held by Lender to pay said premiums, taxes and special assessments. If the amounts to be paid for the taxes, levies, charges, fees and special assessments are not ascertainable at the time any deposit is required to be made, the deposit shall be made on the basis of the amounts of such payments for the prior year as adjusted for known or reasonably anticipated increases in such taxes, charges and premiums, and upon the amounts of such payments being fixed for the then current year, Borrower, upon notice from Lender, shall deposit any deficiency with Lender. Such payments, hereinafter referred to as "Reserves," may be held without any allowance of interest or dividend to Borrower and need not be kept separate and apart from other escrow funds of Lender. All payments mentioned in this paragraph and all payments to be made under the Note secured hereby shall be added together and the aggregate amount thereof shall be paid by Borrower each month in a single payment to be applied by


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Lender to the payment of the following items in the order set forth:(i) taxes, levies, charges, fees, special assessments, fire and other hazard insurance premiums; (ii) interest on the Note secured hereby; and (iii) amortization of the principal of said Note.


(c) The arrangement provided for in Paragraph 1.02(b) is solely for the added protection of Lender and entails no responsibility on Lender's part beyond the provision of notice to Borrower to make such payments to Lender and the allowance of due credit, without interest, for the sums actually received by it. Upon assignment of this Deed of Trust by Lender, any funds on hand pursuant to this Article 1 shall be turned over to the assignee, and any responsibility of the assignor with respect thereto shall terminate upon the making of such payment to such assignee.


(d) If the total of the Reserves, described in Paragraph 1.02(b) hereof, shall exceed the amount of payments actually applied by Lender as set forth in Paragraph 1.02(b), such excess may be credited by Lender on subsequent payments to be made by Borrower or, at the option of Lender, refunded to Borrower or its successors in interest as may appear on the records of Lender, except to the extent that it may not do so under Title 12 of the Commercial Law Article of the Annotated Code of Maryland (1975 Replacement Volume and 1980 Cum. Supp.). If, however, the Reserves shall not be sufficient to pay the sums required when the same shall become due and payable, Borrower upon notice from Lender shall immediately deposit with Lender the full amount of any such deficiency. If there is an Event of Default under this Deed of Trust or any of the other Loan Documents, Lender may, but shall not be required to apply, at any time, the balance then remaining in the funds accumulated under Paragraph 1.02(b) hereof, less such sums as will become due and payable during the pendency of the proceedings, against the amounts due and payable under the Note, or under any other of the Loan Documents, except to the extent that it may not do so under Title 12 of the Commercial Law Article of the Annotated Code of Maryland (1975 Replacement Volume and 1980 Cum. Supp.).


1.03 Maintenance, Repair and Inspection. Borrower shall keep the Property and Collateral in good operating order, repair and condition and shall not commit or permit any waste thereof. Borrower shall, in accordance with all applicable building codes and regulations, make all repairs, replacements, renewals, additions and improvements and complete and restore promptly and in good workmanlike manner any building or improvements which may be constructed, damaged, or destroyed thereon, and pay when due all costs incurred therefor. Borrower shall not remove from the Property or demolish any of the Collateral, nor demolish or materially alter such Property or Collateral, except as permitted in accordance with Sections 1.11 and 1.16 herein, without the prior written consent of Lender, such consent not to be unreasonably withheld or delayed. Borrower shall permit Trustees or Lender or their agents the opportunity to inspect the Property, including the interior of any structures, at any reasonable times, as often as may be reasonably requested by Lender or Trustees, and upon reasonable prior notice to Borrower. Lender and Trustees shall observe Borrower's safety requirements during the conduct of such inspections.


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1.04 Compliance with Laws. Borrower shall comply with all laws, ordinances, regulations, permits, covenants, conditions, orders, decrees, and restrictions of any governmental boards, agencies, authorities or commissions affecting Borrower, the Property, the Collateral or the operation or use of the Property or Collateral, and shall pay all fees or charges of any kind in connection therewith. Borrower shall promptly after receipt thereof report to Lender all notices of violations of any laws, ordinances, regulations, permits, covenants and restrictions. Borrower shall have the right to postpone such compliance to contest in good faith the validity or applicability to Borrower, the Property, the Collateral or the uses thereof, of such laws, ordinances, regulations, orders and restrictions, so long as Borrower notifies Lender in writing of its intention to contest the validity or applicability of such laws, the validity or applicability thereof is being contested in good faith and the security of the Lender's lien on the Property and the Collateral shall not be impaired in the event such contest shall be unsuccessful. If compliance with such contested matter is required as a condition of the conduct of such contest or because the Property shall be in imminent danger of being forfeited or subject to any additional liens, Borrower shall comply with all requirements during the pendency of such contest. In any event, Borrower may pay to such governmental boards, agencies, authorities or commissions any amounts hereunder under protest, and if recovered, retain any refund of all or any part thereof after payment to Lender of any reasonable costs or expenses, including reasonable attorney's fees, incurred by Lender for its participation, voluntarily or involuntarily, in such contest.


1.05 Insurance.


(a) Borrower shall at all times keep all buildings and improvements now or hereafter situated on or constituting said Property and all Collateral, to the extent insurable, insured against loss or damage by fire and other hazards including, without limitation, flood insurance (if the Property is located in a special flood or mudslide hazard area), vandalism, malicious mischief, sprinkler leakage and water damage, and boiler and machinery coverage whenever in the reasonable opinion of Lender such protection is necessary in an amount equal to ninety percent (90%) of the replacement value of all buildings and improvements constituting the Property (excluding excavations, foundations and footings), based upon the insurer's agreed value without co-insurance, with a demolition cost endorsement. Borrower shall provide insurance against loss or damage by fire or other hazard, including without limitation, loss by burglary, theft or mysterious disappearance on all on-site uninstalled and in transit building materials and supplies, and all fixtures, furniture, equipment and machinery to be constructed or installed on the Property in the amounts set forth on Schedule 1 attached hereto and made a part hereof. Borrower shall also provide general public liability insurance, naming the Lender as an additional insured, with limits for personal injury and death of $2,000,000 in the aggregate and such limits for property damage as Lender may reasonably require. During any construction, repair or restoration, Borrower shall obtain and keep in effect a standard builder's risk casualty insurance policy


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in All Risk Builders 100% Completed Value Non-Reporting Form with extended coverage including vandalism and malicious mischief, naming the Lender as loss payee, in an amount equal to 100% of the value of such Improvements when completed.


(b) Borrower shall maintain business interruption insurance in an amount reasonably required by, and in all respects reasonably satisfactory to, Lender. The business interruption insurance shall provide that in the event that the Property, or any portion thereof, shall be damaged or destroyed by fire and any other casualty, then t ...