PART IV
ITEM 14. PARAGRAPH 3
EXHIBIT TABLE: SECTION 10
MATERIAL CONTRACTS
EXHIBIT 3(a)
PURCHASE AND SALES AGREEMENT
THIS PURCHASE AND AGREEMENT ("Agreement") is made and entered into in June,
1996, by and between Xxxxx Street Athletic Club, Inc. an Oregon corporation
located at 00000 X.X. Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxx, 00000, hereinafter
referred to as Seller ("Seller"); and HealthTech International, Inc. a Nevada
corporation, located at 0000 X. Xxx Xxxxx Xxxxx, Xxxx, Xxxxxxx, 00000 or its
assignee, hereinafter referred to as Buyer ("Buyer"). Collectively, the Seller
and Buyer herein referred to as Parties.
WITNESSETH
RECITALS
WHEREAS, Seller owns all interest, rights and title to the assets of Xxxxx
Street Athletic Club ("Assets") which include, but are not limited to the
following:
A. approximately 17,000 square feet of improved real estate
property located on approximately one (1) acre located at 00000
X.X. Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxx, 00000 ("Real Property")
legal description attached hereto as Exhibit "A", currently
operated as a health club known as Xxxxx Street Athletic Club
(the "Club"), which includes facilities for fitness, strength
conditioning, aerobics, racquetball,. tanning and child care
B. all improvement and fixtures now or hereafter
attached to the Real Property and used in connection with
the operation or occupancy of the Club (inventory description
and list attached hereto as Exhibit "B", and.....
C. and all the Seller's tangible and intangible personal
property located on or used in connection with the operation or
occupancy of the Club, the Building and/or the above referenced
inventory (list of such property is attached hereto as Exhibit
"C" , and .....
D. membership contracts for approximately 900 current dues
paying members of the Club, and...
E. the right to receive payments for the membership dues from
approximately 900 current dues paying Club members, and...
F. all outstanding accounts receivable, and....
G. all licenses, permits and rights of any kind currently
owned by the Club or related to Club operations as defined and
described in Exhibit "D" attached hereto, and...
H. all records and files which document the operations of the
Club to include but not limited to operating, maintenance and
utilities records, copies of all membership contracts with
names, addresses, initiation and expiration dates, membership
payment records and all other day to day records of the Club.
PURCHASE AND SALE AGREEMENT
HEALTHTECH/XXXXX STREET
JUNE, 1996
WHEREAS, Seller desires to sell and Buyer desires to acquire all interests,
rights and title to the Assets currently held by the Xxxxx Street Athletic Club,
Inc.
NOW, THEREFORE, for the valuable consideration the receipt of which property is
hereby acknowledged and in consideration of mutual promises, representations and
warrants contained herein, the parties do hereby agree as follows:
1. Acquisition Price. The acquisition price shall be Four Hundred Sixty Five
Thousand Three Hundred Dollars ($465,300) and other considerations payable as
follows:
.1 assumption of the amount of the current first mortgage and note
obligations ("Mortgage") of Xxxxx Street Athletic Club which totals
approximately Four Hundred and One Thousand Dollars ($401,000), copies of
mortgage and note attached hereto as Exhibit "E", and...
.2 assumption of the amount of the balance due on payments for
Nautilus equipment which is approximately Thirty Two Thousand Nine Hundred
Dollars ($32,900), copy of loan agreement attached hereto as Exhibit "F", and...
.3 assumption of the lease payments for two (2) tread xxxxx such
payments totaling approximately Eleven Thousand Four Hundred Dollars ($11,400),
copy of lease agreement attached hereto as Exhibit "G", and...
.4 assumption of the amount of the balance of the Promissory note
due and payable to Xxxxxx which is Twenty Thousand Dollars ($20,000) plus
accrued interest, copy of note attached hereto as Exhibit "H", and...
.5 As further consideration Buyer shall issue Sixty Three
Thousand Two Hundred Sixty Seven(63,267) Units of HealthTech International, Inc.
("Units").
2. Units. Each unit shall consist of One (1) common share and One (1) warrant
of HealthTech International, Inc.
The Units will be issued in a non -public offering pursuant to Section 4 (2) of
the Security Act of 1933, as amended, and under corresponding applicable State
laws. The Units will have transfer restrictions pursuant to Rule 144 of the
Securities and Exchange Commission ("SEC"). Rule 144 calls for a sale
restriction period of two (2) years from the date of issuance. By execution
hereof, Seller acknowledges its understanding and agrees that the Units to be
issued by HealthTech are subject to SEC rule 144, and that said Units may not be
traded overseas or subjected to any other circumstances that would cause the
restriction to be removed.
PURCHASE AND SALE AGREEMENT
HEALTHTECH/XXXXX STREET
JUNE, 1996
Units will be ordered on the first business day following the close and
delivered within three (3) business days thereafter.
3. Wrap of Current Mortgage. Seller hereby agrees to wrap the current mortgage
in a manner acceptable to the Buyer or its assignee hereby agree to make the
remaining payments on said mortgage as said payments become due. Buyer will
also take over payments on the Nautilus and the leased equipment currently
installed on the premises and the referenced Xxxxxx Note for Twenty Thousand
Dollars ($20,000).
4. Inspection and closing. It is agreed that within three (3) business day s
from the date of execution hereof, HealthTech shall send authorized
representatives to the Club for a walk through inspection of the facilities
and club records. It is understood and agreed that this Purchase and Sale
Agreement is contingent upon a satisfactory finding of these inspections. If
the findings of said inspections are satisfactory, Buyer will sign
acceptance indicating the closing hereof.
5. Quit Claim Deed. At closing, Seller agrees to execute a Quit Claim Deed to
the Real Property portion of the Assets for the benefit of the Buyer, and
Buyer shall hold said Deed in safekeeping until such time as the Deed is
recorded. The balance of the Assets will be transferred by Xxxx of Sale
which shall be in safekeeping by the Buyer.
6. Contingent Agreements.
.1 Real Estate Taxes and Assessments. It is agreed that real
estate taxes shall be prorated to the closing date of the acquisition of Assets
based on the latest available figures, and that Seller shall pay all current
assessments.
.2 Severance Pay. The Seller agrees to pay (or cancel any
agreement) any severance pay that may be due or become due to any employee and
or manager, and to indemnify HealthTech from any and all claims that may be made
regarding employment and/or severance pay to employees and/or managers. Buyer
makes no representations or warranties to any personnel currently employed by
Xxxxx Street Athletic Club as to continued employment, wages, hours or benefits,
and Buyer assumes no responsibility nor contingent liabilities for same.
.3 Deposits and Bonds. It is agreed that all utility deposits,
including utility deposits and any bonds established by Xxxxx Street Athletic
Club will remain with the Buyer.
.4 Authorization of Sale. At the time of the execution of this
Agreement, Seller shall provide Buyer with an executed copy of any resolutions
or other documents required by the bylaws or operating agreements of the Xxxxx
Street Athletic Club, Inc. authorizing the sale of essentially all the Assets
owned and/or held by the corporation and resolving to enact this Agreement and
abide by all terms and conditions thereof. It is agreed that said resolutions
and other documents shall include a continuing resolution enabling the
Authorized Agent of the corporation, who is the signatory hereof, to execute any
and all documents necessary to fully enact this Agreement.
.5 Insurance. Buyer hereby agrees to insure the building and
equipment in the amount of the replacement value of same, and further to carry a
standard business and liability insurance policy to insure the business
activities of the Club. It is further agreed, so long as personal property of
Xxx Xxxxxxxxx is used to collateralize the current Mortgage obligation of the
Club, he shall be named as a co-insured party on the Club's insurance policies
PURCHASE AND SALE AGREEMENT
HEALTHTECH/XXXXX STREET
JUNE, 1996
7. Representations and Warranties of the Seller.
.1 Xxxxx Street Athletic Club, Inc. is duly organized in the
State of Oregon and will be in good standing at the time of closing.
.2 Notes , Installment Payments, Leases and Liens.
.a The Seller hereby represents and warrants that the Mortgage
on the Real Property is approximately Four Hundred and One thousand Dollars
(401,000), that it has a variable interest rate of Two and Three Quarters (2 3/4
%) over Prime, that approximately twenty one (21) years remain on the twenty
five (25) year amortization, there is no balloon payment or call on the Note,
and that the June principal and interest payment was Four Thousand Eighty Two
Dollars ($4,082). This Mortgage and note obligation provides for a lien on the
Real Property in the amount of the balance due on the note.
.b The Seller hereby represents that the balance of the loan
amount for the referenced Nautilus equipment is approximately Thirty Two
Thousand Nine Hundred Dollars ($32,900), that approximately four years remain on
the five year payment schedule, that the monthly installment payment is Seven
Hundred Forty Seven Dollars and Fifty Two cents ($747.52), that there is no
balloon payment or call on the payments, and that upon making the final payment,
the equipment will be owned free and clear by the Buyer.
.c The Seller hereby represents that the balance of the lease
payment for the referenced two (2) tread mill machines totals approximately
Eleven Thousand Four Hundred Dollars ($11,400),and that the monthly payments in
the amount of Two Hundred Forty Seven Dollars and Eight Two cents ($247.82) are
due and payable for the next forty six (46) months on a sixty (60) month lease
contract, and that upon making the final lease payment, the Buyer may exercise
the option to purchase the referenced equipment for the sum of One (1) Dollar.
.d The Seller hereby represents and warrants that the
Promissory Note obligation to Xxxxxx is for Twenty Thousand Dollars ($20,000),
that payments on the Note are interest only at the rate of Two Hundred Fifty
Dollars ($250) per month, there is no specified term of the Note and no balloon
payments are required, and that there are no provisions for a lien on the Real
Property or any equipment or any Assets being purchased hereunder provided for
in the Note.
.3 The Seller hereby warrants that it is fully authorized to sell
and convey One Hundred Percent (100%) of the Assets of Xxxxx Street Athletic
Club under the terms and conditions set forth herein, and that the below
referenced Authorized Agent for Xxxxx Street Athletic Club, Inc. has full
corporate authority to bind the Seller under this agreement.
.4 The Seller hereby warrants at the time of closing all accounts
payable will be settled in full, with the exception of the Mortgage and Note
obligations on the Real Property, and the balance due on the referenced Nautilus
equipment, which will be paid current up through the time of closing, including
the Promissory Note held by Xxxxxx.
PURCHASE AND SALE AGREEMENT
HEALTHTECH/XXXXX STREET
JUNE, 1996
.5 The Seller hereby warrants that there are no Federal or State
income, payroll or other applicable taxes currently assessed or due to be paid
by Xxxxx Street Athletic Club, Inc., or will disclose to the Buyer the nature
and amount of such taxes for Buyer approval. If there are back taxes or current
assessments of unknown amounts, Seller agrees to pay the same within seven (7)
days of when such amounts become known to the Seller.
.6 The Seller hereby discloses and represents that the Real
Property and all other Assets purchased hereunder are the subject to a Uniform
Commercial Code filing(UCC-1) as made by the Mortgage originator and such filing
as made by said Mortgage originator to secure the indebtedness created by the
Mortgage. Further, the referenced Nautilus equipment is liened by the equipment
load provider in the amount of the balance due, and the lease originator for the
tread mill machines has a lien on that equipment for the amount of the balance
of the lease payments.
.7 The Seller warrants that it is not directly or indirectly
involved in any pending or threatened litigation, disputes, investigations or
other legal proceeding.
8 Representations and Warranties of the Buyer.
.1 HealthTech International, Inc. is duly organized in the
State of Nevada and will be in good standings at the time of closing.
.2 All certificates evidencing Units of HealthTech International,
Inc. issued to Seller and/or its assigns will include a legend declaring that
the Units are restricted securities as defined in Rule 144 as promulgated under
the Securities Act of 1933 as amended.
.3 All Units of HealthTech International, Inc.issued in connection
with the acquisition of Assets shall be fully paid and non-assessable.
.4 The Buyer hereby acknowledges that it is aware that a sewer
assessment will be made on the Property in the near future, and that the Buyer
agrees to assume the lien when such assessments is made, together with any other
conditions that may be needed for compliance.
9 Private Placement. The Parties to this agreement declare and agree that this
transaction is buy means of private placement and treaty, and waive any and all
reference or remedies as to the consideration paid by Buyer or Seller being
construed or confirming constructively as a securities transaction as
promulgated by any State or Federal Agency or law.
PURCHASE AND SALE AGREEMENT
HEALTHTECH/XXXXX STREET
JUNE, 1996
10 Due Diligence. Each Party represents to the other that is fully investigated
the other Parties business and hereby affirms respectively that all normal due
diligence has been satisfactorily completed before the execution hereof. The
Seller hereby attests that it has received and thoroughly reviewed the most
recent quarter (form Q) and yearend (form K) reports from HealthTech and has
found the company to be in satisfactory condition. Further, each Party warrants
the other that it is sophisticated in matters of business, specifically as to
this type of transaction, and each Party hereto, holds and indemnifies the other
harmless in the matters of this transaction and any event or act that may result
therefrom.
11. GENERAL PROVISIONS.
.1 Entire Agreement. This Agreement constitutes the entire
agreement between the Parties hereto pertaining to the transaction contemplated
hereby, and includes all relevant prior agreements, understandings and
negotiations, both written and oral, between the Parties with respect to the
subject matter hereof.
.2 Amendment or Modification. This Agreement may not be amended,
altered or modified in any way except in writing signed by both Parties.
.3 Authority to Execute. The Parties to this agreement are fully
empowered and legally qualified and are duly authorized to execute and deliver
this agreement and to be bound by its Terms and Conditions.
.4 Severability. Should any provision of this Agreement be or
become invalid by virtue of applicable law(s) or fail enforceability, then the
Agreement shall remain in full force and effect and the invalid or unenforceable
provision shall be replaced by provision(s) to be mutually agreed upon between
the signing parties within the spirit and intent of this Agreement.
.5 Notices. All notices, consents, and other communications
required or permitted to be given by either Party shall be in writing and shall
be deemed to have been given if mailed and/or delivered by United States
registered or certified mail, postage prepaid, return receipt requested, to each
respective Party's business address. Either Party may change its address
relative to this Agreement by written notice to the other Party.
.6 No Waiver. No delay or omission of either Party to enforce any
right or power shall impair any such right or power, nor shall be construed to
be a waiver of any nonperformance, unless it is in writing. No written waiver of
any specific provision shall be deemed to be a waiver of any other provision, or
of any subsequent breach of the same or any other provision. Any consent to or
approval of any act by any party hereto to the other shall not be deemed to
render unnecessary the procurement of consent or approval of any subsequent act,
whether or not similar to the act so consented to or approved.
.7 Survival of Rights and Assignment. This Agreement and all of
the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto, their respective legal representatives, nominees, and permitted
successors and assigns. Other than by operation of law neither party may assign
or transfer this Agreement or any of the rights, interest or obligations created
hereunder, except with the express written consent of the other party, which
consent will not be unreasonably withheld
.8 Applicable Law. This agreement shall be governed by and
construed in accordance with the laws of the State of Arizona, and said forum
shall be the applicable law governing the construction, interpretation,
execution, validity, enforceability, performance and/or any other such matters
in respect to this document.
PURCHASE AND SALE AGREEMENT
HEALTHTECH/XXXXX STREET
JUNE, 1996
.9 Attorney's Fees. In the event that suit or other action or
proceedings are brought to compel compliance with, or for a breach of the terms
and conditions of this agreement, each Party will be responsible for the payment
of their attorney fees.
.10 Exhibits and Further Documents. All Exhibits attached hereto
are incorporated herein and are deemed part of this Agreement. The Parties for
themselves, their heirs, personal and corporate representatives, nominees and
assigns hereby covenant and agree that they shall from time to time and at such
time as may be required, perform such acts and execute such further agreements,
supplemental agreements and other documents and instruments as may reasonably be
required and necessary to carry out the matters contemplated hereby and to
effectuate the provisions hereto.
.11 Counterparts. This Agreement may be signed in any number of
counterparts each of which shall be an original, but all of which, taken
together, shall constitute one agreement. It shall not be required that any
single counterpart hereof be signed by both Parties, so long as each Party signs
counterpart hereof.
.12 Construction and Headings. Whenever required by context
hereof, the singular shall include the plural and vice versa, and the masculine
gender shall include the feminine and neuter genders and vice versa. Paragraph
headings and captions contained in this Agreement are inserted only as a matter
of convenience and for the reference and in no way define, limit, extend or
describe the scope of this Agreement or the intent of any provision hereof.
.13 Impartial Interpretation. This Agreement is the result of
negotiations between the parties and therefore the language contained in this
Agreement shall be construed as a whole according to its fair meaning and not
strictly for or against any Party.
.14 Rule of Construction. Buyer and Seller have each read and
fully understand the Terms and Conditions of the Agreement, and each has had the
opportunity to have this Agreement reviewed by its own counsel. The rule of
construction providing that ambiguities in an agreement shall be construed
against the Party drafting the same shall not apply.
.15 Acceptance. The Parties to this Agreement hereby agree to
accept a signed copy of this document delivered by facsimile transmission as if
it was an original.
IN WITNESS WHEREOF, Buyer and Seller, have executed this Purchase
and Sale Agreement on the date and year first stated above.
SELLER:
/s/ Xxx Xxxxxxxxx /s/ Xxx Xxxxxxxxx
Xxx Xxxxxxxxx, President Xxx Xxxxxxxxx, Authorized Agent
for Xxxxx Street Athletic Club,Inc. for Xxxxx Street Athletic Club, Inc.
BUYER: Acknowledgment of Satisfactory
Property
Documentation Inspection
/s/ Xxxxxx Xxxx
Xxxxxx Xxxx, CEO Authorized Representative
for HealthTech International, Inc.
and/or assignee
U.S. Small Business Administration
SBA Loan Number
GP 485407 30 30 PTD
NOTE
Springfield, Oregon
$420,000.00
July 08, 1992
For value received, the undersigned promises to pay to the order of
Centennial Bank at its' office in the city of : Springfield State of: Oregon or
at holder's option, at such other place as may be designated from time to time
by the holder Four Hundred Twenty Thousand and 00/100ths Dollars, with interest
on unpaid principal computed from the date of each advance to the undersigned at
the rate of See Page Four (4) percent per annum, payment to be made in
installments as follows:
See Page Four (4)
If this note contains a fluctuating interest rate, the notice provision
is not a pre-condition for fluctuation (which shall take place regardless of
notice). Payment of any installment of principal or interest owing on this Note
may be made prior to the maturity date thereof without penalty. Borrower shall
provide lender with written notice of intent to prepay part or all of this loan
at least three (3) weeks prior to the anticipated prepayment date. A prepayment
is any payment made ahead of schedule that exceeds twenty (20) percent of the
then outstanding principal balance. If borrower makes a prepayment and fails to
give at least three (3) weeks advance notice of intent to prepay, then,
notwithstanding any other provision to the contrary in this note or other
document, borrower shall be required to pay lender three weeks interest on the
unpaid balance as of the date preceding such prepayment.
The term "Indebtedness" as used herein shall mean the indebtedness evidenced by
this Note. including principal, interest, and expenses, whether contingent, now
due or hereafter to become due and whether heretofore or contemporaneously
herewith or, hereafter contracted. The term "Collateral" as used in this Note
shall mean any funds, guaranties, or other property or rights therein of any
nature whatsoever, or the proceeds thereof which may have been, are, or
hereafter may be, hypothecated, directly or indirectly by the undersigned or
others, in connection with, or as security for, the indebtedness or any part
thereof. The Collateral, and each part thereof, shall secure the indebtedness
and each part thereof. The covenants and conditions set forth or referred to in
any and all instruments of hypothecation constituting the Collateral are hereby
incorporated in this Note as covenants and conditions of the undersigned with
the same force and effect as though such covenants and conditions were fully set
forth herein.
The indebtedness shall immediately become due and payable, without
notice or demand upon the appointment of a receiver or liquidator, whether
voluntary or involuntary, for the undersigned or for any of its property, or
upon the filing of a petition by or against the undersigned under the provisions
of any State insolvency law or under the provisions of the Bankruptcy Reform Act
of 1978, as amended, or upon the making by the undersigned of an assignment for
the benefit of its creditors. Holder is authorized to declare all or any part of
the indebtedness immediately due and payable upon the happening of any of the
following events: (1) Failure to pay any or any part of the indebtedness when
due: (2) nonperformance by the undersigned of any agreement with, or any
condition imposed by, Holder or Small Business Administration (hereafter called
"SBA"), with respect to the indebtedness: (3) Holder's discovery of the
undersigned's failure in any application of the undersigned to Holder or SBA to
disclose any fact deemed by Holder to be material or of the making therein or in
any of the said agreements, or in any affidavit or other documents submitted in
connection with said application or the indebtedness, of any misrepresentation
by, on behalf of, or for the benefit of the undersigned: (4) the reorganization
(other than a reorganization pursuant to any of the provisions of the Bankruptcy
Reform Act of 1978, as amended) or merger or consolidation of the undersigned
(or the making of any agreement therefor) without the prior written consent of
Holder: (5) the undersigned's failure duly to account to Holder's satisfaction,
at such time or times as Holder may require for any of the Collateral, or
proceeds thereof, coming into the control of the Undersigned: or (6) the
institution of any suit affecting the undersigned deemed by Holder to affect
adverse its interest hereunder in the Collateral or otherwise. Holder's failure
to exercise its rights under this paragraph shall not constitute a waiver
thereof.
Upon the nonpayment of the Indebtedness, or any part thereof, when due,
whether by acceleration are otherwise, Holder is empowered to sell, assign, and
deliver the whole or any part of the Collateral at public or private sale,
without demand, advertisement or notice of the time or place of sale or of any
adjournment thereof, which are hereby expressly waived. After deducting all
expenses incidental to or arising from such sale or sales. Holder may apply the
residue of the proceeds thereof to the payment of the indebtedness, as it shall
deem proper, returning the excess, if any, to the undersigned. The undersigned
hereby waives all right of redemption or appeasement whether before or after
sale.
Holder is further empowered to collect or cause to be collected or
otherwise to be converted into money all or any part of the Collateral, by suit
or otherwise, and to surrender, compromise, release, renew, extend, exchange, or
substitute any item of the Collateral in transactions with the undersigned or
any third party, irrespective of any assignment thereof by the undersigned, and
without prior notice to or consent of the undersigned or any assignee. Whenever
any item of the Collateral shall not be paid when due, or otherwise shall be in
default, whether or not the indebtedness, or any part thereof, has become due.
Holder shall have the same rights and powers with respect to such item of the
Collateral as are granted in this paragraph in case of nonpayment of the
indebtedness, or any part thereof, when due. None of the rights, remedies,
privileges, or powers of Holder expressly provided for herein shall be
exclusive, but each of them shall be cumulative with and in addition to every
other right, remedy, privilege. and power now or hereafter existing in favor of
Holder, whether at law or equity, by statute or otherwise.
The undersigned agrees to take all necessary steps to administer,
supervise, preserve, and protect the Collateral; and regardless of any action
taken by Holder, there shall be no duty upon Holder in this respect. The
undersigned shall pay all expenses of any nature, whether incurred in or out of
court and whether incurred before or after this Note shall become due at its
maturity date or otherwise, including but not limited to reasonable attorney's
fees and costs which Holder may deem necessary or proper in connection with the
satisfaction of the indebtedness of the administration, supervision,
preservation. protection of including, but not limited to, the rnaintenance of
adequate insurance, or the realization upon the Collateral . Holder is
authorized to pay at any time and from time to time any or all of such expenses,
add the amount of such payment to the amount of the indebtedness, and charge
interest thereon at the rate specified herein with respect to the principal
amount of this Note.
The security rights of Holder and its assigns hereunder shall not be
impaired by Holder's sale, hypothecation or rehypothecation of any note of the
undersigned or any item of the Collateral., or by any indulgence, including but
not limited to (a) any renewal, extension, or modification which Holder may
grant with respect to the indebtedness or any part thereof. or {b) any
surrender, compromise, release, extension, exchange, or, substitution which
Holder may grant in respect of the Collateral, or (c) any indulgence granted in
respect of any endorser, guarantor, or surety. The purchaser, assignee,
transferee, or pledge of this Note, the Collateral, and guaranty, and any other
document (or any of them), sold, assigned, transferred, pledged, or repledged,
shall forthwith become vested with and entitled to exercise all the powers and
rights given by this Note and all applications of the undersigned to Holder or
SBA, as if said purchaser, assignee. transferee, or pledges were originally
named as Payee in this Note and in said application or applications .
This promissory note is given to secure a loan which SBA is making or
in which it is participating and, pursuant to Part 101 of the Rules and
Regulations of SBA (13 C.F.R. 101.1(d)), this instrument is to be construed and
(when SBA is the Holder or a party in interest) enforced in accordance with
applicable Federal Law.
Xxxxx Street Athletic Club, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxx
President
Attest: /s/ Xxxxxx X. Xxxxxxxxx
Secretary
1. Installments, including principal and interest, payable $3,650.00 per month,
beginning one (1) month from date hereof. -
2. Each said installment shall be applied first to interest accrued to the date
of receipt of said installment and the balance, if any, to principal.
3. The balance of principal and interest payable twenty-five (25) years from the
date hereof.
4. The interest rate as of the date hereof is nine and one-quarter percent
(9-1/4%) per annum. This is a variable interest rate loan in which the interest
rate will be adjusted in accordance with the low prime rate published in the
Money Rate Section of the Western Edition of the Wall Street Journal. The prime
rate published as of April 21,1992 in that publication was six and one-half
percent (6-1/2%). The interest rate (spread) to be added to the prime rate at
the beginning of each adjustment period wil1 be two and three quarters percent
(2-3/4%).
The interest rate shall not exceed twelve and three quarters percent (12-3/4%)
nor be less than five and three-quarters percent (5-3/4%).
5. Each adjustment period will be for one (l) month, beginning on the first
calendar day of the first month following first disbursement.
6. The interest rate on this Note shall increase or decrease by adding the
interest rate spread to the base rate as of the beginning of each adjustment
period.
7. In the event that the interest accrued in any one month exceeds the
monthly payment, undersigned shall pay said difference to Holder in that
month.
6. If the undersigned shall be in default in payment due on the indebtedness
herein and the Small Business Administration (SBA) purchases its guaranteed
portion of said indebtedness, the rate of interest on both the guaranteed and
unguaranteed portions herein shall become fixed at the rate in effect as of the
date of default. If the undersigned is not in default in payment when SBA
purchases its guaranteed portion, the rate of interest on both the guaranteed
and unguaranteed portions herein shall be fixed at the rate in effect as of the
date of purchase by SBA.
DEED OF TRUST
THIS DEED OF TRUST IS DATED JULY 8, 1992, among Xxxxxx X. Xxxxxxxxx, whose
address is 00000 X.X. Xxxxxx Xx. Xxxxxx, XX 00000 (referred to below as
"Grantor"); Centennial Bank, whose address is 0000 Xxxxxx Xxxx., X. X. Xxx X,
Xxxxxxxxxxx, XX 00000 (referred to below sometimes as "Lender" and sometimes as
"Beneficiary"); and Xxxxxxx Title, whose address is 0000 X.X. Xxxxxxxxxx Xxxxxx
Xx., Xxxxx 000, Xxxxxx, XX 00000 (referred to below as "Trustee").
CONVEYANCE AND GRANT. For valuable consideration, Grantor conveys to Trustee for
the benefit of Lender as Beneficiary all of Grantor's right, title, and interest
in and to the following described real property, together with all existing or
subsequently erected or affixed buildings, improvements and fixtures; all
easements, rights of way, and appurtenances: all water, water rights and ditch
rights (including stock in utilities with ditch and irrigation rights); and all
other rights, royalties, and profits relating to the real property, including
without limitation all minerals, oil, gas, geothermal and similar matters,
located in Multnomah County, State of Oregon (the "Real Property"):
Parcel 1:
Xxx 000, XXXXX ACRES, except that part taken for widening of X.X.
Xxxxx Street, in the County, of Multnomah and State of Oregon.
The Real Property or its address is commonly known as 00000 X.X. Xxxxx Xx.,
Xxxxxxxx, XX 00000.
Grantor presently assigns to Lender (also known as Beneficiary in this Deed of
Trust) all of Grantor's right, title, and interest in and to all present and
future leases of the Property and all Rents from the Property. In addition,
Grantor grants Lender a Uniform Commercial Code security interest in the Rents
and the Personal Property defined below.
DEFINITIONS. The following words shall have the following meanings when used in
this Deed of Trust. Terms not otherwise defined in this Deed of Trust shall have
the meanings attributed to such terms in the Uniform Commercial Code. All
references to dollar amounts shall mean amounts in lawful money of the United
States of America.
Beneficiary. The word "Beneficiary" means Centennial Bank, its successors and
assigns. Centennial Bank also is referred to as "Lender" in this Deed of Trust.
Borrower. The word "Borrower" means Xxxxx Street Athletic Club, Inc.
Deed of Trust. The words "Deed of Trust" mean this Deed of Trust among
Grantor, Lender, and Trustee, and includes without limitation all assignment and
security interest provisions relating to the Personal Property and Rents.
Grantor. The word "Grantor" means any and all persons and entities
executing this Deed of Trust, including without limitation Xxxxxx X. Xxxxxxxxx.
Any Grantor who signs this Deed of Trust, but does not sign the Note, is signing
this Deed of Trust only to grant and convey that Grantor's interest in the Real
Property and to grant a security interest in Grantor's interest in the Rents and
Personal Property to Lender and is not personally liable under the Note except
as otherwise provided by contract or law.
Guarantor. The word "Guarantor" means and includes without limitation, any and
all guarantors, sureties, and accommodation parties in connection with the
indebtedness.
Improvements. The word "Improvements" means and includes without limitation all
existing and future improvements, fixtures, buildings, structures, mobile homes
affixed on the Real Property, facilities, additions and other construction on
the Real Property.
Indebtedness. The word "Indebtedness" means all principal and interest
payable under the Note and any amounts expended or advanced by Lender to
discharge obligations of Grantor or expenses incurred by Trustee or Lender to
enforce obligations of Grantor under the Deed of Trust, together with interest
on such amounts as provided in Deed of Trust.
Lender. The word "Lender" means Centennial Bank, its successors and
assigns.
Note. The word "Note" means the Note dated July 14, 1992, in the principal
amount of $420,000.00 from Borrower to Lender, together with all renewals,
extensions, modifications, refinancings, and substitutions for the Note. The
maturity date of the Note is July 8, 2017. The rate of interest on the Note is
subject to indexing, adjustment, renewal, or renegotiation.
Personal Property. The words "Personal Property" mean all equipment,
fixtures, and other articles of personal property now or hereafter owned by
Grantor, and now or hereafter attached or affixed to the Real Property; together
with all accessions, parts, and additions to, all replacements and all
substitutions for, any of such property; and together with all proceeds
(including without limitation all insurance proceeds and refunds of premiums)
from any sale or other disposition of the Property.
Property. The word "Property" means collectively the Real Property and the
Personal Property.
Real Property. The words "Real Property" mean the property, interests and
rights described above in the "Conveyance and Grant" section.
Related Documents. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements, guaranties,
security agreements, mortgages, deeds of trust, and all other instruments,
agreements and documents, whether now or hereafter existing, executed in
connection with the indebtedness.
Rents. The word "Rents" means all present and future rents, revenues,
income, issues, royalties, profits, and other benefits derived from the
Property.
Trustee. The word "Trustee" means Xxxxxxx Title and any substitute or
successor trustees.
THIS DEED OF TRUST, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTERE5T
IN THE RENTS AND PER50NAL FROPERTY, 1S GIVEN TO SECURE (1) PAYMENT OF THE
INDEBTEDNE55 AND (2) PERFORMANCE OF ANY AND ALL OBLIGAT10NS OF GRANTOR UNDER THE
NOTE, THE RELATED DOCUMENTS, AND TH1S DEED OF TRUST. THIS DEED OF TRUST 1S GIVEN
AND ACCEPTED ON THE FOLLOWING TERMS.
GRANTOR'S REPRESENTATIONS AND WARRANTIES. Grantor warrants that (a) this Deed of
Trust is executed at Borrower's request and not at the request of Lender; (b)
Grantor has the full power and right to enter into this Deed of Trust and to
hypothecate the Property; (c) Grantor has established adequate means of
obtaining from borrower on a continuing basis information about Borrower's
financial condition; and (d) Lender has made no representation to Grantor about
Borrower (including without limitation the creditworthiness of Borrower).
GRANTOR'S WAIVERS. Grantor waives all rights or defenses arising by reason of
any "one action" or "anti-deficiency" law, or any other law which may prevent
Lender from bringing any action against Grantor, including a claim for
deficiency to the extent Lender is otherwise entitled to claim for deficiency,
before or after Lender's commencement or completion of any foreclosure action,
either judicially or by exercise of a power of sale.
PAYMENT AND PERFORMANCE. Except as otherwise provided in this Deed of Trust,
Borrower shall pay to Lender all indebtedness secured by this Deed of Trust as
it becomes due, and Borrower and Grantor shall strictly perform all their
respective obligations under the Note, this Deed of Trust, and the Related
Documents.
P0SSESS10N AND MAINTENANCE OF THE PROPERTY. Grantor and Borrower agree that
Grantor's possession and use of the Property shall be governed by the following
provisions:
Possession and Use. Until the occurrence of an Event of Default, Grantor may (a)
remain in possession and control of the Property, (b) use, operate or manage the
Property, and (C) collect any Rents from the Property. The following provisions
relate to the use of the Property or to other limitations on the Property.
THIS INSTRUMENT WILL NOT ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT
IN VIOLATION OF APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE SIGNING OR
ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD
CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED
USES.
Duty to Maintain. Grantor shall maintain the property in tenantable
condition and promptly perform all repairs, replacements, and maintenance
necessary to preserve its value.
Hazardous substances. The terms "hazardous waste," "hazardous
substance," "disposal," "release," and "threatened release," as used in this
Deed of Trust, shall have the same meanings as set forth in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, 42
U.S.C. Section 9601, et seq. ("CERCLA") the Superfund Amendments and
Reauthorization Act of 1986, L. No. 99-499 ("XXXX"), the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation
and Recovery Act, 49 U.S.C. Section 6901, et seq., or other applicable state or
Federal laws, rules, or regulations adopted pursuant to any of the foregoing.
Grantor represents and warrants to Lender that: (a) During the period of
Grantor's ownership of the Property, there has been no use, generation,
manufacture, storage, treatment, disposal, release or threatened release of any
hazardous waste or substance by any person on, under, or about the Property; (b)
Grantor has no knowledge of, or reason to believe that there has been , except
as previously disclosed to and acknowledged by Lender in writing, (i) any use,
generation, manufacture, storage, treatment, disposal, release, or threatened
release of any hazardous waste or substance by any prior owners or occupants of
the Property or (ii) any actual or threatened litigation or claims of any kind
by any person relating to such matters: and (c) Except as previously disclosed
to and acknowledged by Lender in writing, (i) neither Grantor nor any tenant,
contractor, or agent or other authorized user of the Property shall use,
generate, manufacture, store, treat, dispose of or release any hazardous waste
or substance on, under, or about the property and (ii) any such activity shall
be conducted in compliance with all applicable federal, state, and local laws,
regulations and ordinances, including without limitation those laws,
regulations, and ordinances described above. Grantor authorizes Lender and its
agents to enter upon the Property to make such inspections and tests as Lender
may deem appropriate to determine compliance of the Property with this section
of the Deed of Trust. Any inspections or tests made by Lender shall be for
Lender's purposed only and shall not be construed to create any responsibility
or liability on the part of Lender to Grantor or to any other person. The
representations and warranties contained herein are based on Grantor's due
diligence in investigating the Property for hazardous waste. Grantor hereby (a)
releases and waives any future claims against Lender for indemnity or
contribution in the event Grantor becomes liable for cleanup or other costs
under any such laws, and (b) agrees to indemnity and hold harmless Lender
against any and all claims, losses, liabilities, damages, penalties, and
expenses which Lender may directly or indirectly sustain or suffer resulting
from a breach of this section of the Deed of Trust or as a consequence of any
use, generation, manufacture, storage, disposal, release or threatened release
occurring prior to Grantor's ownership or interest in the Property, whether or
not the same was or should have been known to Grantor. The provisions of this
section of the Deed of Trust, including the obligation to indemnity, shall
survive the payment of the indebtedness and the satisfaction and reconveyance of
the lien of the Deed of Trust and shall not be affected by Lender's acquisition
of any interest in the Property, whether by foreclosure or otherwise.
Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor
commit, permit, or suffer any stripping of or waste on or to the Property or and
portion of the Property. Specifically without limitation, Grantor will not
remove, or grant to any other party the right to remove, any timber, minerals
(including oil and gas), soil, gravel or rock products without the prior written
consent of Lender.
Removal of Improvements. Grantor shall not demolish or remove any improvements
from the Real Property without the prior written consent of Lender. As a
condition to the removal of any improvements, Lender may require Grantor to make
arrangements satisfactory to Lender to replace such improvements with
improvements of at least equal value.
Lender's Right to Enter. Lender and its agents and representatives may enter
upon the Real Property at all times to attend to Lender's interests and inspect
the Property for purposes of Grantor's compliance with the terms and conditions
of this Deed of Trust.
Compliance with Governmental Requirements. Grantor shall promptly comply with
all laws, ordinances, and regulations, now or hereafter in effect, of all
governmental authorities applicable to the use and occupancy of the Property.
Grantor may contest in good faith any such law, ordinance, or regulation and
withhold compliance during any proceeding, including appropriate appeals, so
long as Grantor has notified Lender in writing prior to doing so and so long as,
in Lender's sole opinion, Lender's interests in the Property are not
jeopardized. Lender may require Grantor to post adequate security or surety
bond, reasonably satisfactory to Lender, to protect Lender's Interest.
Duty to Protect. Grantor agrees neither to abandon nor leave unattended the
Property. Grantor shall do all other acts, in addition to those acts set forth
above in this section, which from the character and use of the Property are
reasonably necessary to protect and preserve the Property.
DUE ON SALE - CONSENT BY LENDER. Lender may, at its option, declare immediately
due and payable all sums secured by this Deed of Trust upon the sale or
transfer, without Lender's prior written consent, of all or any part of the Real
Property. A "sale or transfer" means the conveyance of Real Property or any
right, title or interest therein; whether legal or equitable; whether voluntary
or involuntary; whether by outright sale, deed, installment sale contract, land
contract, contract for deed, leasehold interest with a term greater than three
(3) years, lease-option contract, or by sale, assignment, or transfer of any
beneficial interest in or to any land trust holding title to the Real Property,
or by any other method of conveyance of Real Property interest. If any Grantor
is a corporation or partnership, transfer also includes any change in ownership
of more than twenty-five percent (25%) of the voting stock or partnership
interests, as the case may be, of Grantor. However, this option shall not be
exercised by Lender if such exercise is prohibited by federal law or by Oregon
law.
TAXES AND LIENS. The following provisions relating to the taxes and liens on the
Property are a part of this Deed of Trust.
Payment. Grantor shall pay when due (and in all events prior to
delinquency) all taxes, special taxes, assessments, charges (including water and
sewer), fines and impositions levied against or on account of the Property, and
shall pay when due all claims for work done on r for services rendered or
material furnished to the Property. Grantor shall maintain the Property free of
all liens having priority over or equal to the interest of Lender under this
Deed of Trust, except for the lien of taxes and assessments not due and except
as otherwise provided in this Deed of Trust.
Right to Contest. Grantor may withhold payment of any tax,assessment,
or claim in connection with good faith dispute over the obligation to pay, so
long as Lender's interest in the Property is not jeopardized. If a lien arises
or is filed as a result of non-payment, Grantor shall within fifteen (15) days
after the lien arises or, if a lien is filed, within fifteen (15) days after
Grantor has notice of the filing, secure the discharge of the lien, or if
requested by Lender, deposit with Lender cash or sufficient corporate surety
bond or other security satisfactory to Lender in an amount sufficient to
discharge the lien plus any costs and attorney's fees or other charges that
could accrue as a result of a foreclosure or sale under the lien. In any
contest, Grantor shall defend itself and Lender and shall satisfy any adverse
judgment before enforcement against the Property. Grantor shall name Lender as
an additional obligee under any surety bond furnished in the contest
proceedings.
Evidence of Payment. Grantor shall upon demand furnish to Lender
satisfactory evidence of payment of the taxes or assessments and shall authorize
the appropriate governmental official to deliver xxx Lender at any time a
written statement of the taxes and assessments against the Property.
Notice of Construction. Grantor shall notify Lender at least fifteen
(15) days before any work is commenced, any services are furnished, or any
materials are supplied to the Property, if any mechanic's lien, materialman's
lien or other lien could be asserted on account of the work, services, or
materials and the cost exceeds $2,500.00. Grantor will upon request of Lender
furnish to Lender advance assurances satisfactory to Lender that Grantor can and
will pay the cost of such improvements.
PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the
Property are a part of this Deed of Trust.
Maintenance of Insurance. Grantor shall procure and maintain policies
of fire insurance with standard extended coverage endorsements on a replacement
basis for full insurable value covering all improvements on the Real Property in
an amount sufficient to avoid application of any coinsurance clause, and with a
standard mortgages clause in favor of Lender, together with such other
insurance, including but not limited to hazard, liability, business
interruption, and boiler insurance, as Lender may reasonably require. Policies
shall be written in form, amounts, coverages and basis reasonably acceptable to
Lender and issued by a company or companies reasonably acceptable to Lender.
Grantor, upon request of Lender, will deliver to Lender from time to time the
policies or certificates of insurance in form satisfactory to Lender, including
stipulations that coverages will not be canceled or diminished without at least
ten (10) days' prior written notice to Lender. Should the Real Property at any
time become located in an area designated by the Director of the Federal
Emergency Management Agency as a special flood hazard area, Grantor agrees to
obtain and maintain Federal Flood Insurance to the extent such insurance is
required and is or becomes available, for the term of the loan and for the full
unpaid principal balance of the loan, or the maximum limit of coverage that is
available, whichever is less.
Application of Proceeds. Grantor shall promptly notify Lender of any
loss or damage to the Property if the estimated cost of repair or replacement
exceeds $1,000.00. Lender may make proof of loss if Grantor fails to do so
within fifteen (15) days of the casualty. Whether or not Lender's security is
impaired, Lender may, at its election, receive and retain the proceeds and apply
the proceeds to the reduction of the indebtedness, payment of any lien affecting
the Property, or restoration and repair of the Property. If Lender elects to
apply the proceeds to restoration and repair, Grantor shall repair or replace
the damaged or destroyed improvements in a manner satisfactory to Lender. Lender
shall, upon satisfactory proof of such expenditure, pay or reimburse Grantor
from the proceeds for the reasonable cost of repair or restoration if Grantor is
not in default under this Deed of Trust. Any proceeds which have not been
disbursed within 180 days after their receipt and which Lender has not committed
to the repair or restoration of the Property shall be used first to pay any
amount owing to Lender under this Deed of Trust, then to pay accrued interest,
and the remainder, if any, shall be applied to the principal balance of the
indebtedness. If Lender holds any proceeds after payment in full of the
indebtedness, such proceeds shall be paid to Grantor as Grantor's interests may
appear.
Unexpired Insurance at Sale. Any unexpired insurance shall inure to
the benefit of, and pass to, the purchaser of the Property covered by this Deed
of Trust at any trustee's sale or other sale held under the provisions of this
Deed of Trust, or at any foreclosure sale of such Property.
Grantor's Report on Insurance. Upon request of Lender, however not
more than once a year, Grantor shall furnish to Lender a report on each existing
policy of insurance showing: (a) the name of the insurer; (b) the risks insured;
(c) the amount of the policy; (d) the property insured, the then current
replacement value of such property, and the manner of determining that value;
and (e) the expiration date of the policy. Grantor shall, upon request of
Lender, have an independent appraiser satisfactory to Lender determine the cash
value replacement cost of the Property.
EXPENDITURES BY LENDER. If Grantor fails to comply with any provision of this
Deed of Trust, or if any action or proceeding is commenced that would materially
affect Lender's interests in the Property, Lender on Grantor's behalf may, but
shall not be required to, take any action that Lender deems appropriate. Any
amount that the Lender expends in so doing will bear interest at the rate
charged under the note from the date incurred or paid by Lender to the date of
repayment by Grantor. All such expenses, at Lender's option, will (a) be payable
on demand, (b) be added to the balance of the Note and be apportioned among and
be payable with any installment payments to become due during either (1) the
term of any applicable insurance policy or (2) the remaining term of the Note,
or (3) be --cannot read this line --. This Deed of Trust also will secure
payment of these amounts. The rights provided for in this paragraph shall be in
addition to any remedies to which Lender may be entitled on account of the
default. Any such action by Lender shall not be construed as curing the fault so
as to bar Lender from any remedy that it otherwise would have had.
WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of
the Property are a part of this Deed of Trust.
Title. Grantor warrants that: (a) Grantor holds good and marketable
title of record to the Property in fee simple, free and clear of all liens and
encumbrances other than those set forth in the Real Property description or in
any title insurance policy, title report, or final title opinion issued in favor
of, and accepted by, Lender in connection with this Deed of Trust, and (b)
Grantor has the full right, power, and authority to execute and deliver this
Deed of Trust to Lender.
Defense of Title. Subject to the exception in the paragraph above, Grantor
warrants and will forever defend the title to the Property against the lawful
claims of all persons. In the event any action or proceeding is commenced that
questions Grantor's title or the interest of Trustee or Lender under this Deed
of Trust, Grantor shall defend the action at Grantor's expense. Grantor may be
the nominal party in such proceeding, but Lender shall be entitled to
participate in the proceeding and to be represented in the proceeding by counsel
of Lender's own choice, and Grantor will deliver, or cause to be delivered, to
Lender such instruments as Lender may request from time to time to permit such
participation.
Compliance with Laws. Grantor warrants that the Property and Grantor's use of
the Property complies with all existing applicable laws, ordinances, and
regulations of governmental authorities.
CONDEMNAT1ON. The following provisions relating to condemnation proceedings are
a part of the Deed of Trust.
Application of Net Proceeds. If all or any part of the Property is
condemned by eminent domain proceedings or by any proceeding or purchase in lieu
of condemnation, Lender may at its election require that all or any portion of
the net proceeds of the award to be applied to the indebtedness or the repair or
restoration of the Property. The net proceeds of the award shall mean the award
after payment of all reasonable costs, expenses, and attorneys' fees. Trustee or
Lender in connection with the condemnation.
Proceedings. If proceeding in condemnation is filed. Grantor shall
promptly notify Lender in writing, and Grantor shall promptly take such steps as
may be necessary to defend the action and obtain the award. Grantor may be the
nominal party in such proceeding, but Lender shall be entitled to participate in
the proceeding and to be represented in the proceeding by counsel of its own
choice, and Grantor will deliver or cause to be delivered to Lender such
instruments as may be requested by it from time to time to permit such
participation.
IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following
provisions relating to governmental taxes, fees and charges are a part of this
Deed of Trust:
Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall
execute such documents in addition to this Deed of Trust and take whatever other
action is requested by Lender to perfect and continue Lender's lien on the Real
Property. Grantor shall reimburse Lender for all taxes, as described below,
together with all expenses incurred in recording, perfecting or continuing this
Deed of Trust, including without limitation all taxes, fees, documentary stamps,
and other charges for recording or registering this Deed of Trust.
Taxes. The following shall constitute taxes it which this section
applies: (a) a specific tax upon this type of Deed of Trust or upon all or any
part of the indebtedness secured by this Deed of Trust; (b) a specific tax on
Borrower which Borrower is authorized or required to deduct from payments on the
indebtedness secured by this type of Deed of Trust; (c) a tax on this type of
Deed of Trust chargeable against the Lender or the holder of the Note; and (d) a
specific tax on all or any portion of the indebtedness or on payments of
principal and interest made by Borrower.
Subsequent Taxes. If any tax to which this section applies is enacted
subsequent to the date of this Deed of Trust, this event shall have the same
effect as an Event of Default (as defined below), and Lender may exercise any or
all of its available remedies for an Event of Default as provided below unless
Grantor either (a) pays the tax before it becomes delinquent, or (b) contests
the tax as provided above in the Taxes and Liens section and deposits with
Lender cash or sufficient corporate surety bond or other security satisfactory
to Lender.
SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to
this Deed of Trust as a security
agreement are a part of this Deed of Trust.
Security Agreement. This instrument shall constitute a security
agreement to the extent any of the Property constitutes fixtures or other
personal property, and Lender shall have all of the rights of a secured party
under the Uniform Commercial Code as amended from time to time.
Security Interest. Upon request by Lender, Grantor shall execute
financing statements and take whatever other action is requested by Lender to
perfect and continue Lender's security interest in the Rents and Personal
Property. In addition to recording this Deed of Trust in the real property
records, Lender may, at any time and without further authorization from Grantor,
file executed counterparts, copies or reproductions of this Deed of Trust as a
financing statement. Grantor shall reimburse Lender for all expenses incurred in
perfecting or continuing this security interest. Upon default, Grantor shall
assemble the Personal Property in a manner and at a place reasonably convenient
to Grantor and Lender and make it available to Lender within three (3) days
after receipt of written demand from Lender.
Addresses. The mailing addresses for Grantor (debtor) and Lender
(secured party), from which information concerning the security interest granted
by this Deed of Trust may be obtained (each as required by the Uniform
Commercial Code), are as stated on the first page of this Deed of Trust.
FURTHER ABSSURANCES; ATTORNEY-IN- FACT. The following provisions relating to
further assurances and attorney-in-fact are a part of this Deed of Trust.
Further Assurances. At any time, and from time to time, upon request
of Lender, Grantor will make, execute and deliver, or will deliver or will cause
to be made, executed or delivered, to Lender or to Lender's designee, and when
requested by Lender , cause to be filed, recorded, refiled or rerecorded, as the
case may be, at such times ad in such offices and places as Lender may deem
appropriate, any and all such mortgages, deed of trust, security deeds, security
agreements, financing statements, continuation statements, instruments of
further assurance, certificates, and other documents as may, in the sole opinion
of Lender, be necessary or desirable in order to effectuate, complete, perfect,
continue, or preserve (a) the obligations of Grantor and Borrower under the
Note, This Deed of Trust, and the Related Documents, and (b) the liens and
security interests created by this Deed of Trust as first and prior liens on the
Property, whether now owned or hereafter acquired by Grantor. Unless prohibited
by law or agreed to the contrary by Lender in writing, Grantor shall reimburse
Lender for all costs and expenses incurred in connection with the matters
referred to in this paragraph.
Attorney-in-Fact. If Grantor fails to do any of the things referred to
in the preceding paragraph, Lender may do so for and in the name of Grantor and
at Grantor's expense. For such purposes, Grantor hereby irrevocably appoints
Lender as Grantor's attorney-in-fact for the purpose of making, executing,
delivering, filing, recording, and doing all another things as may be necessary
or desirable, in Lender's sole opinion, to accomplish the matters referred to in
the preceding paragraph.
FULL PERFORMANCE. If Borrower pays all the indebtedness when due, and otherwise
performs all the obligations imposed upon Grantor under this Deed of Trust,
Lender shall execute and deliver to Trustee a request for full performance and
shall execute and deliver to Grantor suitable statements of termination of any
financing statement on file evidencing Lender's security interest in the Rents
and Personal Property. Any reconveyance fee required by law shall be paid by
Grantor, if permitted by applicable law.
DEFAULT. Each of the following, at the option of Lender, shall constitute an
event of default ("Event of Default") under this Deed of Trust.
Default on indebtedness. Failure of Borrower to make any payment when
due on the indebtedness.
Default on Other Payments. Failure of Grantor within the time required
by this Deed of Trust to make any payment for taxes or insurance, or any other
payment necessary to prevent filing of or to effect discharge of any lien.
Compliance Default. Failure to comply with any other term, obligation,
covenant or condition contained in this Deed of Trust, the Note or in any of the
Related Documents, if such a failure is curable and if Grantor or Borrower has
not been given a notice of a breach of the same provision of this Deed of Trust
within the preceding twelve (12) months, it may be cured (and no Event of
Default will have occurred) if Grantor or Borrower, after Lender sends, written
notice demanding cure of such failure: (a) cures the failure within fifteen (15)
days; or (b) if the cure requires more than fifteen (15) days, immediately
initiates steps sufficient to cure the failure and thereafter continues and
completes all reasonable and necessary steps sufficient to produce compliance as
soon as reasonably practical.
Breaches. Any warranty, representation or statement made or furnished
to Lender by or on behalf of Grantor or Borrower under this Deed of Trust, the
Note or the Related Documents is, or at the time made or furnished was, false in
any material respect.
Insolvency. The insolvency of Grantor or Borrower, appointment of a
receiver or any part of Grantor or Borrower's property, any assignment to the
benefit of creditor, the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Grantor or Borrower, other dissolution or
termination of Grantor or Borrower's existence as a going business (if Grantor
or Borrower is a business). Except to the extent prohibited by federal law or
Oregon law, the death of Grantor or Borrower (if Grantor or Borrower is an
individual) also shall constitute an Event of Default under this Deed of Trust.
Foreclosure, etc. Commencement of foreclosure, whether by judicial
proceeding, self-help, repossession or any other method, by any creditor or
Grantor against any of the Property. However, this subsection shall not apply in
the event of a good faith dispute by Grantor as to the validity or
reasonableness of the claim which is the basis of the foreclosure, provided that
Grantor gives Lender written notice of such claim and furnishes reserves or a
surety bond for the claim satisfactory to Lender.
Breach of Other Agreement. Any breach by Grantor or Borrower under the
terms of any other agreement between Grantor or Borrower and Lender that is not
remedied within any grace period provided therein, including without limitation
any agreement concerning any indebtedness or other obligation of Grantor or
Borrower to Lender, whether existing now or later.
Events Affecting Guarantor. Any of the preceding events occurs with
respect to any Guarantor of any of the indebtedness or such Guarantor dies or
becomes incompetent. Lender, at its option, may, but shall not be required to,
permit the Guarantor's estate to assume unconditionally the obligations arising
under the guaranty in a manner satisfactory to Lender, and, in doing so, cure
the Event of Default.
Insecurity. Lender in good xxxxx xxxxx itself insecure.
RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default and
at any time thereafter, Trustee or Lender, at its option, may exercise any one
or more of the following rights and remedies, in addition to any other rights or
remedies provided by law:
Accelerate indebtedness. Lender shall have the right at its option to
declare the entire indebtedness immediately due and payable, including any
prepayment penalty which Borrower would be required to pay.
Foreclosure. With respect to all or any part of the Real Property, the
Trustee shall have the right to foreclose by notice and sale, and Lender shall
have the right to foreclose by judicial foreclosure. In either case in
accordance with and to the full extent provided by applicable law. If this Deed
of Trust is foreclosed by judicial foreclosure, Lender will be entitled to a
judgment which we provide that if the foreclosure sale proceeds are insufficient
to satisfy the judgment, execution may issue for the amount of the unpaid
balance of the judgment.
UCC Remedies. With respect to all or any part of the Personal
Property, Lender shall have all the rights and remedies of a secured party under
- - - Cannot read this line - - - - - .
Collect Rents. Lender shall have the right, without notice to Grantor
or Borrower, to take possession of and manage the Property and collect the
Rents, including amounts past due and unpaid, and apply the net proceeds, over
and above Lender's costs, against the indebtedness, in furtherance of this
right, Lender may require any tenant or other user of the Property to make
payments of rent or use fees directly to Lender. If the Rents are collected by
Lender, then Grantor irrevocably designates Lender as Grantor's attorney-in-fact
to endorse instruments received in payment thereof in the name of Grantor and to
negotiate the same and collect he proceeds. Payments by tenants or other users
to Lender in response to Lender's demand shall satisfy the obligations for which
the payments are made, whether or not any proper grounds for the demand existed.
Lender may exercise its rights under this subparagraph either in person, by
agent, or through a receiver.
Appoint Receiver. Lender shall have the right to have a receiver
appointed to take possession of all or any part of the Property, with the power
to protect and preserve the Property, to operate the Property preceding
foreclosure or sale, and to collect the Rents from the Property and apply the
proceeds, over and above the cost of the receivership, against the indebtedness.
The receiver may serve without bond if permitted by law Lender's right to the
appointment of a receiver shall exist whether or not the apparent value of the
Property exceeds the indebtedness by a substantial amount.
Employment by Lender shall not disqualify a person from serving as a receiver.
Tenancy at Sufferance. If Grantor remains in possession of the
Property after the Property is sold as provided above or Lender otherwise
becomes entitled to possession of the Property upon default of Grantor, Grantor
shall become a tenant at sufferance of Lender or the purchaser of the Property
and shall, at Lender's option, either (a) pay a reasonable rental for the use of
the Property, or (b) vacate the Property immediately upon the demand of Lender.
Other Remedies. Trustee or Lender shall have any other right or remedy provided
in this Deed of Trust or the Note or by law.
Notice of Sale. Lender shall give Grantor reasonable notice of the
time and place of any public sale of the Personal Property or of the time after
which any private sale or other intended disposition of the Personal Property is
to be made. Reasonable notice shall mean notice given at least ten (10) days
before the time of the sale or disposition. Any sale of Personal Property may be
made in conjunction with any sale of the Real Property.
Sale of the Property. To the extent permitted by applicable law,
Grantor and Borrower hereby waive any and all rights to have the Property
marshaled. In exercising its rights and remedies, the Trustee or Lender shall be
free to sell all or any part of the Property together or separately, in one sale
or by separate sales. Lender shall be entitled to bid at any public sale on all
or any portion of the Property.
Waiver; Election of Remedies. A waiver by any party of a breach of a
provision of this Deed of Trust shall not constitute a waiver of or prejudice
the party's rights otherwise to demand strict compliance with that provision or
any other provision. Election by Lender to pursue any remedy provided in this
Deed of Trust, the Note, in any Related Document, or provided by law shall not
exclude pursuit of any other remedy, and an election to make expenditures or to
take action to perform an obligation of Grantor or Borrower under this Deed of
Trust after failure of Grantor or Borrower to perform shall not affect Lender's
right to declare a default and to exercise any of its remedies.
Attorneys' Fees; Expenses. If Lender institutes any suit or action to
enforce any of the terms of the Deed of Trust, Lender shall be entitled to
recover such sum as the court may adjudge reasonable as attorneys' fees at trial
and on any appeal. Whether or not any court action is involved, all reasonable
expenses incurred by Lender which in Lender's opinion are necessary at any time
for the protection of its interest or the enforcement of its rights shall become
a part of the indebtedness payable on demand and shall bear interest at the Note
rate from the date of expenditure until repaid. Expenses covered by this
paragraph include, without limitation, however subject to any limits under
applicable law Lender's attorneys' fees whether or not there is a lawsuit
including attorneys' fees for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), appeals and any anticipated
post-judgment collection services, the cost of searching records, obtaining
title reports )including foreclosure reports), surveyors reports, appraisal
fees, title insurance, and fees for the Trustee, to the extent permitted by
applicable law. Grantor also will pay any court costs, in addition to all other
sums provided by law.
Right of Trustee. Trustee shall have all of the rights and duties of Lender as
set forth in this section.
POWERS AND OBLIGATIONS OF TRUSTEE. The following provisions relating to the
powers and obligations of Trustee are part of this Deed of Trust.
Powers of trustee. In addition to all powers of Trustee arising as a
matter of law, Trustee shall have the power to take the following actions with -
- - - - - -cannot read this line - - - - - - -
PART IV
ITEM 14. PARAGRAPH 3
EXHIBIT TABLE: SECTION 10
MATERIAL CONTRACTS
EXHIBIT 3(b)
PROMISSORY NOTE
$791,000.00
Midland,Texas September 27, 1996
FOR VALUE RECEIVED, the undersigned, IFM INVESTMENTS, INC., a Texas
corporation ("Borrower"), promises to pay to the order of MIDLAND AMERICAN BANK,
a Texas banking association ("Lender"), at its banking offices at 000 X. Xxxxx,
Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx, the principal sum of SEVEN HUNDRED NINETY-ONE
THOUSAND AND NO/100 DOLLARS ($791,000.00), together with interest on the unpaid
principal balance from day to day outstanding prior to default or maturity at a
per annum rate which shall from day to day be equal to the lesser of (i) the
Prime Rate (hereinafter defined) in effect from day to day, plus two percent
(2%) per annum (the "Established Rate) (calculated on the basis of actual days
elapsed in a year consisting of 360 days) or (ii) the Maximum Rate (hereinafter
defined) (calculated on the basis of actual days elapsed in a year consisting of
365 or 366 days, as appropriate). Each change in the rate of interest charged
hereunder shall, subject to the terms hereof, become effective, without notice
to Borrower, upon the effective date of each change in the Prime Rate or the
Maximum Rate, as the case may be. If at any time and from time to time the
Established Rate exceeds the Maximum Rate, thereby causing the interest payable
to be limited to the Maximum Rate, then any subsequent reduction in the
Established Rate shall not reduce the rate of interest hereunder below the
Maximum Rate until the total amount of interest accrued hereon equals the amount
of interest that would have accrued if the Established Rate had at all times
been in effect. All past due principal on and accrued interest of this Note
shall bear interest at the Maximum Rate.
As used herein, "Prime Rate" shall mean that rate of interest
established from time to time, and denominated as such, by Lender as its general
reference rate of interest. The Prime Rate is not the lowest rate of interest
charged by Lender on extensions of credit to its customers.
As used herein, "Maximum Rate" shall mean the maximum non-usurious
rate of interest, if any, that at any time, or from time to time, may be
contracted for, taken, reserved, charged or received under applicable law on the
indebtedness evidenced by this Note, after taking into account, to the extent
required by applicable law, any and all relevant payments, charges or other
amounts under this Note and all instruments securing payment of this Note. To
the extent that Article 5069-1.04, Texas Revised Civil Statutes Annotated, as
amended, is relevant for purposes of determining the Maximum Rate, Lender hereby
notifies Borrower that the applicable rate ceiling shall be the "indicated rate
ceiling" from time to time in effect, as limited by Article 5069-1.04 (b);
provided, however, that to the extent permitted by applicable law, Lender
reserves the right to change the applicable rate ceiling from time to time by
further notice to Borrower; and, provided further, that the Maximum Rate shall
not be limited to the applicable rate ceiling under Article 5069-1.04 if federal
laws or other state laws now or hereafter in effect and applicable to this Note
(and the interest contracted for, charged and collected hereunder) shall permit
a higher rate of interest.
The principal of this Note shall be due and payable in thirty-five (35)
consecutive monthly installments in the amount of $9,416.00 each, followed by a
thirty-sixth (36) and final installment for, charged, or received by Lender
exceed the Maximum Rate. If, for any circumstance whatsoever, interest would
otherwise be payable to Lender in excess of the Maximum Rate, the interest
payable to Lender hereunder shall be reduced to the Maximum Rate; and if for any
circumstance Lender shall ever receive anything of value deemed interest by
applicable law in excess of the Maximum Rate, then an amount equal to any such
excess shall be applied to the reduction of the principal hereof and not the
payment of interest, or if such excessive interest exceeds the unpaid balance of
principal hereof, such excess shall be refunded to Borrower. All interest paid
or agreed to be paid to Lender shall, to the extent permitted by applicable law,
be amortized prorated, allocated, and spread throughout the full period until
payment in full of the principal (including the period of any renewal or
extension hereof) so that the interest hereon for such full period shall not
exceed the Maximum Rate.
This Note shall be governed by and construed in accordance with the laws of the
State of Texas and the laws of the United States applicable to transactions in
Texas.
THIS NOTE AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
IFM INVESTMENTS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
Printed Name: Xxxxxxx X. Xxxxxxx
Title: Agents & Attorney
Written by
X. Xxxx
Hanzle
BORROWER:
IFM INVESTMENTS, lNC.
By: /s/ Xxxxxxx Xxxxxxx
Name: Xxxxxxx Xxxxxxx
Title: Agent & Attorney
BANK:
MIDLAND AMERICAN BANK
By: /s/ Xxxx X. Xxxxxx
Title: Vice President
HEALTHTECHI INTERNATIONAL, INC.
Name: /s/ Xxx Xxxxxxxx
Title: President
MIDLAND AMERICAN BANK
LOAN AGREEMENT
This loan Agreement (the "Agreement") dated as of September 27, 1996, by and
between MIDLAND AMERICAN BANK, ("Bank"), IFM INVESTMENTS, INC., a Texas
corporation ("'Borrower"), and HEALTHTECH INTERNATIONAL, INC., a Nevada
corporation ("Guarantor").
In consideration of the Loan or Loans described below and the mutual covenants
and agreements contained herein, and intending to be legally bound hereby, Bank,
Borrower, and Guarantor agree as follows:
1. DEFINITIONS AND REFERENCE TERMS. In addition to any terms defined herein, the
following terms shall have the meaning set forth with respect thereto:
A. Borrower: IFM Investments, Inc. B. Borrower's Address: 000 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000 C. Current Assets. Current Assets means the aggregate
amount of all of Borrower's assets which would, in accordance with
generally accepted account principals ("GAAP"), properly be defined as
current assets. D. Current Liabilities. Current Liabilities means the
aggregate amount of all current liabilities as determined in accordance
with GAAP, but in any event shall include all liabilities except those
having a maturity date which is more than one year from the date as of
which such computation is being made. E. Guarantor: HealthTech
International, Inc. F. Guarantor's Address: 0000 Xxxxx Xxx Xxxxx Xxxxx
Xxxx, Xxxxxxx 00000 G. Hazardous Materials. Hazardous Materials include all
materials defined as hazardous materials or substance under any local,
state or federal environmental laws, rules or regulations, and petroleum,
petroleum products, oil and asbestos. H. Loan. Any loan described in
section 2 hereof and any subsequent loan which states that it is subject to
this Agreement. I. Loan Documents. Loan Documents means this Agreement and
any and all promissory notes executed by Borrower in favor of Bank and all
other documents, instruments, guarantees, certificates and agreements
executed and/or delivered by Borrower, Guarantor, and/or any other
guarantor or third party in connection with any Loan. J. Tangible Net
Worth. Tangible Net Worth means the amount by which total assets exceed
total liabilities in accordance with GAAP. K. Accounting Terms. All
accounting terms not specifically defined or specified herein shall have
the meanings generally attributed to such terms under GAAP, as in effect
from time to time, consistently applied, with respect to the financial
statements referenced in Section 3.H hereof.
2. LOANS
A. Loan. Subject to the terms and conditions of this Agreement and of
the other Loan Documents, Bank hereby agrees to make (or has made) one or more
loans to Borrower in the aggregate principal face amount of $791,000.00. The
obligation to repay the loans is evidenced by a promissory note dated as of
September 27, 1996, in the principal amount of $791,000.00, to be made by
Borrower and payable to the order of Bank, and having a maturity date, repayment
terms, and interest rate as set forth in said promissory note (the promissory
note together with any all renewals, extensions or rearrangements thereof, being
hereafter collectively referred to as the "Note").
3. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and warrants to
Bank as follows:
A. Good Standing. Borrower is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Texas and has the
power and authority to own its property and to carry on its business in each
jurisdiction in which Borrower does business.
B. Authority and Compliance. Borrower has full power and authority to
execute and deliver the Loan Documents and to incur and perform the obligations
provided to therein, all of which have been duly authorized by all proper and
necessary action of the appropriate governing body of Borrower. No consent or
approval of any public authority or other third party is required as a condition
to the validity of any Loan Document, and Borrower is in compliance with all
laws and regulatory requirements to which it is subject.
C. Binding Agreement. This Agreement and the other Loan Documents executed
by Borrower constitute valid and legally binding obligations of Borrower,
enforceable in accordance with their terms.
D. Litigation There is no proceeding involving Borrower pending or, to the
knowledge of Borrower, threatened before any court of government authority,
agency or arbitration authority, except as disclosed to Bank in writing and
acknowledged in writing by Bank prior to the date of the Agreement.
E. No Conflicting Agreements. There is no charter, bylaw, stock provision,
partnership agreement or other document pertaining to the organization, power or
authority of Borrower and no provision of any existing agreement, mortgage,
indenture or contract binding on Borrower or affecting its property, which would
conflict with or in any way prevent the execution, delivery or carrying out of
the terms of this Agreement and the other Loan Documents.
F. Ownership of Assets. Borrower has good title to its assets, and its
assets are free and clear of liens, except those disclosed by Borrower and
acknowledged by Bank in writing prior to the date of this Agreement.
G. Taxes. All taxes and assessments due and payable by Borrower have been
paid or are being contested in good faith by appropriate proceedings and the
Borrower has filed all tax returns which it is required to file.
H. Financial Statements. The financial statements of Borrower heretofore
delivered to Bank have been prepared on a consistent basis throughout the period
involved and fairly present Borrower's financial condition as of the date or
dates thereof, and there has been no material adverse change in Borrower's
financial condition or operations since June 30, 1996. All factual information
furnished by Borrower to Bank in connection with this Agreement and the other
Loan Documents is and will be accurate and complete on the date as of which such
information is delivered to Bank and is not and will not be incomplete by the
omission of any material fact necessary to make such information not misleading.
I. Place of Business. Borrower's chief executive office is located at: 000
Xxxxxxxxx Xxxxx Xxxxxxx, XX 00000
J. Environmental. The conduct of Borrower's business operations and the
condition of Borrower's property do not and will not violate any federal laws,
rules or ordinances for environmental protection, regulations of the
Environmental Protection Agency, any applicable local or state law, rule,
regulation or rule of common law or any judicial interpretation thereof relating
primarily to the environment or Hazardous Materials.
K. Continuation of Representations and Warranties. All representations and
warranties made under this Agreement shall be deemed to be made at and as of the
date hereof and as of the date of any advance under any Loan
4. COIMMITMENT FEE. As a condition precedent to the obligations of Bank
under this Agreement, Borrower shall pay to Bank a non-refundable loan
commitment fee in the amount of $7,500.00 at or prior to closing of the Loan. 5.
AFFIRMATIVE COVENANTS. Until full payment and performance of all obligations of
Borrower under the Loan Documents, Borrower will, unless Bank consents otherwise
in writing (and without limiting any requirement of any other Loan Document):
A. Financial Condition. Maintain Borrower's financial condition as
follows, determined in accordance with GAAP applied on a consistent
basis throughout the period involved except to the extent modified by
the following definitions:
i. Maintain a cash flow coverage ratio, defined as the aggregate
of net income after taxes plus depreciation and other non-cash expenses, less
gain on sale of assets, dividends, withdrawals and treasury stock purchases
divided by the aggregate of the current portion of long-term debt and capital
lease obligations, of not less than 1.5 for each calendar quarter beginning with
the calendar quarter ending December 31, 1996 and continuing every quarter
thereafter.
B. Maintenance of Minimum Value of Pledged Stock. As part of the
security for the Note and the Loan, Borrower has pledged 50,000 fully paid and
unrestricted shares of the common stock of Guarantor. Borrower agrees to obtain
and pledge additional fully paid, non-assessable, and unrestricted shares of
stock of Guarantor, from time to time as hereinafter set forth, sufficient to
maintain the value of all such shares of stock of Guarantor pledged to Midland
American Bank at no less than $150,000.00. Such value will be determined, and
such pledge maintained, as follows:
i. Within ten (10) business days of the end of the third
calendar quarter of 1996, Borrower will calculate the average closing price of
Guarantor's stock over the preceding calendar quarter. Such will be calculated
by adding the final closing price of Guarantor's stock at the close of each
trading day during the preceding calendar quarter, and dividing the resulting
sum by the number of such trading days.
ii. The resulting average closing price of Guarantor's stock
shall then be multiplied by the number of shares of Guarantor's stock then
pledged by Borrower to Bank. If the resulting product is less than $150,000.00,
by the end of such ten (10) business day period Borrower shall actually deliver
to Bank, and executed appropriate pledge documents prepared by Bank, a
certificate or certificates for additional fully paid, non-assessable, and
unrestricted shares of the common stock of Guarantor sufficient to bring the
value thereof (using the previously calculated average closing price) to a
minimum of $150,000.00.
iii Within ten (10) business days of the end of the fourth
calendar quarter of 1996 and each calendar quarter thereafter, Borrower will in
the same fashion calculate the average closing price of Guarantor's common stock
and deliver to Bank a certificate or certificates for such additional shares of
the fully paid, non-assessable, and unrestricted common stock of Guarantor as
may be necessary to maintain the value of all such shares pledged to Bank at a
minimum of $150,000.00.
C. Financial Statements and Other Information; Compliance
Certificates Maintain a system of accounting satisfactory to Bank and in
accordance with GAAP applied on a consistent basis throughout the period
involved and permit Bank's officers or authorized representatives to visit and
inspect Borrower's books of account and other records at such reasonable times
and as often as Bank forgoing purposes. Unless written notice of another
location is given to Bank, Borrower's books and records will be located at
Borrower's chief executive office set forth above. Except as specifically
provided otherwise below, all financial statements called for below shall be
prepared in form and content acceptable to Bank and by independent certified
public accountants acceptable to Bank.
In addition, Borrower will:
i. Furnish to Bank company prepared financial statements
(including a balance sheet, profit and loss statement, and statement of cash
flows) of Borrower for each quarter of each fiscal year of Borrower, within 30
days after the close of each such period.
ii. Furnish to Bank a FORM 10-K financial statement of
Guarantor for each fiscal year of Guarantor, within 120 days after the close of
each such fiscal year.
iii. Furnish to Bank a FORM 10-Q financial statement of
Guarantor for each quarter of each fiscal year of Guarantor, within 45 days
after the close of each such period.
iv. Furnish to Bank a compliance certificate for (and
executed by an authorized representative of) Borrower concurrently with and
dated as of the date of delivery of each of the financial statements as required
in paragraphs i and ii above, covering the period of such financial statement,
and containing (a) a certification that the financial statements of even date
are true and correct and that the Borrower is not in default under the terms of
this Agreement; (b) a certification at the average closing price for Guarantor's
common stock provided by Borrower to Bank pursuant to Paragraph 5B of this
Agreement has been properly calculated by Borrower, and Borrower has properly
delivered to Bank additional certificates of the fully paid, non-assessable, and
unrestricted shares of common stock of Guarantor for pledge to maintain the
minimum value requirements of Paragraph 5B of this Agreement; (c) a
certification that the Borrower has maintained the cash flow coverage ratio in
accordance with the requirements of Paragraph 5A (i) of this Agreement,
providing to Bank a detailed calculation of such cash flow coverage ratio; and
(d) computations and conclusions, in such detail as Bank may request, with
respect to compliance with this Agreement, and the other Loan Documents,
including computations of all quantitative covenants. Each such compliance
certificate shall contain a statement by Borrower that all statements made in
the compliance certificate are true and correct, based upon true and correct
financial records of Borrower.
v. Furnish to Bank promptly such additional information,
reports and statements respecting the business operations and financial
condition of Borrower and Guarantor, respectively, from time to time, as Bank
may reasonably request.
C. Insurance. Maintain insurance with responsible insurance companies on
such of its properties, in such amounts and against such risks as is customarily
maintained by similar businesses operating in the same vicinity, specifically to
include fire and extended coverage insurance covering all assets, business
interruption insurance, workers compensation insurance and liability insurance,
all to be with such companies and in such amounts as are satisfactory to Bank
and providing for at least 30 days prior notice to Bank of any cancellation
thereof, and listing the Bank as the loss payee. Satisfactory evidence of such
insurance Will be supplied to Bank prior to funding under the Loan(s) and 30
days prior to each policy renewal.
D. Existence and Compliance. Maintain its existence, good standing and
qualification to do business, where required and comply with all laws,
regulations and governmental requirements including, without limitation,
environmental laws applicable to it or to any of its property, business
operations and transactions.
E. Adverse Conditions or Events. Promptly advise Bank in writing of (i) any
condition, event or act which comes to its attention that would or might
materially adversely affect Borrower's financial condition or operations or
Bank's rights under the Loan Documents, (ii) any litigation filed by or against
Borrower, (iii) any event that has occurred that would constitute an event of
default under any Loan Documents and (iv) any uninsured or partially uninsured
loss through fire, theft liability or property damage in excess of an aggregate
of $25,000.
F. Taxes and Other Obligations. Pay all of its taxes, assessments and other
obligations, including, but not limited to taxes, costs or other expenses
arising out of this transaction, as the same become due and payable, except to
the extent the same are being contested in good faith by appropriate proceedings
in a diligent manner.
G. Maintenance. Maintain all of its tangible property in good condition and
repair and make all necessary replacements thereof, and preserve and maintain
all licenses, trademarks, privileges, permits, franchises, certificate and the
like necessary for the operation of its business.
H. Environmental. Immediately advise Bank in writing of (i) any and all
enforcement cleanup, remedial, removal, or other governmental or regulatory
actions instituted, completed or threatened pursuant to any applicable federal,
state, or local laws, ordinances or regulations relating to any Hazardous
Materials affecting Borrower's business operations; and (ii) all claims made or
threatened by any third party against Borrower relating to damages,
contribution, cost recovery, compensation, loss or injury resulting from any
Hazardous Materials. Borrower shall immediately notify Bank of any remedial
action taken by Borrower with respect to Borrower's business operations.
Borrower will not use or permit any other party to use any Hazardous Materials
at any of Borrower's places of business or at any other property owned by
Borrower except such materials as are incidental to Borrower's normal course of
business, maintenance and repairs and which are handled in compliance with all
applicable environmental laws. Borrower agrees to permit Bank, its agents,
contractors and employees to enter and inspect any of Borrower's places of
business or any other property of Borrower at any reasonable times upon three
(3) days prior notice for the purposes of conducting an environmental
investigation and audit (including taking physical samples) to insure that
Borrower is complying with this covenant and Borrower shall reimburse Bank on
demand for the costs of any such environmental investigation and audit. Borrower
shall provide Bank, its agents, contractors, employees and representatives with
access to and copies of any and all data and documents relating to or dealing
with any Hazardous Materials used, generated, manufactured, stored or disposed
of by Borrower's business operations within five (5) days of the request
therefore.
I. Title Curative. Within sixty (60) days of funding of the Loan provided
for in Section 2 of this Agreement, Borrower shall: (i) present to Bank
appropriate documentation satisfactory in form and substance to Bank, in its
sole discretion, evidencing Borrower's acquisition of good and merchantable
title, free and clear of liens, claims, and encumbrances, to the 30-foot wide
strip of land out of Xxx 0, Xxxxx 0, Xxxxxxxxx Xxxxx, an Addition to the City of
Midland, Midland County, Texas, according to the map or plat thereof of record
in Cabinet D, Page 65, Plat Records, Midland County, Texas, which is currently
being utilized by Borrower for parking purposes in the operation of its business
at 000 Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxx, as more particularly reflected on the
survey being furnished to Bank at closing of the Loan, and (ii) execute,
acknowledge, and deliver such deeds of trust as the Bank may require to create a
first and prior lien in its favor upon such 30-foot wide strip of land as
security for payment of the Loan and performance of the Loan Documents.
6. NEGATIVE COVENANTS. Until full payment and performance of all
obligations of Borrower under the Loan Documents, Borrower will not, without the
prior written consent of Bank (and without limiting any requirement of any other
Loan Documents):
A. Capital Expenditures. Make capital expenditures during each fiscal
year (including capitalized leases) exceeding in the aggregate
$25,000.
B. Lease Expenditures. Incur new obligations for the lease or hire of
real or personal property requiring payments in any fiscal year in
excess of an aggregate of $10,000.
C. Transfer of Assets or Control.. Sell, lease, assign or otherwise
dispose of or transfer any assets, except in the normal course of its
business, or enter into any merger or consolidation, or transfer
control or ownership of the Borrower or form or acquire any
subsidiary.
E. Liens. Grant, suffer or permit any contractual or noncontractual lien
on or security interest in its assets, except in favor of Bank, or
fail to promptly pay when due all lawful claims, whether for labor,
materials or otherwise.
F. Extensions of Credit. Make or permit any subsidiary to make, any loan
or advance to any person or entity, or purchase or otherwise acquire,
or permit any subsidiary to purchase or otherwise acquire, any capital
stock, assets, obligations, or other securities of, make any capital
contribution to, or otherwise invest in or acquire any interest in any
entity, or participate as a partner or joint venture with any person
or entity, except for the purchase of direct obligations of the United
States or any agency thereof with maturities of less than one year.
G. Borrowings. Create, incur, assume or become liable in any manner for
any indebtedness (for borrowed money, deferred payment for the
purchase of assets, lease payments, as surety or guarantor for the
debt for another, or otherwise) other than to Bank, except for normal
trade debts incurred in the ordinary course of Borrower's business,
and except for existing indebtedness disclosed to Bank in writing and
acknowledged by Bank in writing prior to the date of this Agreement.
H. Dividends and Distributions. Make any distribution (other than
dividends payable in capital stock of Borrower) on any shares of any
class of its capital stock, or apply any of its property or assets to
the purchase, redemption or other retirement of any shares of any
class of capital stock of or any partnership interest in Borrower
exceeding in the aggregate or in any way amend its capital structure.
I. Character of Business. Change the general character of business as
conducted at the date hereof, or engage in any type of business not
reasonably related to its business as presently conducted.
J. Management Change. Make any substantial change in its present
executive or management personnel.
DEFAULT. Borrower shall be in default under this Agreement and
under each of the other Loan Documents: (a) if it shall default in the payment
of any amounts due and owing under the Loan or should it fail to timely and
properly observe, keep or perform any term, covenant, agreement or condition in
any Loan Document or in any other loan agreement, promissory note, security
agreement, deed of trust, deed to secure debt, mortgage, assignment or other
contract securing or evidencing payment of any indebtedness of Borrower to Bank
or any affiliate or subsidiary of Bank; or (b) if default shall be made in the
timely performance of the payments required to be made by "Settling Defendants"
under that certain Settlement Agreement dated as of August 21, 1996, between
Xxxxxx Commercial, Inc., as "Plaintiff," and HealthTech International, Inc.,
Borrower, and Xxxxxx Xxxx, as "Settling Defendants," relating to compromise and
settlement of the consent judgment rendered pursuant thereto in Cause No. 40,875
in the 000xx Xxxxxxxx Xxxxx xx Xxxxxxx Xxxxxx, Xxxxx, styled "Xxxxxx Commercial,
Inc. v. HealthTech International, Inc., IFM Investments, Inc., Xxxx Xxxxxx, and
Xxxxxx Xxxx." The foregoing events of default are hereinafter referred to
collectively as 'Events of Default."
8. REMEDIES UPON DEFAULT. If an Event of Default shall occur, Bank shall
have all rights, powers and remedies available under each of the Loan Documents
as well as all rights and remedies available at law or in equity.
9. NOTICES. All notices, requests or demands which any party is required or
may desire to give to any other party under any provision of this Agreement must
be in writing delivered to the other party at the following address:
Borrower : IFM Investments, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Guarantor : HealthTech International, Inc.
0000 Xxxxx Xxx Xxxxx Xxxxx
Xxxx, Xxxxxxx 00000
Bank : Midland American Bank
000 X. Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxx X. Xxxxxx, Vice-President
or to such other address as any party may designate by written notice to the
other party. Each such notice, request and demand shall be deemed given or made
as follows:
A. If sent by mail, upon the earlier of the date of receipt or five (5)
days after deposit in the U.S. Mail, first class postage prepaid;
B. If sent by any other means, upon delivery.
10. COSTS, EXPENSES, AND ATTORNEYS' FEES. Borrower shall pay
to Bank immediately upon demand the full amount of all costs and expenses,
including reasonable attorneys' fees (to include outside counsel fees and all
allocated costs of Bank's in-house counsel if permitted by applicable law),
incurred by Bank in connection with (a) negotiation and preparation of this
Agreement and each of the Loan Documents, and (b) all other costs and
attorney's' fees incurred by Bank for which Borrower is obligated to reimburse
Bank in accordance with the terms of the Loan Documents.
11. MISCELLANEOUS. Borrower and Bank further covenant and agree as follows,
without limiting any requirement of any other Loan Document.
A. Cumulative Rights and No Waiver. Each and every right granted to Bank
under any Loan Document, or allowed it by law or equity shall be cumulative of
each other and may be exercised in addition to any and all other rights of Bank,
and no delay in exercising any right shall operate as a waiver thereof, nor
shall any single or partial exercise by Bank of any right preclude any other or
future exercise thereof or the exercise of any other right. Borrower expressly
waives any presentment demand, protest or other notice of any kind, including
but not limited to notice of intent to accelerate and notice of acceleration. No
notice to or demand on Borrower in any case shall, of itself, entitle Borrower
to any other or future notice or demand in similar or other circumstances.
B. Applicable Law. This Agreement and the rights and obligations of the
parties hereunder shall be governed by and interpreted in accordance with the
laws of Texas and applicable United States federal law.
C. Amendment. No modification, consent, amendment or waiver of any
provision of this Agreement, nor consent to any departure by Borrower therefrom,
shall be effective unless the same shall be in writing and signed by an officer
of Bank, and then shall be effective only in the specified instance and for the
purpose for which given. This Agreement is binding upon Borrower and Guarantor,
their successors and assigns, and inures to the benefit of Bank, its successors
and assigns; however, no assignment or other transfer of Borrower's or
Guarantor's rights or obligations hereunder shall be made or be effective
without Bank's prior written consent, nor shall it relieve Borrower or Guarantor
of any obligations hereunder. There is no third party beneficiary of this
Agreement.
D. Documents. All documents, certificates and other items required under
this Agreement to be executed and/or delivered to Bank shall be in form and
content satisfactory to Bank and its counsel.
E. Partial Invalidity. The unenforceability or invalidity of any provision
of this Agreement shall not affect the enforceability or validity of any other
provision herein and the invalidity or unenforceability of any provision of any
Loan Document to any person or circumstance shall not affect the enforceability
or validity of such provision as it may apply to other persons or circumstances.
F. Indemnification. Notwithstanding anything to the contrary contained in
this Agreement, Borrower shall indemnify, defend and hold Bank and is successors
and assigns harmless from and against any and all claims, demands, suits,
losses, damages, assessments, fines, penalties, costs or other expenses
(including reasonable attorneys' fees and court costs) arising from or in any
way related to any of the transactions contemplated hereby, including but not
limited to actuate or threatened damage to the environment, agency costs of
investigation, personal injury or death, or property damage, due to a release or
alleged release of hazardous materials, arising from Borrower's business
operations, any other property owned by Borrower or in the surface or ground
water arising from Borrower's business operations, or gaseous emissions arising
from Borrower's business operations or any other condition existing or arising
from Borrower's business operations resulting from the use or existence of
hazardous materials, whether such claim proves to be true or false. Borrower
further agrees that is indemnity obligations shall include, but are not limited
to, liability for damages resulting from the personal injury or death of an
employee of the Borrower regardless of whether the Borrower has paid the
employee under the workmen's compensation laws of any state or other similar
federal or state legislation for the protection of employees. The term "property
damage" as used in this paragraph includes, but is not limited to, damage to any
real or personal property of the Borrower, the Bank, and of any third parties.
The Borrower's obligations under this paragraph shall survive the repayment of
the Loan and any deed in lieu of foreclosure or foreclosure of any Deed to
Secure Debt, Deed of Trust, Security Agreement or Mortgage securing the Loan.
G. Survivability. All covenants, agreements, representations and warranties
made herein or in the other Loan Documents shall survive the making of the Loan
and shall continue in full force and effect so long as the Loan is outstanding
or the obligation of the Bank to make any advances under the Loan shall not have
expired.
8
12. ARBITRATION. EXCEPT AS SPECIFICATLY PROVIDED OTHERWISE IN THIS SECTION
12 BORROWER. GUARANTOR, AND BANK AGREE THAT ANY CONTROVERSY OR CLAIM BETWEEN OR
AMONG THE PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR
RELATING TO THIS INSTRUME}IT, AGREEMENT OR DOCUMENT, THE LOAN DOCUMENTS, OR ANY
RELATED INSTRUMENTS, AGREEMENTS OR DOCUMENTS, INCLUDING ANY CLAIM BASED ON OR
ARISING FROM AN ATLEGED TORT, SHALL BE DETERMINED BY BINDING ARBITRATION IN
ACCORDANCE WITH THE FEDERAT ARBITRATION ACT (OR IF NOT APPLICABLE, THE TEXAS
ARBITRATION ACT), THE RULES OF PRACTICE AND PROCEDURE FOR THE ARBITRATION OF
COMMERCIAT DISPUTES OF J.A.M.S/ENDISPUTE OR ANY SUCCESSOR THEREOF (J.A.M.S."),
AND THE, "SPECIAT RULES" SET FORTH BELOW. IN THE EVENT OF ANY INCONSISTENCY. THE
SPECIAT RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED
IN ANY COURT HAVING JURISDICTION. ANY PARTY TO THIS AGREEMENT MAY BRING AN
ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL AR81ntATION OF
ANY CONTROVERSY OR CLAIM TO WHICH THIS AGREEMENT APPLIES IN ANY COURT HAVING
JURISDICTION OVER SUCH ACTION.
A. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN MIDLAND, MIDLAND
COUNTY, TEXAS, AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN
ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGATLY PRECLUDED FROM
ADMINISTERING ARBITRATION, THEN THE AMERICAN ARB1TRATION ASSOCIATION
WILL SERVE. ATL ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90 DAYS
OF THE DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY,
UPON A SHOWING OF CAUSE, BE PERMITTED TO EXTE'ND THE COMMENCEMENT OF
SUCH HEARING FOR UP TO AN ADDITIONAL 60 DAYS.
B. RESERVATION OF RIGHTS. NOTEING 1N THIS ARBITRATION PROVISION SHALL BE
DEEMED TO (1) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE
STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS
ARBITRATION PROVISION; OR (II) BE A WAIVER BY THE BANK OF THE
PROTECTION AFFORDED TO IT BY 12 U.S.C. SEC. 91 OR ANY SUBSTANTIATLY
EQUIVATENT STATE LAW; OR (III) LIMIT THE RIGHT OF THE BANK HERETO (A)
TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF, OR
(B) TO FORECLOSE AGAINST ANY REAL OR PERSONAT PROPERTY COLLATERAL, OR
(C) TO OBTAIN FROM A COURT PROVISIONAT OR ANCILLARY REMEDES SUCH AS
(BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE
APPOINTMENT OF A RECEIVER. THE BANK MAY EXERCISE SUCH SELF HELP
RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAT OR
ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY
ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS INSTRUMENT, AGREEMENT
OR DOCUMENT. NEITHER THIS EXERCISE OF SELF HELP REMEDIES NOR THE
INSTITUTION OR MAINTENANCE OF AN ACTION FOR FORECLOSURE OR PROVISIONAT
OR ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY
PARTY' INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE THE
MERITS OF THE CONTROVERSY OR C.LAIM OCCASIONING RESORT TO SUCH
REMEDIES.
13. NO ORAL AGREEMENT. THIS WRITTEN LOAN AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAT AGREEMENT BETWEEN THE PARTIES AND NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAT AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed under seat by
their duly authorized representatives as of the date first above written.
9
SUBORDINATION AGREEMENT
Midland County, Texas
REFERENCE is hereby made for all purposes to that certain Deed of Trust dated
June 5, 1995, recorded in Volume 1355, Page 599 of the Official Public Records
of Midland County, Texas, from IFM Investments, Inc. to HealthTech
International, Inc., securing payment of a promissory note in the original
principal amount of $4,325,369.00.
For valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, HealthTech International, Inc. hereby subordinates the above
described deed of trust in its entirety, and all liens or encumbrances or
security interests created thereby, to the liens, encumbrances, security
interests, and other rights crated by: (a) that certain Deed of Trust dated
September 27, 1996, from IFM Investments, Inc. to Midland American Bank; (b)
WCC-1 Financing Statements filed by Midland American Bank pursuant thereto, with
Midland County and the State of Texas; and (c) that certain Loan Agreement
between IFM Investments, Inc. and Midland American Bank dated September 27,
1996; all insofar as they pertain to the real property in Midland, Midland
County, Texas, more particularly described in Exhibit "A" hereto. Midland
American Bank's rights as to such real property, under the above described
documents, shall be first and superior to those of HealthTech International,
Inc., under the above described Deed of Trust.
SIGNED: September 30, 1996
HEALTHTECH INTERNATIONAL, INC.
By: /s/ Xxx Xxxxxxxx
Printed Name: Xxx Xxxxxxxx
Title: President
SEPARATE STOCK ENDORSEMENT
FOR VATUE RECEIVED, the undersigned, IFM INVESTMENTS, INC., a Texas corporation,
hereby SELLS, ASSIGNS, and TRANSFERS to MIDLAND AMERICAN BANK, a Texas state
banking association, 50,000 shares of the common stock of HealthTech
International, Inc., a Nevada corporation, no par value, as represented by share
certificate no(s). 2063, CUSIP No. 42221Ml06 of said corporation, issued and
standing in the name of IFM Investments, Inc.
The undersigned does further hereby irrevocably appoint Xxxx X. Xxxxxx as its
attorney to transfer the said shares on the books of said corporation with full
power of substitution in the premises.
DATED: September 27, 1996.
IFM INVESTMENTS, INC.
By: /s/ Xxxxxxx Xxxxxxx
Printed Name: Xxxxxxx Xxxxxxx
Title: Agent - Attorney
PLEDGE AGREEMENT
(Stock and CD)
THIS PLEDGE AGREEMENT is entered into as of the 27th day of September, 1996, by
and between MIDLAND AMERICAN BANK, a Texas state banking association (the
"Secured Party"), and IFM INVESTMENTS, INC., a Texas corporation (the "Pledgor")
WITNESSETH:
WHEREAS, Pledgor is indebted to Secured Party under the terms of that certain
Loan Agreement (the "Loan Agreement") of even date herewith, between Pledgor, as
"Borrower," HealthTech International, Inc., as "Guarantor," and Secured Party,
as "the Bank"; and
WHEREAS, in order to secure the payment and performance of the obligations of
Pledgor to Secured Party, Pledgor has agreed to pledge to Secured Party the
Collateral described herein.
NOW, THEREFORE, for and in consideration of the foregoing premises, the mutual
covenants set forth in this Pledge Agreement and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
Section 1. Pledge As Collateral security for the due and timely payment and
performance and discharge in full of the obligations described in Section 2
hereof, Pledge hereby pledges, hypothecates, assigns, transfers, sets over and
delivers unto Secured Party and hereby creates and grants to Secured Party a
security interest in: (i) 50,000 shares of the Common Stock, no par value, of
HealthTech International, Inc., a Nevada corporation, represented by Stock
Certificate No. 2063, CUSIP Number 00000X000, (such securities in clause (i)
being hereinafter called the "Pledged Securities"); (ii) any and all other
securities hereafter deposited by Pledge with Secured Party pursuant to
subsection l (a) of this Pledge Agreement, or Paragraph 5B of the Loan
Agreement; (iii) any and all cash, additional securities and other property that
may at any time or from time to time hereafter be distributed or otherwise
received in respect of, on account of, upon, in exchange for, in substitution
for or upon conversion of any or all of the Pledged Securities or any or all of
the securities referred to in clause (i) of this sentence, whether directly or
indirectly as a result of one or more distributions, receipts, exchanges or
substitutions; (iv) any and all proceeds arising from the sale or other
disposition of any or all of the Pledged Securities, the securities referred to
in clause (ii) of this sentence and the cash, additional securities and other
property referred to in clause (iii) of this sentence; and (v) Midland American
Bank Certificate of Deposit No. 9893, dated September 27, 1996, maturing October
1, 1999, in the face amount of $100,000.00 and issued to IFM Investments, Inc.,
DBA Results - Midland Dep. Account (the "CD") (the CD, Pledged Securities, such
other securities and such cash, additional securities and other property and the
proceeds thereof being hereinafter called collectively the "Collateral").
Section 2. Obligations Secured The security interest created hereby secures the
following:
(a) The Notes. Payment of the indebtedness evidenced by, and performance
and discharge of each and every covenant, condition, and agreement contained in
that certain Promissory Note (the 'Note") of even date herewith, in the
principal amount of $791,000.00, made by Pledge, and bearing interest and
payable to the order of Secured Party as therein provided.
(b) Loan Agreement. Payment of the obligations and indebtedness evidenced
by, and performance of each and every condition, covenant and agreement set
forth and contained in the Loan Agreement.
(c) Future Advances. Repayment of all additional sums as may be hereafter
advanced to Pledge, or expended by Secured Party, its successors or assigns, on
behalf of Pledgor for any purpose whatsoever and evidenced by notes, drafts,
open account, or otherwise, with interest thereon at rates as herein provided or
if not so provided to be fixed at the time of advancing or expending such
additional sums; provided, however, that the making of any such advances or
expenditures shall be optional with Secured Party, its successors or assigns,
and this 'Pledge Agreement shall secure the payment of any and all extensions or
renewals and successive extensions or renewals of the Note and of any other
indebtedness at any time owing by Pledgor to Secured Party, its successors or
assigns.
(d) This Agreement. Payment of any and all indebtedness of Pledgor
hereunder and the performance and discharge of each and every obligation,
covenant, and agreement of Pledgor herein contained.
Section 1. Representations and Warranties. The Pledgor hereby represents
and warrants to Secured Party that:
(a) The Pledgor is the legal and equitable owner of the Collateral, has the
complete and unconditional authority to pledge the Collateral being pledged by
it and holds the same free and clear of all liens, charges, encumbrances and
security interests of every kind and nature; the Pledgor has good right and
legal authority to pledge the Collateral being pledged by it in the manner
hereby done or contemplated and will defend its title thereto against the claims
of all persons whomsoever.
(b) No consent-or approval of any person, governmental body or regulatory
authority, or of any securities exchange, was or is necessary to the validity of
such pledge or any such consent or approval has been obtained.
(c) All representations and warranties of Pledgor contained in the Note and the
Loan Agreement are herein expressly incorporated by reference and are herein
represented and warranted to by Pledgor.
PLEDGE AGREEMENT
Page 2
Section 4. Events of Default. The term "Default" as used herein, shall mean the
occurrence of any "Event of Default", as that term is defined in the Loan
Agreement.
Section 5. Remedies Upon Default. Upon the occurrence and during the
continuance of a Default:
(a) Secured Party shall be entitled to exercise any and all rights granted to it
by the Note, the Loan Agreement, and this Pledge Agreement.
(b) Secured Party shall be entitled to exercise any and all rights and remedies
of a secured party under the Uniform Commercial Code of the State of Texas (the
"Code"), and any and all rights granted by any other applicable law or statute,
including, without limitation, the right to take whatever steps it deems
reasonably necessary to preserve the value of the Collateral pledged to it or in
which it otherwise has a security interest and to enforce and realize upon such
security interest in such Collateral.
(c) Secured Party may (i) without giving notice to the Pledgor, apply, in the
rnanner set forth in Section 6 below, any cash dividends or interest received by
it and (ii) if following such application, there shall remain outstanding any
obligations, sell the remaining Collateral, or any part thereof, at public or
private sale, for cash, upon credit or for future delivery as Secured Party
shall deem appropriate. Secured Party shall be authorized at any such sale (if,
on the advice of counsel, it deems it advisable to do so) to restrict the
prospective bidders or purchasers to persons who will represent and agree that
they are purchasing the Collateral for their own account for investment and not
with a view to the distribution or sale thereof, and upon consummation of any
such sale, Secured Party shall have the right to assign, transfer and deliver to
the purchaser or purchasers thereof the Collateral so sold. Each such purchaser
at any such sale shall hold the property sold absolutely free from any claim or
right on the part of Pledgor, and the Pledgor hereby waives (to the extent
permitted by law) all rights of redemption, stay and/or appraisal that Pledgor
now has or may at any time in the future have, under any rule of law or statute
now existing or hereafter enacted.
(d) Secured Party shall give Pledgor ten (10) days' written notice of Secured
Party's intention to make any such public or private sale. Such notice, in case
of public sale, shall state the time and place for such sale, and, in the case
of private sale, the day on which the Collateral, or any portion thereof, will
first be offered for sale. Any such public sale shall be held at such time or
times within the ordinary business hours and at such place or places as Secured
Party may fix and shall state in the notice of such sale. At any sale, the
Collateral, or any portion thereof, to be sold may be sold in one lot as an
entirety or in separate parcels, as Secured Party may (in its sole and absolute
discretion) determine. Secured Party shall not be obligated to make any sale of
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale of Collateral may have been given. Secured Party may, without
notice or publication, adjourn any public or private sale or cause the same to
be adjourned from time to time by announcement at the time and place fixed for
sale,
PLEDGE AGREEMENT
Page 3
and such sale may, without further notice, be made at the time and place to
which the same was so adjourned. In the event a sale of all or any part of the
Collateral is made on credit or for future delivery, the Collateral so sold may
be retained by Secured Party until the sale price is paid by the purchaser or
purchase is thereof, but Secured Party shall not incur any liability in case any
such purchaser or purchasers shall fail to take up and pay for the Collateral so
sold and, in case of any such failure, such Collateral may be sold again upon
like notice. As an alternative to exercising the power of sale herein conferred
upon it, Secured Party may proceed by a suit or suits at law or in equity to
foreclose under this Pledge Agreement and to sell the Collateral, or any portion
thereof, pursuant to a judgment or decree of a court or courts of competent
jurisdiction.
(e) Secured Party may at its option retain the Collateral in satisfaction of the
obligations whenever the circumstances are such that Secured Party is entitled
to do so under the Code.
(f) Secured Party may at its option perform or attempt to perform (but Secured
Party shall not be obligated to do so) any of Pledgor's covenants, duties,
liabilities, obligations, or agreements hereunder or under the Note, the Loan
Agreement, and/or this Pledge Agreement, and any amount expended by Secured
Party in such performance or attempted performance shall become a part of the
obligations, and Pledgor agrees to promptly pay any such amount to Secured
Party.
(g) In order to facilitate Secured Party's enforcing its rights and remedies
with respect to the Collateral and in order to allow Secured Party to preserve
the property or interest in property evidenced by certificate(s) representing
the Collateral, Secured Party may cause the Pledged Securities or any other
Collateral to be transferred to its own name and it may take such actions as are
deemed reasonably necessary by it, and Pledgor will take whatever actions and
execute whatever documents are deemed reasonably necessary by Secured Party, to
register any such transfer and to cause any and all governmental agencies, if
any, having jurisdiction to consent to and approve such transfer.
Secured Party shall not be liable for any action taken in good faith or believed
in good faith to be within the power, authority and discretion given to Secured
Party hereunder, in the Loan Agreement or in the Note, and Pledgor does hereby
agree that any action so taken by Secured Party shall not be considered as an
impairment of the Collateral, and Pledgor does hereby waive any and all rights
it may have, or may have in the future, if any, to claim discharge pursuant to
Article 3.606(a)(2) of the Code.
No waiver by Secured Party of any Default shall operate as a waiver of any other
Default of the same Default on a future occasion, and no failure or delay by
Secured Party in exercising any right, power, or privilege hereunder shall
operate as a waiver thereof, and no single or partial exercise thereof shall
preclude any other or further exercise or the exercise of any other right, power
or privilege.
PLEDGE AGREEMENT
Page 4
Section 6 Application of Proceeds of Sale and Cash. The proceeds of any sale of
Collateral sold pursuant to Section 5 hereof and any cash included in the
Collateral shall be applied by Secured Party as follows:
First: to the payment of all costs and expenses incurred by Secured Party in
connection with such sale, including, but not limited to, all court costs and
the reasonable fees and expenses of counsel for Secured Party in connection
therewith, and to the repayment of all advances made by Secured Party hereunder
for the account of Pledgor and the payment of all costs and expenses paid or
incurred by Secured Party upon the exercise of any right or remedy hereunder or
thereunder, to the extent that such advances, costs and expenses shall not have
been paid to Secured Party upon its demand therefor;
Second: to the payment in full of the obligations secured hereby, to the extent
not previously paid by Pledgor with any amounts in payment applied first to
accrued and unpaid interest, then to principal; and
Third: to the payment to Pledgor of any remainder of such proceeds.
Section 7. Reimbursement of Secured Party. The Pledgor hereby agrees to
reimburse Secured Party on demand for all expenses incurred by it in connection
with the administration and enforcement of this Pledge Agreement, and agrees to
indemnify Secured Party and hold it harmless from and against any and all
liability incurred by it hereunder or in connection herewith.
Section 8. Authority of Secured Party. Secured Party shall have and be entitled
to exercise all such powers hereunder as are specifically delegated to Secured
Party by the terms hereof, together with such powers as are reasonably
incidental thereto. Secured Party may execute any of its duties hereunder by or
through agents or employees and shall be entitled to retain counsel and to act
in reliance upon the advice of such counsel concerning all matters pertaining to
its duties hereunder.
Section 9. Secured Party Appointed Attorney-in-Fact. The Pledgor hereby appoints
Secured Party as Pledgor's attorney-in-fact for the purpose of carrying out the
provisions of this Pledge Agreement and taking any action and executing any
instrument which it may deem necessary or advisable to accomplish the purposes
hereof, which appointment is irrevocable and coupled with an interest. Without
limiting the generality of the foregoing, Secured Party shall have the right and
power to receive, endorse and collect all checks and other orders for the
payment of money made payable to the Pledgor representing any interest or
dividend or other distribution or amount payable in respect of the Pledged
Securities or other Collateral or any part thereof and to give full discharge
for the same.
PLEDGE AGREEMENT
Page 5
Section 10. Voting Rights. Dividends, Etc.
(a) Except upon occurrence and during the continuance of any Default hereunder,
Pledgor shall have the right to vote any of the Collateral on any matter
presented for approval to the security holders of the issuer(s) of the Pledged
Securities or other Collateral.
(b) Any and all stock or liquidating dividends, other distributions in property,
return of capital or other distributions made on or in respect of any of the
Collateral, whether resulting from a subdivision, combination or
reclassification of the outstanding capital stock of the issuer(s) thereof or
received in exchange for or upon conversion of the Collateral, or any part
thereof, or as a result of any merger, consolidation, acquisition or other
exchange of assets to which the issuer(s) thereof may be a party or otherwise,
shall be and become part of the Collateral pledged hereunder and, if received by
Pledgor, shall forthwith be delivered to Secured Party to be held by it as
Collateral hereunder and shall be applied in accordance with the provisions
hereof.
(c) Except upon the occurrence and during the continuance of any Default
hereunder, Pledgor shall have the sole and exclusive right to receive and retain
the dividends and interest payable or accruing from any of the Collateral, and
to retain all other rights and benefits from the Collateral.
Section 11 . Covenants With Respect to Collateral. The Pledgor agrees with
Secured Party with respect to the Collateral as follows:
(a) Pledgor hereby transfers the Pledged Securities to Secured Party with proper
instruments of assignment duly executed. The Pledgor covenants that he will
cause any additional securities issued to or received by the Pledgor with
respect to any of the Collateral, whether for value paid by the Pledgor or
otherwise, to be forthwith deposited and pledged hereunder, in each case
accompanied by proper instruments of assignment duly executed in blank by
Pledgor.
(b) From and after the date hereof, Pledgor (i) shall not and shall not attempt
to encumber, subject to any further pledge or security interest, sell, transfer
or otherwise dispose of any of the Collateral or any interest therein; (ii)
shall not permit or suffer any of the Collateral to be attached or levied upon
or seized in any legal proceedings, or held by virtue of any lien or distress;
and (iii) shall pay promptly all taxes and assessments upon any of the
Collateral.
Section 12. Termination. This Pledge Agreement will terminate when the Note and
all other obligations secured hereby have been fully paid and performed, at
which time Secured Party shat1 reassign and deliver to Pledgor, or to such
person or persons as Pledgor shall designate, against receipt, such of the
Collateral (if any) pledged by Pledgor as shall not have been sold or otherwise
applied by Secured Party pursuant to the terms hereof and shall still be held by
it hereunder, together with appropriate instruments of reassignment and release.
Any such reassignment shall be without recourse upon or warranty by Secured
Party and at the expense of Pledgor.
PLEDGE AGREEMENT
Page 6
Section 19. Headings. Section headings used herein are for convenience
only and are not to affect the construction of or to be taken into consideration
in interpreting this Pledge Agreement.
Section 20. Severability. Should any one or more of the provisions
hereof be determined to be illegal or unenforceable, all other provisions
hereof shall be given effect separately therefrom and shall not be affected
thereby.
1N WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to be
duly executed as of the day first above written.
MIDLAND AMERICAN BANK
By: /s/Xxxx X. Xxxxxx
Printed Name: Xxxx X. Xxxxxx
Title: Vice President
SECURED PARTY
IFM INVESTMENTS, INC.
By: /s/Xxxxxxx Xxxxxxx
Printed Name: Xxxxxxx Xxxxxxx
Title: Agent and Attorney
PLEDGOR
PLEDGE AGREEMENT
Page 8
TRANSFER OF LIENS
THE STATE OF TEXAS
COUNTY OF MIDLAND
REFERENCE is here made for all purposes to the Deed of Trust and to the other
instruments and documents which are more particularly described on Exhibit "A"
attached hereto and made a part hereof for all purposes (collectively, the
"Security Documents"), creating, extending, and renewing a deed of trust lien
against the Midland, Texas real property described on attached Exhibit ; B" (the
"Property',).
FOR GOOD AND VATUABLE CONSIDERATION, the receipt and legal sufficiency of which
are hereby acknowledged and confessed, the undersigned, H. A. DE COMPlEGNE, JR.,
TRUSTEE, as the legal and equitable owner and holder of all indebtedness
described in and secured by the Security Documents, hereby TRANSFERS and ASSIGNS
to MIDLAND AMERICAN BANK, whose address is 000 X. Xxxxx, Xxxxxxx, Xxxxx 00000,
without recourse upon the undersigned, (i) all remaining unpaid indebtedness
described in and secured by the Security Documents, (ii) all liens and security
interests created, extended, renewed, and/or evidenced by the Security
Documents, and (iii) any and all other rights, titles, and interests of the
undersigned in and to the Property.
This Transfer of Liens is made without representation or warranty of any kind as
to the validity or enforceability of the Security Documents, the title of the
undersigned thereto, or any other matters involving or affecting the Security
Documents.
EXECUTED this 27th day of September 1996.
EXHIBIT "A"
Attached to and made a part of Transfer of Liens from H. A. DE COMPIEGNE, JR.,
TRUSTEE to MIDLAND AMERICAN BANK THE SECURITY DOCUMENTS
1. Deed of Trust dated August 11, 1989, from Xxxx Xxxxxx, Inc. to Xxxxxxx
X. Pennchaker, Trustee, for the benefit of H. A. de Compiegne, Jr., Trustee,
recorded in Volume 682, Page 000, Xxxx xx Xxxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx.
2. Deed of Trust Extension dated September 20, 1990 by and between Xxxx
Xxxxxx, Inc. and H. A. de Compiegne, Jr., Trustee, recorded in Volume 710, Page
18 of the Deed of Trust Records of Midland County, Texas.
3. Assumption and Extension dated October 2, 1995 by and between IFM
Investments, Inc. et at. and H. A. de Compiegne, Jr., Trustee, recorded in
Volume 1332, Page 681 of the Official Records of Midland County, Texas.
4. Deed of Trust Extension dated December 1, 1995 by and between IFM
Investments, Inc. et at. and H. A. de Compiegne, Jr., Trustee, recorded in
Volume 1347, Page 157 of the Official Records of Midland County, Texas.
5. Third Extension Agreement dated February 5, 1996 by and between IFM
Investments, Inc. et at. and H. A. de Compiegne, Jr., Trustee, recorded in
Volume 1357, Page 129 of the Official Records of Midland County, Texas.
6. Fourth Extension Agreement dated March 29,1996 by and between IFM
Investments, Inc. et at. and H. A. de Compiegne, Jr., Trustee, recorded in
Volume 1369, Page 40 of the Official Records of Midland County, Texas.
7. Fifth Extension Agreement dated May 29, 1996 by and between IFM
Investments, Inc. et at. and H. A. de Compiegne, Jr.; Trustee, recorded in
Volume 1385, Page 533 of the Official Records of Midland County, Texas.
8. Sixth Extension Agreement filed August 27,1996 by and between IFM
Investments, Inc., et at. and H. A. de Compiegne, Jr., Trustee, recorded in
Volume 1405, Page 130 of the Official Records of Midland County, Texas.
TRANSFER OF LIEN
Page 2
DEED OF TRUST
This DEED OF TRUST (herein referred to as the "Deed of Trust"), entered into as
of the 27th day of September 1996, by IFM INVESTMENTS, INC., a Texas
corporation, as Grantor, whose mailing address for notice hereunder is at 000
Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000, to XXXX X. XXXXX, TRUSTEE, whose address
is 000 X. Xxxxx, Xxxxxxx, Xxxxx 00000, for the benefit of the hereinafter
described Beneficiary.
WITNESSETH:
ARTICLE 1 - DEFINITIONS
I. I Definitions. As used herein, the following terms shall have the meanings
set forth below. Capitalized terms used herein but not defined below shall have
the meanings given such terms in the Loan Agreement [as that term is defined
below.
Beneficiary. MIDLAND AMERICAN BANK, a Texas state banking association,
whose address for notice hereunder is 000 X. Xxxxx, Xxxxxxx, Xxxxx 00000,
Attention: Xxxx X. Xxxxxx, and the subsequent holder or holders, from time to
time, of the Note.
Code: The Uniform Commercial Code, as amended from time to time, in effect
in the state in which the Mortgaged Property is located.
Contracts: All of the right, title, and interest of Grantor in, to, and
under any and all (i) contracts for the purchase of all or any portion of the
Mortgaged Property, whether such Contracts are now or at any time hereafter
existing, including but without limitation, any and all xxxxxxx money or other
deposits escrowed or to be escrowed or letters of credit provided or to be
provided by the purchaser under the Contracts, including all amendments and
supplements to and renewals and extensions of the Contracts at any time made,
and together with all payments, earnings, income, and profits arising from the
sale of all or any portion of the Mortgaged Property or from the Contracts and
all other sums due or to become due under and pursuant thereto and together with
any and all xxxxxxx money, security, letters of credit or other deposits under
any of the Contracts; (ii) contracts, licenses, permits, and rights whether
executed, granted, or issued by a private person or entity or a governmental or
quasi-governmental agency, which are directly or indirectly related to, or
connected with, the development of the Mortgaged Property, whether such
contracts, licenses, and permits are now or at any time hereafter existing
including without limitation, any and all rights of living unit equivalents with
respect to water, wastewater, and other utility services, certificates,
licenses, zoning variances, permits, and no-action letters from each
governmental authority required: (a) to evidence compliance by Grantor and all
improvements constructed or to be constructed on the Mortgaged Property with all
legal requirements applicable to the Mortgaged Property, and (b) to develop
and/or operate the Mortgaged Property as a commercial and/or residential
project; and (iii) all other contracts which in any way relate to the use,
enjoyment, occupancy, operation, maintenance, or ownership of the Mortgaged
Property (save and except any and all leases, subleases or other agreements
pursuant to which Grantor is granted a possessory interest in the Land)
including but not limited to maintenance agreements and service contracts.
Debtor Relief Laws: Title 11 of the United States Code, as now or hereafter
in effect, or any other applicable law, domestic or foreign, as now or hereafter
in effect, relating to bankruptcy, insolvency, liquidation, receivership,
reorganization, arrangement or composition, extension or adjustment of debts, or
similar laws affecting the rights or creditor.
Default Rate: The rate of interest specified in the Note to be paid by the
maker of the Note from and after the occurrence of a default in payment under
the provisions of the Note and Loan Documents but not in excess of the Maximum
Lawful Rate.
Disposition: Any sale, lease (except as permitted under this Deed of
Trust), exchange, assignment, conveyance, transfer, Trade, or other disposition
of all or any portion of the Mortgaged Property (or any interest therein) or all
or any part of the beneficiary ownership interest in Grantor (if Grantor b a
corporation, partnership. generat partnership, limited partnership, joint
venture, Trust, or other type of business association or legal entity).
Event of Default: Any happening or occurrence described h' Article VI
hereof.
Environmental Law: Any federal, state, or local law, statute, ordinance, or
regulation pertaining to health, industrial hygiene, or the environment
conditions on, under, or about the mortgaged property, including without
limitation, the Comprehensive environment Response, Comprehensive, and Liability
Act of 1980 ("CERCLA") as amended, 42 U.S.C. 5 9601 el seq. ("RCRA"), the Texas
Water Code ("TWC"), the Texas Solid Waste Disposal Act, Tex. Rev. Civ. Stat.
Xxx. An. 4477-7, and regulations, rules, guidelines, or standards promulgated
pursuant to such laws, as such statutes, regulations, rules, guidelines, and
standards are amended from time to time.
Fixtures: All materials, supplies, equipment, systems, apparatus, and other
items now owned or hereafter acquired by Grantor and now or hereafter attached
to, installed in', or used in connection with (temporarily or permanently any of
the Improvements or The land, which are now owned or hereafter acquired by
Grantor and are now or hereafter attached to the Land or the improvements, and
including but not limited to any and all partitions, dynamos, window screens and
shades, draperies, rugs and other floor coverings, awnings, motors, engines,
boiler, furnaces, pipes, cleaning, and sprinkler systems, fire extinguishing
apparatus and equipment, water tanks, swimming pools, heating, ventilating,
refrigeration, plumbing, laundry, lighting, gene-raring, cleaning, waste
disposal, transportation (of people or things, including but not limited to,
stairways, elevators, escalators, and conveyor), incinerating, air conditioning
and air cooling equipment and systems, gas and electric machinery, appurtenances
and equipment, disposals, dishwasher, refrigerators and ranges, recreational
equipment and facilities of all kinds, and water, gas, electrical, storm and
sanitary sewer facilities, and all other utilities whether or not situated in
easement, together with all accessions. appurtenances, replacements,
betterment's, and substitutions for any of the foregoing and the proceeds
thereof.
Governmental Authority: Any and all courts, boards, agencies, commissions,
offices, or authorities of any nature whatsoever for any governmental xxxx
(xxxxxxx, xxxxx, xxxxxx, xxxxxxxx, xxxxxxxxx, xxxx or otherwise), whether now or
hereafter in existence.
Grantor: The individual or entity described as Grantor in the initial
paragraph of this Deed of Trust and any and all subsequent owners of the
Mortgaged property or any part thereof (without hereby implying Beneficiary's
consent to any Disposition of the Mortgaged Property).
Guarantor(individually and/or collectively, as the context may require):
Those persons, firms, or entities, if any, designated as Guarantor in the
Guaranty.
Guaranty (individually. and/or collectively, as the context may require):
That or those instruments of guaranty now or hereafter in effect from Guarantor
to beneficiary guaranteeing the repayment of all or any part of the Indebtedness
or the satisfaction of, or continued compliance with. the Obligations, or both.
Hazardous Substance: Hazardous Substance is any substance, product, waste,
or other material which is or becomes listed, regulated, or addressed as being a
toxic hazardous, polluting, or similarly harmful substance under any
Environmental Law, including without limitation: (i) any substance included
within the definition of "hazardous waste. pursuant to Section 1004 of RCRA;
(ii) any substance included within The definition of "hazardous substance"
pursuant to Section 101 of CERCLA; and (iii) any substance included within (a)
the definition of waste pursuant to Section 26.342(9) of TWC or (b) the
definition of "hazardous substance" pursuant to Section 30 .003 (b) of TWC or
(c) the definition of "pollutant" pursuant to Section 26.001(13)of the TWC.
Impositions: (i) All real estate and personal property taxes, charges,
assessments, standby fees, excises, and levies and any interest, costs, or
penalties with respect thereto, generat and special, ordinary and extraordinary,
foreseen and unforeseen, of any kind and nature whatsoever which at any time
prior to or after the execution hereof may be assessed, levied, or imposed upon
The Mortgaged Property or The ownership, use, occupancy, or enjoyment thereof,
or any portion Thereof, or the sidewalks, streets, or alleyways adjacent
thereto; (ii) any charges, fees, license payments, or other sums payable for or
under any easement, license, or agreement maintained for The benefit of the
Mortgaged Property; (iii) water, gas, sewer, electricity, and other utility
charges and Fees relating to the Mortgaged Property; and (iv) assessments and
charges arising under any subdivision, condominium, planned unit development, or
other declarations restrictions, regimes, or agreements affecting the Mortgaged
Property.
Indebtedness: (i) The principal of, interest on, or other sums evidenced by
the Note or the Loan Documents; (ii) any other amounts, payments, obligations or
covenants under the Loan Documents, or premiums payable under the Loan
Documents, and (iii) any and all other indebtedness of any kind or character now
or hereafter owing by Grantor to beneficiary.
Land: The real property or interest therein described in Exhibit "A"
attached hereto and incorporated herein by this reference, together with all
right, title, interest, and privileges of Grantor in and to (a) all streets,
ways, roads, alleys, easements, rights-of-way, licenses, rights of ingress and
egress, vehicle parking rights and public places, existing or proposed,
abutting, adjacent, used in connection with or pertaining to such real property
or The improvements thereon (b) any strips of real property between such real
property and abutting or adjacent property - ; (c) all water and water; rights,
timber, crops, pertaining to such real estate; and (d) all appurtenances and all
reversions end remainders in or to such real property.
Leases: Any and all leases, master leases, subleases, licenses,
concessions, or other agreement (written or oral., now or hereafter in effect)
which grant to third parties a possessory interest in and to, or the right to
use, all or any part of the Mortgaged Property, together with all security and
other deposits or payments made in connection therewith.
Legal Requirements: (i) Any and all present and future judicial decisions,
statutes, rulings, rules, regulations, permits, certificates, or ordinances of
any Governmental Authority in any way applicable to Grantor, any Guarantor or
the Mortgaged Property, including, without limiting the generality of the
foregoing, the ownership, use, occupancy, possession, operation, maintenance,
alteration, repair, or reconstruction thereof, (ii) any and all covenants,
conditions, and restrictions contained in any deeds, other forms of conveyance,
or in any other instruments of any nature that relate in any way or are
applicable to Mortgaged Property or the Ownership, use, or occupancy thereof,
(iii) Grantor's or any Guarantor's presently or subsequently effective bylaws
and articles of incorporation or partnership, limited partnership, joint
venture, trust, or other form of business association agreement, (iv) any and
all Leases, (v) any and all Contracts, and (vi) any and all leases, other than
those described in (iv) above, and other contracts (written or oral) of any
nature that relate in any way to the Mortgaged Property and to which Grantor or
any Guarantor may be bound, including, without limiting the generality of the
foregoing, any lease or other contract pursuant to which Grantor is granted a
possessory interest in and to the Land and/or the Improvements.
Loan Agreement: The Loan Agreement of even date herewith by and between
Grantor, a5 "Borrower ~ and Beneficiary, as "Bank," governing the loan evidenced
by the Note and secured, inter, by this Deed of Trust;;
Loan Documents: The Loan Agreement, the Note, this Deed of Trust, any and
all other instruments or documents now or hereafter securing payment of the
Indebtedness or performance of the Obligations, and any and all other
instruments or documents executed pursuant to or in connection with the Loan
Agreement, as the same may at any time hereafter be amended.
Maximum Lawful Rate: The rate utilized by Beneficiary pursuant to either
(i) tile indicated (weekly) rate ceiling from time to time in effect as provided
in Article 5069-1.04, as amended or (ii) United States federal law which permits
Beneficiary to contract for, charge, or receive a greater amount of interest
than that provided by Article 50691.04, as amended, for the purpose of
determining the maximum lawful rate allowed by applicable laws. Additionally, to
the extent permitted by applicable law now or hereinafter in effect, Beneficiary
may, at its option and from time to time, implement any other method of
computing option and from time to time, implement any other method of computing
The Maximum Lawful Rate under such Article 5069-1.04, as amended, or under other
applicable law by giving police, if required, to Grantor as provided by
applicable law now or hereafter in effect.
Minerals: All substances in, on, under The Land which are now, or may
become in the future, intrinsically valuable, that. is, valuable in Themselves,
and which now or may be in the future enjoyed Through extraction or removal from
the property, including without limitation, oil, gas, and all other
hydrocarbons, coat, lignite, carbon dioxide and all other non-hydrocarbon gases,
uranium and all other radioactive substance, and gold, silver, copper, iron and
all other metallic substance or ores.
Mortgaged Property: The Land, Mineral, Fixtures, Improvements, Personalty,
Contracts, Leases and Rents, and any interest of Grantor now owned or hereafter
acquired in and to the Land, Minerals, Fixture Personality, Leases and Rents,
together with any and all other security and collateral of any nature whatsoever
now o; hereafter given for the repayment of The Indebtedness or the performance
and discharge of the obligations. A; used in this Deed of Trust The Term
"Mortgaged Property" shall be expressly defined as meaning all Or, where The
context permits or requires, any portion of the above and all or, where the
context permits or requires, an interest therein.
Note: That certain Promissory Note in the original principal amount of
Seven Hundred Ninety-One Thousand and No/100 Dollar (S791,000.00), of even date
herewith, executed and delivered by Borrower, and made payable to The order of
Lender, bearing interest as Therein specified, containing an attorneys" fee
clause, and with interest and principal being payable as therein specified, and
secured by, among other things, this Deed of Trust and any and all renewals,
modifications, rearrangements, reinstatements, or extensions of such promissory
note(s) or of any promissory node or notes given in renewal, substitution, or
replacement therefor; however, the amount of the Note shall not be increased
except for protective advances made pursuant to the Loan Documents.
Obligations: Any and all of The covenants, conditions, warranties,
representations, and other obligations (other than to repay The Indebtedness)
made or undertaken by Grantor, Guarantor, or any Constituent Party to
Beneficiary, Trustee, or other as set forth in the Loan Documents, the Leases,
and in any deed, Lease, sublease, or other form of conveyance, or any other
agreement pursuant to which Grantor is granted a possessory interest in the
Land.
Permitted. Exceptions: The liens, easements, restrictions, security
interests, and other matters (if any) as reflected on Exhibit "B" attached
hereto and incorporated herein by reference and The liens and security interests
created by the Loan Documents.
Personalty: All of The right, title, and interest of Grantor in and to (i)
furniture, furnishings, equipment, machinery, goods (including, but not limited
to, crops, farm products. timber and timber to be cut, and extracted Minerals);
(ii) generat intangibles, notes, chattel paper, money, insurance proceeds,
accounts, contract and subcontract rights, Trademarks, trade names, inventory;
(iii) all refundable, returnable, or reimbursable Fees, deposits or other funds
or evidences of credit or indebtedness deposited by or on behalf of Grantor with
any governmental agencies, boards, corporations, provider of utility services,
public or private, including specifically, but without limitation, all
refundable, returnable' or reimbursable tap fees, utility deposits, commitment
fees and development costs, any awards remuneration's, reimbursements,
settlements, or compensation heretofore made or hereafter to be made by any
Governmental Authority pertaining to the Land, Improvements, Fixtures,
Contracts, or Personalty, including but not limited to those for any vacation
of, or change of grade in, any streets affecting The Land or the Improvements
and those for municipal utility district or other utility costs incurred or
deposits made in connection with the Land, and (iv) all other personal property
of any kind or character as defined in and subject to the provisions of the Code
(Article 9 -Secured Transactions); any and all of which are now owned or
hereafter acquired by Grantor, and which are now or hereafter situated in, on,
or about fee Land or The Improvements, or used in or necessary to The complete
and proper planning, development, construction, financing, use, occupancy, or
operation thereof, or acquired (whether delivered to the Land or stored
elsewhere) for use in or on the Land or the Improvements, together with all
accessions, replacements, and substitutions thereto or therefor and the proceeds
Thereof.
Release: Release," "removal," "environment," and "disposal" shall have the
meanings given such terms in CERCLA, and the term "disposal" shall also have the
meaning given it in RCRA; provided that in the event either CERCLA or RCRA is
amended so as TO broaden The meaning of any term defined thereby, such broader
meaning shall apply subsequent to the effective date of such amendment, and
provided further that to the extent the laws of the state of Texas establish a
meaning for `release," "removal," "environment," or "disposal," which is broader
than that specified in either CERCLA and RCRA, such broader meaning shall apply.
Remedial W - : Any investigation, site monitoring, containment, cleanup,
removal, restoration, or other work of any kind or nature reasonably necessary
under any applicable Environmental Law in connection with the current or future
presence, suspected presence, release, or suspected release of a Hazardous
Substance in quantities which violate the Environmental Laws in or into the air,
soil, ground water, surface water, or soil vapor at, on, about, under, or within
the Mortgaged Property, or any part thereof.
Rents: All of the rents, revenues, income, proceeds, profits, security and
other types of deposits (after Grantor acquires title thereto) and other
benefits paid or payable by parties to the Contracts and/or Leases, other than
Grantor for using, leasing, licensing, possessing, operating from, residing in,
selling, or otherwise enjoying all or any portion of the Mortgaged Property.
Subordinate Mortgage: Any mortgage, deed of trust, pledge, lien (statutory,
constitutional, or contractual), security interest, encumbrance or charge, or
conditional sale or other title retention agreement, covering all or any portion
of The Mortgaged Property executed and delivered by Grantor, the lien of which
is subordinate and inferior to the lien of this Deed of Trust.
Trustee: The individual described as Trustee in the initial paragraph of
the Deed of Trust.
1.2 Additional Definitions. As used herein, the following terms shall have
the following meanings:
(a) "Hereof', "hereby': "hereto", "hereunder' herewith" and similar
terms mean of, by, to under and with respect to, the Deed of Trust or
to the other documents or matters being referenced.
(b) Heretofore" means before, "hereafter" means after, and "herewith"
means concurrently with, the date of this Deed of Trust.
(c) All pronouns, whether in masculine, feminine or neuter form, shall
be deemed to refer to the object of such pronoun whether same is
masculine, feminine or neuter in gender, as the context may suggest or
require.
(d) All terms used herein, whether or not defined in Section 1.1
hereof, and whether used in singular or plural form, shall be deemed
to refer to the object of such term whether such is singular or plural
in nature, as the context may suggest or require.
ARTICLE 11- GRANT
To secure the full and timely payment of the Indebtedness and the full and
timely performance and discharge of the Obligations, Grantor has GRANTED,
BARGAINED, SOLD and CONVEYED, and by these presents does GRANT, BARGAIN, SELL
and CONVEY, unto Trustee, in trust, the Mortgaged Property, subject, however, to
the Permitted Exceptions, TO HAVE AND to HOLD the Mortgaged Property unto
Trustee, forever, and Grantor does hereby bind itself, its successors, and
assigns to WARRANT AND FOREVER DEFEND the title to the Mortgaged Property unto
Trustee against every person whomsoever lawfully claiming or to claim the same
or any part thereof; provided, however that if Grantor shall pay (or cause to be
paid) the Indebtedness as and when the same shall become due and payable and
shall fully perform and discharge (or cause to be fully performed and
discharged) the Obligations on or before the date same are to be performed and
discharged, then the liens, security interests, estates, and rights granted by
the Loan Documents shall terminate, in accordance with The provisions hereof.
Otherwise same shall remain in full force and effect. A certificate or other
written statement executed on behalf of Trustee or Beneficiary confirming that
the Indebtedness has not been fully paid or the Obligations have not been fully
performed or discharged shall be sufficient evidence thereof for the purpose of
reliance by Third parties on such fact.
ARTICLE 111- WARRANTIES AND REPRESENTATIONS
Grantor hereby unconditionally warrants and represents to Beneficiary, as of the
date hereof and at all times during The term of This Deed of Trust, as follows:
3.1 Organization and Power. If Grantor or any Constituent Party is a
corporation, generat partnership, limited partnership, joint venture, trust, or
other type of business association, as the case may be, Grantor and any
Constituent Party, if any, (a) is either a corporation duly incorporated with a
Legal status separate from its affiliates, or a partnership or trust, joint
venture or other type of business association duly organized, validly existing,
and in good standing under The laws of the state of its formation or existence,
and has complied with all conditions prerequisite to its doing business in the
state in which the Mortgaged Property is located, and (b) has all requisite
power and all governmental certificates of authority, licenses, all requisite
power and all governmental certificates of authority, licenses, permits,
qualifications, and documentation's to own, lease, and operate its properties
and to carry on its business as now being, and as proposed to be, conducted.
3.2 Validity Loan Documents. The execution, delivery, and performance by Grantor
of the Loan Documents (other than the Guaranty), (a) if Grantor, or any
signatory who signs on its behalf, is a corporation, generat partnership,
limited partnership, joint venture, trust, or other type of business
association, as the case may be, are within Grantor's and each Constituent
Party's power and have been duly authorized by Grantor's and each Constituent
Party's board of directors, shareholders, partners, ventures, trustees, or other
necessary parties and all other requisite action for such authorization has been
taken, (b) have received any and all requisite prior governmental approvals in
order to be Legally binding and enforceable in accordance with the terms
thereof, and (c) will not violate, be in conflict with, result in a breach of,
or constitute (with due notice or lapse of time, or both) a default under or
violation of any Legal Requirement or result in the creation of imposition of
any lien, charge, or encumbrance of any nature whatsoever upon any of Grantor's
and any Constituent Party's or Guarantors" property or assets, except as
contemplated by the provisions of the Loan Documents. The Loan Documents
constitute The Legal, valid, and binding obligations of Grantor, Guarantor, and
other obligated under the Terms of the Loan Documents, enforceable in accordance
with their respective terms, subject to laws applicable generally to rights of
creditors.
3.3 Information. All information. financial statements, reports, papers, and
date given or to be given to beneficiary with respect to Grantor, each
Constituent Party, Grantor, others obligated under the terms of the Loan
Documents, or the Mortgaged Properly are, or at the time of delivery will be,
accurate, complete, and correct in all material respects and do not, or will
not, omit any fact, the inclusion of which is necessary to prevent the facts
contained Therein from being materially misleadin6. Since the date of The
financial statements of Grantor, any Constituent Party, or of any Guarantor or
other party liable for payment of the Indebtedness or performance of The
Obligations or any part thereof heretofore furnished to Beneficiary, no material
adverse effect has occurred.
3.4 Title and Lien. Grantor has good and indefeasible title to the Land (in fee
simple, if the lien created hereunder be on the fee, or a first and prior
leasehold estate, if it be created on the Leasehold estate) and Improvements,
and good and marketable title to the Fixtures and Personalty, free and clear of
any liens, charges, encumbrances, security interests, claims, easements,
restrictions, options, lease (other than the Leases), covenants, and other
rights, title interests, or estates of any nature whatsoever, except The
Permitted Exceptions. The Deed of Trust constitutes a valid subsisting first
lien on the Land, the Improvements, and the Fixtures; a valid, subsisting first
priority security interest in and to the Personalty, contracts, and to The
extent that The terms of the Lease and Rents include items covered by the Code,
in and to the Leases and Rents; and a valid, subsisting priority assignment of
the Lease and Rents not covered by The Code, all in accordance with The terms
hereof.
3.5 Business Purposes. 11IC loan evidenced by The Note is solely for the
purpose of carrying on or acquiring a business of Grantor, and is not for
personal, family, household, or agriculture purposes.
3.6 Taxes. Grantor, each Constituent Party, and Guarantor have filed all
federal, state, county, municipal, and city income and other tax returns
required to have been filed by them, or filed appropriate extensions, and have
paid all faxes and related liabilities which have become due pursuant to such
returns or pursuant to any assessments received by them. Neither Grantor, any
Constituent Party, nor any Guarantor knows of any baste for any additional
assessment in respect of any such faxes and related liabilities.
3.7 Mailing Address. Grantor's mailing address, as SCI forth in The opening
paragraph hereof or as changed pursuant to the provisions hereof, is true and
correct.
3.8 Relationship of Grantor and Beneficiary. The relationship between Grantor
and Beneficiary is solely That of debtor and creditor, and Beneficiary has no
fiduciary or other special relationship with the Grantor, and no term or
condition of any of The Loan Documents shall be construed so as to deem the
relationship between Grantor and Beneficiary to be other than that of debtor and
creditor.
3.9 No Reliance by Beneficiary. Grantor experienced in the ownership and
operation of properties similar to The Mortgaged Property, sad Grantor and
Beneficiary have and are relying solely upon Grantor's expertise and business
plan in connection with The ownership and operation of the Mortgaged Property.
Grantor is not relying on Beneficiary's expertise or business acumen in
connection with the Mortgaged Property.
3.10 Environmental and Hazardous Substances.
(a) To Grantor's knowledge, The Mortgaged Property and the operations conducted
Thereon do not violate any applicable law, statute, ordinance, rule, regulation,
order, or determination of any Governmental Authority or any restrictive
covenant or deed restriction (recorded or otherwise), including without
limitation all applicable zoning ordinances and building code, flood disaster
laws and Environmental Laws.
(b) Without limitation of Section 3.10 (a) immediately preceding, to Grantor's
knowledge, the Mortgaged Property and operations conducted thereon by the
current owner or operator of such Mortgaged Property, are not in violation of or
subject to any existing, pending, or threatened action, suit, investigation,
inquiry, or proceeding by any governmental or nongovernmental entity or person
or to any remedial obligations under any Environmental Law.
(c) To Grantor's knowledge, all polices, permits, licenses, or similar
authorizations, if any, required to be obtained or filed in connection with the
ownership, operation, or use of the Mortgaged Property, including, without
limitation, The past or present generation, treatment, storage, disposal, or
release of a Hazardous Substance (as hereinafter defined) into The environment,
have been duly obtained or filed.
(d) To Grantor's knowledge, the Mortgaged Property does not contain any
Hazardous Substanco used or storod in violation of Environmental Law.
(e) Grantor has taken all reasonable steps necessary to determine if any
Hazardous Substances have boon generated, treated, placed, held, located, or
otherwise released on, under, from, or about the Mortgaged Property.
(f) Grantor has not undertaken, permitted, authorized, or suffered and will not
undertake, permit authorize, or suffer the presence, use, manufacture, handling,
generation, transportation, storage, treatment discharge, release, burial, or
disposal on, under, from or about the Mortgaged Property of any Hazardous
Substance or the transportation to or from the Mortgaged Property of any
Hazardous Substance in violation of Environmental Law other Than in the ordinary
course of operating an apartment complex.
(g) Except as disclosed in writing by Grantor to Beneficiary, to Grantor's
knowledge, there is no pending or threatened litigation, proceedings, or
investigations before or by any administrative agency in which any person or
entity alleges or is investigating any alleged presence, release, threat of
release, placement on, under, from or about The Mortgaged Property, or the
manufacture, handling, generation transportation storage, treatment, discharge,
burial, or disposal on, under, from or about the Mortgaged Property, or the
transportation to or from The Mortgaged Property, of any Hazardous Substance in
violation of Environmental Law.
(h) Except as disclosed in writing by Grantor to Beneficiary, Grantor has not
resolved any notice, and has no actual knowledge, that any Governmental
Authority or any employee or agent hereof has determined, or threatens to
determine, or is investigating any allegation that There is a presence, release,
threat of release, placement on, under, from or about the Mortgaged Property, or
the use, manufacture, handling, generation, Transportation, storage, treatment,
discharge, burial, or disposal on, under, from or about the Mortgaged Property,
or the transportation to or from The Mortgaged Property, of any Hazardous
Substance in violation of Environmental Law.
(i) Except as disclosed in writing by Grantor to Beneficiary, to Grantor's
knowledge, there have been no communications or agreements with any Governmental
Authority thereof or any private entity, including, but not limited to, any
prior owners or operator of the Mortgaged Property, relating in any way to The
presence, release, Threat of release, placement on, under or about The Mortgaged
Property, or The use, manufacture, handling, generation, transportation.
storage, treatment, discharge, burial, or disposal on, under or about The
Mortgaged Property, or the transportation to or from the Mortgaged Property, of
any Hazardous Substance in violation of Environmental Law.
(j) Neither Grantor nor, to the knowledge of Grantor, any other penon,
including, but not limited, to any predecessor owner, tenant, licensee,
occupant, user, or operator of all or any portion of the Mortgaged Property, has
ever caused, permitted, authorized or suffered, and Grantor will not cause,
permit, authorize, or suffer, any Hazardous Substance to be placed, held,
located, or disposed of, on, under or about any other real property, all or any
portion of which is legally or beneficially owned (or any interest or estate
herein whicl1 is owned) by Grantor in any jurisdiction now or hereafter having
in effect a so-called `superlien" law or ordinance or any part thereof, the
effect of which law or ordinance would be to create a lien on The Mortgaged
Property to secure any obligation in connection will' the "superlien. law of
such other jurisdiction.
(k) Grantor has received no notice that it has not been issued all required
federal, state, and local licenses, certificates, or permits relating to, and,
to Grantor's knowledge, Grantor and its facilities, business assets, property,
leaseholds, and equipment are in compliance in all respects with all applicable
federal, state, and local laws, rules, and regulations relating to, air
emissions, water discharge, noise emissions, solid or liquid waste disposal,
hazardous waste or materials, or other environmental, heath, or safely matters.
3.11 No Litigation. Except as disclosed in writing to Beneficiary pursuant
to the Loan Agreement to the best of Grantor's knowledge, there arc no (I)
actions, suits, or proceedings, at law or in equity, before any Governmental
Authority or arbitrator pending or threatened against or affecting Grantor,
Guarantor, or any Constituent Party or involving the Mortgaged Property which
would have a material adverse effect if determined against such party, (ii)
outstanding or unpaid judgments against the Grantor, Guarantor, any Constituent
Party, or the Mortgaged Property; or (iii) defaults by Grantor with respect to
any order, writ, injunction, decree, or demand of any Governmental Authority or
arbitrator.
ARTICLE IV - AFFIRMATIVE COVENANTS
Grantor hereby unconditionally covenants and agrees with Beneficiary, until The
entire Indebtedness shall have been paid in full and all of the Obligations
shall have been fully performed and discharged as follows:
4.1 Payment and Performance. Grantor will pay she 1ndebieduess as and when
specified in the Loan Documents, and will perform and discharge all of the
Obligations, in full and on or before the dates same are to be performed.
4.2 Existence. Grantor will and will cause each Constituent Party to preserve
and keep in full force and effect its existence, rights, franchises, and trade
names.
4.3 `:Compliance with Legal Requirements. Grantor will promptly and faithfully
comply with' conform to, end obey all Legal Requirements, whether the same shall
necessitate structural changes in, improvements to, or interfere with the use or
enjoyment of, The Mortgaged Property.
4.4 First Lien Status. Grantor will protect The first lien and security interest
status of this Deed of Trust and the other Loan Documents and will not permit to
be created or to exist in respect of the Mortgaged Property or any part thereof
any lien or security interest on a parity with' superior to, or inferior to any
of the liens or security interests hereof, except for the Permitted Exceptions
and lien claims bonded around as provided in Loan Documents.
4.5 Payment of Impositions. Grantor will duly pay and discharge, or cause to be
paid and discharged, the Impositions not later Than the earlier to occur of (i)
the due date Thereof, (ii) the day any fine, penalty, interest, or cost may be
added thereto or imposed, or (iii) the day any lien may be filed for the
nonpayment thereof (if such day is used to determine the due date of the
respective item), and Grantor shall deliver to Beneficiary a written receipt
evidencing the payment of the respective Imposition.
4.6 Repair. Grantor will keep the Mortgaged Property in first-class order and
condition (subject to normal wear and tear) and will make all repairs,
replacements Is, renewal, additions, betterment's, improvements, and alterations
Thereof and thereto, interior and exterior, structural and non-structural,
ordinary end extraordinary, foreseen and unforeseen, which are necessary or
reasonably appropriate to keep same in such order and condition. Grantor will
use its best efforts to prevent any act, occurreace, or neglect which might
impair the value or usefulness of the Mortgaged Property for its intended usage.
In instances where repair, replacements, renewals, additions, betterment's
improvements, or alterations are required in and to the Mortgaged Property on an
emergency basis to prevent loss damage, waste, or destruction thereof, Grantor
shall proceed to repair, replace, add to, better, improve, or alter same, or
cause same to be repaired, replaced, added to, bettered, improved, or altered,
notwithstanding anything to the contrary contained in Section 5.2 hereof;
provided, however, that in instances where such emergency measures are to be
taken, Grantor will nolify Beneficiary in writing of the commancement of same
and the measures to be taken, and, when same are completed, the completion date
and the measures actually taken.
4.7 Insurance. Grantor will obtain and maintain insurance upon and relating to
the Mortgaged Property with such insurer, in such amounts and covering such
risks as shall be reasonably satisfactory to Beneficiary, from time to time,
including but not limited to: (i) owner's policies of comprehensive general
public liability insurance (including automobile coverage if Beneficiary later
requires); (ii) hazard insurance in an amount not less than the full replacement
cost of all improvements, including the cost of debris removal, with annual
agreed amount endorsement and sufficient at all times to prevent Grantor from
becoming a coinsurer, (iii) business interruption or rental loss insurance; (iv)
if the Mortgaged Property is in a `Flood Hazard Area," a flood insurance policy,
or binder therefore, in an amount equal to the principal amount of The note or
The maximum amount available under The Flood Disaster Protection Act of 1973,
and regulations issued pursuant thereto, as amended from time to time, whichever
is less, in form complying with the insurance purchase requirement" of that act;
and (v) such other insurance, if any, as Beneficiary may reasonably require from
time to time. Each insurance policy issued in connection herewith shall provide
by way of endorsements, riders or otherwise that (a) with respect to liability
insurance, it shall name Beneficiary as an additional insured, with respect to
the other insurance, it shall be payable to Beneficiary as a mortgagee and not
as a coinsured, and with respect to all policies of insurance carried by each
Lessee for the benefit of the Grantor, it shall be payable to Beneficiary as
Beneficiary's interest may appear; (b) the coverage of Beneficiary shall not be
terminated, reduced, or affected in any matter regardless of any breach or
violation by Grantor of any warranties, declarations, or conditions in such
policy; (c) no such insurance policy shall be canceled, endorsed, altered, or
reissued to effect a change in coverage for any reason and to any extent
whatsoever unless such insurer shall have first given Beneficiary thirty (30)
days' prior written notice thereof; and (d) Beneficiary may, but shall not be
obligated to, make premium payments to prevent any cancellations, endorsement,
alteration, or reissuance, and such payments shall be accepted by the insurer to
prevent same. Beneficiary shall be famished with a copy of each such initial
policy coincident with the execution of this Deed of Trust and the original of
each renewal policy not less Than Ten (10) days prior to the expiration of The
initial, or each immediately preceding renewal policy, together with receipts or
other evidence listed The premiums thereon have been paid for one (1) year.
Grantor shall furnish to Beneficiary, on or before Thirty (30) days after the
close of each of Grantor's fiscal year, a statement certified by Grantor or a
duly authorized officer of Grantor of the amounts of insurance maintained in
compliance herewith, of The risks covered by such insurance and of the insurance
company or companies which carry such insurance. Grantor may satisfy the
requirements of this Section 4.7 by use of a so-called "blanker policy,"
provided That the coverage is not diminished and the coverage b separately and
individually allocated to the Mortgaged Property.
4.8 Inspection. Grantor will permit Trustee and Beneficiary, and their agents,
reprcsenlatives, and employees, to inspect the Mortgaged Property at all
reasonable time upon prior notice to Grantor.
4.9 Hold Harmless. Grantor will defend, at its own cost and expense, and hold
Trustee and Beneficiary harmless from, any action, proceeding, or claim
affecting the Mortgaged Property or the loan Documents, and all costs and
expenses Incurred by Beneficiary In protecting Its Interests hereunder in such
an event (Including all court costs and attorneys' fees) shall be borne by
Grantor. If Grantor is a partnership or Joint venture, each partner venturer of
Grantor jointly and severally agree that In the event any dispute whatsoever
arises among any or all of the partner or venturer, each generat partner or
venturer will Indemnify Trustee and Beneficiary and any corporation controlling,
controlled by, or under common control with either Trustee or Beneficiary, and
any shareholder, officer, director, employee and agent of either Trustee or
Beneficiary or any such corporation, and will hold Trustee and Beneficiary and
any such corporation and any such shareholder, officer, director, employee and
agent of such corporation or Beneficiary, harmless from and against all
expenses, including without limiting the generality of this foregoing, all legal
fees, damage, and other liabilities of any type whatsoever (including but not
limited to, any liabilities arising out of demands by any of the partners for
undisbursed loan funds) suffered or Incurred as a result of or in connection
with any such dispute. This indemnity provision shall survive repayment of the
Indebtedness, shall be binding upon the respective heirs, legal representatives,
successor, and assigns of Grantor, and If Grantor is a partnership or joint
venture, each general partner or venturer of Grantor, and shall inure to the
benefit of Trustee and Beneficiary, their successor, and assigns, any
corporation controlling, controlled by, or under common control with either
Trustee or beneficiary and the corporation's shareholder, directors, officers,
employees and agents.
5.0 Books and Records. Grantor will maintain full and accurate books of account
and other records reflecting the results of the operations of the Mortgaged
Property and will furnish, or cause to be furnished, to Beneficiary: (a)
quarterly operating statements for, The Mortgaged Property, within Thirty (30)
days after the end of each March 31, June 30, September 30 and December 31
during the term of The Note, setting forth the financial condition and The
income and expenses for the Mortgaged Property in such reasonable detail as
Beneficiary may request and including a certification That such statements have
been prepared in accordance with the cash basis of accounting applied on a
consistent basis and fairly applied (except that taxes and insurance shall be
accrued as provided in Sections 5.14 and 5.15 of the Loan Agreement), (is) upon
request by Beneficiary a certificate by Grantor certifying that, as of the date
thereof, there does or does not (as the case may be) exist an event which
constitutes, or which upon due notice or lapse of time or both would constitute
an Event of Default or, if an Event of Default exists, specifying the nature
thereof, (c) immediate notice of any material adverse change in Grantor's or The
Mortgaged Property financial condition or business prospects, and (d) on a
quarterly basis attached to The quarterly operating statements, an updated Rent
Roll for the Mortgaged Property. At any time and from time to time Grantor shall
deliver to Beneficiary such other financial data as Beneficiary shall reasonably
request with respect to the ownership, maintenance, use and operation of The
Mortgaged Property, and Beneficiary shall have the right, at reasonable times
and upon reasonable notice, to audit, examine, and make copies or extracts of
Grantor's books of account and records relating to the Mortgaged Property, all
at Beneficiary expense, and all of which shall be maintained and made available
to beneficiary and beneficiary representatives for such purpose at the address
specified herein for Grantor or at such other location as beneficiary may
approve Upon beneficiary request, Grantor shall also furnish Beneficiary with
convenient facilities and all books and records necessary for an audit of such
statements.
4.11 Financial Statements: Tax Returns. Grantor shall promptly furnish or cause
to be furnished to Beneficiary financial statements of Grantor and Guarantor
prepared on The CAAP basis (except That faxes and insurance shall be accrued as
provided in Sections 5.14 and 5.15 of the Loan Agreement) in accordance with
sound accounting principles consistently applied by and certified to be true and
correct by the chief financial officer of Grantor and each Guarantor, as
applicable, and deliver same to Beneficiary within Thirty (30) days after the
end of each calendar quarter (annual financial statements to be provided no
later Than February 15 of each year), to provide such certified interim
financial statements of Grantor or Guarantor as may be reasonably requested by
Beneficiary and to allow Beneficiary from time to time at a reasonable time upon
prior notice to inspect all books and records relating to Grantor's and each
Guarantor's, as applicable, financial condition or to the indebtedness, and to
make and take away copies of such books and records, all at beneficiary expense.
If Grantor or any Guarantor is a partnership, joint venture, Trust or other Type
of business association, Grantor or such Guarantor shall provide Beneficiary
with any and all financial statements and other documents and make any and all
disclosures to Beneficiary with respect to any Constituent Party, as Grantor or
such Guarantor is required to provide and make, and in The manner required to be
provided and made, with respect to Grantor or such Guarantor pursuant to This
paragraph. Grantor shall also furnish or cause to be famished to beneficiary tax
returns for Grantor and each Guarantor Within fifteen ( 15) days of filing, but
in no event later than October I of each year.
4.12 Payment for Labor and Materials. Grantor will promptly pay all bills for
labor, materials' and specifically fabricated materials incurred in connection
with The Mortgaged Property and never permit to exist in respect of The
Mortgaged Property or any part Thereof any lien or security interest, even
Though inferior to The liens and security interests hereof, for any such xxxx,
and in any event never permit to be created or exist in respect of the Mortgaged
Property or any part thereof any other or additional lien or security interest
on a parity with, superior, or inferior to any of The liens or security
interests hereof, except for the Permitted Exceptions. Notwithstanding The
foregoing or any other provision of This Deed of Trust or The other loan
Documents, Grantor shall not be in default for failure to pay a xxxx which gives
rise to a lien or an affidavit claiming a lien on the Mortgaged Property if (a)
Grantor is diligently and in good faith contesting the validity of The xxxx,
(is) upon request of Beneficiary, Grantor shall "bond around" file lien or
furnish Beneficiary with other assurances that the xxxx will be paid prior to
final judgment, and (c) Grantor prevents the Mortgaged Property being made
subject to a final, adverse judgment enforcing any such lien.
4.13 Further Assurances and Corrections. From time to time, at the request of
Beneficiary, Grantor will (i) promptly correct any defect, error, or omission
which may be discovered in the contents of this Deed of Trust or in any other
Loan Document or in the execution or acknowledgment thereof; (ii) execute,
acknowledge, deliver, record and/or file such further instruments (including,
without limitation, further deeds of trust, security agreements, financing
statements, continuation statements and assignments of rents or leases) and
perform such further acts and provide such further assurances as may be
reasonably necessary, desirable, or proper, in Beneficiary's opinion, to carry
out more effectively the purposes of this Deed of Trust and the Loan Documents
and to subject to the liens and security interests hereof and thereof any
property intended by the terms hereof or thereof to be covered hereby or
thereby, including without limitation, any renewals, additions, substitutions,
replacements, or appurtenances to the Mortgaged Property; and (iii) execute,
acknowledge, deliver, procure, file, and/or record any document or instrument
(including without limitation, any financing statement) deemed advisable by
Beneficiary to protect the liens and the security interests herein granted
against the rights or interests of third persons. However, under no
circumstances will the requirements of this Section 413 cause Grantor to execute
documents or take other steps which would modify its obligations, duties and
liability under the Loan Documents, as written.
4.14 Taken Deed of Trust. At any time any law shall be enacted imposing or
authorizing the imposition of any lax upon this Deed of Trust, or upon any
rights, titles, liens, or security interests created hereby, or upon the
Indebtedness or any part thereof, Grantor will immediately pay all such tax,
provided that if such law as enacted makes it unlawful for Grantor to pay such
tax, Grantor shall not pay nor be obligated to pay such tax. Nevertheless, if a
law is enacted making it unlawful for Grantor to pay such taxes, then to the
extent allowed by law, Grantor must prepay the Indebtedness in full within one
hundred eighty (180) days after demand therefor by Beneficiary.
4.15 Statement of Unpaid Balance. At any time and from time to time, but no more
often than semiannually, Grantor will furnish promptly, upon the request of
Beneficiary, a written statement or affidavit, in form satisfactory to
Beneficiary, stating the unpaid balance of the Indebtedness and that there ate
no offsets or defenses against full payment of the Indebtedness and the terms
hereof, or if there are any such offsets or defenses, specifying them.
4.16 Expenses. Grantor will pay on demand all reasonable and bona fide
out-of-pocket costs, fees, and expenses and other expenditures, including, but
not limited to, reasonable attorneys' fees and expenses, paid or incurred by
Beneficiary or Trustee to third parties incident to this Deed of Trust or any
other Loan Document (including without limitation, reasonable attorneys' fees
and expenses in connection with the negotiation, preparation, and execution
hereof and of any other Loan Document and any amendment hereto or thereto, any
release hereof, any consent, approval or waiver hereunder or under any other
Loan Document, the making of any advance under the Note, and any suit to which
Beneficiary or Trustee b a party involving this Deed of Trust or the Mortgaged
Property) or incident to the enforcement of the indebtedness w the exercise of
any right or remedy of 8eneficiaty under say Loan Document.
4.17 Address. Grantor shall give written notice to Beneficiary and Trustee of
any change of address of Grantor at least five (5) days prior to the effective
xxxx of such change of address, but any failure to do so shall not be an Event
of Default. Absent such of official written notice of a change in address for
Grantor, then Beneficiary and Trustee shall be entitled for all purpose under
the Loan Documents to rely upon Grantor's address as set forth in the initial
paragraph of the Deed of Trust, as same may have been therefore changed in
accordance with the provisions hereof.
4.18 Environment and Hazardous Substances. Grantor will:
(a) not use, generate, manufacture, produce, store, release, discharge,
treat, or dispose of on, under, from or about the Mortgaged Property
or transport to or from the Mortgaged Property any Hazardous Substance
or allow any other person Or entity to do so in violation of any
Environmental Law;
(b) keep and maintain the Mortgaged Property in compliance with, and shall
not cause or permit the Mortgaged Property to be in violation of, any
Environmental Law;
(c) monitor the use of the Mortgaged Property to attempt to assure that no
violation of Environmental Laws occurs (Grantor does not represent or
warrant that a tenant will not violate an Environmental Law.);
(d) give prompt written notices to Beneficiary of: (i) any proceeding or
inquiry by any governmental or nongovernmental entity or person with
respect to the presence of any Hazardous Substance on, under, from or
about the Mortgaged Property, the migration thereof from or to other
property, the disposal, storage, or treatment of any Hazardous
Substance generated or used on, under or about the Mortgaged Property,
(ii) all claims made or threatened by any third party against Grantor
or the Mortgaged Property or any other owner or operator of the
Mortgaged Property relating to any loss or injury resulting from any
Hazardous Substance, and (iii) Grantor's discovery of any occurrence
or condition on any real property adjoining or in the vicinity of the
Mortgaged Property that could cause the Mortgaged Property or any part
thereof to be subject to any investigation or cleanup of the Mortgaged
Property pursuant to any Environmental Law;
(e) permit Beneficiary to join and participate in, as a party if it so
elects, any legal proceedings or actions initiated with respect to the
Mortgaged Property in connection with any Environmental Law or I
Hazardous Substance, and Grantor shall pay all attorneys', fees
incurred by Beneficiary in connection therewith;
(f) protect, indemnity, and hold harmless' Trustee and Beneficiary, their
parents, subsidiaries, directors, officers, employees,
representatives, agents, successors, and assigns from and against any
and all loss, damage, costs, expense, action, causes of action, or
liability (including attorneys' fees and costs) directly or indirectly
arising from or attributable to the use, generation, manufacture,
production, storage, release, threatened release, discharge, disposal,
or presence of a Hazardous Substance on, under or about the Mortgaged
Property, whether known or unknown at the time of the execution
hereof, including without limitation (i) all foreseeable consequential
damages of any such use, generation, manufacture, production, storage,
release, threatened release, discharge, disposal, or presence, and
(ii) the costs of any required or necessary environmental
investigation or monitoring, any repair, cleanup, or detoxification of
the Mortgaged Property, and the preparation and implementation of any
closure, remedial, or other required plan,. This covenant and the
Indemnity contained herein shall survive the release of the lien of
this Deed of Trust, or the extinguishment of the lien by foreclosure
or action In lieu thereof; and
(g) in the event that any Remedial Work is reasonably necessary or
desirable, Grantor shall commence and thereafter diligently prosecute
to completion all such Remedial Work within a reasonable period of
time after written demand by Beneficiary for performance thereof (or
any specific period of time as may be required under any Legal
Requirement), with such Remedial Work being commenced within thirty
(30) days of Beneficiary's written demand. All Remedial Work shall be
performed by contractors approved in advance by Beneficiary, and under
the supervision of a consulting engineer approved by Beneficiary. All
costs and expenses of such Remedial Work shall be paid by Grantor
including, without limitation, Beneficiary's reasonable attorneys'
fees and costs incurred in connection with monitoring or review of
such Remedial Work. In the event Grantor shall fail to timely
commence, or cause to be commence, or fail to diligently prosecute to
completion, such Remedial Work, Beneficiary may, but shall not be
required to, cause such Remedial Work to be performed, and all costs
and expense thereof. or incurred in connection therewith, shall become
part of the Indebtedness'.
ARTICLE V - NEGATIVE COVENANTS
Grantor hereby unconditionally covenants and agrees with Beneficiary
until the entire Indebtedness shall have been paid in full and all of the
Obligations shall have been fully performed and discharged as follows:
5.1 Use Violations. Grantor will not use, maintain, operate, or
occupy, or allow the use, maintenance, operation, or occupancy of,
the Mortgaged Property in any manna which (a) violates any Legal
Requirement, (b) may be dangerous unless safeguarded as required
by law and/or appropriate insurance, (C) constitutes a public or
private nuisance, or (d) makes void, voidable, or cancelable, or
increases the premium of, any insurance then in force with respect
thereto.
5.2 Waste; Alterations. Grantor will not commit or permit any waste or
impairment of the Mortgaged Property (ordinary wear and tear excepted)
and will not (subject to the provisions of Sections 4.3 and 4.6
hereof), without The prior written consent of Beneficiary, make or
permit to be made any alterations or additions to the Mortgaged
Property of a material nature, which consent shall not be unreasonably
withheld or delayed.
5.3 Replacement of Fixtures and Personalty. Grantor will not, without
the prior written consent of Beneficiary, permit any of the Fixtures or
Personalty exceeding the value of Ten Thousand and No/lOOths Dollars
($10,000.00) to be removed at any time from the Land or Improvements
unless the removed item is removed temporarily (not to exceed six (6)
months) for maintenance and repair or, if removed permanently, is
replaced by an article of equal suitability and value, owned by
Grantor, free and clear of any lien or security interest except as may
be approved in writing by Beneficiary.
5.4 Change in Zoning. Grantor will not seek or acquiesce in a zoning
reclassification of all or any portion of the Mortgaged Property or
grant or consent to any easement, dedication, plat, or restriction (or
allow any easement to become enforceable by prescription), or any
amendment or modification thereof, covering all or any portion of the
Mortgaged Property, without Beneficiary's prior written consent.
5.5 No Drilling. Grantor will not, without the prior written consent of
Beneficiary, permit any drilling or exploration for or extraction,
removal, or production of, any Minerals from the surface or subsurface
of the Land regardless of the depth thereof or the method of mining or
extraction thereof.
5.6 No Disposition. Grantor will not make a Disposition without
obtaining Beneficiary's prior written consent to the Disposition.
5.7 No Subordinate Mortgages. Grantor will not create, place, or permit
to be created or placed, or through any act or failure to act,
acquiesce in The placing of, or allow to remain any Subordinate
Mortgages regardless of whether such Subordinate Mortgage is expressly
subordinate to the liens or security interests of the Loan Document
with respect to the Mortgaged Property, other than the Permitted
Exceptions.
ARTICLE Vl - EVENTS OF DEFAULT
The term "Event of Default," as used herein and in the Loan
Documents, shall mean the occurrence or happening, at any time and from
time to time, of any one or more of the following:
6.1 Payment of Indebtedness. If Grantor shall fail, refuse, or
neglect to pay, in full, any installment or portion of the Indebtedness
as and when the same shall become due and payable, whether at the due
date thereof stipulated in the Loan Documents, upon acceleration or
otherwise.
6.2 Performance of Obligations. If Grantor shall fail, refuse or
neglect or cause the failure, refusal, or neglect to comply with,
perform and discharge fully and timely any of the Obligations as and
when called for, other than repayment of the Indebtedness and such
failure, refusal or neglect continues for a period of shiny (30) days
after delivery to Grantor of written notice from Beneficiary of such
failure, refusal or neglect (such period to be increased for an
additional period not to exceed sixty (60) days, if Grantor is
diligently pursuing the cure of the matter(s) in question, upon
Grantor's delivery to Beneficiary of appropriate bonds or additional
collateral the form of same to be acceptable to Beneficiary in its
reasonable discretion). However, any such failure, refusal o; neglect
with respect to the Leases occurring in the ordinary course of business
of Grantor or the operation of The Mortgaged Property shall not be an
Event of Default.
6.3 False Representation. If any representation, warranty, or statement
made by Grantor, any Guarantor or Constituent Party in, under, or
pursuant to the Loan Documents or any affidavit or other instrument
executed or delivered with respect to the Loan Documents or the
Indebtedness b determined by Beneficiary to be false or misleading in
any material respect as of the date hereof or thereof or shall become
so at any time prior to the repayment in full of he Indebtedness.
6.4 Default Under other Lien. Documents. If Grantor shall default
or commit an Event of Default under and pursuant to any other mortgage
or security agreement which coven or effects any part of the Mortgaged
Property.
6.5 Insolvency; Bankruptcy. If Grantor (i) shall execute an assignment
for the benefit of creditor or an admission in writing by Grantor of
Grantor's inability to pay, or Grantors failure to pay, debts generally
as the debts become due; or (ii) shall allow the levy against the
Mortgaged Property or any part thereof, of any execution, attachment,
sequestration or other writ which is not vacated within sixty (60) days
after the levy; or (iii) shall allow the appointment of a receiver,
trustee or custodian of Grantor or of the Mortgaged Property or any
part thereof, which receiver, trustee or custodian is not discharged
within sixty (60) days after the appointment; or (iv) files as a debtor
a petition, case, proceeding or other action pursuant to, or
voluntarily seeks of the benefit or benefits of any Debtor Relief Law,
or takes any action in furtherance thereof; or (v) files either a
petition, complaint, answer or other instrument which seeks to effect a
suspension of, or which has the effect of suspending any of the rights
or powers of Beneficiary or Trustee granted in The Note, herein or in
any loan Document; or (vi) allows the filing of a petition, case,
proceeding or other action against Grantor as a debtor under any Debtor
Relief Law or seeks appointment of a receiver trustee, custodian or
liquidator of Grantor or of the Mortgaged Property, or any part
thereof, or of any significant portion of Grantors other property; and
(a) Grantor admits, acquiesces in or fails to contest diligently the
material allegations thereof, or (b) the petition, case, proceeding or
other action results in the entry of an order for relief or order
granting the relief sought against Grantor, or (C) the petition, case,
proceeding or other action not permanently dismissed or discharged on
or before the earlier of trial thereon or sixty (60) days next
following the date of filing.
6.6 Dissolution. If Grantor, or any Guarantor, shall dissolve,
terminate, die or liquidate, or merge with or be consolidated into any
other entity.
6.7 No Further Encumbrances; Levy and Attachment. If Grantor creates,
pieces, or permits to be created or placed, or through any act or
failure to act, acquiesces in The placing of, or allows to remain, any
Subordinate Mortgage (securing a debt in excess of Ten Thousand and
No/100ths Dollars (S10,000.00), with a maturity exceeding six (6)
months), regardless of whether such Subordinate Mortgage is expressly
subordinate to the liens or security interests of the Loan Documents,
with respect to The Mortgaged Property, other than the Permitted
Exceptions, which has not been consented to or approved by Beneficiary.
If any levy or attachment is issued, or if any lien for the performance
of work or the supply of materials is filed, against any part of the
Mortgaged Property and remains unsatisfied or unbonded following shiny
(30) days after the date of filing thereof or such later period of time
if Grantor is unaware of such manner, subject to the right of Grantor
to contest the validity thereof provided in this Deed of Trust.
6.8 Disposition of Mortgaged Property and Beneficial Interest
in Grantor. If Grantor makes a Disposition, without the prior written
consent of Beneficiary.
6.9 Condemnation. If any condemnation proceeding is instituted or
threatened which would, in Beneficiary's reasonable judgment,
materially impair the use and enjoyment of the Mortgaged Property for
its intended purposes.
6.10 Destruction of improvements. If the Mortgaged Property is
demolished, destroyed, or substantially damaged so that, in
Beneficiary's reasonable judgment, it cannot be restored or rebuilt
with available funds to the condition existing immediately prior to
such demolition, destruction, or dama8e within a reasonable period of
time.
6.11 Transfer of Improvements. If Grantor executes any conditional xxxx
of sale, chattel mortgage or other security instrument covering any
materials' fixtures or articles intended to be incorporated in the
Improvements or the appurtenances thereto, or covering articles of
personal property placed in the Improvements, or files a financing
statement publishing notice of such security instrument, or if any of
such materials, fixtures or articles are not purchased in such a manner
that the ownership thereof vests unconditionally in Grantor, free from
encumbrances on delivery at the Land, or if Grantor does not produce to
Lender upon reasonable demand the contracts, bills of sire, statements,
receipted vouchers or agreements, or any of them, under which Grantor
claims title to such materials, fixtures and articles.
6.12 Abandonment. If Grantor abandons all or any portion of the
Mortgaged Property.
6.13 Guarantor's Default. The occurrence of any event referred
to in Secilon.6.5 hereof with respect to Guarantor.
6.14 Loan Documents. The occurrence of an Event of Default as
defined in any of the other Loan Documents.
ARTICLE Vll - REMEDIES
7.1 Beneficiary's Remedies Upon Default. Upon the occurrence of an Event of
De6ult Beneficiary may, at Beneficiary's option, and by or through Trustee, by
Beneficiary itself or otherwise, do any one or more of the following:
(a) Right to Perform Grantor's Covenants. If Grantor has failed to keep or
perform any covenant whatsoever contained in this Deed of Trust or the
other Loan Documents, Beneficiary may, but shall not be obligated to
any person to do so, perform or attempt to perform said covenant, and
any payment made or expense incurred in the performance or attempted
performance of any such covenant shall be and become a part of the
Indebtedness, and Grantor promises, upon demand, to pay to Beneficiary
at the place where the Note is payable, all sums so advanced or paid
by Beneficiary, with interest from the cat; when paid or incurred by
Beneficiary at the Default Rate. No such payment by Beneficiary shall
constitute a waiver of any Event of Default. In addition to the liens
and security interests hereof, Beneficiary shall be subrogated to all
rights titles, liens, and security interests securing the payment of
any debt, claim, tax, or assessment for the payment of which
8eneficiary may make an advance, or which 8eneficiary may pay.
(b) Right of Entry. Beneficiary may, prior or subsequent to the
institution of any foreclosure proceedings, enter upon the Mortgaged
Property, or any part thereof, and take exclusive possession of the
Mortgaged Property and of all books, records, and accounts relating
thereto and exercise without interference from Grantor any and all
rights which Grantor has with respect to the management, possession,
operation protection, or preservation of the Mortgaged Property,
including without limitation the right to rent the same for The
account of Grantor and to deduct from such Rents all costs, expenses,
and liabilities of every character incurred by the Beneficiary in
collecting such Rents and in managing, operating, maintaining,
protecting, or preserving the Mortgaged Property and to apply the
remainder of such Rents on the Indebtedness in such manner a5
Beneficiary may elect. A11 such costs, expenses, and liabilities
incurred by the Beneficiary in collecting such Rents and in managing,
operating, maintaining, protecting, or preserving the Mortgaged
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,
all of which shall constitute a ponion of the Indebtedness. If
necessary to obtain The possession provided for above, the Beneficiary
may invoke any and all legal remedies to dispossess Grantor, including
specifically one or more actions for forcible entry and detainer,
trespass to try title, and restitution. In connection with any action
taken by the Beneficiary pursuant to this subsection, the Beneficiary
shall not be liable for any 1055 sustained by Grantor resulting from
any failure to let the Mortgaged Property, or any part thereof, or
from any other act or omission of the Beneficiary in managing the
Mortgaged Property unless such loss is caused by the gross negligence
or willful misconduct of the Beneficiary, nor shall the Beneficiary be
obligated to perform or discharge any obligation, duty, or liability
under any Lease or under or by reason hereof or the exercise of rights
or remedies hereunder. Grantor shall and does hereby agree to
indemnify the Beneficiary for, and to hold the Beneficiary harmless
from, any and all liability, loss, or damage, which may or might be
incurred by the Beneficiary under any such Lease or under or by reason
hereof or the exercise of rights or remedies hereunder (except by
reason of Beneficiary's gross negligence and recklessness), and from
any and all claims and demands whatsoever which may be asserted on its
part to perform or discharge any of the terms, covenants, or agree-
ments contained in any such Lease. Should The Beneficiary incur any
such liability, the amount thereof,including without limitation costs,
expenses, and reasonable attorneys' fees, together with interest
thereon from the date of expenditure until paid at: The Default Rate,,
shall be secured hereby, and Grantor shall reimburse the Beneficiary,
therefore, immediately upon demand. Nothing in this subsection shall
impose any duty, obligation, or responsibility upon the Beneficiary
for the control, care, management, leasing, or repair of the Mortgaged
Property, nor force the carrying out of any of the terms and
conditions of any such Lease; nor shall it operate to make the
Beneficiary responsible or liable for any waste committed on the
Mortgaged Property by the tenants or by any other party or for any
Hazardous Substance on or under the Mortgaged Property, or for any
dangerous or defective condition of the Mortgaged Property or for any
negligence in the management, leasing, upkeep, repair, or control of
the Mortgaged Property resulting in loss or injury or death to any
tenant, licensee, employee, or stranger. Grantor hereby assents to,
ratifies, and confirms any and all actions of the Beneficiary with
respect to the Mortgaged Property taken under this subsection.
The remedies in this subsection are in addition to other remedies
available to the Beneficiary and the exercise of the remedies in this
subsection shall not be deemed to be an election of nonjudicial or
judicial remedies otherwise available to the Beneficiary. fee remedies
in this Article VII are available under and governed by the real
property laws of Texas and are not governed by the personal property
laws of Texas including but not limited to, the power to dispose of
personal property in a commercially reasonable manner under Section
9.504 of the Code. No action by Beneficiary, taken pursuant to this
subsection, shall be deemed to be an election to dispose of personal
property under Section 9.505 of the Code. Any receipt of consideration
received by Beneficiary pursuant to this subsection shall be
immediately credited against the Indebtedness (in the inverse order of
maturity) and the value of said consideration shall be treated like
any other payment against the Indebtedness.
(c) Right to Accelerate. Except as provided herein and in the other Loan
Documents Beneficiary may, without notice, demand, presentment, notice
of nonpayment or nonperformance protest notice of protest, notice of
intent to accelerate, notice of acceleration, or any other notice or
any other action, all of which are hereby waived by Grantor and all
other parties obligated in any manner whatsoever on the Indebtedness,
declare the entire unpaid balance of the Indebledness immediately due
and payable, and upon such declaration, the entire unpaid balance of
the Indebledness shell be immediately due and payable. The failure to
exercise any remedy available to the Beneficiary shall not be deemed
to be a waiver of any rights or remedies of the Beneficiary under the
Loan Documents, at law or in equity.
(d) Foreclosure-Power of Sale. Beneficiary may request Trustee to proceed
with foreclosure under the power of sale which is hereby conferred,
such foreclosure to be accomplished in accordance with the following
provisions:
(e) Public Sale. Trustee is hereby authorized and empowered, and it shall
be Trustee's special duty, upon such request of Beneficiary, to sell
the Mortgaged Property, or any part thereof, at public auction to the
highest bidder for cash, with or without having taken possession of
same. Any such sale (including notice thereof) shall comply with the
applicable requirements, at the time of the sale, of Section 51.002 of
The Texas Property Code or, if and to the extent such stature is not
then in force, with the applicable requirements, at the time of the
sale, of the successor statute or statutes, if any, governing sales of
Texas real property under powers of sale conferred by deeds of trust.
If there is no statute in force at the time of the sale governing
sales of Texas real property under powers of sale conferred by deeds
of trust, such sale shall comply with applicable law, at the time of
the sale, governing sales of Texas real property under powers of sale
conferred by deeds of trust.
(ii) Right to Require Proof of Financial Ability and/or Cash Bid. At any
time during the bidding, The Trustee may require a bidding party (A)
to disclose its full name, state and city of residence, occupation,
and specific business office location, and the name and address of the
principal the bidding party is representing (if applicable), and (B)
to demonstrate reasonable evidence of the bidding party's financial
ability (or, if applicable, the financial ability of the principal of
such bidding party), as a condition to the bidding party submitting
bids at the foreclosure sale. If any such bidding party (the
"Questioned Bidder") declines to comply with the Trustee's requirement
in this regard, or if such Questioned Bidder does respond but the
Trustee, in Trustee's sole and absolute discretion deems the
information or the evidence of the financial ability of the Questioned
Bidder (or, if applicable, the principal of such bidding party) to be
inadequate, then the Trustee may continue the bidding with
reservation; and in such event (1) the Trustee shall be authorized to
caution the Questioned Bidder concerning the legal obligations to be
incurred in submitting bids, and (2) if the Questioned Bidder is not
the highest bidder at the sale, or if having been the highest bidder
the Questioned Bidder fails to deliver the cash purchase price payment
promptly to the Trustee, all bids by the Questioned Bidder shall be
mill and void. The Trustee may, in Trustee's sole and absolute
discretion, determine that a credit bid may be in the best interest of
the Grantor and Beneficiary, and elect to sell the Mortgaged Property
for credit or for a combination of cash and credit; provided, however,
that The Trustee shall have no obligation to accept any bid except an
all cash bid. In the event the Trustee requires a cash bid and cash is
not delivered within a reasonable time after conclusion of the bidding
process, as specified by the Trustee, but in no event later than 3:45
p.m. local time on the day of sale, then said contingent sale shall be
null and void, the bidding process may be recommenced, and any
subsequent bids or sale shall be made as if no prior bids were made or
accepted.
(iii)Sale Subject in Unmatured Indebtedness. in addition to the rights and
powers of sale granted under The preceding provisions of this
subsection, if default is made in the payment of any installment of
the Indebtedness, Beneficiary may, at Beneficiary's option, at once or
at any time thereafter while any matured installment remains unpaid,
without declaring the entire indebtedness to be due and payable,
orally or in writing direct Trustee to enforce the trust and to sell
the Mortgaged Property subject to such unmatured Indebtedness and to
the rights, powers, liens, security interests, and assignments
securing or providing recourse for payment of such unmatured
Indebtedness, in the same manner, all as provided in the preceding
provisions of this subsection. Sales made without maturing the
Indebtedness may be made hereunder whenever there is a default in the
payment of any installment of the Indebtedness, without exhausting the
power of sale granted hereby, and without affecting in any way the
power of sale granted under this subsection, the unmatured balance of
the Indebledness or the rights, powers, liens, security interests, and
assignments securing or providing recourse for payment of the
Indebtedness.
(iv) Partial foreclosure. Sale of a part of the Mortgaged Property shall
not exhaust the power of sale, but sales may be made from time to time
until The Indebledness is paid and the Obligations are performed and
discharged in full. It is intended by each of the foregoing provisions
of this subsection that Trustee may, after any request or direction by
Beneficiary, sell not only the Land and the Improvements, but also the
Fixtures and Personalty and other interests constituting a part of the
Mortgaged Property or any part thereof, along with the Land and the
Improvements or any part thereof, as a unit and as a part of a single
sale, or may sell at any time or from time to time any part or parts
of the Mortgaged Property separately from the remainder of the
Mortgaged Property. It shall not be necessary to have present or to
exhibit at any sale any of the Mortgaged Property.
(v) Trustee's Deeds. After any sale under this subsection, Trustee shall
make good and sufficient deeds, assignments, and other conveyances to
the purchaser or purchaser thereunder in the name of Grantor,
conveying The Mortgaged Property or any part thereof so sold to the
purchaser or purchaser with general warranty of title by Grantor. It
is agreed that in any deeds, assignments or other conveyances given by
Trustee, any and all statements of fact or other recitals therein made
as to the identify of Beneficiary, the occurrence or existence of any
Event of Default, the notice of intention to accelerate, or
acceleration of, the maturity of the Indebtedness, the request to
sell, notice of sale, time, place, terms and manner of sale, and
receipt, distribution, and application of the money realized
therefrom, the due and proper appointment of a substitute trustee, and
without being limited by the foregoing, any other act or thing having
been duly done by or on behalf of Beneficiary or by or on behalf of
Trustee, shall be taken by all courts of law and equity as prima facie
evidence that such statements or recitals state true, correct, and
complete facts and are without further question to be so accepted, and
Grantor does hereby ratify and confirm any and all acts that Trustee
may lawfully do in the premises by virtue hereof.
(e) Beneficiary's Judicial Remedies. Beneficiary, or Trustee, upon written
request of Beneficiary, may proceed by suit or suits, at law or in
equity, to enforce the payment of the Indebtedness and the performance
and discharge of the Obligations; in accordance with the terms hereof,
of the Note, and the other Loan Documents, to foreclose the liens and
security interests of this Deed of Trust as against all or any par' of
The Mortgaged Property, and to have all or any put of The Mortgaged
Property sold under the judgment or decree of a court of competent
jurisdiction. This remedy shall be cumulative of any other nonjudicial
remedies available to the Beneficiary with respect to the Loan
Documents. Proceeding with a request or receiving a judgment for legal
relief shall not be or be deemed to be an election of remedies or bar
any available nonjudicial remedy of the Beneficiary.
(f) Beneficiary's Right to Appointment of Receiver. Beneficiary, as a
matter of right and without regard to the sufficiency of The security
for repayment of the Indebtedness and performance and discharge of the
Obligations, without notice to Grantor and without any showing of
insolvency, fraud, or mismanagement on the part of Grantor, and
without the necessity of filing any judicial or other proceeding other
than the proceeding for appointment of a receiver, shall be entitled
to the appointment of a receiver or receivers of the Mortgaged
Property or any part thereof, and of the Rents, and Grantor hereby
irrevocably consents to the appointment of a receiver or receivers.
Any receiver appointed pursuant to the provisions of this subsection
shall have the usual powers and duties of receivers in such matter.
(g) Beneficiary's Uniform Commercial Code Remedies. The Beneficiary may
exercise its rights of enforcement with respect to Fixtures and
Personalty under The Code, and in conjunction with, in addition to or
in substitution for the rights and remedies under the Code, the
Beneficiary may:
(i) without demand or notice to Grantor, enter upon the Mortgaged Property
to take possession of, assemble, receive, and collect the Personalty,
or any part thereof, or to render it unusable; and
(ii) require Grantor to assemble the Personalty and make it available al a
place the Beneficiary designates which is mutually convenient to allow
the 8eneficisq to take possession or dispose of the Personalty; and
(iii)written notice mailed to Grantor as provided herein al least ten (10)
days prior to the date of public sale of the Personalty or prior to
the date after which private sale of the Personalty will be made shall
constitute reasonable notice; and
(iv) sale conducted in a commercially reasonable manner if held
contemporaneously with the sale of the other Mortgaged Property under
power of sale as provided herein upon giving the same notice with
respect to the sale of the Personalty hereunder as b required for such
sale of the other Mortgaged Property under power of sale and such sale
shall be deemed to be pursuant to a security agreement covering both
real and personal property under 9.501(d) of the Code; and
(v) in the event of a foreclosure sale, whether made by the Trustee under
the terms hereof, or under judgment of a court, the Personalty and the
other Mortgaged Property may, al the option of the Beneficiary, be
sold as a whole; and
(vi) it shall not be necessary that The Beneficiary take possession of the
Personalty, or any part thereof, prior to The time that any sale
pursuant to the provisions of this subsection is conducted, and it
shall not be necessary that the Personalty or any part thereof be
present at the location of such sale; and
(vii)prior to application of proceeds of disposition of the Personalty to
the Indebtedness, such proceeds shall be applied to the reasonable
expenses of retaking, holding, preparing for sale or lease, selling,
leasing and the like, and the reasonable attorneys' fees and legal
expenses incurred by the Beneficiary; and
(viii) after notification, if any, hereafter provided in this subsection,
Beneficiary may sell, lease, or otherwise dispose of the Personalty,
or any part thereof, in one or more parcels at public or private sale
or sales, al Beneficiary's offices or elsewhere, for ash, on credit,
or for future delivery. Upon the request of Beneficiary, Grantor shall
assemble the Personalty and make it available to Beneficiary at any
place designated by Beneficiary that is reasonably convenient to
Grantor and Beneficiary. Grantor agrees that Beneficiary shall not be
obligated to give more than ten ( 10) days' written notice of the time
and place of any public sale or of the time after which any private
sale may take place and that such notice shall constitute reasonable
notice of such matters. Grantor shall be liable for all expenses of
retaking, holdin6 preparing for sale, or the like, and all attorneys'
fees, legal expenses, and all other costs and expenses incurred by
Beneficiary in connection with the collection of the Indebtedness and
the enforcement of Beneficiary's rights under the Loan Documents.
Beneficiary shall apply the proceeds of the sale of the Personalty
against the Indebtedness in accordance with the provisions of Section
7.4 of this Deed of Trust. Grantor shall remain liable for u y
deficiency if the proceeds of any sale or deposition of the Personalty
are insufficient to pay the Indebtedness in full. Grantor waives all
rights of marshaling in respect of the Personalty; and
(ix) any and all statements of fact or other recitals made in any xxxx of
sale or assignment or other instrument evidencing any foreclosure sale
hereunder, the nonpayment of the Indebtedness, the occurrence of any
Event of Default, the Beneficiary having declared all or a ponion of
such Indebtedness to be due and payable, the notice of time, place,
and terms of sale and of the properties to be sold having been duly
given, or any other act or thing having been duly done by the
Beneficiary shall be taken as prima facie evidence of the truth of the
facts so stated and recited; and
(x) the Beneficiary may appoint or delegate any one or more persons as
agent to perform any act or acts necessary or incident to any sale
held by the Beneficiary, including the sending of notices and the
conduct of the sale, but in the name and on behalf of The Beneficiary.
(h) Rights Relating to Leases and Rents. Grantor has, pursuant to Article
lX of this Deed of Trust, assigned to Beneficiary all Rents under each
of the Leases covering all or any portion of the Mortgaged Property.
Beneficiary, or Trustee on Beneficiary's behalf, may at any time
following the occurrence of an Event of Default hereunder, and without
further notice, either in person, by agent, or by receiver to be
appointed by a court, enter and take possession of the Mortgaged
Property or any part thereof, and in its own name, xxx for or
otherwise collect the Rents. Grantor hereby agrees, upon notice from
Trustee or Beneficiary to Grantor of the occurrence of an Event of
Default, to terminate the limited license granted to Grantor in
Section 9.2 hereof, and thereafter direct the lessees under the Leases
to pay direct to Beneficiary the Rents due and to become due under the
Leases and attorn in respect of all other obligations thereunder
direct to Beneficiary, or Trustee on Beneficiary's behalf, without any
obligation on their part to determine whether an Event of Default does
in fact exist or has in fact occulted. All Rents collected by
Beneficiary, or Trustee acting on Beneficiary's behalf, shall be
applied as provided for in Section 7.4 of this Deed of Trust;
provided, however, that if the costs, expenses, and attorneys' fees
shall exceed the amount of Rents collected, the excess shall be added
to the Indebtedness, shall bear interest at the Default Rate, and
shall be immediately due and payable. The entering upon and
taking possession of the Mortgaged Property, the collection of Rents,
and the application thereof as aforesaid shall not cure or waive any
Event of Default or notice of default, if any, hereunder nor
invalidate any act done pursuant to such notice, except to the extent
any such default is fully cured. Failure or discontinuance by
Beneficiary, or Trustee on Beneficiary's behalf, at any time or from
time to time, to collect said Rents shall not in any manner impair the
subsequent enforcement by Beneficiary, or Trustee on Beneficiary's
behalf, of the right, power and authority herein conferred upon it.
Nothing contained herein, nor the exercise of any right, power, or
authority herein granted to Beneficiary's, or Trustee on Beneficiary's
behalf, shall be, or shall be construed to be, an affirmation by it of
any tenancy, lease, or option, nor an assumption of liability under,
nor the subordination of, the lien or charge of this Deed of Trust to
any such tenancy, lease, or option, nor an election of judicial
relief, if any such relief is requested or obtained as to Leases or
Rents, with respect to the Mortgaged Property or any other collateral
given by Grantor to Beneficiary. In addition, from time to time
Beneficiary may elect, and notice hereby is given to each lessee under
any Lease, to subordinate the lien of this Deed of Trust to any Lease
by unilaterally executing and recording an instrument of
subordination, and upon such election the lien of this Deed of Trust
shall be subordinate to the Lease identified in such instrument of
subordination; provided, however, in each instance such subordination
will not affect or be applicable to, and expressly excludes any lien,
charge, encumbrance security interest, claim, easement, restriction,
option, covenant and other rights, titles, interests or estates or;
any nature whatsoever with respect to all or any portion of the
Mortgaged Property to the extent that the same may have arisen or
intervened during the period between the recordation of this Deed of
Trust and the execution of the Lease identified in such instrument of
subordination.
(i) Other Rights. Beneficiary (i) may apply the reserve for Impositions
and insurance premiums if any, required by the provisions of this Deed
of Trust, toward payment of the Indebtedness; and (ii) shall hay; and
may exercise any and all other rights and remedies which Beneficiary
may have at law or in equity, or by virtue of any Loan Document or
under the Code, or otherwise.
(j) Beneficiary as Purchaser. Beneficiary may be the purchaser of the
Mortgaged Property or any put thereof, at any sale thereof, whether
such sale be under the power of sale herein vested in Trustee or upon
any other foreclosure of the liens and security interests hereof, or
otherwise, and Beneficiary shall, upon any such purchase, acquire good
title to the Mortgaged Property so purchased, free of the liens and
security interests hereof, unless the sale was made subject to an
unmatured portion of the Indebtedness. The Beneficiary, as purchaser,
shall be treated in the same manner as any third party purchaser and
the proceeds of the Beneficiary's purchase shall be applied in
accordance with Section 7.4 of this Deed of Trust.
7.2 Other Rights of Beneficiary. Should any part of the
Mortgaged Property come into the possession of Beneficiary, whether
before or after default, Beneficiary may (for itself or by or through
other persons, firms, or entities) hold, lease, manage, use, or operate
the Mortgaged Property for such time and upon such terms as Beneficiary
may deem prudent under the circumstances (making such repairs,
alterations, additional and improvements thereto and taking such other
action as Beneficiary may from time to time deem necessary or
desirable) for the purpose of preserving the Mortgaged Property or its
value, pursuant to the order of a court of appropriate jurisdiction or
in accordance with any other rights held by Beneficiary in respect of
the Mortgaged Property. Grantor covenants to promptly reimburse and pay
to Beneficiary on demand, at the place where the Note is payable, the
amount of all reasonable expenses (including without limitation the
cost of any insurance, Impositions, or other charges) incurred by
Beneficiary in connection with Beneficiary's custody, preservation,
use, or operation of the Mortgaged Property together with interest
thereon from the date incurred by Beneficiary at die Default Rate; and
all such expenses costs taxes, interest, and other charges shall be and
become a part of the Indebtedness. It is agreed, however, that the risk
of loss or damage to the Mortgaged Property is on Grantor, and
Beneficiary shall have no liability whatsoever for decline in value of
die Mortgaged Property, for failure to obtain or maintain insurance, or
for failure to determine whether insurance in force is adequate as to
amount or as to the risks insured. Possession by the Beneficiary shall
not be deemed an election of judicial relief, if any such possession is
requested or obtained, with respect to any Mortgaged Property or
collateral not in Beneficiary's possession.
7.3 Possession After Foreclosure. If the liens or security
interests hereof shall be foreclosed by power of sale granted herein,
by judicial action or otherwise, the purchaser al any such sale shall
receive, as an incident to purchaser's ownership, immediate possession
of the property purchased, and if Grantor or Grantor's successor shall
hold possession of said property or any part thereof subsequent to
foreclosure, Grantor and Grantor's successor shall be considered as
tenants at sufferance of the purchaser at foreclosure sale (without
limitation of other rights or remedies, at a reasonable rental per day,
due and payable daily, based upon the value of the portion of the
Mortgaged Property so occupied and sold to such purchaser), and anyone
occupying such ponion of the Mortgaged Property, after demand is made
for possession thereof, shall be guilty of forcible detainer and shall
be subject to eviction and removal with or without process of law, and
all damages by reason thereof are hereby expressly waived.
7.4 Application of Proceeds. The proceeds from any sale,
lease, or other disposition made pursuant to this Article Vll, or any
Rents collected by Beneficiary from the Mortgaged Property, or the
reserve for Impositions and insurance premiums, if any, required by the
provisions of this Deed of Trust or sums received pursuant to Section
8.1 hereof, or proceeds from insurance which Beneficiary elects to
apply to the Indebtedness pursuant to Section 8.2 hereof, shall be
applied by Trustee, or by Beneficiary, as the case may be, to the
Indebtedness in the following order and priority: ( I ) to The payment
of all expenses of advertising, selling, and conveying the Mortgaged
Property or part thereof, and/or prosecuting or otherwise collecting
Rents, proceeds, premiums, or other sums including reasonable
attorneys' fees end a reasonable fee or commission to Trustee, not to
exceed five percent of the proceeds thereof or sums so received; (2) to
the remainder of die Indebtedness as follows: first, to the remaining
accrued but unpaid interest, second, to the matured portion of
principal of the Indebtedness, and third, to prepayment of the
unmatured portion, if any, of principal of the indebtedness applied to
installments of principal in inverse order of maturity; and (3) the
balance, if any and to the extent applicable, remaining after the full
and final payment of the indebtedness and full performance and
discharge of the Obligations to the holder or beneficiary of any
inferior liens covering the Mortgaged Property, if any, in order of the
priority of such inferior
liens (Trustee and Beneficiary shell hereby be entitled to rely
exclusively upon a commitment for title insurance issued to determine
such priority); and (4) the cash balance, if any, to the Grantor. The
application of proceeds of sale or other proceeds as otherwise provided
herein shall be deemed to be a payment of the Indebtedness like any
other payment. The balance of the indebtedness remaining unpaid, if
any, shall remain fully due and owing in accordance with the terms of
the Note or the other Loan Documents.
7.5 Abandonment of Sale. In the event a foreclosure hereunder
is commenced by Trustee in accordance with Subsection 7.1(d) hereof, at
any time before the sale, Trustee may abandon the sale, and Beneficiary
may then institute suit for the collection of the Indebtedness and for
the foreclosure of the liens and security interests hereof and of the
Loan Documents. If Beneficiary should institute a suit for the
collection of the indebtedness and for a foreclosure of The liens and
security interests, Beneficiary may, at any time before the entry of a
final judgment in said suit, dismiss the same and require Trustee to
sell the Mortgaged Property or any part thereof in accordance with the
provisions of this Deed of Trust.
7.6 Payment of Fees. If the Note or any other part of the
Indebtedness shall be collected of if any of The obligations shall be
enforced by legal proceedings, whether through a probate or bankruptcy
court or otherwise, or shall be placed in the hands of an attorney for
collection after maturity, whether matured by the expiation of time or
by an option given to the Beneficiary to mature same, or if Beneficiary
becomes a party to any suit where this Deed of Trust or the Mortgaged
Property or any part thereof is involved, Grantor agrees to pay
Beneficiary's attorneys' fees and expenses incurred, and such fees
shall be and become a part of the Indebledness and shall bear interest
from the date such costs are incurred al the Default Rate.
7.7 Miscellaneous.
(a) In case Beneficiary shall have proceeded to
invoke any right, remedy, or recourse permitted under the
Loan Documents and shall thereafter elect to discontinue
or abandon same for any reason, Beneficiary shall have the
unqualified right so to do and, in such event, Grantor and
Beneficiary shall be restored to their former positions
with respect to the Indebledness, The Loan Documents, the
Mortgaged Property or otherwise, and the rights, remedies,
recourses and power of Beneficiary shall continue as if
same had never been invoked.
(b) In addition to the remedies set forth in this
Article, upon the occurrence of an Event of Default, the
Beneficiary and Trustee shall, in addition, have all other
remedies available to them at law or in equity.
(c) All rights, remedies, and recourses of
Beneficiary granted in the Note, this Deed of Trust, the
other Loan Documents, any other pledge of collateral, or
otherwise available at law or equity: (i) shall be
cumulative and concurrent; (ii) may be pursued separately,
successively, or concurrently against Grantor, the
Mortgaged Property, or any one or more of them, at the
sole discretion of Beneficiary; (iii) may be exercised as
often as occasion therefor shall arise, it being agreed by
Grantor that the exercise or failure to exercise any of
same shall in no event be construed as a waiver or release
thereof or of any other right, remedy, or recourse; (iv)
shall be nonexclusive; (v) shall not be conditioned upon
Beneficiary exercising or pursuing any remedy in relation
to The Mortgaged Property prior to Beneficiary bringing
suit to recover the Indebtedness or suit on the
Obligations; and (vi) in the event Beneficiary elects to
bring suit on the Indebtedness and/or the Obligations and
obtains a judgment against Grantor prior to exercising any
remedies in relation to Mortgaged Property, all liens and
security interests, including the lien of this Deed of
Trust, shall remain in full force and effect and may be
exercised at Beneficiary's option.
(d) Beneficiary may release, regardless of
consideration, any part of the Mortgaged Property without,
as to the remainder, in any way impairing, affecting,
subordinating, or releasing the lien or security interests
evidenced by this Deed of Trust or the other Loan
Documents or affecting the obligations of Grantor or any
other party to pay the Indebtedness or perform and
discharge the Obligations. For payment of the
Indebtedness, Beneficiary may resort to any of the
collateral therefor in such order and manner as
Beneficiary may elect. No collateral heretofore, herewith,
or hereafter taken by Beneficiary shall in any manner
impair or affect the collateral given pursuant to the Loan
Documents, and all collateral shall be taken, considered,
and held as cumulative.
(e) Grantor hereby irrevocably and unconditionally
waives and releases: (i) all benefits that might accrue to
Grantor by virtue of any present or future law exempting
the Mortgaged Property from attachment, levy or sale on
execution or providing or any appraisement, stay of
execution, exemption from civil process, redemption, or
extension of time for payment; (ii) except as otherwise
provided herein, all notices of any Event of Default or of
Trustee's exercise of any right, remedy, or recourse
provided for under the Loan Documents; and (iii) any right
to a marshaling of assets or a sale in inverse order of
alienation.
(f) Grantor and Beneficiary mutually agree that there
are no, nor shall there be any, implied covenants of good
faith and fair dealing or other similar covenants or
agreements in this Deed of Trust and the other loan
Documents. All agreed contractual duties are set forth in
the Deed of Trust, the Note, and the other Loan Documents.
(g) The remedies in this Article VII are available
under and governed by the real property laws of Texas.
ARTICLE VIII - SPECIAL PROVISIONS
8.1 Condemnation Proceeds. Beneficiary shall be entitled to
receive any and all sums, in trust, which may be awarded and become
payable to Grantor for condemnation of the Mortgaged Property or any
part thereof, for public or quasi-public use, or by virtue of private
sale in lieu thereof, and any sums which may be awarded or become
payable to Grantor for damages caused by public works or construction
on or near the Mortgaged Property. All such sums are hereby assigned to
Beneficiary, and Grantor shall, upon request of Beneficiary, make,
execute, acknowledge, and delivery any and all additional assignments
and documents as may be necessary from time to time to enable
Beneficiary to collect and receipt for any such sums. Beneficiary shall
not be, under any circumstances, liable or responsible for failure to
collect, or exercise diligence in the collection of, any of such sums.
Any sums received by Beneficiary as a result of condemnation shall be
applied in Beneficiary's discretion, if economically feasible, to the
restoration of the Mortgaged Property or to the Indebtedness in
accordance with the provision of Section 7.4 hereof.
8.2 Insurance Proceeds. The proceeds of any and all insurance
upon the Mortgaged Property (other than proceeds of general public
liability insurance) shall he collected by Beneficiary, and 8eneficiaq
shall have the option in Beneficiary's reasonable discretion, to apply
any proceeds so collected either to the restoration of The Mortgaged
Property (but only if economically feasible), in the amounts, manner,
method and pursuant to such requirements and documents as Beneficiary
may require, or to The liquidation of The Indebtedness in accordance
with the provisions of Seclion.7.4 hereof.
8.3 Right to Rebuild. Subject to compliance with the terms
hereof and notwithstanding the provisions in Section 8.2 hereof, the
insurance proceeds will be made available to Grantor, and Grantor may
rebuild or restore the Mortgaged Property in the event of a casually so
long as (i) in Beneficiary's reasonable judgment the Mortgaged Property
can be rebuilt or restored in an economically feasible manner and (ii)
Grantor provides to Beneficiary a budget for the restoration of the
Mortgaged Property which budget shall set forth in such detail as
Beneficiary requires the cost of the work, the projected construction
timetable or schedule, end the source of funds to pay for the
restoration. If the costs of rebuilding exceed the amount of insurance
proceeds available to Beneficiary and Grantor, Grantor shall place into
an account to be controlled by Beneficiary the amount of additional
cash necessary to complete the restoration of the Mortgaged Property.
Grantor shall (x) provide to 8eneficiary plans and specifications and
all construction contracts to be used to rebuild the Mortgaged Property
and (y) deposit with Beneficiary all additional funds necesary to
complete the restoration.
8.4 Reserve for Tax Impositions and Insurance Premiums. At
Beneficiary's request, Grantor shall create a find or reserve for the
payment of all insurance premiums and Tax Impositions against or
affecting the Mortgaged Property by paying to Beneficiary, in each
calendar month (on the same day as the date of the monthly payments
under the Note) prior to the maturity of the Note, a sum equal to the
premiums that will next become due and payable on the insurance
policies covering Grantor, the Mortgaged Property or any part thereof
or such other insurance policies required hereby or by the Loan
Documents, plus Tax Impositions next due on the Mortgaged Property or
any part thereof as estimated by Beneficiary, less all sums paid
previously to Beneficiary therefore, divided by the number of months to
elapse before one month prior to the date when each of such premiums
and Tax Impositions will become due, such sums to be held by
Beneficiary without interest to Grantor, unless interest is required by
applicable law, for the purposes of paying such premiums and Tax
Impositions. Any excess reserve shall, al the discretion of
Beneficiary, be credited by Beneficiary on subsequent reserve payments
or subsequent payments to be made on the Note by the maker thereof, and
any deficiency shall be paid by Grantor to Beneficiary on or before the
date when Beneficiary demands such payment to be made, but in no event
after the xxxx when such premiums and Tax Impositions shall become
delinquent. In the event there exists a deficiency in such fund or
reserve at any time when Tax Impositions or insurance premiums are due
and payable, Beneficiary may, but shall not be obligated to, advance
the amount of such deficiency on behalf of Grantor and such amounts so
advanced shall become a part of the Indebledness, shall be immediately
due and payable, and shall bear interest at the Default Rate from the
date of such advance through and including the date of repayment.
Transfer of legal title to the Mortgaged Property shall automatically
transfer to the holder of legal title to the Mortgaged Property the
interest of Grantor in all sums deposited with Beneficiary under the
provisions hereof or otherwise.
8.5 Indemnity. If Beneficiary Is made, a party defendant to
any litigation concerning this Deed of Trust or The Mortgaged Properly
or any Interest Therein, or The occupancy thereof by Grantor, then
Grantor shall indemnify, defend, and hold harmless Beneficiary from all
liability, claim, less, cost, or expense by reason of such litigation,
Including without limitation attorneys' fees and expenses Incurred by
Beneficiary In any such litigation, whether or not any such litigation
is prosecuted to Judgment. If Beneficiary brings an action against
Grantor hereunder upon The occurrence of an Event of Default, Grantor
shall pay to Beneficiary, Beneficiary's attorneys' fees and expenses,
and the right to such attorneys, fees and expenses shall be deemed to
have accrued on the commencement of such action, and shall be
enforceable whether or not such action is prosecuted to Judgment. If
Grantor breaches any term of this Deed of Trust or if Beneficiary
believes it is necessary or desirable to take any action to protect or
enforce the lien or security interest hereby created in the Mortgagee
Property or the covenants herein or in the other Loan Documents,
Beneficiary may employ an attorney or attorneys to protect its rights
hereunder and thereunder, and In the event of such employment, Grantor
shall pay Beneficiary the attorneys' fees and expenses incurred by
Beneficiary, whether or not an action is actually commenced against
Grantor by reason of such breach and including, without limitation, a
judicial foreclosure action or a foreclosure proceeding pursuant to the
power of sale provided herein.
8.6 Subrogation. Grantor waives any and all right to claim,
recover, or subrogation against Beneficiary or its officers, directors,
employees, agents, attorneys, or representatives for loss or damage to
Grantor, the Mortgaged Property, Grantor's property or the property of
others under Grantor's control from any cause insured against or
required to be insured against by the provisions of the Loan Documents.
8.7 Waiver of Setoff. The Indebtedness, or any part thereof,
shall be paid by Grantor without notice, demand counterclaim, setoff,
deduction, or defense and without abatement, suspension, deferment,
diminution, or reduction by reason of: (i) any damage to, destruction
of, or any condemnation or similar taking of the Mortgaged Property:
(ii) any restriction or prevention of or interference with any use of
the Mortgaged Property; (iii) any title defect or encumbrance or any
eviction from The Mortgaged Property by superior title or otherwise;
(iv) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation, or other like proceeding relating
to Trustee, Beneficiary, or Grantor, or any action taken with respect
to this Deed of Trust by any trustee or receiver of Beneficiary or
Grantor, or by any court, any such proceeding; (v) any claim which
Grantor has or might have against Trustee or Beneficiary; or (vi) any
other occurrence whatsoever, whether similar or dissimilar to the
foregoing, whether or not Grantor shall have notice or knowledge of any
of the foregoing. Except as expressly provided herein, Grantor waives
all rights now or hereafter conferred by statute or otherwise to any
abatement. suspension, deferment, diminution, or reduction of the
Indebtedness.
8.8 Setoff. Beneficiary shall be entitled to exercise both The
rights of setoff and banker's lien, if applicable, against the interest
of Grantor in and to each and every account and other property of
Grantor which are in the possession of Beneficiary to the full extent
that Grantor is liable for the outstanding balance of the Indebtedness,
as provided in all of the Loan Documents.
8.9 Consent to Disposition. It is expressly agreed that
Beneficiary may predicate Beneficiary's decision to grant or withhold
consent to a Disposition on such xxxxx and conditions as Beneficiary
may require, in Beneficiary' sole discretion, including without
limitation (i)) consideration of the creditworthiness of the party to
whom such Disposition will be made and its management ability with
respect to the Mortgaged Property, (ii) consideration of whether the
security for repayment of the Indebtedness and the performance and
discharge of the Obligations, or Beneficiary's ability to enforce its
rights, remedies, and recourses with respect to such security, will be
impaired in any way by the proposed Disposition, (iii) an increase in
the rate of interest payable under the Note or any other change in the
terms and provisions of the Note and other Loan Documents, (iv)
reimbursement of Beneficiary for all costs and expense incurred by
Beneficiary in investigating the creditworthiness and management
ability of the party to whom such Disposition will be made and in
determining whether Beneficiary" security will be impaired by the
proposed Disposition, (v) payment to Beneficiary of a transfer fee to
cover the cost of documenting the Disposition in its records, (vi)
payment of Beneficiary's reasonable attorneys' fees in connection with
such Disposition, (vii) the express assumption of payment of the
Indebtedness and performance and discharge of the Obligations by the
party to whom such Disposition will be made (with or without the
release of Grantor from liability for such Indebtedness and
Obligations), (viii) the execution of assumption agreement,
modification agreements, supplemental loan documents, and financing
statements, satisfactory in form and substance to Beneficiary, and (ix)
endorsements to the extent available under applicable law) to any
existing mortgagee title insurance policies insuring Beneficiary's
liens and security interests covering the Mortgaged Property. In the
event Beneficiary approves a Disposition for which the consult of
Beneficiary is required, all references to Grantor in this Deed of
Trust or to the Borrower in the Loan Agreement shall no longer
reference any subsequently occurring act, condition or status of the
original Grantor or Borrower, but shall instead refer to the permitted
transferee.
8.10 Consent to Subordinate Mortgage. In the event of consent
by Beneficiary to the granting of a Subordinate Mortgage, or in the
event the above described right of Beneficiary to declare the
Indebtedness to be immediately due end payable upon the granting of a
Subordinate Mortgage without the prior written consent of Beneficiary
is determined by a court of competent jurisdiction to be unenforceable
under the provisions of any applicable IDW, Grantor will not execute or
deliver any Subordinate Mortgage unless (i) it shall contain express
covenants to the effect (a) that the Subordinate Mortgage is in all
respects unconditionally subject and subordinate to the lien and
security interest evidenced by this Deed of Trust and each term and
provision hereof; (b) that if any action or proceeding shall be
instituted to foreclose the Subordinate Mortgage (regardless of whether
the same is judicial proceeding or pursuant to a power of sale
contained therein), no tenant of any ponion of the Mortgaged Property
will be named as a party defendant, nor will any action be taken with
respect to the Mortgaged Property which would terminate any occupancy
or tenancy of the Mortgaged Property without the prior written consent
of Beneficiary; (C) that the rents and profits, if collected through a
receiver or by the holder of The Subordinate Mortgage, shall be applied
first to the Indebtedness, next to the payment of the Impositions, and
then to the performance and discharge of the Obligations; and (d) that
if any action or proceeding shall be brought to foreclose the
Subordinate Mortgage (regardless of whether The same is a judicial
proceeding or pursuant to a power of sale contained therein), written
notice of the commencement thereof will be given to Beneficiary
contemporaneously with the commencement of such action or proceeding;
and (ii) a copy thereof shall have been delivered to Beneficiary not
less than ten ( 10) days prior to the date of the execution of such
Subordinate Mortgage.
8.11 Contest of Certain Claims. Notwithstanding The provisions
of Sections 4.3, 4.5 or 4.12 hereof, Grantor shall not be in Default
for failure to satisfy any Legal Requirement or to pay or discharge any
Imposition or mechanic's or materialman's lien asserted against The
Mortgaged Property if, and so long as, (a) Grantor shall have notified
Beneficiary of same within five (5) days of obtaining knowledge
thereof; (b) Grantor shall diligently and in good faith contest the
same by appropriate legal proceedings which shall operate to prevent
the enforcement or collection of the same and the sale of the Mortgaged
Property or any part thereof, to satisfy the same; (c) Grantor shall
have furnished to Beneficiary a cash deposit, or an indemnity bond
satisfactory to Beneficiary with a surety satisfactory to Beneficiary,
in the amount of the Imposition or mechanic's or materialman's lien
claim, or with respect to a Legal Requirement, an amount determined by
Beneficiary in its sole and absolute discretion, plus a reasonable
additional sum to pay all costs, interest end penalties that may be
imposed or incurred in connection therewith, to assure payment or
performance of The mailers under contest and to prevent any sale or
forfeiture of the Mortgaged property or any part thereof, (d) Grantor
shall promptly upon final determination thereof satisfy any such Legal
Requirement or pay the amount of any such Imposition or claim so
determined, together with all costs, interest and Penalties which may
be payable in connection therewith; (e) The failure to satisfy any such
Legal Requirement or pay the Imposition or mechanic's or materialman's
lien claim does not constitute a deferral under any other deed of
trust, mortgage or security interest covering or affecting any part of
The Mortgaged Property; and (f) notwithstanding the foregoing, Grantor
shall immediately upon request of Beneficiary satisfy such Legal
Requirement (and if Grantor shall fails so, to do, Beneficiary may, but
shall not be required to, satisfy or cause to be satisfied, any such
Legal Requirement) or pay (and if Grantor shall fail so to do,
Beneficiary may, but shall not be required to, pay or cause to be
discharged or bonded against) any such Imposition or claim,
notwithstanding such contest, if in the reasonable opinion of
Beneficiary the Mortgaged Property shall be in jeopardy or in danger of
being forfeited or foreclosed. Beneficiary may pay over any such cash
deposit or part thereof to the claimant entitled thereto when a final
judgment is entered against the Grantor or the Mortgaged Property or
claimant commences foreclosure proceedings with respect to the
Mortgaged Property.
ARTICLE IX - ASSIGNMENT OF LEASES AND RENTS
9.1 Assignment. For Ten Dollars($10.00) and other good and
valuable consideration, including the indebtedness evidenced by the
Note, the receipt and sufficiency of which are hereby acknowledged and
confessed, Grantor has ASSIGNED, GRANTED, BARGAINED, SOLD, and
CONVEYED, and by These presents does ASSIGN, GRANT, BARGAIN, SELL and
CONVEY unto Beneficiary the Leases and the Rents subject only to the
Permitted Exceptions applicable thereto and The License (herein
defined) to be applied by Beneficiary in payment of the Indebtedness
and the performance and discharge the Obligations; TO HAVE AND TO HOLD
The Leases and the Rents unto Beneficiary, forever, and Grantor does
hereby bind itself, its successors, and assigns to warrant and forever
defend the title to the Leases and the Rents unto Beneficiary against
every person whomsoever lawfully claiming or to claim the same or any
part thereof; provided, however, that if Grantor shall pay or cause to
be paid The Indebledness as and when same shall become due and payable
and shall perform and discharge or cause to be performed and discharged
the obligations on or before the date same are to be performed and
discharged, then this assignment shall terminate and be of no further
force and effect, and all rights, titles, and interests conveyed
pursuant to this assignment shall become vested in Grantor without the
necessity of any further act or requirement by Grantor, Trustee, or
Beneficiary. Notwithstanding any provision of the Deed of Trust or any
other Loan Document which might be construed to the contrary, the
assignment and not merely a security interest.
9.2 Limited License. Beneficiary hereby grants to Grantor a
limited license (the "License") for so long as there is no Event of
Default, nonexclusive with The rights of Beneficiary reserved in
Section 9.4 hereof, to exercise and enjoy all incidences of The status
of a lessor of the Leases and the Rents, including without limitation,
the right to collect, demand, xxx for, attach, levy, recover, and
receive the Rents, and to give proper receipts, releases, and
acquittances therefor. Grantor hereby agrees to receive all Rents and
hold the same as a trust fund to be applied, and to apply the Rents so
collected, first to the payment of the Indebtedness then due, next to
the payment of the Impositions then due and then to the performance and
discharge of the Obligations then due. Thereafter, Grantor may use the
balance of the Rent collected in any manner not inconsistent with the
Loan Documents.
9.3 Enforcement of Leases. So long as the License is in
effect, Grantor shall (i) submit any and all proposed Leases utilizing
other than the form approved by Beneficiary pursuant to the Loan
Agreement (including the master lease and sublease utilized for
temporary executive apartment leases to) Beneficiary for approval prior
to the execution thereof, which approval shall not be unreasonably
withheld or delayed, (ii) duly and punctually perform and comply with
any and all representations, warranties, covenants, and agreements
expressed as binding upon the lessor under any Lease except as may be
limited by Grantor's ordinary course of business, (iii) maintain each
of the Leases in full force and effect during the term thereof, (iv)
appear in and defend any action or proceeding in any manner connected
with any of the Leases, (v) deliver to Beneficiary copies of all Leases
if and as requested by Beneficiary, and (vi) deliver to Beneficiary
such further information, and execute and deliver to Beneficiary such
further assurances and assignments, with respect to the Leases as
Beneficiary may from time to time reasonably request. Without
Beneficiary's prior written consent, which approval shall not be
unreasonably withheld or delayed, Grantor shall not (i) do or knowingly
permit to be done anything to impair the value of any of the Leases,
(ii) except for security or similar deposits, collect any of the Rent
more than one month in advance of the time when the same becomes due
under the terms of any Lease, (iii) discount any future accruing Rents,
(iv) amend, modify, or terminate any of the Leases except in the
ordinary course of business, or (v) assign or grant a security interest
in or to the License or any of the Leases and/or Rents. Non-material
modifications In existing leases need not be approved in advance by
Beneficiary.
9.4 No Merger of Estates. So long as any part of the
Indebtedness and the Obligations secured hereby remain unpaid and
unperformed or undischarged, the fee and leasehold estates to The
Mortgaged Property shall not merge but rather shall remain separate and
distinct, notwithstanding The union of such s either in Grantor
Beneficiary, any lessee, or any third party purchaser or otherwise.
9.5 Grantor's Indemnities. So long as the License is in
effect, Grantor shall Indemnify and hold harmless Beneficiary and
Trustee from and against any and all liability, loss, cost, damage, or
expense which Beneficiary may incur under or by reason of this
assignment except as a result of Beneficiary's gross negligence or
recklessness, or for any action taken by Beneficiary and/or Trustee
hereunder, or by reason of or In defense of any and all claims and
demands whatsoever which may be asserted against Beneficiary and/or
Trustee arising out of The Leases or with respect to the Rents. In the
event Beneficiary and/or Trustee incurs any such liability, loss, cost,
damage, or expense, the amount thereof together with all reasonable
attorneys' fees and interest thereon at the Default Rate shall be
payable by Grantor to Beneficiary and/or Trustee immediately, without
demand, and shall be deemed a part of The Indebtedness and secured
under Article ll hereof.
ARTICLE X - SECURITY AGREEMENT
10.1 Security Interest. This Deed of Trust (a) shall be
construed as a deed of trust on real property, and (b) shall also
constitute and serve as a "Security Agreement" on personal property
within the meaning of, and shall constitute until the grant of this
Deed of Trust shall terminate as provided in Article ll hereof, a first
and prior security interest under the Code as to property within the
scope thereof and in the state, where the Mortgaged Property is located
with respect to the Personalty, Fixtures, Contracts, Leases and Rents.
To this end, Grantor has GRANTED BARGAINED, CONVEYED, ASSIGNED,
TRANSFERRED, and SET OVER, and by these presents does GRANT BARGAIN,
CONVEY, ASSIGN, TRANSFER and SET OVER, unto Trustee and Beneficiary, a
first and prior security interest and all of Grantor's right, title and
interest in, to, under and with respect to the Personalty, Fixtures,
Contracts Leases, and Rents to secure the full and timely payment of
the indebtedness and the full and timely performance and discharge of
the obligations. It is the intent of Grantor, Beneficiary, and Trustee
that this Deed of Trust encumber all Leases and Rents, that all items
contained in the definition of "Leases" and "Rents" which are included
within the Code be covered by the security interest granted in This
Article X, and that all items contained in the definition of "Leases"
and "Rents" which are excluded from the Code be covered by the
provisions of Article ll and Article IX hereof.
10.2 Financing Statements. Grantor hereby agrees with
Beneficiary to execute and deliver to Beneficiary, in form and
substance satisfactory to Beneficiary, such "Financing Statement" and
such further assurances as Beneficiary may, from time to time,
reasonably consider necessary to create, perfect, and preserve
Beneficiary's security interest herein granted, and 8eneficiary may
cause such statements and assurances to be recorded and filed, at such
times and places as may be required or permitted by law to so create,
perfect, and preserve such security interest.
10.3 Fixture Filing. This Deed of Trust shall also constitute
a "fixture filing" for the purposes of the Code. All or part of The
Mortgaged Property are or are to become fixtures; information
concerning the security interest herein granted may be obtained from
the parties at the address of the parties set forth herein. For
purposes of the security interest herein granted, the address of debtor
(Grantor) is set forth in the first paragraph of this Deed of Trust and
the address of the secured party (Beneficiary) is set forth in Article
I hereof.
ARTICLE Xl - CONCERNING THE TRUSTEE
11.1 No Required Action. Trustee shall not be required to take
any action toward the execution and enforcement of the trust hereby
created or to institute, appear in, or defend any action, suit, or
other proceeding in connection therewith where, in his opinion, such
action would be likely to involve him in expense or liability, unless
requested so to do by a written instrument signed by Beneficiary and,
if Trustee so requests, unless: Trustee is tendered security and
indemnity satisfactory to Trustee against any and all cost, expense,
and liability arising therefrom. Trustee shall not be responsible for
the execution, acknowledgment, or validity of the Loan Documents, or
for the proper authorization thereof, or for the sufficiency of the
lien and security interest purported to be created hereby, and Trustee
makes no representation in respect thereof or in respect of the rights,
remedies, and recourses of Beneficiary.
11.2. Certain Rights. With the approval of Beneficiary,
Trustee shall have The right to take any and all of the following
actions: (i) to select, employ, and advise with counsel (who may be,
but need not be, counsel for Beneficiary) upon any matters arising
hereunder, including the preparation, execution, and interpretation of
the Loan Documents, and shall be fully protected in relying as to legal
matters on the advice of counsel, (ii) to execute any of the trusts and
powers hereof and to perform any duty hereunder either directly or
through his agents of attorneys, (iii) to select and employ, in and
about the execution of his 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 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 (iv) any and all other
lawful action as Beneficiary may instruct Trustee to take to protect or
enforce Beneficiary'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 Mortgaged Property for debts
contracted for or liability or damages incurred in the management or
operation of the Mortgaged Property. Trustee shall have the right to
rely on any instrument, document, or signature authorizing or
supporting any 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 expenses incurred by Trustee in
the performance of Trustee's duties hereunder and to reasonable
compensation for such Trustee's services hereunder as shall be
rendered. Grantor will, from time to time, pay the compensation due to
Trustee hereunder and reimburse Trustee for, and save Trustee harmless
against, any and all liability and expenses which may be incurred by
Trustee in the performance of Trustee's duties.
11.3 Retention of Money. All monies 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.
11.4 Successor Trustees. Trustee may resign by the giving of
notice of such resignation in writing or verbally to Beneficiary. If
Trustee shall die, resign, or become disqualified from acting in the
execution of this trust or if, for any reason, Beneficiary shall prefer
to appoint a substitute trustee or multiple substitute Trustees, or
successive substitute trustees or successive multiple substitute
trustees, to act instead of the aforenamed Trustee, Beneficiary shall
have full power to appoint a substitute trustee (or, if preferred,
multiple substitute trustees) in succession who shall succeed (and if
multiple substitute trustees are appointed, each of such multiple
substitute trustees shall succeed) to all the estates, rights, powers,
and duties of the aforenamed Trustee. Such appointment may be executed
by any authorized agent of Beneficiary, and if such Beneficiary be a
corporation and such appointment be executed in its behalf by any
officer of such corporation, such appointment shall be conclusively
presumed to be executed with authority and shall be valid and
sufficient without proof of any action by the board of directors or any
superior officer of the corporation. Grantor hereby ratifies and
confirms any and all acts which the aforenamed Trustee, or his
successor or successor in this trust, shall do lawfully by virtue
hereof. If multiple substitute Trustees are appointed, each of such
multiple substitute Trustees shall be empowered and authorized to act
alone without the necessity of the xxxxxx of the other multiple
substitute trustees, whenever any action or undertaking of such
substitute trustees is requested or required under or pursuant to this
Deed of Trust or applicable law.
11.5 Perfection of Appointment. Should any deed, conveyance,
or instrument of any nature be required from Grantor by any Trustee or
substitute Trustee to more fully and certainly vest in and confirm to
the trustee such estates, rights, powers, and duties, then, upon
request by The Trustee or substitute Trustee, any and all such deeds,
conveyance and instruments shall be made, executed, acknowledged, and
delivered and shall be caused to be recorded and/or filed by Grantor.
11.6 Succession Instruments. Any substitute Trustee appointed
pursuant to any of the provisions hereof shall, without any further
act, deed, or conveyance, become vested with all the estates,
properties, rights, powers, and trusts of its or his predecessor in the
rights hereunder with like effect as if originally named as Trustee
herein, but nevertheless, upon the written request of Beneficiary or of
the substitute Trustee, the Trustee ceasing to act shall execute and
deliver any instrument transferring to such substitute Trustee, upon
the trusts herein expressed, all the estates, properties, rights,
powers, and trusts of the Trustee so ceasing to act, and shall duly
assign, transfer and deliver any of the property and moneys held by
such Trustee to The substitute Trustee so appointed in the Trustee's
place.
11.7 No Representation by Trustee or Beneficiary. By accepting
or approving anything required to be observed, performed, or fulfilled
or to be given to Trustee or Beneficiary pursuant to the 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, neither Trustee nor
Beneficiary shall be deemed to have warranted, consented to, or
affirmed the sufficiency, legality, effectiveness, or legal effect of
the same, or of any term, provision, or condition thereof, and such
acceptance or approval thereof shall not be or constitute any warranty
or affirmation with respect thereto by Trustee or Beneficiary.
ARTICLE Xll - MISCELLANEOUS
12.1 Release. If the Indebtedness is paid in full in
accordance with the terms of this Deed of Trust, the Note, and the
other Loan Documents, and if Grantor shall well and truly perform each
and every of the Obligations to be performed and discharged in
accordance with the xxxxx of this Deed of Trust, the Note and the other
Loan Documents, then this conveyance shall income null and void and be
released at Grantor's request and expense, and Beneficiary shall have
no further obligation to make advances under and pursuant to the
provisions hereof or in the other Loan Documents.
12.2 Performance at Grantor's Expense. Grantor shall (i) pay
all legal fees incurred by Beneficiary in connection with the
preparation of the Loan Documents (including any amendments thereto or
consents, releases, or waivers granted thereunder); (ii) reimburse
Beneficiary, promptly upon demand, for all amounts expended, advanced,
or incurred by Beneficiary to satisfy any obligation of Grantor under
the Loan Documents, which amounts shall include all court costs,
attorneys' fees (including, without limitation, for trial, appeal, or
other proceedings), fees of auditors and accountants and other
investigation expenses reasonably incurred by Beneficiary in connection
with any such marten; and (iii) any and all other costs and expenses of
performing or complying with any and all of the obligations. Except to
the extent that costs and expenses are included within the definition
"Indebtedness," the payment of such costs and expenses shall not be
credited, in any way and to any extent, against any installment on or
portion of the indebtedness recovery of the fullest amount otherwise
called for
hereunder or thereunder. All sums paid or agreed to be paid to
Beneficiary for the use, forbearance, or detention of the Indebtedness
shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full stated term of the
Indebtedness until payment in full so that the rate or amount of
interest on account of the Indebtedness until payment in full so that
the rate or amount of interest on account of the Indebtedness does not
exceed the Maximum Lawful Rate from time to time in effect and
applicable to the Indebtedness for so long as the Indebtedness is
outstanding. In no event shall the provisions of Article 5069, ch. 15
of the Revised Civil Statutes of Texas (which regulated certain
revolving credit loan accounts and revolving triparty accounts) apply
to the loan evidenced by the Loan Documents and/or secured hereby.
Notwithstanding anything to the contrary contained herein or at any of
the other loan Documents, it is not the intention of Trustee and/or
Beneficiary to accelerate the maturity of any interest that has not
accrued at the time of such acceleration or to collect unearned
interest at the time of such acceleration.
12.12 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 Mortgaged Property, then, to the extent
of such funds so used, Beneficiary shall be subrogated to all of the
rights, claims, liens, titles. and interests existing against the
Mortgaged 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 Beneficiary and are tner6ed with the lien
and security interest created herein as cumulative security for the
repayment of the Indebtedness and the performance and discharge of the
obligations.
12.13 Rights Cumulate. Beneficiary shall have all rights,
remedies, and recourses granted in the Loan Documents and available at
law or in equity (including, without limitation, those granted by the
Code and applicable to the Mortgaged property or any portion thereof),
and the same (i) shall be cumulative and concurrent, (ii) may be
pursued separately, successively, or concurrently against Grantor or
others obligated for the Indebtedness or any part then of, or against
any one or more of them. or against the Mortgaged Property, at the sob
discretion of Beneficiary, (iii) may be exercised as often as occasion
therefor shall arise, it being agreed by Grantor that the exercise
discontinuance of the exercise of or failure to exercise any of the
same shall in no event be construed as a waiver o; release thereof or
of any other right, remedy, or recourse, and (iv) are intended to be,
and shall be, nonexclusive. All rights and remedies of Beneficiary
hereunder and under the other Loan Documents shall extend to any period
after the initiation of foreclosure proceedings, judicial or otherwise,
with respect to the Mortgaged Property.
12.14 Payments. Remittances in payment of any part of the
Indebtedness other than in the required amount in funds immediately
available at The place where The Note is payable shall not, regardless
of any receipt or credit issued therefor, constitute payment until the
required amount is actually received by Beneficiary in funds
immediately available at the place where the Note is payable (or such
other place as Beneficiary, in 8enefciuy's sole discretion, may have
established by delivery of written notice thereof to Grantor in
accordance with the provisions of Section 12.5 hereof and shall be made
and accepted subject to the condition that any check or draft may be
handled for collection in accordance with the practice of the
collecting bank or banks. Acceptance by Beneficiary of any payment in
an amount less than the amount then due shall be deemed an acceptance
on account only, and the failure to pay the entire amount then due
shall h and continue to be an Event of Default.
12.15 Exceptions to Covenants. Grantor stroll not be deemed to
be permitted to take any action or to fail to lake any action with
respect to any particular covenant or condition contained herein or in
any of the Loan Documents if The action or omission would result: in
The breach of any other covenant or condition contained herein or in
any of the Loan Documents which has not been specifically waived or
consented to by Beneficiary, nor shall Beneficiary be deemed to have
consented to any such act or omission if the same would provide cause
for acceleration of the Indebtedness as a result of the breech of any
other covenant or condition contained herein or in any of the Loan
Documents which has not been specifically waived or consented to by
Beneficiary.
12.16 Reliance. Grantor recognizes and acknowledges That in
entering into the loan transaction evidenced by the Loan Documents and
accepting this Deed of Trust, Beneficiary is expressly and primarily
relying on The truth and accuracy of the foregoing warranties and
representations set forth in Article lIl hereof without any obligation
to investigate the Mortgaged Property and Notwithstanding any
investigation of The Mortgaged Property by Beneficiary; that such
reliance exists on the part of Beneficiary prior hereto; that such
warranties and representations are a material inducement to Beneficiary
in making the loan evidenced by the Loan Documents and accepting of
this Deed of Trust; and that Beneficiary would not be willing to make
the loan evidenced by the Loan Documents and accept this Deed of Trust
in The absence of any of such warranties and representations.
12.17 Change of Security. Any part of the Mortgaged Property
may be released, regardless of consideration, by Beneficiary from time
to time without impairing, subordinating, or affecting in any way the
lien, security interest, and other rights hereof against the remainder.
The lien, security interest, and other rights granted hereby shall not
be affected by any other security taken for the Indebtedness or
Obligations, or any part thereof. The taking of additional collateral,
or the amendment, extension, renewal, or rearrangement of the
Indebtedness or Obligations, or any part Thereof, shall not release or
impair the lien, security interest, and other rights granted hereby, or
affect The liability of any endorser or guarantor or improve the right
of any junior lienholder; and this Deed of Trust, as well as any
instrument given to secure any amendment, extension, renewal, or
rearrangement of the Indebtedness or Obligations, or any part thereof,
shall be and remain a first and prior lien, except as otherwise
provided herein, on all of the Mortgaged Property not expressly
released until the Indebtedness is fully paid and the Obligations are
fully performed and discharged.
12.18 Headings. The Article, Section, and Subsection
entitlements hereof are inserted for convenience of reference only and
shall in no way alter, modify, or define, or be used In construing The
text of such Articles, Sections
or Subsections.
12.19 Renewal and Extension of Prior Liens. The indebtedness
evidenced by the Note is incurred partially in extension and renewal
(and not extinguishment) of the remaining unpaid indebtedness secured
by the following security documents u d all of the liens and security
interests of such security documents are hereby extended, renewed and
carried forward for the benefit of Beneficiary as additional security
for the payment of the Indebtedness and the performance of the
Obligations:
(a) Deed of Trust dated August 11, 1989, from Xxxx Xxxxxx Inc. to Xxxxxxx
X. Pennchaker Trustee, for the benefit of H. A. de Compiegne, Trustee,
recorded in Volume 682, Page 000, Xxxx xx Xxxxx Xxxxxxx, Xxxxxxx
Xxxxxx, Xxxxx.
(b) Deed of Trust Extension dated September 20, 1990 by end between Xxxx
Xxxxxx, Inc. and H. A. de Compiegne, Jr., Trustee, recorded in Volume
710, Page 18 of the Deed of Trust Records of Midland County Texas.
(c) Assumption and Extension dated October 2, 1995 by and between IFM
Investments, Inc. et al. and 11. A. de Compiegne, Jr., Trustee,
recorded in Volume 1347, Page 157 of the Official Records of Midland
County, Texas.
(d) Deed of Trust Extension dared December 1 1995 by and between IFM
Investments, Inc. et al. and H. A. de Compiegne, Jr., Trustee,
recorded in Volume 1347 Page 157 of the Official Records of Midland
County, Texas.
(e) Third Extension Agreement dated February 5, 1996 by and between IFM
Investments, Inc. et al. and H. A. de Compiegne, Jr., Trustee,
recorded in Volume 1357, Page 129 of the Official Records of Midland
County, Texas.
(f) Fourth Extension Agreement dated March 29, 1996 by and between IFM
Investments, Inc., et al. and H. A. de Compiegne, Jr., Trustee,
recorded in Volume 1369, Page 40 of the Official Records of Midland
County, Texas.
(g) Fifth Extension Agreement dated March 29, 1996 by and between IFM
Investments, Inc. et al. and H. A. de Compiegne, Jr., Trustee,
recorded in Volume 1369, Page 40 of the Official Records of Midland
County Texas.
(h) Sixth Extension Agreement dated August 27, 1996 by and between IFM
Investments, Inc., et al. and H. A. de Compiegne, Jr., Trustee,
recorded in Volume 1405, Page 130 of the Official Records of Midland
County, Texas.
12.20 Entire Agreement; Amendment. THIS DEED OF TRUST AND THE
OTHER LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL RELATING
TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED OR
VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL
AGREEMENTS AMONG THE PARTIES HERETO. The provisions of this Agreement
and the Loan Documents may be amended or waived only by an instrument
in writing signed by the Grantor and Beneficiary.
EXECUTED as of the date first above written.
GRANTOR:
IFM INVESTMENTS, INC.
By: /s/ Xxxxxxx Xxxxxxx
Printed Name: Xxxxxxx Xxxxxxx
Title: Agent & Attorney
THE STATE OF TEXAS
COUNTY OF MIDLAND
The foregoing instrument was ACKNOWLEDGED before me this 27th day of
September, 1996, by /s/ Xxxxxxx Xxxxxxx, Agent & Attorney of Fact. of IFM
INVESTMENTS, INC., a Texas corporation, on behalf of said corporation.
List of Attachments:
Exhibit "A" - Land Description Exhibit "B" - Permitted
Exceptions PREPARED IN THE LAW OFFICE OF:
XXXX & XXXX, L.L. P.
000 X. Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
(Xxxxxxx X. Xxxx, Xx.)
AFTER RECORDING RETURN TO:
XXXX & XXXX, L.L.P.
EXHIBIT "A"
Land Description
BEING LOT TWO (2), BLOCK ONE (1), CORPORATE PLAZA, an addition to the City
of Midland, Midland County, Texas, according to the map or plat thereof of
record in Cabinet D, Page 65, Plat Records of Midland County, Texas
EXHIBIT "B"
Land Descriptions
1. Save and Except: All oil, gas. and other minerals in, on, under and
that may be produced from said land and the rights of owners incident
thereto, as reserved in Deed from Xxxx Xxxxxxxx, Trustee to Xxxx X.
Xxxxxx, et ux dated January 22, 1980, recorded in Volume 673, Page
682, Deed Records of Midland County, Texas.
2. Easement from Xxxx X Xxxxxx to TESCO, dated August 25, 1982 recorded
in Volume 764, Page 197, Deed Records of Midland County, Texas.
3. Utility Easement from Xxxx Xxxxxx to the City of Midland, dated April
22,1983 recorded in Volume 780, Page 146, Deed Records of Midland
County, Texas.
4. Utility Easement from Xxxx Xxxxxx to the City of Midland, dated August
2, 1983, recorded in Volume 794 Page 392, Deed Records of Midland
County, Texas.
5. Building setback, as per plat of record in Cabinet D, Page 65, Plat
Records of Midland County, Texas.
6. Channel Easement from R X. Xxxxxx, et al to the State of Texas, dated
January 7, 1944, recorded in Volume 77, Page 497 of the Deed Records
of Midland County, Texas.
TO BE FILED IN TIIE UNIFORM COMMERCIAL CODE RECORDS OF
THE SECRETARY OF THE STATE OF TEXAS
FINANCING STATEMENT
This instrument is prepared as, and is intended to be, a Financing
Statement, complying with the formal requisites therefor, as set forth in
the Texas Business and Commerce Code, Article 9 (also known as the Texas
Uniform Commercial Code Secured Transactions), and, in particular, Section
9.402 thereof.
1. The name and address of the debtor ("Debtor") are:
IFM Investments, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx 00000X (D ~
2. The namo and address of the secured party
("Secured Party") are:
Midland American Dank
000 X. Xxxxx
Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxx
3. This Financing Statement coven the following types of
collateral ("Collateral"):
The items described in the Schedule of Collateral
attached hereto and incorporated herein by reference
for all purposes, as the same relate to the land
described in "Exhibit "A" attached hereto and the
improvements thereon of thereto (collectively, the
"Mortgaged Property").
4. Proceeds of the Collateral are also covered.
DATED as of the 27th day of September, 1996.
SIGNATURE OF DEBTOR:
IFM INVESTMENTS, INC.
By: /S/Xxxxxxx Xxxxxxx
Printed Name: Xxxxxxx Xxxxxxx
Title: Agent & Attorney
SIGNATURE OF SECURED PARTY:
MIDLAND AMERICAN BANK
By: /S/Xxxx X. Xxxxxx
Printed Name: Xxxx X. Xxxxxx
Title: Vice President
When filed, return to:
Xxxxxxx X. Xxxx, Xx.
Xxxx & Xxxx, L.L.P.
000 X. Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
1. Contracts: All of the right, title, and interest of Debtor
in, to, and under any and all (i) contracts for the purchase of all or
any portion of the Mortgaged Property, whether such Contracts are now
or at any time hereafter existing, including but without limitation,
any and all xxxxxxx money or other deposits escrowed or to be escrowed
or letters of credit provided or to be provided by the purchasers under
the Contracts, including all amendments and supplements to and renewals
and extensions of the Contracts at any time made, and together with all
payments, earnings, income, and profits arising from sale of all or any
portion of the Mortgaged Property or from the Contracts and all other
sums due or to become due under and pursuant thereto and together with
any and all xxxxxxx money, security, letters of credit or other
deposits under any of (he Contracts; (ii) contracts, licenses, permits,
and rights relating to living unit equivalents for water, wastewater,
and other utility services whether executed, granted, or issued by a
private person or entity, or a governmental or quasi-governmental
agency, which are directly or indirectly related to, or connected with,
the development of the Mortgaged Property, whether such contracts,
licenses, and permits are now or at any time thereafter existing,
including without limitation, any and all rights of living unit
equivalents with respect to water, wastewater, and other utility
services, certificates, licenses, zoning variances, permits, and
no-action letters from each governmental authority required: (a) to
evidence compliance by Debtor and all improvements constructed or to be
constructed on the Mortgaged Property with all legal requirements
applicable to the Mortgaged Property, and (b) to operate The Mortgaged
Property AS a commercial and/or residential project; (iii) any and all
right, title, and interest Debtor may have in any financing
arrangements relating to the financing of or the purchase of all or any
portion of The Mortgaged Property by future purchaser; and (iv) all
other contracts which in any way relate to the use, enjoyment,
occupancy, operation, maintenance, or ownership of the Mortgaged
Property (save and except any and all leases, subleases or other
agreements pursuant to which Debtor is granted a possessory interest in
the Land), including but not limited to maintenance agreements, and
service contracts.
2. Fixtures: All materials, supplies, equipment, systems,
apparatus, and other items now owned or hereafter acquired by Debtor
and now or hereafter attached to, installed in, or used in connection
with (temporarily or permanently) any of the Mortgaged Property, which
are now owned or hereafter acquired by Debtor and are now or hereafter
attached to the Mortgaged Property, and including but not limited to
any and all partitions, dynamos, window screens and shades, draperies,
rugs and other floor coverings, awnings, motors, engines, boilers,
furnaces, pipes, cleaning, call and sprinkler systems, fire
extinguishing apparatus and equipment, water tanks, swimming pools,
heating, ventilating, refrigeration, plumbing, laundry. lighting,
generating, cleaning, waste disposal, transportation (of people or
things, including but not limited to, stairways, elevator, escalators,
and conveyor), incinerating, air conditioning and air cooling equipment
and systems, gas and electric machinery, appurtenances and equipment,
disposals, dishwasher, refrigerator and ranges, recreational equipment
and facilities of all kinds, and water, au, electrical, storm and
sanitary sewer facilities, and all other utilities whether or not
situated in easements, together with all accessions appurtenances,
replacements, betterments, and substitutions for any of the foregoing
and this proceeds thereof.
3. Leases: Any and all leases, master leases, subleases, licenses,
concessions, or other agreements (written or oral, now or hereafter in
e(effect) which grant to third panics a possessory interest in and to,
or the right to use, all or any part of the Mortgaged Property,
together with all security and other deposits or payments made in
connection therewith.
4. Minerals: All substances in, on, or under the Mortgaged Properly which
are now, or may become in the future, intrinsically valuable, that is,
valuable hl themselves, and which now or may be in the future enjoyed
through extraction or removal from the Mortgaged Property, including
without limitation oil, gas, and all other hydrocarbons, coal, lignite,
carbon dioxide and nil other nonhydrocarbon gases, uranium and all
other radioactive substances, and gold, silver, copper, iron and all
other metallic substances or ores, upon extraction or removal from the
Mortgaged Property.
5. Personalty:: All of the right title, and interest of Debtor in and to
(i) furniture, furnishings, equipment, machinery, goods (including,
but not limited to, crops, farm products, timber and timber to be cut,
and extracted minerals); (ii) general intangibles, notes, chattel
paper, money, insurance proceeds accounts contract and subcontract
rights trademarks, trade names, inventory; (iii) all refundable,
returnable, or reimbursable fees, deposits or other funds or evidences
of credit or indebtedness deposited by or on behalf of Debtor with any
governmental agencies, boards, corporations, provider of utility
services, public or private, including specifically, but without
limitation, all refundable, returnable, or reimbursable tap fees,
utility deposits, commitment settlements, or compensation heretofore
made or hereafter to be made by any governmental authority pertaining
to the mortgaged Property or the Fixtures, Contracts, or Personalty,
but not limited to those for any vacation of, or change of grade in,
any streets affecting the Mortgaged Property and those for municipal
utility district or other utility costs incurred or deposits made in
connection with the Mortgaged Property; and (iv) all outer personal
property of any kind or character as defined in and subject to the
provisions of the Code (Article 9 - Secured Transactions); any and all
of which are now owned or hereinafter acquired by Debtor, and which
are now or hereafter situated in, on, or about the Mortgaged Property,
or used in or necessary to the complete and proper planning,
development, construction, financing, use, occupancy, or operation
thereof, or acquired (whether delivered to The Mortgaged Property
stored elsewhere) for use in or on the Mortgaged Property, together
with all accessions, replacements, and substitutions thereto or
therefor and the proceeds thereof.
6. Rents: All of the rents, revenues, income, proceeds, profits, security
and other type of deposits (after Debtor acquires title thereto), and
other benefits paid or payable by parties to a contract and/or lease,
other than Debtor for using, leasing, licensing, possessing, operating
from, residing in, selling, or otherwise enjoying all or any portion of
the Mortgaged Property.
BEING LOT TWO (2), BLOCK ONE (1), CORPORATE PLAZA, an addition to the
City of Midland, Midland County, Texas, according to the map or plat
thereof of record in Cabinet D, Page 65, Plat Records of Midland
County, Texas l
TO BE FILED IN THE APPROPRIATE COUNTY RECORDS OF MIDLAND COUNTY
FINANCING STATEMENT
This instrument is prepared as, and is intended to be, a Financing
Statement, complying with the formal requisites therefor, as set forth
in the Texas Business and Commerce Code, Article 9 (also known as the
Texu Uniform Commercial Code Secured Transaclions), and, in particubr,
Section 9.402 thereof.
I. The name and address of the debtor ("Debtor") are:
IFM Investments, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx 00000
2. The name and address of the secured party ("Secured Party") are:
Midland American Bank 000 X. Xxxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxx
3. The Financing Statement covers the following types of collateral
("Collateral"):
The items described in the Schedule of Collateral attached hereto and
incorporated herein by reference for all purpose, as the same relate to
the land described h Exhibit "A" attached hereto and the Improvements
thereon or thereto (collectively, the "Mortgaged Property").
4. Proceeds of the Collateral are also covered.
DATED as of the 271b day of September, 1996.
SIGNATURE OF DEBTOR:
IFM INVESTMENTS, INC.
By: /s/ Xxxxxxx Xxxxxxx
Printed Name: Xxxxxxx Xxxxxxx
Title: Agent & Attorney
SIGNATURE OF SECURED PARTY:
MIDLAND AMERICAN BANK
By: /s/ Xxxx X. Xxxxxx
Printed Name: Xxxx X. Xxxxxx
Title: Vice President
When filed, return to:
Xxxxxxx X. Xxxx, Xx.
Xxxx & Xxxx, L.L.P.
000 X. Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
SCHEDULE OF COLLATERAL
I. Contracts: All of the right, title, and interest of Debtor in, to, and under
any and all (i) contracts for the purchase of all or any portion of the
Mortgaged Property, whether such Contracts are now or at any time hereafter
existing, including but without limitation, any and all xxxxxxx money or other
deposits escrowed or to be escrowed or letters of credit provided or to be
provided by the purchasers under the Contracts, including all amendments and
supplements to and renewals and extensions. of the Contracts at any time made,
and together with all payments, earnings" income, and profits arising from sale
of all or any portion of the Mortgaged Property or from the Contracts and all
other sums due or to become due under and pursuant thereto and together with any
and all xxxxxxx money, security, letters of credit or other deposits under any
of the Contracts; (ii) contracts, licenses, permits, and rights relating to
living unit equivalents for water, wastewater, and other utility services
whether executed, granted, or issued by a private person or entity, or a
govemmental or quasi-govemmental agency, which are directly or indirectly
related to, or connected with the development of the Mortgaged Property, whether
such contracts, licenses, and permits are now or at any time; thereafter
existing, including without limitation, any and all right5 of living unit
equivalents with respect to water, wastewater, and other utility services,
certificates, licenses, zoning variances, permits, and no action letters from
each governmental authority required: (a) to evidence compliance by Debtor and
all improvements constructed or to be constructed on the Mortgaged Property with
all legal requirements applicable to the Mortgaged Property, and (b) to operate
the Mortgaged Property as a commercial and/or residential project; (iii) any and
all right, title, and interest Debtor may have in any financing arrangements
relating to the financing of or the purchase of all or any portion of the
Mortgaged Property by future purchasers; and (iv) all other contracts which in
any way relate to the use, enjoyment, occupancy, operation, maintenance, or
ownership of the Mortgaged Property (save and except any and all leases,
subleases or other agreements pursuant to which Debtor is granted a possessory
interest in the Land1 including but not limited to maintenance agreement, and
service contracts.
2. Fixtures: All materials, supplies, equipment, systems, apparatus, and
other items now owned or hereaner acquired by Debtor and now or hereafter
attached to, installed in, or used in connection with (temporarily or
permanently) any of the Mortgaged Property, which are now owned or hereafter
acquired by Debtor and are now or hereafter attached to the Mortgaged Property,
and including but not limited to any and all partitions, dynamos, window screens
and shades, draperies, rugs and other floor coverings, awnings, motors, engines,
boilers, furnaces, pipes, cleaning, call and sprinkler systems, fire
extinguishing apparatus and equipment, water tanks, swimming pools, heating,
ventilating, refrigeration, plumbing, laundry, lighting, generating, cleaning,
water disposal, transportation (of people or things, including but not limited
to, stairways, elevators, escalator,` and conveyors), incinerating, air
conditioning and air cooling equipment and systems, gas and electric machinery,
appurtenances and equipment, disposals, dishwashers, refrigerators and ranges,
recreational equipment and facilities of all kinds, and water, gas, electrical,
storm and sanitary sewer facilities, and all other utilities whether or not
situated in easements, together with all accession,` appurtenances,
replacements, betterments, and substitutions for any of the foregoing and the
proceeds thereof.
3. Leases: Any and all leases, master leases, subleases, licenses,
concessions, or other agreements (written or oral, now or hereafter in effect)
which grant to third parties a possessory interest in and to, or the right to
use all or any part of the Mortgaged Property, together with all security and
other deposits or payments made in connection therewith.
4. Minerals: All substances in, on, or under the Mortgaged Property which
are now, or may become in the future, intrinsically valuable, that is, valuable
in themselves, and which now or may be in the future enjoyed through extraction
or removal from the Mortgaged Property, including without limitation oil, au,
and all other hydrocarbons, coal, lignite, carbon dioxide and all other
nonhydrocarbon gases, uranium and all other radioactive substances, and gold,
silver, copper, iron and ell other metallic substances or ores, upon extraction
or removal from the Mortgaged Property.
5. Personality: All of the right, title and interest of Debtor in and unto
(i) furniture, furnishings, equipment, machinery, goods (including, but not
limited to, crops, farm produce, timber and timber to be cut, and extracted
minerals); (ii) general intangibles, notes, chattel paper, money, insurance
proceeds accounts contract and subcontract rights trademarks, trade names,
inventory; (iii) all refundable, returnable, or reimbursable fees, deposits or
other funds or evidences of credit or indebtedness deposited by or on behalf of
Debtor with any govemmental agencies, boards corporations, providers of utility
services, public or privat4 including specifically, but without limitation, all
refundabl4 returnable, or reimbursable tap fees, utility deposits, commitment
settlements, or compensation heretofore made or hereafter to be made by any
govemmental authority pertaining to the mortgaged Property or the Fixtures,
Contract, or Personalty, including but not limited to those for any vacation of,
or change of grade in, any streets affecting the Mortgaged Properly and those
for municipal utility district or other utility costs incurred or deposits made
in connection with the Mortgaged Property; and (iv) all other personal property
of any kind or character u defined in and subject to the provisions of the Code
(Article 9 - Secured Transactions); any and all of which are now owned or
hereinafter acquired by Debtor, and which are now or hereafter situated in, on,
or about the Mortgaged Property, or used in or necessary to the complete and
proper planning, development, construction, financing, use, occupancy, or
operation thereof, or acquired (whether delivered to The Mortgaged Properly or
stored elsewhere) for use in or on the Mortgaged Property, together with all
accessions, replacements, and substitutions thereto or therefor and the proceeds
thereof.
6. Rents: All of the rents, revenues, income, proceeds, profit, security
and other types of deposits (after Debtor acquires title thereto), and other
benefits paid or payable by panics to a contract and/or lease, other than Debtor
for using, leasing, licensing, possessing, operating from, residing in, selling,
or otherwise enjoying all or any portion of the Mortgaged Property.
COLLATERAL
SAFE KEEPING DEPARTMENT
5077
Midland American Bank
000 X. Xxxxx - Xxxxx 000 - Xxxxxxx, Xxxxx 00000
RECEIVED OF IFM INVESTMENTS, INC.
9-30-96
Certificate #2063 for 50,000 shares of HealthTech International, Inc. stock.
The within receipt is evidence that the securities described were held
by Midland American Bank, Midland, Texas, at the date hereof, but said
securities may be delivered to the record owner upon his receipt
therefor without the surrender hereof, and this receipt shall no be
deemed to be conclusive as to the holding of any securities at any time
subsequent to its date.
Received the above described Securities
Midland American Bank
By: /s/ Xxxxxxxxx X. Wales
Assistant Cashier
COLLATERAL
SAFE KEEPING DEPARTMENT
Midland American Bank
5 0 7 6
Received of IFM INVESTMENTS, INC. d/b/a RESULTS-MIDLAND
Midland American Bank Certificate of Deposit Y9893 in the amount of
$100,000.00 dated 9-27-96 maturing 10-1-99 and subsequent renewals.
The within receipt is evidence that the securities described were held
by MIDLAND AMERICAN BANK, MIDLAND TEXAS , at the date hereof, but said
securities may be delivered to the record owner upon his receipt
therefor without the surrender hereof, and this receipt shall not be
deemed to be conclusive as to the holding of any securities at any time
subsequent to its date.
Received the above described securities
Midland American Bank
By: Xxxxxxxxx X. Wales
Assistant Cashier
ORIGINAL NOT NEGOTIABLE
PARTIV
ITEM 14. PARAGRAPH 3
EXHIBIT TABLE: SECTION 10
MATERIAL CONTRACTS
EXHIBIT 3(c)
EXTENSION AND MODIFICATION AGREEMENT
STATE OF TEXAS
KNOW ALL PERSONS BY THESE PRESENTS:
COUNTY OF TARRANT
This Extension and Modification Agreement (this "Agreement") is made
and entered into to be effective as of September 30, I996 (the
"Effective Date") by and between WD LIQUIDATING CORPORATION, a
California corporation (formerly known as Xxxxxxx-Dome Energy
Corporation, a California corporation) ("Lender"), doing business at
0000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxx, Xxxxxxxxxx 00000, acting by
and through its duly authorized officer, and RESULTS INTERNATIONAL,
INC., a Nevada corporation (formerly known as HealthTech International
Inc., a Nevada corporation, formerly known as USA Health Technologies,
Inc., a Nevada corporation) ("Borrower"), doing business at 0000 X. Xxx
Xxxxx Xxxxx, Xxxx Xxxxxxx 00000, acting by and through its duly
authorized officer.
WITNESSETH:
RECITALS
A. Lender is the legal and equitable owner and holder of that certain
Real Estate Lien Note (the "Note") dated September 29, 1995 in the
original principal amount of Five Hundred Thousand and No/100 Dollars
($500,000). executed by Borrower, payable to the order of lender, the
payment of the Note being secured by the vendor's lien retained in
that certain Special Warranty Deed with Vendor's Lien (the "Deed")
dated September 29, 1995, executed by Lender in favor of Borrower,
filed for record in the Office of the County Clerk of Tarrant County,
Texas under Instrument No. D195184466 (Volume 12129, Page 0849) of the
Real Property Records of Tarrant County, Texas, and additionally
secured by the Deed of Trust, Security Agreement and Assignment of
Rents (the "Deed of Trust") dated September 29, 1995 executed by
Borrower to Xxxxxxx X. Xxxxxxxxxx, Trustee, for the benefit of lender.
the Deed of Trust being filed for record in the Office of the County
Clerk of Tarrant County, Texas under Instrument No. D1951 84467
(Volume 12129, Page 0857) of the Real Property Records of Tarrant
County, Texas, encumbering, among other property, certain real
property located in Tarrant County, Texas. as described in the Deed of
trust and as more particularly described on Exhibit "A" attached
hereto and incorporated herein by reference for all purposes (the
"Property").
B. The Note, the vendor's lien created in the Deed, the Deed of Trust,
this Agreement and any and all other documents and instruments
executed and delivered by Borrower in connection therewith, as
modified hereby, are hereafter collectively referred to as the "Loan
Documents", and the loan established by Lender, as evidenced by the
Loan Documents, is hereafter referred to as the "Loan". `
C. Lender and Borrower have agreed to renew and extend the maturity date
of the Note and to modify the Loan Documents pursuant to the terms and
conditions set forth in this Agreement.
D. Borrower has executed and delivered this Agreement to, among other
things, acknowledge that the liens and security interests created
under the Loan Documents are valid and subsisting, notwithstanding the
renewal and extension of the Loan, as evidenced by this Agreement.
E. Borrower hereby expressly acknowledges that it will derive a direct
benefit from the renewal and extension. the Loan, as evidenced by this
Agreement.
AGREEMENTS
NOW, THEREFORE. for and in consideration of the terms of the foregoing
Recitals, the terms of this Agreement and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Lender and
Borrower hereby agree as follows:
1. The foregoing Recitals are incorporated in this Agreement to the same
extent as if they had been herein stated in full.
2. As of the Effective Date, the outstanding unpaid principal balance of
the Note is Five Hundred Thousand and No/100 Dollars ($500,000), and the current
interest rate thereon is nine and one-half percent (9.5%) per annum.
3. Notwithstanding the terms of the Note or any other Loan Document to the
contrary, the Note is hereby renewed, extended and modified as follows
a. Borrower hereby promises to pay to Lender the principal sum of Five
Hundred Thousand and No/100 Dollars ($500,000), together with accrued
interest from the Effective Date on the principal balance from time to
time remaining unpaid prior to default or maturity at the rate of nine
and one-half percent (9.5%) per annum; provided, however. that such
interest shall in no event ever exceed the Maximum Lawful Rate, as such
term is defined in the Note, calculated on a 365-day basis for all
purposes. The Note shall be due and payable as follows:
(i) On or before the close of business on Monday, October 21, 1996,
Borrower shall deliver to Lender an amount equal to all accrued
interest and applicable late charges for ~e period firon1 September 1,
1996 through October 15, 1996, the receipt of which is hereby
acknowledged by Lender.
(ii)On or before the close of business on Friday, November 1, 1996,
Borrower shall deliver to Lender the sum of $25,000 (the "Extension Fee"),
provided that such amount, when added to all other amounts charged or paid
under the Note that are deemed to be interest, shall not exceed the Maximum
Lawful Rate. The Extension Fee is a non-refundable fee for Lender's
agreement to modify and extend the term of the Note; except, however, if
the Note is paid in full on or before January 15, 1997, the Extension Fee
shall be applied in full to the then remaining principal balance of the
Note . (iii) Installments of accrued interest at the rate of nine and
one-half percent (9.5%) per annum shall be due and payable by Borrower on
the first day of each month commencing November 1, 1996, and continuing on
the first day of each succeeding month thereafter, to and including April
1, 1998. (iv)If the Note is not pan' in full on or before January 15, 1997,
then installments of principal on the Note shall be due and payable as
follows:
Due Date Principal Amount
January 16, 1997 $100,000
April 16, 1997 $50,000
July 16, 1997 $100,000
April l, 1998 Remaining unpaid principal balance
(v) The principal balance of the Note, all accrued but unpaid interest
thereon, and all other amounts due and owing thereunder or under any of the
other Loan Documents, shall be due and payable on April I, 1998, or on such
earlier date as the maturity thereof may be accelerated at the option of
Lender due to an event of default under the Note or a default under any
other Loan Document.
b. Lender and Borrower agree that Lender's address for payment of all
installments of principal and interest on the Note is as follows: WD
Liquidating Corporation 0000 Xxxxxx Xxxxxx, Xxxxx x000 Xxx Xxxxx,
Xxxxxxxx0xx 00000
4. Borrower and Lender agree that the Deed and the Deed of Trust are hereby
amended to correct the legal description of the Property, which is correctly
described on Exhibit "A" attached hereto and made a part hereof for all
purposes.
5. On or before the close of business on Friday, November 1, 1996, Borrower
shall deliver to Lender an amount equal to Three Thousand and No/l00 Dollars
($3,000) to reimburse Lender for attorneys' fees it has incurred in connection
with Borrower's default under the Note, posting the Property for foreclosure
sale and preparation of this Agreement.
6. Concurrently with its execution of this Agreement, Borrower shall, at
its sole cost and expense, deliver or cause to be delivered to Lender (i) an
Endorsement, issued through Trinity-Western Tilte Company in Fort Worth, Texas
under Procedural Rule P-9.b.(3) promulgated by the Texas State Board of
Insurance under the Texas Title Insurance Act, to the existing Mortgagee Policy
of Title Insurance Xx. 000000 dated October 9, 1995 issued by Alamo Title
Insurance of Texas in favor of Lender in the amount of Five Hundred Thousand and
no/100 Dollars ($500,000), insuring the first lien created by the Deed of Trust,
as modified hereby, covering the Property, to the effect that the insurer will
not deny coverage based on this Agreement; and (ii) such documentation as Lender
may reasonably request to evidence Borrower's change of corporate name from USA
Health Technologies. Inc. to HealthTech International, Inc. to Results
International, Inc., and the authority of the person executing this Agreement on
behalf of Borrower.
7. As additional security for Borrower's payment of the Note, concurrently
untie the execution of this Agreement, Borrower shall deliver to Lender Two
Hundred Thousand (200,000) shares of R-l44 common stock of Results
International. Inc., which, in the event of a default by Borrower under the
terms of the Loan Documents, will become unrestricted ant can be sold by Lender,
the proceeds of which sale shall be applied to payment of the unpaid
1ndebtedr~css due and owing under the Loan Documents. Lender hereby reserves all
rights available to it under the Loan Documents and under applicable law to
claim and proceed against Borrower for any deficiency, if any, which may be
created after the stock delivered to Lender is sold and applied against all
indebtedness due and owing under the terms of the Loan Documents.
8. As additional consideration for Lender's extension and modification of
the Loan and the Loan Documents, as evidenced hereby, and the other benefits
received and acknowledged by Borrower hereunder, Borrower does hereby RELEASE,
RELTNQUISH and forever DISCHARGE Lender and Lenders successors, assigns, agents,
officers, directors, employees, counsel and legal representatives of and from
any and all claims, demands, actions and causes of action, of any and every kind
or character, whether known or unknown, which Borrower may have against Lender
and its successors, assigns, agents, officers, director,, employees, counsel and
representatives as of the Effective Date, arising out of or with respect to any
and all transactions relating to the Loan Documents or the Property, Including.
but not limited to, any loss, expense and/or detriment of any kind or character
growing out of or in any way connected with or in any way resulting from the
acts, actions or o7mssions of Lender and its successors, assig7ns, agents,
officers, directors, employees, couns7el. and legal representatives including,
but not limited to, any loss, cost or damage in connection with any breach of
4
fiduciary duty, breach of any duty of fair dealing, breach of confidence,
breach of funding commitment, undue influence, duress, economic coercion,
conflict of interest, negligence, bat faith, malpractice, intentional or
negligent infliction of mental distress, tortious interference with corporate
governance or prospective business advantage, breach of contract, deceptive
trade practices, libel. slander, conspiracy, any claim for wrongfully
accelerating the Note or attempting to foreclose on any collateral securing the
Note or the charging, contracting for, taking, reserving, collecting or
receiving of interest in excess of the highest lawful rate applicable to the
Loan. Any and all of such claims of Borrower not specifically released herein of
any nature, if any, are hereby unconditionally assigned to Lender. Borrower
hereby represents, warrants and declares that it has not assigned to any third
party any claims, rights or causes of action in any manner arising under or
relating to the Loan Documents.
9. Borrower hereby agrees and acknowledges that it is well and truly
indebted to L0'der pursuant to the terms of the Loan Documents. Borrower hereby
acknowledges and agrees that the liens, security interests and assignments
arising under the Loan Documents are valid and subsisting first and prior liens,
security interests and assignments securing the Loan; there does not exist any
other lien, security interest, assignment or other encumbrance that is or will
be superior to the liens, security interests and assignments securing the Loan;
and the priority, validity and perfection of the liens, security interests and
assignments created under the loan Documents are not diminished in any respect
by this Agreement.
10. Borrower, by its execution of this Agreement, hereby declares that it
has no setoffs, counterclaims, defenses or other causes of action against Lender
arising out of the Loan Documents, the Property or otherwise and, to the extent
any such setoffs, counterclaims, defenses or other causes of action may exist,
whether known or unknown, such items are hereby waived by Borrower.
11. This Agreement is a modification of the Note and the other Loan
Documents, and is not a novation of the same and, except as expressly modified
hereby, all terms and provisions of the Note and all other Loan Documents shall
be and shall remain unchanged, and the Note and all other Loan Documents arc
hereby ratified and confirmed in all respects and shall be and shall remain in
full force and effect, enforceable in accordance with their respective terms,
subject to the terms hereof. Notwithstanding the foregoing, in the event of any
inconsistency between this Agreement and the other Loan Documents, the terms ant
conditions of this Agreement shall be deemed to control, and the teens of this
Agreement shall supersede any inconsistent terms contained in such other Loan
Documents.
12. Borrower shall execute such other documents as may be necessary or
required to effect the transactions contemplated herein ant to protect the
priority and validity of the liens, security interests and assignments created
by the Loan Documents securing, the Loan.
13. This Agreement shall be binding upon the panics hereto and inure to the
benefit of the respective successors and assigns of Borrower and Lender.
5
14. The Loan Documents shall be governed by and shall be construed and
enforced in accordance with the laws of the State of Texas.
I5. This Agreement contains the entire agreement between the parties hereto
with respect to the matters set forth herein. No variations, modifications or
changes hereof shall be binding upon any part unless set forth in a document
duly executed by the parties hereto. Additionally, accordance with Chapter 26,
Section 26.02 of the Texas Business and Commerce Code;
THIS AGREEMENT, AS THE WRITTEN LOAN AGREEMENT BETWEEN THE PARTIES
HERETO, REPRESENTS THE FINAL AGREEMFNT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
16. If any provision of this Agreement or the application hereof to any
person or circumstance shall be invalid or unenforceable to any extent, such
provision shall be modified to the extent necessary to make its application
valid and enforceable, and the remainder of this Agreement and the application
of such provision to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law
17. No consent or waiver, express or implied, by Lender of any breach or
default of Borrower in the performance of its obligations hereunder shall be
deemed to be a consent to or a waiver of any breach or default in ~e performance
by Borrower of the same or any other obligatior1 of Borrower hereunder. Failure
on the part of Lender to complain of any act or failure of Borrower to act or to
declare Borrower in default, irrespective of how long such failure continues,
shall not constitute a waiver by Lender of any rights hereunder.
18. Lender and Borrower acknowledge. agree and intend that the relationship
between them shall be solely that of creditor and debtor. Nothing in this
Agreement is intended or shall in any way be construed or deemed to create any
form of partnership, joint venture, tenancy-in-common, agency relationship or
co-ownership between Lender and Borrower, and the parties hereby expressly
disclaim any intention of any kind to create any such partnership, joint
venture, tenancy-in-common, agency relationship or co-ownership. Accordingly, in
no event shall Lender be responsible or liable for any of the debts, losses,
obligations, or liabilities of Borrower with respect to the Property as a result
of the execution of this Agreement, and Lender's only interests shall be
Lender's right to receive payments under the Loan Documents in accordance with
their terms. All obligations to pay real property taxes, assessments, insurance
premiums and all other fees and charges arising from the ownership, operation
and occupancy of, the Property and to perform all agreements and contracts
relating to the Property shall be the sole responsibility of Borrower. Borrower
shall be free to determine and follow its own policies and practices in the
conduct of its business on the Property, subject to the terms of the Loan
Documents.
6
19. THE LOAN IS PAYABEE IN FULL AT MATURITY. BORROWER MUST REPAY THE ENTIRE
PRINCIPAL BALANCE OF THE NOTE AND UNPAID INTEREST THEN DUE. LENDER IS UNDER NO
OBLIGATJON TO REFINANCE THE LOAN AT THAT TIME. BORROWER WILL THEREFORE BE
REQUIRED TO MAKE PAYMENT OUT Of OTHER ASSETS THAT BORROWER MAY OWN OR BORROWER
WILL HAVE TO FIND A LENDER WILLING TO LEND BORROWER THE MONEY. IF BORROWER
REFINANCES THIS LOAN AT MATURITY, BORROWER WILL HAVE TO PAY SOME OR ALL OF THE
CLOSING COSTS NORMALLY ASSOCIATED WITH A NEW LOAN.
20. This instrument may be executed in any number of counterparts, each to
be an original, but all of which shall constitute one instrument, and it shall
be sufficient if any party hereto signs any such counterpart, so long as each of
the parties hereto executes at least one such counterpart
IN WITNESS WHEREOF, this Agreement has been executed by lender and Borrower
on the dates set forth in their respective acknowledgments below, to be
effective as of the Effective Date.
LENDER;
WD LIQUIDATING CORPORATION, a California
corporation (formerly known as Xxxxxxx-Dome Energy
Corporation, a California corporation)
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: President
BORROWER:
RESULTS INTERNATIONAL, INC.,
a Nevada corporation (formerly known as HealthTech International, Inc.,
a Nevada corporation, formerly known as USA Health Technologies, Inc.
a Nevada corporation)
By: /s/ Xxx Xxxxxxxx
Name: Xxx Xxxxxxxx
Title: President
The preceding document was notarized in the :
THE STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
EXHIBIT "A"
TO
EXTENSION AND MODIFICATION AGREEMENT
Tract 1:
Lot I XX- 0, Xxxxx 7, Newel & Xxxxxx Business Park, an addition to the
City of Fort Worth, Tarrant County, Texas, according to the Plat
recorded in Volume 388-158, Page 40, Plat Records of Tarrant County,
Texas.
Tract II:
BEING a tract of land out of the X. X. Xxxxxxx Survey, Abstract No.
1521, Tarrant County, Texas, and a part of the remainder of Block 5,
Xxxxxx and Xxxxxx Industrial Park as shown by plat recorded in Volume
388-111, Pages 19 and 20, of the Plat Records of Tarrant County, Texas,
and also a part of the tract conveyed to Xxxxxx and Xxxxxx Real Estate
1n Volume 8046, Page 979 of the Deed Records of Tarrant County, Texas,
said tract being tied to the Texas Coordinate System using a combined
scale and elevation factor of 0.9998699, and said tract being more
particularly described as follows:
BEGINN1NG at a point in the west line of Interstate Highway, East Loop
820, North at its intersection with the South line of a 75 foot wide
sanitary sewer easement conveyed to the City of Fort Worth, said point
being the southeast corner of Xxx 0, Xxxxx 00, Xxxxx Xxxx East Office
Park, as shown by plat recorded in Volume 388-186, Pages 91 and 92 of
the Plat Records of Tarrant County, Texas, said point having
coordinates of X = 2,088,278.90 and Y = 407,883.66;
THENCE S. 1* 12' W. with said Highway right-of-way line 845.7
R. a point having coordinates of X = 2,088,256.11 and Y = 407,038.22;
THENCE N. 88* 48' W. 305.0 R. to a point in the east line of Xxx 0.
Xxxxx 00, Xxxxx Xxxx East Office Park, as shown by said plat;
THENCE N. 1* 12' E. 639.8 R. to a point in the south line of said
sanitary sewer easement said point having coordinates
of X = 2,087,964.67 and Y = 407,684.18;
THENCE N. 57* 10' E. with said sanitary sewer easement line 368.0 ft.
to the PLACE OF BEGINNING.
PARTIV
ITEM 14. PARAGRAPH 3
EXHIBIT TABLE: SECTION 10
MATERIAL CONTRACTS
CONTRACTS EXHIBIT 3(d)
HealthTech International, Inc.
A Public Company - NASDAQ: GYMM
January 17, 1997
Primus Health Care
0000 X. Xxx. 000, Xxxxx 0000X
Xxxxx Xxxxxxx, Xxxxx 00000
Tel: 000-000-0000
Fax: 000-000-0000
RE: Acquisition all issued and outstanding stock of Primus Health Care
Systems, Inc. by HealthTech International, Inc.
Gentlemen:
Whereas we have agreed on all of the terms for the purchase of all of the
outstanding stock of Primus Health Care Systems, Inc., and such terms are set
forth below. Please sign this agreement and return an original to me for my
files.
Purchase Price: In exchange for all issued and outstanding shares of Primus
Health Care Systems, Inc. (Primus), Primus will receive:
a. 500,000 shares of HealthTech International, Inc. (HTI) common stock
(restricted under Rule 144);
b. 1,000,000 options to purchase HTI restricted (under Rule 144) common
stock at $1.00 per share;
c. $3,000,000 of prepaid television advertising air time on various local
and national stations, and;
d. $2,400,000 of prepaid radio advertising air time on various local and
national stations.
Primus represents and warrants and HTI acknowledges that Primus' assets
shall not be less than the following:
a. Approximately $3,500,000 of medical receivables;
b. Approximately $1,300,000 of chiropractic receivables;
c. $330,000 of equipment, and;
d. $40,000 of furniture and fixtures;
e. Two clinic operation rights.
The parties agree that to facilitate the closing of this transaction HTI will
form a corporation into which the above purchase price will be transferred and
100% of the stock of said corporation shall be delivered to Primus shareholders.
IN WITNESS WHEREOF, the parties hereto have executed this purchase agreement
effective as of the date first above written.
HEALTHTECH INTERNATIONAL, INC. PRIMUS HEALTHCARE SYSTEMS, INC.
by: /s/ Xxxxxx Xxxx by: /s/ Xxxxxx Xxxxxxx
Xxxxxx Xxxx Xxxxxx Xxxxxxx
its: Chairman & CEO its: Chairman
EXHIBIT 6
PART IV
ITEM 14. PARAGRAPH 3
EXHIBIT TABLE: SECTION 21
SUBSIDIARIES OF THE REGISTRANT
Results Sports & Fitness, Inc.
Results Xxxxx Street, Inc.
IFM Investments, Inc.
Results Riverbend, Inc.
Fitness Performance, Inc.
CHG, Inc.
EXHIBIT 7
PART IV
ITEM 14. PARAGRAPH 3
EXHIBIT TABLE: SECTION 23
CONSENTS OF EXPERTS AND COUNSEL
ACCOUNTANTS CONSENT AND REPORT ON CONSOLIDATED SCHEDULES
The Board of Directors and Stockholders of
HealthTech International, Inc.:
Under date of February 11, 1997, we reported on the consolidated
balance sheets of HealthTech International, Inc. (the "Company"), and
subsidiaries as of September 30, 1996, the related consolidated
statements of income, cash flow and changes in stockholder's equity for
each of the years in the three-year period ended September 30, 1996 as
contained in the 1996 Annual Report on Form 10-K. These consolidated
financial statements and our report thereon shall or may be
incorporated by reference into an Annual report to Shareholders, proxy
statement to shareholders, Quarterly Reports on Form 10-Q for fiscal
year 1997, private placement memoranda and/or Registration statements
on Forms S-3 and/or S-8 and where such information is required or would
be necessary to an overall understanding of the HealthTech
International, Inc.'s operations.
The consolidated financial statement schedules are the responsibility
of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statement schedules based on
our audits.
Xxxxx, Dance & Co.
Irving, Texas
February 11, 1997
