EXHIBIT 10.17
Recording Requested By, and
When Recorded Return To:
Xxxxx, Xxxxxxxxx, XxXxxx &
Xxxxxxx
4496 So. Pecos Road
Las Vegas, Nevada 89121
______________________________________________________________________________
DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE
FILING ("Deed of Trust"), made this 26th day of September, 1997, by and between
Inco Homes Corporation, a Delaware corporation ("Trustor"), Orange Coast Title
Company, a California corporation ("Trustee"), and those persons and entities
listed on Exhibit "A" attached hereto ("Beneficiary").
WITNESSETH:
That for good and valuable consideration, including the indebtedness herein
recited and the trust herein created, the receipt of which is hereby
acknowledged, and for the purpose of securing, in such priority as Beneficiary
may elect, each of the following:
1. The due, prompt and complete payment, observance, performance and
discharge of each and every obligation, covenant and agreement contained in
Trustor's Promissory Note of even date herewith in the initial principal amount
of One Hundred Twenty Thousand Dollars ($120,000.00) (the "Note"), together with
interest thereon specified therein, payable to the order of Beneficiary and any
and all modifications, extensions or renewals thereof, whether hereafter
evidenced by the Note or otherwise; and
2. The payment of all other sums, with interest thereon at the rate of
interest provided for herein or in the Note, becoming due or payable under the
provisions of this Deed of Trust, or any other instrument or instruments
heretofore or hereafter executed by Trustor having reference to or arising out
of or securing the indebtedness represented by the Note; and
3. The payment of such additional sums and interest thereof which may
hereafter be loaned to Borrower, or its successors or assigns, by Beneficiary,
whether or not evidenced by a promissory note or notes which are secured by this
Deed of Trust; and
4. The due, prompt and complete observance, performance and discharge of
each and every obligation, covenant and agreement of Borrower contained in the
Note, and of Trustor contained in this Deed of Trust or any other document
evidencing the Loan (collectively, the "Loan Documents");
TRUSTOR DOES HEREBY irrevocably grant, transfer, bargain, sell, convey and
assign to Trustee, in trust, with power of sale and right of entry and
possession, and does grant to Beneficiary a security interest for the benefit
and security of Beneficiary under and subject to the terms and conditions
hereinafter set forth, in and to any and all of the following described property
which is (except where the context otherwise requires) herein collectively
called the "Mortgaged Property" whether now owned or held or hereafter acquired
and wherever located, including any and all substitutions, replacements and
additions to same:
(a) That certain real property located in Riverside County, State of
California and more particularly described in Exhibit "A," attached hereto and
incorporated herein by this reference, together with all of the easements,
rights, privileges, franchises, appurtenances thereunto belonging or in any way
appertaining to the real property, including specifically but not limited to all
appurtenant water, water rights and water shares or stock of Trustor, any and
all general intangibles relating to the use and/or development of the real
property, including development allotments, governmental permits, approvals,
authorizations and entitlements, agreements to provide necessary utility or
municipal services, all engineering plans and diagrams, surveys and/or soil and
substrata studies, and all other rights, privileges and appurtenances related to
the said real property and all of the estate, right, title, interest, claim and
demand whatsoever of Trustor therein or thereto, either in law or in equity, in
possession or in expectancy, now owned or hereafter acquired (hereinafter
referred to as the "Property");
(b) All structures, buildings and improvements of every kind and
description now or at any time hereafter located on the Property (hereinafter
referred to as the "Improvements"), including all equipment, apparatus,
machinery, fixtures, fittings, and appliances and other articles and any
additions to, substitutions for, change in or replacements of the whole or any
part thereof, now or at any time hereafter affixed or attached to and which are
an integral part of said structures, buildings, improvements or the Property or
any portion thereof, and such Improvements shall be deemed to be fixtures and an
accession to the freehold and a part of the Property as between the parties
hereto and all persons claiming by, through or under such parties except that
same shall not include such machinery and equipment of Trustor, or any tenant of
any portion of the Property or Improvements, which is part of and/or used in the
conduct of the normal business of Trustor or its tenant conducted upon the
Mortgaged Property, which is distinct and apart from the ownership, operation
and maintenance of the Mortgaged Property.
(c) All articles of tangible personal property and any additions to,
substitutions for, changes in or replacements of the whole or any part thereof
other than personal property which is or at any time has become toxic waste,
waste products or hazardous substances (hereinafter referred to as the "Personal
Property"), including without limitation all wall-beds, wall-safes, built-in
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furniture and installations, shelving, partitions, door-tops, vaults, elevators,
dumb-waiters, awnings, window shades, venetian blinds, light fixtures, fire
hoses and brackets and boxes for the same, fire sprinklers, alarm systems,
drapery rods and brackets, screens, water heaters, incinerators, wall coverings,
carpeting, linoleum, tile, other floor coverings of whatever description,
communication systems, all specifically designed installations and furnishings,
office maintenance and other supplies and all of said articles of property, the
specific enumerations herein not excluding the general, now or at any time
hereafter placed upon or used in any way in connection with the ownership,
operation or maintenance of the Property or the Improvements or any portion
thereof and owned by Trustor or in which Trustor now has or hereafter acquires
an interest, and all building materials and equipment now or hereafter delivered
to the Property and intended to be installed or placed in or about the
Improvements. Such tangible, personal property shall, in addition to all other
tangible, personal property herein described or defined, specifically include
each and every item of tangible, personal property and any substitutions for,
changes in or replacements thereof which are used in the operation of the
Improvements. Notwithstanding the breadth of the foregoing, the Personal
Property shall not include (i) personal property which may be owned by lessees
or other occupants of the Mortgaged Property; (ii) inventory of any lessee or
occupant of the Mortgaged Property used in the normal course of the business
conducted thereon; (iii) material, equipment, tools, machinery, or other
personal property which is brought upon the Mortgaged Property only for use in
construction, maintenance or repair and which is not intended to remain after
the completion of such construction, maintenance or proper maintenance, of the
Mortgaged Property; or (iv) such items of tangible personal property which have
not been purchased or installed with proceeds of the Note and for which
Beneficiary shall have executed such documents as may be required to subordinate
to the lien or security interest of any purchase money lender or supplier of
such tangible personal property;
(d) All right, title and interest of Trustor, now owned or hereafter
acquired in and to any and lying within the right-of-way of any street, road,
alley or public place, opened or proposed, vacated or extinguished by law or
otherwise, and all easements and rights of way, public or private, tenements,
hereditaments, appendages, rights and appurtenances how or hereafter located
upon the Property or now or hereafter used in connection with or now or
hereafter belonging or appertaining to the Property; and all right, title and
interest in the Trustor, now owned or hereafter acquired, in and to any strips
and gores adjoining or relating to the Property;
(e) All judgments, awards of damages, settlements and any and all proceeds
derived from such hereafter made as a result of or in lieu of any taking of the
Mortgaged Property or any part thereof, interest therein or any rights
appurtenant thereto under the power of eminent domain, or by private or other
purchase in lieu thereof, or for any damage (whether caused by such taking or
otherwise) to the Mortgaged Property or the Improvements thereon, including
change of grade of streets, curb cuts or other rights of access for any public
or quasi-public use or purpose under any law;
(f) All rents, incomes, issues and profits, revenues, royalties, bonuses,
rights, accounts, contract rights, insurance policies and proceeds thereof,
general intangibles and benefits of the Mortgaged Property, or arising from any
lease or similar agreement pertaining thereto (the
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"Rents and Profits"), and all right, title and interest of Trustor in and to all
leases of the Mortgaged Property now or hereafter entered into and all right,
title and interest of Trustor thereunder, including, without limitation, cash or
securities deposited thereunder to secure performance by the lessees of their
obligations thereunder, whether said cash or securities are to be held until the
expiration of the terms of said leases or applied to one or more of the
installments of rent coming due immediately prior to the expiration of said
terms with the right to receive and apply the same to said indebtedness, and
Trustee or Beneficiary may demand, sue for and recover such payments but shall
not be required to do so; and
(g) All proceeds of the conversion, voluntary or involuntary, of any of
the foregoing into cash or liquidated claims.
Trustor makes the foregoing grant to Trustee for the purposes herein set
forth; provided, however, that if the Trustor shall pay or cause to be paid to
the holder of the Note all amounts required to be paid under the provisions of
the Note, this Deed of Trust or any other Loan Documents, and at the time and in
the manner stipulated therein, and shall further pay or cause to be paid all
other sums payable hereunder and all indebtedness hereby secured, then, in such
case, the estate, right, title and interest of the Trustee and Beneficiary in
the Mortgaged Property shall cease, determine and become void, and upon proof
being given to the satisfaction of the Beneficiary that all amounts due to be
paid under the Note have been paid or satisfied, and upon payment of all fees,
costs, charges, expenses and liabilities chargeable or incurred or to be
incurred by Trustee or Beneficiary, and of any other sums as herein provided,
the Trustee shall, upon receipt of the written request of the Beneficiary,
cancel, reconvey and discharge this Deed of Trust.
TO HAVE AND TO HOLD THE MORTGAGED PROPERTY UNTO THE TRUSTEE ITS SUCCESSORS AND
ASSIGNS FOREVER, ALL IN ACCORDANCE WITH THE PROVISIONS HEREOF.
ARTICLE 1
TRUSTOR'S COVENANTS
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Trustor covenants, warrants and agrees with Trustee and Beneficiary as
follows:
1.1 Payment of Note. Trustor shall fully pay the principal and interest
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and other sums coming due with respect to the Note, this Deed of Trust or any of
the Loan Documents at the time and place in the manner specified in and
according to the terms thereof.
1.2 Title. The Trustor warrants that:
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(a) Trustor has good and marketable title to an indefeasible fee
simple estate in the Property described in Exhibit "A" subject only to those
liens, charges or encumbrances approved by Beneficiary; that Trustor has full
power and authority to grant, bargain, sell and convey the
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Mortgaged Property in the manner and form herein done or intended hereafter to
be done; that this Deed of Trust is and shall remain a valid and enforceable
lien on the Mortgaged Property subject only to the Permitted Exceptions; that
Trustor and its successors and assigns shall preserve its title and interest in
and title to the Mortgaged Property and shall forever warrant and defend the
same and shall warrant and defend the validity and priority of the lien thereof
forever against all claims and demands of all persons whomsoever, and that this
covenant shall not be extinguished by any exercise of power of sale or
foreclosure sale hereof, but shall run with the land; and
(b) Trustor has and shall maintain good and marketable title to the
Improvements and Personal Property, including any additions or replacements
thereto, free of all security interests, liens and encumbrances, if any,
disclosed to and accepted by Beneficiary in writing, and has good right to
subject Improvements and Personal Property to the security interest created
hereunder. If the lien of this Deed of Trust on any Improvements or Personal
Property be subject to a lease agreement, conditional sale agreement or chattel
mortgage covering such property, then in the event of any default hereunder all
the rights, title and interest of the Trustor in any and all deposits made
thereon or therefor are hereby assigned to the Trustee, together with the
benefit of any payments now or hereafter made thereon. There is also
transferred, set over and assigned by Trustor to Trustee, its successors and
assigns, hereby all of Trustor's right, title and interest in and to the Project
Documents, and all leases and use agreements of machinery, equipment and other
personal property of Trustor in the categories hereinabove set forth, under
which Trustor is the lessee of, or entitled to use such items, and Trustor
agrees to execute and deliver to Trustee or Beneficiary all such Project
Documents, leases and agreements when requested by Trustee or Beneficiary.
Trustor hereby covenants and agrees to well and punctually perform all covenants
and obligations under such Project Documents, leases or agreements as it so
chooses, but nothing herein shall obligate Trustee or Beneficiary to perform any
obligations of Trustor under such Project Documents, leases or agreements unless
Trustee or Beneficiary shall so choose; and
(c) Trustor will, at its own cost without expense to Trustee or
Beneficiary, do, execute, acknowledge and deliver all and every such further
act, deed, conveyance, mortgage, assignment, notice of assignment, transfer and
assurance as Trustee or Beneficiary shall from time to time reasonably require
for the better assuring, conveying, assigning, transferring and confirming unto
Trustee and Beneficiary the property and rights hereby conveyed or assigned or
intended now or thereafter so to be, or which Trustor may be or hereafter become
bound to convey or assign to Beneficiary for the intention of facilitating the
performance of the terms of this Deed of Trust or for the filing, registering,
perfecting or recording of this Deed of Trust and any other Loan Document and,
on demand, Trustor will execute, deliver and file or record one or more
financing statements, chattel mortgages or comparable security instruments more
effectively evidencing the lien hereof upon the Personal Property.
1.3 Business Existence. Trustor shall do all things necessary to preserve
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and keep in full force and effect its rights and privileges to do business and
to conduct its business in the State of California, and shall comply with all
regulations, rules, ordinances, statutes, orders and decrees of any governmental
authority or court applicable to the Trustor.
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1.4 Payment of Taxes, Assessments, Insurance Premiums and Charges. Trustor
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shall pay, prior to delinquency, all insurance premiums that become due and
payable on any insurance policies required to be maintained hereunder, all
taxes, assessments, charges and levies imposed by any Governmental Agency which
are or may become a lien affecting the Property or any part thereof, including
without limitation assessments on any appurtenant water stock; except that
Trustor shall not be required to pay and discharge any tax, assessment, charge
or levy that is being actively contested in good faith by appropriate
proceedings, as long as Trustor has established and maintains reserves adequate
to pay any liabilities contested pursuant to this Section in accordance with
generally accepted accounting principles and, by reason of nonpayment, none of
the Mortgaged Property covered by the Loan Documents or the lien or security
interest of Beneficiary is in danger of being lost or forfeited.
1.5 Maintenance and Repair. The Trustor shall, at its sole cost and
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expense, keep the Mortgaged Property in good operating order, repair and
condition and shall not commit or permit any waste thereof, which condition,
during the course of any reconstruction of the Improvements, shall be subject to
the normal constraints and effects of reconstruction. Trustor shall make all
repairs, replacements, renewals, additions and improvements and complete and
restore promptly and in good workmanlike manner any Improvements which may be
damaged or destroyed thereon, and pay when due all costs incurred therefor.
Trustor shall not remove or demolish any of the Mortgaged Property conveyed
hereby, nor demolish or materially alter the Mortgaged Property without the
prior written consent of the Beneficiary. Trustor shall permit Trustee or
Beneficiary or its agents the opportunity to inspect the Mortgaged Property,
including the interior of any structures, at any reasonable times.
1.6 Compliance with Laws. The Trustor shall comply with all laws,
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ordinances, regulations, covenants, conditions and restrictions affecting the
Mortgaged Property or the operation thereof, and shall pay all fees or charges
of any kind in connection therewith.
1.7 Insurance. The Trustor shall at all times maintain the following
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policies of insurance:
(a) prior to completion of the Improvements, builder's "all risk"
insurance ("completed value" form), including "course of construction" coverage,
covering the Improvements and any Personal Property;
(b) from and after completion of the Improvements, property "all risk"
insurance covering the Improvements and any Personal Property;
(c) commercial general liability insurance in favor of the Trustor
(and naming the Beneficiary as an additional insured) in an aggregate amount not
less than $2,000,000.00 (or such greater amount as may be specified by the
Beneficiary from time to time) combined single limit; and
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(d) such other insurance as may be required by applicable Laws
(including worker's compensation and employer's liability insurance) or as the
Beneficiary may reasonably require from time to time (including "all risk"
insurance with respect to any other improvements now or in the future located on
the Real Property and comprehensive form boiler and machinery insurance, if
applicable, rental loss insurance and business interruption insurance).
The Trustor shall also cause the Contractor and each subcontractor to
maintain a policy of commercial general liability insurance and, upon request by
the Beneficiary, shall cause the Architect and any engineer engaged in
connection with the Project to maintain a policy of professional liability
insurance, in each case for such periods and in such amounts as the Beneficiary
may reasonably require from time to time.
Each policy of property insurance required by this Section shall be in an
amount not less than the full replacement cost of the property covered by such
policy, shall contain a "waiver of coinsurance" provision, a "full replacement
cost" indorsement, shall insure each Unit against flood loss risk to the maximum
available policy amount if the Land is located in a Flood Hazard Area, and shall
name the Beneficiary as an "additional insured and/or loss payee." Each policy
of commercial general liability insurance required by this Section shall cover
personal injury, property liability and (where applicable) completed operations
and such insurance shall be primary and non-contributing with any other
insurance available to the Beneficiary. All insurance policies and certificates
evidencing such policies shall be in form and substance and issued by insurers
reasonably satisfactory to the Beneficiary, and shall contain such deductible
and such endorsements as the Beneficiary may reasonably require. Upon request
by the Beneficiary from time to time, the Trustor shall deliver to the
Beneficiary originals or copies of all such insurance policies and certificates
evidencing such policies.
1.8 Casualty. The Trustor will give the Beneficiary prompt notice of
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damage to or destruction of any Improvements on the Property and in case of loss
covered by policies of insurance, the Beneficiary is hereby authorized to make
proof of loss if not made promptly by the Trustor or any lessee. Any expenses
incurred by the Beneficiary in the collection of insurance proceeds, together
with interest thereof from date of any such expense at the per annum interest
rate set forth in the Note shall be added to and become a part of the
indebtedness secured hereby and all be reimbursed to the Beneficiary, together
with accrued interest thereon, immediately upon demand. Upon the occurrence of
damage to or destruction of any Improvements, if Beneficiary shall so elect in
its sole and unfettered discretion, the Beneficiary shall make the net proceeds
of insurance available for repair, restoration and/or reconstruction under the
conditions and in the manner specified in the next following paragraph. If
Beneficiary shall otherwise determine, then such insurance proceeds shall be
applied by the Beneficiary upon or in reduction of the indebtedness secured
hereby then most remotely to be paid. If the Beneficiary shall require that the
Improvements be repaired or rebuilt then the repair, restoration, replacement or
rebuilding of the Improvements shall be to a condition of at least equal value
as prior to such damage or destructions.
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Insurance proceeds made available for restoration, repair, replacement or
rebuilding of the Improvements shall be disbursed from time to time (provided no
default exists in the Note or this Deed of Trust or any other Loan Document at
the time of each such disbursement), in the manner determined by Beneficiary.
The Beneficiary may require that plans and specifications for the restoration,
repair, replacement or rebuilding be submitted to and approved by the
Beneficiary prior to the commencement of the work. Any surplus which may remain
out of said insurance proceeds after payment of costs of building and
restoration may, at the option of the Beneficiary, be applied either on account
of the indebtedness secured hereby then most remotely to be paid or be paid to
any person or persons entitled thereto. Application or release of proceeds
under the provisions hereby shall not cure or waive any default or notice of
default hereunder or invalidate any act done pursuant to such notice. No
interest shall be allowed on account of any such proceeds or any other funds
held in the hands of the Beneficiary or the disbursing party hereunder.
1.9 Condemnation. The Trustor, immediately upon obtaining knowledge of the
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institution of any proceeding for the condemnation of the Mortgaged Property or
any portion thereof, shall notify Beneficiary of the pendency thereof. The
Trustor hereby assigns, transfers and sets over unto the Beneficiary all
compensation, rights of action and the entire proceeds of any award, up to the
maximum amount of all amounts then due and payable under the Note and the Loan
Documents, including, without limitation, all interest, costs, expenses and
Advances, as that term is herein defined, and any claim for damages for any of
the Mortgaged Property taken or damaged under the power of eminent domain or by
condemnation or by sale in lieu thereof. Beneficiary may, at its option,
commence, appear in and prosecute, in its own name, any action or proceeding, or
make any compromise or settlement, in connection with such condemnation, taking
under the power of eminent domain or sale in lieu thereof, and hereby appoints
Beneficiary as its true and lawful attorney for such purposes, such power being
coupled with an interest. After deducting therefrom all of its expenses,
including attorneys fees, the Beneficiary may elect, in its sole discretion and
notwithstanding the fact that the security given hereby may not be impaired by a
partial condemnation, to apply any part or all of the proceeds of the award, in
such order as Beneficiary may determine, upon or in reduction of the
indebtedness secured hereby whether due or not. Any application of all or a
portion of the proceeds of any such award to the indebtedness shall not cure or
waive any default or notice of default hereunder or invalidate any act done
pursuant to such notice. Trustor agrees to execute such further assignments of
any compensation, award, damages, right of action and proceeds as Beneficiary
may require.
1.10 Indemnification. The Trustor shall appear in and defend any suit,
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action or proceeding that might in any way, in the reasonable judgment of
Beneficiary, affect the value of the Mortgaged Property, the title to the
Mortgaged Property or the rights and powers of Trustee or Beneficiary. Trustor
shall, at all times, indemnify, hold harmless and on demand reimburse
Beneficiary for any and all loss, damage, expense or cost, including cost of
evidence of title and attorneys fees, arising out of or incurred in connection
with any such suit, action or proceeding, and the sum of such expenditures shall
be secured by this Deed of Trust and shall accrue interest at the "Default Rate"
as that term is defined in the Note and shall be due and payable on demand.
Trustor
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shall pay costs of suit, cost of evidence of title and reasonable attorneys'
fees in any proceeding or suit brought by Trustee or Beneficiary to foreclose
this Deed of Trust.
1.11 Sale of Premises or Additional Financing Not Permitted. Trustor
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specifically agrees that:
(a) In order to induce Beneficiary to make the loan secured hereby,
Trustor agrees that if the Mortgaged Property or any part thereof or any
interest therein, shall be sold, assigned, transferred, conveyed, pledged,
mortgaged or encumbered with financing other than that secured hereby or
otherwise alienated by Trustor whether voluntarily or involuntarily or by
operation of law, except as shall be specifically hereinafter permitted or
without the prior written consent of Beneficiary, then Beneficiary, at its
option, may declare the Note secured hereby and all other obligations hereunder
to be forthwith due and payable. Except as shall be otherwise specifically
provided herein, any (a) change in the legal or equitable ownership of the
Mortgaged Property whether or not of record, or (b) change in the form of entity
or ownership (including the hypothecation or encumbrance thereof) of the stock
or any other ownership interest in Trustor shall be deemed a transfer of an
interest in the Mortgaged Property. In connection herewith, the financial
stability and managerial and operational ability of Trustor is a substantial and
material consideration to Beneficiary in its agreement to make the loan to
Trustor secured hereby. The transfer of an interest in the Mortgaged Property
may materially alter and reduce Beneficiary's security for the indebtedness
secured hereby. Moreover, Beneficiary has agreed to make its loan based upon the
presumed value of the Mortgaged Property and the Rents and Profits thereof.
Therefore, it will be a diminution of Beneficiary's security if junior
financing, except as shall be permitted by Beneficiary, or if other liens or
encumbrances should attach to the Mortgaged Property.
(b) Trustor may request Beneficiary to approve a sale or transfer of
the Mortgaged Property to a party who would become the legal and equitable owner
of the Mortgaged Property and would assume any and all obligations of Trustor
under the Loan Documents (the "Purchaser"). Beneficiary shall not be obligated
to consider or approve any such sale, transfer or assumption or request for the
same. However, upon such request, Beneficiary may impose limiting conditions and
requirements to its consent to an assumption.
(c) In the event ownership of the Mortgaged Property, or any part
thereof, becomes vested in a person or persons other than Trustor, the
Beneficiary may deal with such successor or successors in interest with
reference to the Note or this Deed of Trust in the same manner as with Trustor,
without in any way releasing, discharging or otherwise affecting the liability
of Trustor under the Note, this Deed of Trust or the other Loan Documents. No
sale of Trustor's interest in the Mortgaged Property, no forbearance on the part
of Beneficiary, no extension of the time for the payment of the Deed of Trust
indebtedness or any change in the terms thereof consented to by Beneficiary
shall in any way whatsoever operate to release, discharge, modify, change or
affect the original liability of the Trustor herein, either in whole or in part.
Any deed conveying the Mortgaged Property, or any part thereof, shall provide
that the grantee thereunder assume all of Trustor's obligations under the Note,
this Deed of Trust and all other Loan Documents. In the event
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such deed shall not contain such assumption, Beneficiary shall have all rights
reserved to it hereunder in the event of a default or if Beneficiary shall not
elect to exercise such rights and remedies, the grantee under such deed shall
nevertheless be deemed to have assumed such obligations by acquiring the
Mortgaged Property or such portion thereof subject to this Deed of Trust.
Nothing contained in this section shall be construed to waive the restrictions
against the transfer of the Mortgaged Property contained in Section 1.11(a).
1.12 Transfer of Personal Property. Trustor shall not voluntarily,
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involuntarily or by operation of law sell, assign, transfer, hypothecate, pledge
or otherwise dispose of the Personal Property or any interest therein and shall
not otherwise do or permit anything to be done or occur that may impair the
Personal property as security hereunder, except that so long as this Deed of
Trust is not in default, Trustor shall be permitted to sell or otherwise dispose
of the Personal Property when absolutely worn out, inadequate, unserviceable or
unnecessary for use in the operation of the Property or in the conduct of the
business of Trustor, upon replacing the same or substituting for the same other
Personal Property at least equal in value to the initial value of that disposed
of and in such a manner so that said Personal Property is sold in connection
with the sale of the Property.
1.13 Title to Replacements and Substitutions. All right, title and
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interest of Trustor in and to all extensions, improvements, betterments,
renewals, substitutes and replacements of, and all additions and appurtenances
to the Personal Property, Improvements or the Mortgaged Property hereafter
acquired by or released to Trustor or constructed, assembled or placed by
Trustor on the Mortgaged Property, and all conversions of the security
constituted thereby, immediately upon such acquisition, release, construction,
assembling, placement or conversion, as the case may be, and in each such case,
without any further deed of trust, conveyance, assignment or other act by
Trustor, shall become subject to the lien of this Deed of Trust as fully and
completely, and with the same effect and in the same priority as the lien of
this Deed of Trust shall have attached to the item so replaced or substituted
immediately prior to such replacement of substitutions, as though now owned by
Trustor and specifically described in the granting clause hereof, but at any and
all times Trustor will execute and deliver to Trustee any and all such further
assurances, deeds of trust, conveyances or assignments thereof as Trustee or
Beneficiary may reasonably require for the purpose of expressly and specifically
subjecting the same to the lien of this Deed of Trust.
1.14 Security Agreement. This Deed of Trust shall be self-operative and
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shall constitute a Security Agreement and a Construction Mortgage as those terms
are defined in the California Uniform Commercial Code with respect to all of
those portions of the Mortgaged Property which constitute personal property or
fixtures governed by the Uniform Commercial Code as enacted in California,
provided, however, Trustor hereby agrees to execute and deliver on demand and
hereby irrevocably constitutes and appoints Beneficiary the attorney-in-fact of
Trustor (such power coupled with an interest) to execute, deliver and, if
appropriate, to file with agreement, financing statement or other instruments as
Beneficiary may request or require in order to impose or perfect the lien or
security interest hereof more specifically thereon. Notwithstanding the above,
this Deed of Trust is intended to serve as a fixture filing pursuant to the
terms of the Uniform Commercial Code as
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enacted in California. This filing is to be recorded in the real estate records
in the county in which the Mortgaged Property is located. In that regard, the
following information is provided:
Name of Debtor: Trustor
Address of Debtor: See Section 5.12
Name of Secured Party: Beneficiary
Address of Secured Party: See Section 5.12
1.15 Management. The Trustor agrees that the Beneficiary shall have and
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reserves the right to install professional management of the Mortgaged Property
upon the occurrence of an Event of Default as defined herein. Such installation
shall be at the sole discretion of the Beneficiary and nothing herein shall
obligate the Beneficiary to exercise its right to install professional
management. The cost of such management shall be borne by Trustor and shall be
treated as an Advance under Section 1.16. Nothing contained herein shall limit
Beneficiary's rights in equity to obtain a receiver for the Mortgaged Property.
1.16 Advances. If Trustor shall fail to perform any of the covenants
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herein contained or contained in any other Loan Document, the Beneficiary may,
but without obligation to do so, pay any and all amounts necessary to perform
same or cause same to be performed on behalf of Trustor, and all sums so
expended by Beneficiary for payment of any item whatsoever, including, but not
by limiting the generality of the foregoing, payment of taxes, insurance
premiums, lien claimants or assessments shall be secured by this Deed of Trust
and each such payment shall be and all such payments shall be collectively
referred to herein as an "Advance." The Trustor shall repay to Beneficiary on
demand each and every Advance and the sum of each such Advance shall accrue
interest at the Default Rate, as that term is defined in the Note, from the date
of each Advance until repaid to Beneficiary. Nothing herein contained,
including the payment of such amount or amounts by Beneficiary, shall prevent
any such failure to perform on the part of Trustor from constituting an Event of
Default as defined herein. Any such advance shall be deemed to be made under an
obligation to do so.
1.17 Time. The Trustor agrees that time is of the essence hereof in
----
connection with all obligations of the Trustor herein, in the Note or any other
Loan Documents.
1.18 Estoppel Certificates. The Trustor within ten (10) days after
---------------------
written request shall furnish a duly acknowledged written statement setting
forth the amount of the debt secured by this Deed of Trust, and stating either
that no setoffs or defenses exist against the Deed of Trust debt, or, if such
setoffs or defenses are alleged to exist, the nature thereof.
-11-
1.19 Records. The Trustor agrees to keep adequate books and records of
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account in accordance with generally accepted accounting principles consistently
applied and will permit the Beneficiary and Beneficiary's agents, accountants
and attorneys, to visit and inspect the Mortgaged Property and examine its books
and records of account in respect to the Mortgaged Property, and to discuss its
affairs, finances and accounts with the Trustor, at such reasonable times as
Beneficiary may request.
1.20 Assignment of Rents and Profits. Trustor does hereby assign to
-------------------------------
Beneficiary all Rents and Profits as follows:
(a) The Rents and Profits are hereby unconditionally assigned,
transferred, conveyed and set over to Beneficiary to be applied by Beneficiary
in payment of the principal and interest and all other sums payable on the Note,
and all other sums payable under this Deed of Trust. Prior to the happening of
any Event of Default as set forth in Article 2 hereof, Trustor shall have a
license to collect and receive all Rents and Profits. If an Event of Default
has occurred and is continuing, Trustor's right to collect and receive Rents and
Profits shall cease and Beneficiary shall have the sole right, with or without
taking possession of the Property, to collect all Rents and Profits, including
those past due and unpaid. Any Rents and Profits received by Trustor after an
Event of Default has occurred and is continuing shall be deemed to be received
by Trustor in trust as trustee for Beneficiary and for the benefit of
Beneficiary. Trustor shall be required to account to Beneficiary for any rents
and profits not applied in accordance with the provisions of the Loan Documents.
Nothing contained in this Section 1.20(a) or elsewhere in this Deed of Trust
shall be construed to make Beneficiary a "mortgagee in possession" unless and
until Beneficiary actually takes possession of the Mortgaged Property either in
person or through an agent or receiver.
(b) Trustor agrees to execute such other assignments of Rents and
Profits applicable to the Mortgaged Property as the Beneficiary may from time to
time request while this Deed of Trust and the debt secured hereby are
outstanding. Trustor shall not (i) execute (except as noted above) an assignment
of any of its right, title or interest in the Rents and Profits or any portion
thereof, (ii) execute any lease of any portion of the Mortgaged Property which
shall not be approved in advance by Beneficiary; or (iii) in any other manner
impair the value of the Mortgaged Property or the security of the Beneficiary
for the payment of the indebtedness.
(c) Trustor covenants and agrees that it shall at all times promptly
and faithfully perform, or cause to be performed, all of the covenants,
conditions and agreements contained in all leases of the Mortgaged Property now
or hereafter existing, on the part of the lessor thereunder to be kept and
performed.
(d) Nothing herein shall obligate the Beneficiary to perform the
duties of the Trustor as landlord or lessor under any such leases or tenancies.
(e) The Trustor shall furnish to the Beneficiary, within fifteen (15)
days after a request by the Beneficiary to do so, a written statement, certified
as true and correct by the Trustor,
-12-
containing the names of all lessees or occupants of the Mortgaged Property, the
terms of their respective leases or tenancies, the spaces occupied and the
rentals paid.
1.21 Compliance with Covenants. Trustor warrants that it is not in
-------------------------
violation of any covenant, condition or restriction regarding the ownership, use
or occupancy of the Mortgaged Property and that the use of the Improvements,
upon completion thereof, shall not constitute a violation of any such covenant,
condition or restriction. If Trustor shall fail to perform any obligations set
forth in such covenants, conditions or restrictions, the Beneficiary may, but
without obligation to do so, pay any and all amounts necessary to perform same
or cause same to be performed on behalf of Trustor, and all sums so expended by
Beneficiary for any such payment or performance shall be secured by this Deed of
Trust and shall be an Advance under the terms of this Deed of Trust. Trustor's
failure to perform its obligations under any such declaration or mutual
arrangement shall constitute an Event of Default.
1.22 Substitution of Collateral. So long as no Event of Default has
--------------------------
occurred and is continuing, Trustor may request that beneficiary allow the
substitution of other real property collateral for that described herein. Such
substitution shall be permitted only if approved by Beneficiary (by and through
USA Commercial Mortgage Company, Inc.), in its sole discretion. Such
substituted collateral must, in Beneficiary's opinion, have a value at least
equivalent to that it is replacing. Trustor shall pay all costs and expenses,
including title charges and attorneys' fees, incurred by Beneficiary in
processing such a substitution.
ARTICLE 2
DEFAULT
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2.1 Events of Default. The occurrence of any of the following events
-----------------
shall be an Event of Default: (a) default in the payment or performance of any
obligations secured hereby or contained herein; or (b) the occurrence of any
"Event of Default," as defined below.
The occurrence of any one or more of the following, whatever the reason
therefor, shall constitute an "Event of Default" hereunder:
(a) Trustor shall fail to pay, upon demand by Beneficiary, any
amount due pursuant to the Note; or
(b) Trustor or any guarantor ("Guarantor") of the Note shall fail to
perform or observe any term, covenant or agreement contained in the Note, this
Deed of Trust or any guaranty executed and delivered concurrently herewith on
its part to be performed or observed, other than the failure to make a payment
covered by subsection (a), and such failure shall continue uncured as of the
earlier of thirty (30) calendar days after the occurrence of such failure or ten
(10) calendar days
-13-
after written notice of such failure is given by Beneficiary to Trustor (the
cure period set forth in this subsection (b) shall not apply to any other Event
of Default); or
(c) any representation or warranty contained in any document made or
delivered pursuant to or in connection with any of the Loan Documents proves
incorrect or to have been incorrect in any material respect when made; or
(d) Trustor (which term shall include any entity comprising Trustor)
is dissolved or liquidated, or otherwise ceases to exist, or all or
substantially all of the assets of Trustor or any Guarantor are sold or
otherwise transferred without Beneficiary's written consent; or
(e) Trustor or any Guarantor is the subject of an order for relief by
the bankruptcy court, or is unable or admits in writing its inability to pay its
debts as they mature, or makes an assignment for the benefit of creditors; or
Trustor or any Guarantor applies for or consents to the appointment of any
receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar
officer ("Receiver"); or any Receiver is appointed without the application or
consent of Trustor or any Guarantor, as the case may be, and the appointment
continues undischarged or unstayed for thirty (30) calendar days; or Trustor or
any Guarantor institutes or consents to any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, dissolution, custodianship,
conservatorship, liquidation, rehabilitation or similar proceedings relating to
it or to all or any part of its property under the laws of any jurisdiction; or
any similar proceeding is instituted without the consent of Trustor or any
Guarantor, as the case may be, and continues undismissed or unstayed for thirty
(30) calendar days; or any judgment, writ, attachment, execution or similar
process is issued or levied against all or any part of the Property or Trustor
or any Guarantor, and is not released, vacated or fully bonded within thirty
(30) calendar days after such issue or levy; or
(f) there shall occur a material adverse change in the financial
condition of Trustor or any Guarantor from their respective financial conditions
as of the date of this Note, as determined by Beneficiary in its reasonable
discretion; or
(g) any Loan Document, at any time after its execution and delivery
and for any reason other than the agreement of Beneficiary or the satisfaction
in full of all indebtedness and obligations of Trustor under the Loan Documents,
ceases to be in full force and effect or is declared to be null and void by a
court of competent jurisdiction; or Trustor or any trustee, officer, director,
shareholder or partner of any entity comprising Trustor or any Guarantor claims
that any Loan Document is ineffective or unenforceable, in whole or in part, or
denies any or further liability or obligation under any Loan Document, unless
all indebtedness and obligations of Trustor thereunder have been fully paid and
performed; or
(h) an Event of Default shall occur under any other loan made by
Beneficiary to Trustor.
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ARTICLE 3
REMEDIES
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Upon the occurrence of any Event of Default, Trustee and Beneficiary shall
have the following rights and remedies:
3.1 Acceleration of Maturity. Beneficiary may declare the entire
------------------------
principal of the Note then outstanding (if not then due and payable thereunder)
and all other obligations of Trustor hereunder or under the Note, to be due and
payable immediately, and, subject to applicable provisions of law, upon any such
declaration the principal of the Note and accrued and unpaid interest, and all
other amounts to be paid under the Note, this Deed of Trust or any other Loan
Document shall become and be immediately due and payable, anything in the Note
or in this Deed of Trust to the contrary notwithstanding.
3.2 Default Interest. Irrespective of whether Beneficiary exercises any
----------------
other right set forth in this Article 3, after the Maturity Date or any
acceleration thereof, or upon any Event of Default, through and including the
date such default is cured, the entire principal balance under the Note shall
thereafter earn interest at the Default Rate, as defined in the Note.
3.3 Operation of Mortgaged Property. Beneficiary in person or by agent
-------------------------------
may, without any obligation so to do, and without notice or demand upon, or
consent from, Trustor and without releasing Trustor from any obligation
hereunder; (i) make any payment or do any act which Trustor has failed to make
or do; (ii) enter upon, take possession of, manage and operate the Mortgaged
Property or any part thereof; (iii) make or enforce, or if the same be subject
to modification or cancellation, modify or cancel leases upon such terms or
conditions as Beneficiary deems proper; (iv) obtain and evict tenants, and fix
or modify rents, make repairs and alterations and do any acts which Beneficiary
deems proper to protect the security hereof; and (v) with or without taking
possession, in its own name or in the name of Trustor, use for or otherwise
collect and receive the Rents and Profits and all other benefits, including
those past due and unpaid, and apply the same, less costs and expenses of
operation and collection, including reasonable attorneys fees, upon any
indebtedness secured hereby, and in such order as Beneficiary may determine.
3.4 Judicial Remedies. Beneficiary may bring an action in any court of
-----------------
competent jurisdiction to foreclose this Deed of Trust or to enforce any of the
covenants and agreements hereof and to take such steps to protect and enforce
its rights whether by action, suit or proceeding in equity or at law for the
specific performance of any covenant, condition or agreement in the Note, this
Deed of Trust or any other Loan Document, or in aid of the execution of any
power herein granted, or for any foreclosure hereunder, or for the enforcement
of any other appropriate legal or equitable remedy or otherwise as the
Beneficiary shall elect.
3.5 Maintenance of Mortgaged Property. Beneficiary may have a receiver
---------------------------------
appointed by a court of competent jurisdiction for the purpose of collecting
rents and managing the Mortgaged Property, and Trustor hereby consents in
advance to such appointment. The Trustee or Beneficiary
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personally, or by its agents or attorneys, or by the receiver appointed by the
court, may enter into and upon all or any part of the Mortgaged Property, and
each and every part thereof, and may exclude the Trustor, its agents and
servants wholly therefrom, and having and holding the same, may use, operate,
manage and control the Mortgaged Property and conduct the business thereof,
either personally or by its superintendents, managers, agents, servants,
attorneys or receivers. Upon every such entry, any party occupying the Mortgaged
Property in accordance with this Article 3, at the expense of the Mortgaged
Property or Trustor, may from time to time maintain and restore the Mortgaged
Property or any part thereof either by purchase, repair or construction, and in
the course of such purchase, repair or construction may make such changes in the
Improvements as it may deem desirable and may insure the same. Likewise, from
time to time, at the expense of the Mortgaged Property, the Trustee or
Beneficiary or any such party may make all necessary or proper repairs, renewals
and replacements of the Personal Property and such useful alterations,
betterments and improvements thereto and thereon as to it may seem advisable. In
every such case the Trustee or Beneficiary or any such party shall have the
right to manage and operate the Mortgaged Property and to carry on the business
thereof and exercise all rights and powers of the Trustor with respect thereto
either in the name of the Trustor or otherwise, as it shall deem best, and shall
be entitled to collect and receive the Rents and Profits of the Mortgaged
Property and every part thereof and after deducting the expenses of conducting
the business thereof and of all maintenance, repairs, renewals, replacements,
alterations, additions, betterments and improvements and amounts necessary to
pay for taxes, assessments, insurance and prior or other proper charges upon the
Mortgaged Property or any part thereof, as well as just and reasonable
compensation for the agents, clerks, servants and other employees by it properly
engaged and employed, the Beneficiary shall apply the monies arising as
aforesaid, in the order as is set forth in the Note.
3.6 Rights of Secured Party. Beneficiary shall have all of the remedies
-----------------------
of a Secured Party under the Uniform Commercial Code as enacted in California,
including without limitation, the right and power to sell, or otherwise dispose
of, the Personal Property, or any part thereof, and for that purpose may take
immediate and exclusive possession of the Personal Property, or any part
thereof, and with or without judicial process to the extent permitted by law,
enter upon any premises on which the Personal Property or any part thereof, may
be situated and remove the same therefrom without being deemed guilty of
trespass and without liability for damages thereby occasioned, or at
Beneficiary's option Trustor shall assemble the Personal Property and make it
available to the Beneficiary at the place and the time designated in the demand.
Beneficiary shall be entitled to hold, maintain, preserve and prepare the
Personal Property for sale. Beneficiary, without removal of the Personal
Property from the Mortgaged Property, may render the Personal Property
inoperable and dispose of the Personal Property on the Mortgaged Property. To
the extent permitted by law, Trustor expressly waives any notice of sale or
other disposition of the Personal Property and any other right or remedy of
Beneficiary existing after default hereunder, and to the extent any such notice
is required and cannot be waived, Trustor agrees that as it relates to this
Section 3.6 only, if such notice is mailed, postage prepaid, to the Trustor at
the address set forth in Section 5.12 hereof at least ten (10) days before the
time of the sale or disposition, such notice shall be deemed reasonable and
shall fully satisfy any requirement for giving of said notice.
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3.7 Foreclosure. All rights, powers and privileges granted to or
-----------
conferred upon a beneficiary and trustee under a deed of trust in accordance
with the laws of the State of California are hereby adopted and incorporated
into this Deed of Trust by this reference and in accordance with such rights,
powers and privileges:
(a) The Trustee may, and upon the written request of Beneficiary shall,
with or without entry, personally or by its agents or attorneys insofar as
applicable pursuant to and in accordance with the laws of California:
(i) cause any or all of the Mortgaged Property to be sold under
the power of sale granted by this Deed of Trust or any of the other
Loan Documents in any manner permitted by applicable law. For any
sale under the power of sale granted by this Deed of Trust, Trustee or
Beneficiary must record and give all notices required by law and then,
upon the expiration of such time as is required by law, may sell the
Mortgaged Property, and all estate, right, title, interest, claim and
demand of Trustor therein, and all rights of redemption thereof, at
one or more sales, as an entirety or in parcels, with such elements of
real and/or personal property (and, to the extent permitted by
applicable law, may elect to deem all of the Mortgaged Property to be
real property for purposes thereof), and at such time or place and
upon such terms as Trustee and Beneficiary may determine and shall
execute and deliver to the purchaser or purchasers thereof a deed or
deeds conveying the property sold, but without any covenant or
warranty, express or implied, and the recitals in the deed or deeds of
any facts affecting the regularity or validity of a sale will be
conclusive against all persons. In the event of a sale, by
foreclosure or otherwise, of less than all of the Mortgaged Property,
this Deed of Trust shall continue as a lien and security interest on
the remaining portion of the Mortgaged Property; or
(ii) institute proceedings for the complete or partial foreclosure
of this Deed of Trust as a mortgage; and in this connection Trustor
does hereby expressly waive to the extent permitted by law its right
of redemption after a mortgage foreclosure sale; or
(iii) apply to any court of competent jurisdiction for the
appointment of a receiver or receivers for the Mortgaged Property and
of all the earnings, revenues, rents, issues, profits and income
thereof, which appointment is hereby consented to by Trustor; or
(iv) take such steps to protect and enforce its rights whether by
action, suit or proceeding in equity or at law for the specific
performance of any covenant, condition or agreement in the Note or in
this Deed of Trust, or in aid of the execution of any power herein
granted, or for any foreclosure hereunder, or for the enforcement of
any other appropriate legal or equitable remedy or otherwise as
Beneficiary shall select.
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(b) The Trustee may adjourn from time to time any sale by it made
under or by virtue of this Deed of Trust by announcement at the time and place
appointed for such sale or sales and, except as otherwise provided by any
applicable provision of law, the Trustee without further notice or publication,
may make such sale at the time and place to which the sale shall be so
adjourned;
(c) Upon the completion of any sale or sale made by the Trustee under
or by virtue of this Section, the Trustee shall execute and deliver to the
accepted purchaser or purchasers a good and sufficient instrument, or good and
sufficient instruments, conveying, assigning and transferring all estate, right,
title and interest in and to the property and rights sold, but without any
covenant or warranty, express or implied. The recitals in such deed of any
matters or facts shall be conclusive proof of the truthfulness thereof to the
extent permitted by law. Any such sale or sales made under or by virtue of this
Section whether made under the power of sale herein granted or under or by
virtue of judicial proceedings or of a judgment or decree of foreclosure and
sale, shall operate to divest all the estate, right, title, interest, claim and
demand whatsoever, whether at law or in equity, of the Trustor in and to the
properties and rights so sold, and shall be a perpetual bar both at law and in
equity against the Trustor and against any and all persons claiming or who may
claim the same, or any part thereof from through or under the Trustor.
(d) In the event of any sale made under or by virtue of this Section
whether made under the power of sale herein granted or under or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale, the
entire principal of and interest on the Note and all accrued interest on the
Note, and all other sums required to be paid by the Trustor pursuant to the Note
and this Deed of Trust shall be due and payable, anything in the Note or in this
Deed of Trust to the contrary notwithstanding.
(e) The purchase money proceeds or avails of any sale made under or by
virtue of this Section, together with any other sums which then may be held by
the Trustee or Beneficiary under this Deed of Trust whether under the provisions
of this Section or otherwise, shall be applied as required by applicable law.
(f) Upon any sale made under or by virtue of this Section, whether
made under the power of sale herein granted or granted in accordance with the
laws of the state in which the Property is located or under or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale, the
Beneficiary may bid for and acquire the Mortgaged Property or any part thereof
and in lieu of paying cash therefor may make settlement for the purchase price
by crediting upon the indebtedness of the Trustor secured by this Deed of Trust
the net sales price after deducting therefrom the expenses of the sale and the
cost of the action and any other sums which the Beneficiary is authorized to
deduct under this Deed of Trust. The Beneficiary upon so acquiring the Mortgaged
Property, or any part thereof shall be entitled to hold, lease, rent, operate,
manage and sell the same in any manner provided by applicable laws.
-18-
3.8 Sales of Lots. In the event the Beneficiary shall institute judicial
-------------
proceedings to foreclose the lien hereof, and shall be appointed as mortgagee-
in-possession of the Mortgaged Property, the Beneficiary during such time as it
shall be mortgagee-in-possession of the Mortgaged Property pursuant to an order
or decree entered in such judicial proceedings, shall have, and the Trustor
hereby gives and grants to the Beneficiary, the right, power and authority to
sell any of the Lots for such prices and upon conditions and provisions as such
mortgagee-in-possession may deem desirable. Trustor expressly acknowledges and
agrees that while the Beneficiary is a mortgagee-in-possession of the Mortgaged
Property pursuant to an order or decree entered in such judicial proceedings,
such Beneficiary shall be deemed to be and shall be the attorney-in-fact of the
Trustor for the purpose of selling the Lots for the prices and upon the terms,
conditions and provisions deemed desirable to such Beneficiary and with like
effect as if such sales of Lots had been made by the Trustor as the owner in fee
simple of the Mortgaged Property free and clear of any conditions or limitations
established by this Deed of Trust. The power and authority hereby given and
granted by the Trustor to Beneficiary shall be deemed to be coupled with an
interest and shall not be revocable by Trustor.
3.9 Action by Beneficiary or Agent. Subject to and in accordance with
------------------------------
applicable law, any of the actions referred to in this Article may be taken by
Beneficiary, either in person or by agent, with or without bringing any action
or proceeding, or by receiver appointed by a court, and any such action may also
be taken irrespective of whether any notice of default or election to sell has
been given hereunder and without regard to the adequacy of the security for the
indebtedness hereby secured.
3.10 Marshalling of Assets. To the extent allowed by applicable law,
---------------------
Trustor on its own behalf and on behalf of its successors and assigns hereby
expressly waives all rights to require a marshalling of assets by Trustee or
Beneficiary or to require Trustee or Beneficiary to first resort to the sale of
any portion of the Mortgaged Property which might have been retained by Trustor
before foreclosing upon and selling any other portion as may be conveyed by
Trustor subject to this Deed of Trust.
3.11 Occupancy by Trustor. In the event of a trustee's sale hereunder, if
--------------------
at the time of such sale Trustor occupies the portion of the Mortgaged Property
so sold or any part thereof, Trustor shall immediately become the tenant of the
purchaser at such sale, which tenancy shall be a tenancy from day to day,
terminable at the will of either the tenant or any such purchaser, at a
reasonable rental per day based upon the value of the portion of the Mortgaged
Property so occupied, such rental to be due and payable daily to the purchaser.
An action of unlawful detainer shall lie if the tenant holds over after a demand
in writing from the purchaser for possession of such Mortgaged Property.
3.12 Non-Waiver of Default. The entering upon and taking possession of
---------------------
the Mortgaged Property, the collection of any Rents or Profits or other benefits
and the application thereof, as aforesaid, shall not cure or waive any default
theretofore or thereafter occurring or affect any notice of default hereunder or
invalidate any act done pursuant to such notice; and, notwithstanding
continuance in possession of the Mortgaged Property, or any part thereof by
Beneficiary, Trustee or
-19-
a receiver and the collection, receipt and application of Rents and Profits or
other benefits, Beneficiary shall be entitled to exercise every right provided
for in this Deed of Trust or by law upon or after the occurrence of a default,
including the right to exercise the power of the sale.
3.13 Remedies Cumulative. No remedy herein conferred upon or reserved to
-------------------
Trustee or Beneficiary is intended to be exclusive of any other remedy herein or
by law provided, but each shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute. No delay or omission of Trustee or Beneficiary to exercise any
right or power accruing upon any Event of Default shall impair any right or
power or shall be construed to be a waiver of any Event of Default or any
acquiescence therein; and every power and remedy given by this Deed of Trust to
Trustee or Beneficiary may be exercised from time to time as often as may be
deemed expedient by Trustee or Beneficiary. If there exists additional security
for the performance of the obligations secured hereby, to the extent permitted
by law, the holder of the Note, at its sole option, and without limiting or
affecting any of the rights or remedies hereunder, may exercise any of the
rights and remedies to which it may be entitled hereunder either concurrently
with whatever rights it may have in connection with such other security or in
such order as it may determine. Nothing in this Deed of Trust or in the Note
shall affect the obligation of Trustor to pay the principal of, and interest on,
the Note in the manner and at the time and place therein respectively expressed.
ARTICLE 4
TRUSTEE
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4.1 Acceptance of Trust, Notice of Indemnification. Trustee accepts this
----------------------------------------------
trust when this Deed of Trust, duly executed and acknowledged, becomes a public
record as provided by law. Trustee is not obligated to notify any party hereto
of pending sale under any other Deed of Trust or of any action or proceeding in
which Trustor, Beneficiary or Trustee shall not be obligated to perform any act
of it hereunder unless the performance of such act is requested in writing in
the manner required by law and Trustee is reasonably indemnified against loss,
cost, liability and expense.
4.2 Substitution of Trustee. From time to time with or without cause for
-----------------------
whatever reason, by a writing signed and acknowledged by Xxxxxxxxxxx and filed
for record in the Office of the Recorder of the County in which the Mortgaged
Property is situated, Beneficiary may appoint another trustee to act in the
place and stead of Trustee or any successor and such writing shall refer to this
Deed of Trust and set forth the date, book and page of its recordation. The
recordation of such instrument of substitution shall discharge trustee herein
named and shall appoint the new trustee as the Trustee hereunder with the same
effect as if originally named Trustee herein. A writing recorded pursuant to
this paragraph shall be conclusive proof of the proper substitution of such new
trustee.
4.3 Trustee's Powers. At any time, or from time to time, without
----------------
liability therefor and without notice, upon written request of Beneficiary and
presentation of the Note secured hereby, and
-20-
without affecting the personal liability of any person for payment of the
indebtedness secured hereby or the effect of this Deed of Trust upon the
remainder of said Mortgaged Property, Trustee may (i) reconvey any part of said
Mortgaged Property, (ii) consent in writing to the making of any map or plat
thereof, (iii) join in granting any easement thereon, or (iv) join in any
extension agreement or any agreement subordinating the lien or charge hereof.
4.4 Reconveyance of Trust. Upon written request of Beneficiary stating
---------------------
that all sums secured hereby have been paid and upon surrender to Trustee of
this Deed of Trust and the Note or notes secured hereby for cancellation and
retention and payment of its fees, Trustee shall reconvey, without warranty, the
Mortgaged Property then held hereunder. The recitals in such reconveyance of
any matters or facts shall be conclusive proof of the truthfulness thereof. The
grantee in such reconveyance may be described as "the person or persons legally
entitled thereto."
4.5 Indemnification of Trustee. Trustee may rely on any document
--------------------------
believed by him in good faith to be genuine. All money received by Trustee
shall, until used or applied as herein provided, be held in trust, but need not
be segregated (except to the extent required by law), and Trustee shall not be
liable for interest thereon. Trustor shall indemnify Trustee against all
liability and expenses which he may incur in the performance of his duties
hereunder, except for its own negligence.
ARTICLE 5
MISCELLANEOUS
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5.1 Non-Waiver. By accepting payment of any sum secured hereby after its
----------
due date or late performance of any indebtedness secured hereby, Beneficiary
shall not waive its right against any person obligated directly or indirectly
hereunder or on any indebtedness hereby secured, either to require prompt
payment when due of all other sums so secured or to declare a default for
failure to make payment except as to such payment accepted by Beneficiary. No
exercise of any right or remedy by Trustee or Beneficiary hereunder shall
constitute a waiver of any other right or remedy herein contained or provided by
law.
No delay or omission of the Trustee or Beneficiary in the exercise of any
right, power or remedy accruing hereunder or arising otherwise shall impair any
such right, power or remedy, or be construed to be a waiver of any default or
acquiescence therein.
Receipts of rents, awards, and any other monies or evidences thereof,
pursuant to the provisions of this Deed of Trust and any disposition of the same
by Trustee or Beneficiary shall not constitute a waiver of the power of sale or
right of foreclosure by Trustee or Beneficiary in the event of a default or
failure of performance by Trustor of any covenant or agreement contained herein
or the Note secured hereby.
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5.2 Right to Release. Without affecting the liability of any other
----------------
person for the payment of any indebtedness herein mentioned (including Trustor
should it convey said Mortgaged Property) and without affecting the lien or
priority hereof upon any property not released, Beneficiary may, without notice,
release any person so liable, extend the maturity or modify the terms of any
such obligation, or grant other indulgences, release or reconvey or cause to be
released or reconveyed at any time all or any part of the Mortgaged Property,
take or release any other security or make compositions or other arrangements
with debtors. Beneficiary may also accept additional security, either
concurrently herewith or hereafter, and sell same or otherwise realize thereon
either before, concurrently with, or after sale hereunder.
5.3 Protection of Security. Should Trustor fail to make any payment or
----------------------
to perform any covenant as herein provided, Beneficiary (but without obligation
so to do and without notice to or demand upon Trustor and without releasing
Trustor from any obligation hereof) may: (i) make or do the same in such manner
and to such extent as Beneficiary may deem necessary to protect the security
hereof, Beneficiary being authorized to enter upon the Mortgaged Property for
such purposes; (ii) commence, appear in and defend any action or proceeding
purporting to affect the security hereof or the rights or powers of Beneficiary;
and/or (iii) pay, purchase, contest, or compromise any encumbrance, charge or
lien which in the judgment of Beneficiary is prior or superior hereto and, in
exercising any such power, incur any liability and expend whatever amounts in
its absolute discretion it may deem necessary therefor, including cost of
evidence of title and reasonable attorneys' fee. Any expenditures in connection
herewith shall be deemed an Advance and shall constitute part of the
indebtedness secured by this Deed of Trust.
5.4 Rules of Construction. When the identity of the parties hereto or
---------------------
other circumstances make it appropriate, the masculine gender includes the
feminine and/or neuter, and the singular number includes the plural. The
headings of each article, section or paragraph are for information and
convenience only and do not limit or construe the contents of any provision
hereof.
5.5 Severability. If any term of this Deed of Trust or the application
------------
thereof to any person or circumstances, shall, to any extent, be invalid or
unenforceable, the remainder of this Deed of Trust, or the application of such
term to persons or circumstances other than those as to which it is invalid or
unenforceable, shall not be affected thereby, and each term of this Deed of
Trust shall be valid and enforceable to the fullest extent.
5.6 Successors in Interest. This Deed of Trust applies to, inures to the
----------------------
benefit of, and is binding not only on the parties hereto, but on their heirs,
executors, administrators, successors and assigns. All obligations of Trustor
hereunder are joint and several. The term "Beneficiary" shall mean the holder
and owner, including pledges, of the Note secured hereby, whether or not named
as Beneficiary herein and any owner or holder of the beneficial interest under
this Deed of Trust.
5.7 Governing Law. This Deed of Trust governing the contractual rights
-------------
and obligations of Trustor, Beneficiary and Trustee shall be construed
according to and governed by the laws of the State of Nevada, except to the
extent that the laws of the State of California shall govern the
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perfection, priority and procedures for foreclosure of the lien created by this
Deed of Trust. Trustor hereby consents to the jurisdiction of any competent
court in the State of Nevada and consents to service of process by any means
authorized by Nevada law in any action brought under or arising out of this Deed
of Trust.
5.8 Modifications. This Deed of Trust may not be amended, modified or
-------------
changed nor shall any waiver of any provision hereof be effective, except only
by an instrument in writing and signed by the party against whom enforcement of
any waiver, amendment, change, modification or discharge is sought.
5.9 No Merger. If both the Lessor's and Lessee's estates under any lease
---------
or any portion thereof which constitutes a part of the Mortgaged Property shall
at any time become vested in one owner, this Deed of Trust and the lien created
hereby shall not be destroyed or terminated by application of the doctrine of
merger, and, in such event, Beneficiary shall continue to have and enjoy all of
the rights and privileges of Beneficiary as to the separate estates. In
addition, upon the foreclosure of the lien created by this Deed of Trust on the
Mortgaged Property pursuant to the provisions hereof, any leases or subleases
then existing shall not be destroyed or terminated by application of the law of
merger or as a matter of law or as a result of such foreclosure unless
Beneficiary or any purchaser at any such foreclosure sale shall so elect. No
act by or on behalf of Beneficiary or any such purchaser shall constitute a
termination of any lease or sublease unless Beneficiary or such purchaser shall
have given written notice thereof to such tenant or subtenant.
5.10 Attorneys' Fees. If Beneficiary incurs any costs or expenses,
---------------
including attorneys' fees, for any of the following relating to this Deed of
Trust (or any other instrument evidencing or securing this loan): (a) the
interpretation, performance or enforcement thereof; (b) the enforcement of any
statute, regulation or judicial decision; (c) any collection effort; or (d) any
suit or action for the interpretation, performance or enforcement thereof is
commenced or defended, or, if any other judicial or nonjudicial proceeding is
instituted by Beneficiary or any other person, and an attorney is employed by
Beneficiary to appear in any such action or proceeding, or to reclaim, seek
relief from a judicial or statutory stay, sequester, protect, preserve or
enforce Beneficiary's interest in this Deed of Trust or any other security for
the Note, including but not limited to proceedings under federal bankruptcy law,
in eminent domain, under the probate code, or in connection with any state or
federal tax lien, then Trustor agrees to pay the reasonable attorneys' fees
("reasonable" being the usual hourly billing rates charged by Beneficiary's
attorneys) and costs thereof, regardless of whether suit or action is commenced
or defended as to (a), (b), and (c). Such fees and costs shall be added to the
principal of the Note and shall bear interest at the Default Rate. The
foregoing notwithstanding, in any action commenced by Trustor or Beneficiary
against the other to enforce the provisions of this Deed of Trust or any other
instrument evidencing or securing this loan, the prevailing party of such action
shall be entitled to recover its reasonable attorneys' fees (as set forth above)
from the non-prevailing party and the non-prevailing party shall not be entitled
to recover its attorneys' fees.
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5.11 Conflict. If the term of any other Loan Document, except the Note,
--------
shall be in conflict with this Deed of Trust, then this Deed of Trust shall
govern to the extent of the conflict. If the term of this Deed of Trust shall
be in conflict with the Note, the Note will then govern to the extent of the
conflict.
5.12 Notices. All notices to be given pursuant to this Deed of Trust
-------
shall be sufficient if given by personal service, by guaranteed overnight
delivery service, by telex, telecopy or telegram or by being mailed postage
prepaid, certified or registered mail, return receipt requested, to the
described addresses of the parties hereto as set forth below, or to such other
address as a party may request in writing. Any time period provided in the
giving of any notice hereunder shall commence upon the date of personal service,
the date after delivery to the guaranteed overnight delivery service, the date
of sending the telex, telecopy or telegram or two (2) days after mailing
certified or registered mail.
TRUSTOR'S ADDRESS: Inco Homes Corporation
0000 Xxxx Xxxxx Xxxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxxxx
BENEFICIARY'S ADDRESS: c/o USA Commercial Mortgage Company
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
WITH DUPLICATE NOTICE TO: Xxxxx, Xxxxxxxxx, XxXxxx & Xxxxxxx
0000 Xxxxx Xxxxx Xxxx
Xxx Xxxxx, Xxxxxx 00000
Attn: Xxxxxx X. XxXxxx, Esq.
5.13 Request for Notice of Default. Trustor requests that a true and
-----------------------------
correct copy of any notice of default and any notice of sale be sent to Trustor
at the address set forth in Section 5.12 hereof.
5.14 Late Charges. As set forth and defined in the Note, there shall be
------------
due to Beneficiary a Late Charge of five percent (5%) of the amount of any
payment which is received by Beneficiary so as to incur a Late Charge, and all
such Late Charges are secured hereby.
5.15 Statutory Covenants. Where not inconsistent with the above, the
-------------------
following covenants, Nos. 1; 2 (full replacement value); 3; 4 (five percent [5%]
per annum above the Interest Rate set forth in the Note); 5; 6; 7 (a reasonable
percentage); 8 and 9 of NRS 107.030 are hereby adopted and made a part of this
Deed of Trust.
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5.16 Non-Assumption. Notice is hereby given that Trustor's obligations
--------------
under this Deed of Trust may not be assumed except as permitted by Section 1.11
hereof. Any transfer of Trustor's interest in the Mortgaged Property or any
attempted assumption of Trustor's obligations under the Deed of Trust not so
approved shall constitute a default hereunder and shall permit Beneficiary to
accelerate the Maturity Date of the Note. Reference to applicable sections of
the Loan Documents must be made for the full text of such provisions.
5.17 Review of Covenants, Conditions and Restrictions. No covenant,
------------------------------------------------
condition or restriction or any rule or regulation or any other document or
agreement, however, denominated, which shall purport to apply to the ownership,
operation, maintenance or governance of the Mortgaged Property or any part
thereof, nor any article of incorporation bylaw or any other document or
agreement, however denominated, which shall purport to establish an organization
for the operation, maintenance of governance of the Mortgaged Property or any
part thereof, shall be approved, executed and/or recorded without the express
prior written consent of Beneficiary.
5.18 Partial Releases of Lots. So long as no Event of Default has occurred
------------------------
and is continuing, Beneficiary shall release individual or multiple Lots from
the lien and operation of the Deed of Trust upon satisfaction in Xxxxxx's sole
discretion of the following requirements:
(i) the payment to Lender, from the home sale escrow, of a sum
to be determined by Beneficiary; and
(ii) Borrower pays all costs and expenses in connection with such
release and reconveyance.
IN WITNESS WHEREOF, the undersigned have caused this instrument to be
signed as of the date first above written.
"TRUSTOR":
Inco Homes Corporation, a Delaware
corporation
By: _____________________________
Xxx Xxxxxx, President
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STATE OF ______________ )
) ss.
COUNTY OF _____________ )
On _____________, 1997, before me, _________________________________
_________, a Notary Public, personally appeared Xxx Xxxxxx, personally known
----------
to me (or proved to me on the basis of satisfactory evidence) to be the person
whose name is subscribed to the within instrument and acknowledged to me that
he/she executed the same in his/her authorized capacity, and by his/her
signature on the instrument the person, or entity on behalf of which the person
acted, executed the instrument.
WITNESS my hand and official seal.
_____________________________
Notary Public
(SEAL) (My Commission Expires:______)
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EXHIBIT "B"
DESCRIPTION OF REAL PROPERTY
----------------------------
Parcel 1
--------
Lots 23, 37 and 39 of Tract No. 24840, in the City of Corona, County of
Riverside, State of California, as per map recorded in Book 257, Pages 16, 17
and 18 of Maps, in the Office of the County Recorder of said County.
Parcel 2
--------
Lot 9 of Tract No. 25466, in the City of Corona, County of Riverside, State of
California, as per map recorded in Book 249, Pages 88 through 91, of Maps, in
the Office of the County Recorder of said County.
THIS DEED OF TRUST IS JUNIOR IN LIEN AND SUBJECT TO FIRST AND SECOND TRUST DEEDS
ALREADY RECORDED ENCUMBERING SAID REAL PROPERTY.
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