Exhibit 99.5
NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR
STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED
FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S
LICENSE NUMBER.
Collin County Recording Fee: $______
AFTER RECORDING, RETURN TO:
Dallas City Bank
Attention: Loan Administration Department
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
THIS INSTRUMENT IS INTENDED TO ALSO OPERATE AS A SECURITY AGREEMENT AND
A FINANCING STATEMENT UNDER ARTICLE 9 OF THE TEXAS BUSINESS & COMMERCE
CODE. THIS INSTRUMENT IS PRESENTED TO FILING OFFICERS FOR FILING IN THE
APPROPRIATE UNIFORM COMMERCIAL CODE RECORDS, SUCH FILING OFFICERS BEING
BOTH THE SECRETARY OF STATE OF THE STATE OF TEXAS AS WELL AS THE COUNTY
CLERK OF THE COUNTY OF COLLIN, TEXAS. IT SHOULD BE SO FILED, RECORDED
AND INDEXED. A CARBON, PHOTOGRAPHIC OR OTHER REPRODUCTION OF THIS
INSTRUMENT IS SUFFICIENT AS A FINANCING STATEMENT.
THE STATE OF TEXAS ss.
ss. DEED OF TRUST, SECURITY AGREEMENT AND
COUNTY OF COLLIN ss. ASSIGNMENT OF RENTS, LEASES, INCOMES AND
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AGREEMENTS
Date Hereof: September 29, 2005
Grantor (Debtor): BHDGI, Ltd., a Texas limited partnership
0000 Xxxxxxx Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Trustee: Xxxxxx Xxxxxxxx
Beneficiary
(Secured Party): Dallas City Bank
Attention: Xxx Xxxxxxxx
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
(000) 000-0000
Note Amount: $2,000,000.00
Maturity Date: September 29, 2006
Guarantor(s): Behringer Harvard Short-Term Opportunity Fund I LP, a
Texas limited partnership
Attn: Xxxxxx Xxxxxx
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Prior Lien(s): None
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KNOW ALL MEN BY THESE PRESENTS:
This Deed of Trust, Security Agreement and Assignment of Rents, Leases,
Incomes and Agreements ("Deed of Trust"), entered into as of the Date Hereof, by
Grantor, to Beneficiary.
W I T N E S S E T H:
-------------------
ARTICLE 1.
DEFINITIONS
1.1. DEFINITIONS. As used herein, the following terms shall have the
following meanings:
A. ASSIGNMENT OF RENTS AND LEASES. The Assignment of Xxxxx
and Leases of even date herewith executed by Grantor in favor of
Beneficiary.
B. BENEFICIARY. The Beneficiary stated above, whose address
for notice hereunder is as set forth above, and the subsequent holder or
holders, from time to time, of the Note (as defined hereinbelow).
C. EVENT OF DEFAULT. Any happening or occurrence described
in Article 6. hereinbelow.
D. FIXTURES. All materials, supplies, equipment, apparatus
and other items now or hereafter attached to, installed in or used in
connection with (temporarily or permanently) any of the Improvements or
the Land (as hereinafter defined), including but not limited to any and
all partitions, window screens and shades, drapes, rugs and other floor
coverings, awnings, motors, engines, boilers, furnaces, pipes, plumbing,
cleaning, call and sprinkler systems, fire extinguishing apparatus and
equipment, water tanks, swimming pools, heating, ventilating, plumbing,
laundry, 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 signs of every description and however
erected, placed or attached.
E. GOVERNMENTAL AUTHORITY. Any and all courts, boards,
agencies, commissions, offices or authorities of any nature whatsoever
for any governmental unit (federal, state, county, district, municipal,
city or otherwise) whether now or hereafter in existence.
F. GRANTOR. The above-defined Grantor and any and all
subsequent owners of the Mortgaged Property (as defined hereinbelow).
G. GUARANTOR (INDIVIDUALLY AND/OR COLLECTIVELY, AS THE
CONTEXT MAY REQUIRE). The Guarantor or Guarantors first named above.
H. GUARANTY (INDIVIDUALLY AND/OR COLLECTIVELY AS THE
CONTEXT MAY REQUIRE). That or those instruments of Guaranty of even date
herewith, if any, from Guarantor to Beneficiary guaranteeing the
repayment of the Indebtedness and the satisfaction of, or continued
compliance with, the Obligations (as defined hereinbelow).
I. IMPOSITIONS. All real estate and personal property
taxes, water, gas, sewer, electricity and other utility rates and
charges, charges for any easement, license or agreement maintained for
the benefit of the Mortgaged Property, and all other taxes, charges and
assessments and any interest, costs or penalties with respect thereto,
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 Rents and Incomes (as defined hereinbelow) or
the ownership, use, occupancy, or enjoyment thereof.
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J. IMPROVEMENTS. Any and all buildings, structures, open
parking areas and other improvements, and any and all additions,
alterations, or appurtenances thereto, now or at any time hereafter
situated, placed or constructed upon the Land (as defined hereinbelow)
or any part thereof.
K. INDEBTEDNESS. The principal of, interest on and all
other amounts, payments and premiums due under the Note and secured by
the other Security Documents (as defined hereinbelow) together with and
including all other direct and indirect indebtedness now or any time in
the future owing or to be owing by Grantor to Beneficiary, regardless of
how evidenced or incurred, it being understood that it is contemplated
that Grantor will become further indebted to Beneficiary in the future.
The term "Obligations" as that term is defined in the Loan Agreement
shall be included within the definition of Indebtedness as used in this
Deed of Trust.
L. LAND. The real estate or interest therein described as
follows:
BEING THREE TRACTS OF LAND SITUATED IN THE XXXXXXX XXXXXXX
SURVEY, ABSTRACT NO. 867, COLLIN COUNTY, TEXAS, AND BEING MORE
PARTICULARLY DESCRIBED ON EXHIBIT "A" ATTACHED HERETO AND MADE A
PART HEREOF, AND ALL IMPROVEMENTS AND FIXTURES AND ALL RIGHTS,
TITLES AND INTERESTS APPURTENANT THERETO.
M. LEASES AND AGREEMENTS. Any and all leases, subleases,
licenses, concessions or other agreements (written or verbal, now or
hereafter in effect) which grant a possessory interest in and to, or the
right to use, the Mortgaged Property, or any part thereof, save and
except any and all leases, subleases, or other agreements pursuant to
which Grantor is granted a possessory interest in the Land; and all
other contracts or agreements (written or oral, now or hereinafter in
effect), relating to the use, operation, enjoyment or acquisition of, or
construction on, or provision of goods or supplies to the Mortgaged
Property, or any part thereof, regardless of whether same grant a
possessory interest in and to, or the right to use the Mortgaged
Property, or any part thereof.
N. LEGAL REQUIREMENTS.
(1) 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 the ownership, use, occupancy, operation,
maintenance, repair or reconstruction thereof,
(2) Grantor's or any Guarantor's presently or
subsequently effective Bylaws and Articles or Certificate of
Incorporation, Partnership, Limited Partnership, Joint Venture,
Trust or other form of business association (if either, both or
all be any of same),
(3) Any and all Leases and Agreements, and contracts
(written or oral) of any nature to which Grantor or any
Guarantor is or may be bound or to which the Mortgaged Property
is or may be subject.
O. LOAN AGREEMENT. The Loan Agreement dated as of the Date
Hereof by and between Grantor, Guarantor and Beneficiary pertaining to
the Indebtedness secured by this Deed of Trust.
P. MORTGAGED PROPERTY. The Land, Improvements, Fixtures,
Personalty (as defined hereinbelow) Rents and Incomes, and rights, but
not obligations, under the Leases and Agreements, together with:
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(1) All rights, privileges, tenements,
hereditaments, rights-of-way, easements, appendages and
appurtenances in anywise appertaining thereto, and all right,
title, and interest of Grantor in and to any streets, ways,
alleys, strips or gores of land adjoining the Land or any part
thereof; and
(2) All additions, appurtenances, substitutions,
replacements, and revisions thereof and thereto and all
reversions and remainders therein; and
(3) All of Grantor's right, title, and interest in
and to any award, awards, remuneration, settlements or
compensation heretofore made or hereafter to be made by any
governmental authority to the present or any subsequent owner of
the Land, Improvements, Fixtures or Personalty, including those
for any vacation of, or change of grade in, any streets
affecting the Land or the Buildings; and
(4) Any and all other security and collateral of any
nature whatsoever, now or hereafter given for the repayment of
the Indebtedness or the performance and discharge of the
Obligations.
As 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, any interest therein.
Q. NOTE. The Promissory Note dated of even date herewith,
executed by Grantor payable to the order of Beneficiary in the amount of
the Note Amount and secured, in part, by this Deed of Trust, bearing
interest at the floating rate therein specified and maturing on the
Maturity Date.
R. OBLIGATIONS. Any and all of the covenants, warranties,
representations, and other obligations (other than to repay the
Indebtedness) made or undertaken by Grantor, Guarantor or others to
Beneficiary, Trustee or others, as set forth in the Security Documents;
as set forth in any lease, sublease, or other agreement pursuant to
which Grantor is granted a possessory interest in the Land; or as set
forth in any contract or agreement (written or oral, now or hereinafter
in effect), relating to the use, operation, enjoyment or acquisition of,
or construction on, or provision of goods or supplies to, the Mortgaged
Property, or any part thereof, regardless of whether Grantor is granted
a possessory interest in the Land pursuant thereto.
S. PERSONALTY. All of the right, title, and interest of
Grantor in and to all furniture, furnishings, equipment, machinery,
goods, general intangibles, money, accounts, contract rights, inventory,
insurance and condemnation proceeds and all other personal property
(other than the Fixtures) of any kind or character as defined in and
subject to the provisions of the Texas Business and Commerce Code
(Article 9 - Secured Transactions), now or hereafter located upon,
within or about the Land and the Improvements or used in connection with
the operation thereof, together with all accessories, replacements, and
substitutions thereto or therefor and the proceeds thereof, together
with all articles of personal property now or hereafter used in or about
the improvements which are necessary to the complete and comfortable use
and occupancy of the same for the purpose or purposes for which erected,
and all building materials and equipment now or hereafter delivered to
the above-referenced real property and intended to be installed thereon
or in or upon the Improvements or used in the development of the
Mortgaged Property, and all plans, drawings, surveys, appraisals, books,
records and all other documents of any type or nature used or intended
to be used in the development of the Mortgaged Property (all of such
articles of personal property, building materials, equipment and
documents being hereafter sometimes collectively referred to as the
"Personal Property").
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T. RENTS AND INCOMES. All of the rents, royalties,
revenues, income, proceeds, profits, issues and other benefits paid or
payable by parties to the Leases and Agreements other than Grantor for
using, leasing, licensing, possession, operating from, residing in,
selling or otherwise enjoying the Mortgaged Property.
U. SECURITY DOCUMENTS. This Deed of Trust, the Guaranty,
the Assignment of Rents and Leases, the Loan Agreement, and any and all
other documents now or hereafter executed by Grantor, Guarantor or any
other person or party to evidence or secure the payment of the
Indebtedness or the performance and discharge of the Obligations.
ARTICLE 2.
GRANT
2.1. 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 the Mortgaged Property, 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 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 the liens, security interests, estates and rights
granted by the Security Documents shall terminate; otherwise same shall remain
in full force and effect.
ARTICLE 3.
WARRANTIES AND REPRESENTATIONS
Grantor hereby unconditionally warrants and represents to Beneficiary as
follows:
3.1. VALIDITY OF LOAN INSTRUMENTS. The execution, delivery and
performance by Grantor of the Security Documents (other than the Guaranty), and
the borrowing evidenced by the Note, (a) if Grantor is a corporation, are within
Grantor's Board of Directors, Shareholders and all other requisite corporate
action, (b) if Grantor is a partnership, are within Grantor's partnership powers
and have been duly authorized by the Grantor's Articles and/or Agreement of
Partnership or otherwise by the partners of Grantor, (c) have received all (if
any) requisite prior governmental approval in order to be legally binding and
enforceable in accordance with the terms thereof, and (d) 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, any Legal Requirement or result in the
creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of Grantor's or Guarantor's property or assets, except as
contemplated by the provisions of the Security Documents. The Security Documents
constitute the legal, valid, and binding obligations of Grantor, Guarantor, and
others obligated under the terms of the Security Documents, in accordance with
their respective terms.
3.2. TITLE TO MORTGAGED PROPERTY AND LIEN OF THIS INSTRUMENT. 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 indefeasible title to
the Fixtures and Personalty, free and clear of any liens, charges, encumbrances,
security interests and adverse claims whatsoever. This Deed of Trust constitutes
a valid, subsisting, first lien deed of trust on the Land, the Improvements, and
the Fixtures and a valid, subsisting, first security interest in and to the
Personalty, Leases and Agreements and Rents and Incomes, all in accordance with
the terms hereof.
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ARTICLE 4.
AFFIRMATIVE COVENANTS
Grantor hereby unconditionally covenants and agrees with Beneficiary as
follows:
4..1. PAYMENT AND PERFORMANCE. Grantor will pay the Indebtedness, as
and when called for in the Security Documents and on or before the due dates
thereof, and will perform all of the Obligations, in full and on or before the
dates same are to be performed.
4..2. COMPLIANCE WITH LEGAL REQUIREMENTS. Grantor will promptly and
faithfully comply with, conform to and obey all present and future Legal
Requirements.
4..3. PAYMENT OF IMPOSITIONS. Grantor will duly pay and discharge, or
cause to be paid and discharged, the Impositions not later than the due date
thereof, or the day any fine, penalty, interest or cost may be added thereto or
imposed, or the day any lien may be filed, for the non-payment thereof (if such
day is used to determine the due date of the respective item); provided,
however, that Grantor may, if permitted by law, and if such installment payment
would not create or permit the filing of a lien against the Mortgaged Property,
pay the Impositions in installments whether or not interest shall accrue on the
unpaid balance of such Impositions.
4..4. REPAIRS. Grantor will keep the Mortgaged Property in first class
order and condition and will make all repairs, replacements, additions,
improvements, and alterations thereof and thereto, interior and exterior,
structural and non structural, which are necessary or reasonably appropriate to
keep same in such order and condition.
4..5. INSURANCE. Grantor will obtain and maintain insurance upon and
relating to the Mortgaged Property insuring against personal injury and death,
loss by fire and such other hazards, casualties and contingencies (including
business interruption insurance covering loss of Rents and Incomes and flood
insurance) as are normally and usually covered by extended coverage policies in
effect where the Land is located and such other risks as may be specified by
Beneficiary, from time to time, all in such amounts and with such insurers of
recognized responsibility as are acceptable to Beneficiary. Each insurance
policy issued in connection therewith shall provide by way of endorsements,
riders or otherwise that (a) proceeds will be payable to Beneficiary as its
interest may appear, it being agreed by Grantor that such payments shall be
applied (i) if there be no Event of Default existing or which would exist but
for due notice or lapse of time, or both, to the restoration, repair or
replacement of the Mortgaged Property, or (ii) if there be an Event of Default
existing, or which would exist but for due notice or lapse of time, or both, at
the option of the Beneficiary, either for the above-stated purpose or toward the
payment of the Indebtedness; (b) the coverage of Beneficiary shall not be
terminated, reduced or affected in any manner 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 ten (10) days'
prior written notice thereof; and (d) Beneficiary may, but shall not be obliged
to, make premium payments to prevent any cancellation, endorsement, alteration
or reissuance and such payments shall be accepted by the insurer to prevent
same. Beneficiary shall be furnished with the original of each such initial
policy or an acceptable binder issued in accordance with Chapter 327, Subsection
E of Section 2 of Article 21.48A of the Texas Insurance Code (as amended by the
72nd legislature) coincident with the execution of this Deed of Trust and the
original of each renewal policy not less than fifteen (15) days prior to the
expiration of the initial or each preceding renewal policy together with
(subject to the provisions of Article 11.) receipts or other evidence that the
premiums thereon have been paid. Grantor shall furnish to Beneficiary, on or
before one hundred twenty (120) days after the close of each of Grantor's fiscal
years, a statement certificated by a duly authorized officer of Grantor of the
amounts of insurance maintained in compliance with this Paragraph 4.5. of the
risks covered by such insurance and of the insurance company or companies which
carry such insurance.
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4..6. APPLICATION OF PROCEEDS. If the proceeds of the insurance
described in Paragraph 4.5. hereinabove are to be used for restoration, repair,
or replacement ("Work") of the Mortgaged Property (whether pursuant to Paragraph
4.5.(a)(i), if there be no Event of Default as therein referred to, or pursuant
to Paragraph 4.5.(a)(ii), by reason of exercise of the option of Beneficiary to
use such proceeds for the aforesaid purpose), such proceeds shall be paid out by
Beneficiary from time to time to Grantor (or, at the option of Beneficiary,
jointly to Grantor and the persons furnishing labor and/or material incident to
such work or directly to such persons) as the Work progresses, subject to the
following conditions: (a) prior to commencement of the Work (other than Work to
be performed on an emergency basis to protect the Mortgaged Property or prevent
interference therewith), (i) an architect or engineer, approved by Beneficiary,
shall be retained by Grantor (at Grantor's expense) and charged with the
supervision of the Work and (ii) Grantor shall have prepared, submitted to
Beneficiary and secured Beneficiary's written approval of the plans and
specifications for such Work; (b) each request for payment by Grantor shall be
made on ten (10) days' prior written notice to Xxxxxxxxxxx and shall be
accompanied by a certificate to be made by the architect or engineer supervising
the Work (if one is required pursuant to Paragraph 4.6.(a) hereinabove),
otherwise by an executive officer of Grantor, stating, among such other matters
as may be reasonably required by Beneficiary, that: (i) all of the Work
completed has been done in compliance with the approved plans and specifications
(if any be required under Paragraph 4.6.(a) hereinabove); (ii) the sum requested
is justly required to reimburse Grantor for payments by Grantor to, or is justly
due to, the contractor, subcontractors, materialmen, laborers, engineers,
architects or other persons rendering services or materials for the Work (giving
a brief description of such services and materials); (iii) when added to all
sums previously paid out by Grantor, the sum requested does not exceed the value
of the Work done to the date of such certificate; and (iv) the amount of
insurance proceeds remaining in the hands of Beneficiary will be sufficient upon
completion of the Work to pay for the same in full (giving in such reasonable
detail as Beneficiary may require an estimate of the cost of such completion);
(c) each request shall be accompanied by waivers of lien satisfactory in form
and substance to Beneficiary covering that part of the Work for which payment or
reimbursement is being requested and by a search prepared by a title company or
licensed abstractor or by other evidence satisfactory to Beneficiary that there
has not been filed with respect to the Mortgaged Property any mechanic's lien or
other lien, affidavit or instrument asserting any lien or any lien rights with
respect to the Mortgaged Property; (d) there has not occurred any Event of
Default since the hazard, casualty or contingency giving rise to payment of the
insurance proceeds; and (e) in the case of the request for the final
disbursement, such request is accompanied by a copy of any certificate of
occupancy or other certificate required by any Legal Requirement to render
occupancy of the damaged portion of the Mortgaged Property lawful. If, upon
completion of the Work, any portion of the insurance proceeds has not been
disbursed to Grantor (or one or more of the other aforesaid persons) incident
thereto, Beneficiary may, at Beneficiary's option, disburse such balance to
Grantor or apply such balance toward the payment of the Indebtedness. Nothing
herein shall be interpreted to prohibit Beneficiary from (a) withholding from
each such disbursement ten percent (10%) (or such greater amount, if permitted
or required by any Legal Requirement) of the amount otherwise herein provided to
be disbursed, and from continuing to withhold such sum, until the time permitted
for perfecting liens against the Mortgaged Property has expired, at which time
the amount withheld shall be disbursed to Grantor (or to Grantor and any person
or persons furnishing labor and/or material for the Work or directly to such
persons, or (b) applying at any time the whole or any part of such insurance
proceeds to the curing of any Event of Default.
4..7. RESTORATION FOLLOWING CASUALTY. If any act or occurrence of any
kind or nature (including any casualty for which insurance was not obtained or
obtainable) shall result in damage to or loss or destruction of the Mortgaged
Property, Grantor will give notice thereof to Beneficiary and, if so instructed
by Beneficiary, will promptly, at Grantor's sole cost and expense and regardless
of whether the insurance proceeds (if any) shall be sufficient for the purpose,
commence and continue diligently to completion to restore, repair, replace, and
rebuild the Mortgaged Property as nearly as possible to its value, condition and
character immediately prior to such damage, loss or destruction.
4..8. PERFORMANCE OF LEASES AND AGREEMENTS. Grantor will (a) duly and
punctually perform and comply with any and all representations, warranties,
covenants and agreements expressed as binding upon it under
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each of the Leases and Agreements, (b) not voluntarily terminate, cancel, or
waive its rights or the obligations of any other party under any of the Leases
and Agreements, (c) use all reasonable efforts to maintain each of the Leases
and Agreements in force and effect during the full term thereof, and (d) appear
in and defend any action or proceeding arising under or in any manner connected
with any of the Leases and Agreements or the representations, warranties,
covenants, and agreements of it or the other party or parties thereto.
4..9. INSPECTION. Grantor will permit Trustee and Beneficiary, and
their agents, representatives and employees, to inspect the Mortgaged Property
at all reasonable times.
4..10. HOLD HARMLESS. Grantor will defend, at its own cost and expense,
and hold Beneficiary harmless from, any action, proceeding or claim affecting
the Mortgaged Property or the Security Documents, and all costs and expenses
incurred by Beneficiary in protecting its interests hereunder in such an event
(including all court costs and attorney's fees) shall be borne by Grantor.
4..11. BOOKS AND RECORDS. Grantor will maintain full and accurate books
of account and other records reflecting the results of its operations, and will
furnish or cause to be furnished to Beneficiary, on or before ninety (90) days
after the end of Grantor's fiscal year, an annual operating statement, in such
detail as Beneficiary may reasonably require, which accurately, fairly and
separately presents Grantor's operations of the Mortgaged Property and the
income derived therefrom and expenses attributable thereto for the fiscal year
then ended such operating statement to be certified by Xxxxxxx's accountant as
having been prepared in accordance with generally accepted accounting principles
consistently applied. 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 Grantor's books of account and records relating to
the Mortgaged Property, all of which shall be maintained and made available to
Beneficiary and Beneficiary's representatives for such purpose on the Mortgaged
Property or at such other location as Beneficiary may approve. In addition to
the foregoing Grantor shall furnish to Beneficiary at any time and from time to
time such financial information as may be reasonably required by other
institutional investors in connection with their purchase or proposed purchase
of the loan evidenced by the Note and Security Documents in whole or in part.
4..12. APPRAISALS. Xxxxxxx agrees that if at any time Beneficiary
reasonably believes the value of the Property has declined, or if Beneficiary is
required by any Governmental Authority to procure an appraisal of the Mortgaged
Property, Beneficiary may request that an appraisal be conducted upon the
Mortgaged Property by a qualified appraisal company of Beneficiary's choosing,
the cost of such appraisal to be borne by Grantor. Beneficiary may advance funds
necessary to pay for the appraisal and such advances shall become part of the
indebtedness and secured by this Deed of Trust. Xxxxxxx agrees to promptly
reimburse Beneficiary for any funds so advanced.
4..13. FINANCIAL INFORMATION. Until final payment of the Indebtedness
secured hereby, Grantor covenants and agrees to furnish or cause to be furnished
to Beneficiary upon request a balance sheet, operating statement, profit and
loss statement, a reconciliation of net worth, financial statement(s) and such
other financial and operating information pertaining to Grantor and Guarantor(s)
as Beneficiary may request, including, without limitation, income tax returns,
which shall fairly present, in accordance with generally accepted accounting
principles, the financial condition of Grantor and Guarantor(s), certified as
true and correct by Grantor.
ARTICLE 5.
NEGATIVE COVENANTS
Grantor hereby covenants and agrees with Beneficiary that, until the
entire Indebtedness shall have been paid in full and all of the Obligations
shall have been fully performed and discharged:
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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 manner which (a) violates any Legal Requirement, (b) may be
dangerous unless safeguarded as required by law, (c) constitutes a public or
private nuisance or (d) makes void, voidable or cancellable, or increases the
premium of, any insurance then in force with respect thereto.
5..2. ALTERATIONS. Grantor will not commit or permit any waste of the
Mortgaged Property and will not (subject to the provisions of Paragraphs 4.4.,
4.5. and 4.7. hereinabove) 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.
5..3. REPLACEMENT OF FIXTURES AND PERSONALTY. Grantor will not,
without the prior written consent of Beneficiary, permit any of the Fixtures or
Personalty to be removed at any time from the Land or Improvements unless the
removed item is removed temporarily 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 such as may be
first approved in writing by Beneficiary.
5..4. NO FURTHER ENCUMBRANCES. Grantor will not, without the prior
written consent of Beneficiary, 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 mortgage, pledge, lien (statutory, constitutional, contractual or at
common law), security interest, encumbrance or charge, or conditional sale or
other title retention agreement, regardless of whether same are expressly
subordinate to the liens of the Security Documents, with respect to the
Mortgaged Property, the Leases and Agreements or the Rents and Incomes.
ARTICLE 6.
EVENTS OF DEFAULT
The term "Event of Default", as used in the Security 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. LOAN AGREEMENT. The occurrence of any "Event of Default" as that
term is defined in the Loan Agreement.
6..2. 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 Security Documents, or at a date fixed for prepayment, or by
acceleration, on demand or otherwise, and Grantor fails to cure such default in
payment within five (5) days after written notice of same shall have been sent
to Grantor.
6..3. PERFORMANCE OF OBLIGATIONS. If Grantor shall fail, refuse or
neglect to perform and discharge fully and timely any of the Obligations as and
when called for and Grantor fails to remedy such breach of any obligation within
thirty (30) days after written notice of same shall have been sent to Grantor.
6..4. BREACH OF COVENANTS. If Grantor shall breach any of Grantor's
affirmative or negative covenants, and such breach is not cured within any grace
period provided therefor.
6..5. FALSE REPRESENTATION. If any representation or warranty made by
Grantor, Guarantor, or any partner, officer, shareholder or director of Grantor
or any Guarantor, or others in, under or pursuant to the Security Documents
shall be false or misleading in any material respect.
6..6. BANKRUPTCY. If Grantor or any Guarantor or any partner, officer,
shareholder or director of Grantor or any Guarantor shall (a) seek the entry of
an order for relief under the United States Bankruptcy Code, as
9
amended, or if an order for relief is entered under the United States Bankruptcy
Code with respect to any of them, (b) seek, consent to or not contest the
appointment of a receiver, trustee, custodian, conservator or guardian for
itself or for all or any part of its property, (c) file a petition seeking
relief under the bankruptcy, arrangement, reorganization or other debtor relief
laws of the United States or any state or any other competent jurisdiction, (d)
make a general assignment for the benefit of its or his creditors, or (e)
generally not pay its debts as they become due.
6..7. INVOLUNTARY BANKRUPTCY. If (a) a petition is filed against
Grantor or any Guarantor or any partner, officer, shareholder, or director of
Grantor or any Guarantor seeking the entry of an order for relief under the
bankruptcy, arrangement, reorganization or other debtor relief laws of the
United States or any state or other competent jurisdiction, or (b) a court of
competent jurisdiction enters an order, judgment or decree appointing, without
the consent of Grantor or any Guarantor, or any partner, shareholder, officer or
director of Grantor or any Guarantor, a receiver, trustee, custodian,
conservator or guardian for it, or for all or any part of its property, and such
petition, order, judgment or decree shall not be and remain discharged or stayed
within a period of thirty (30) days after its entry.
6..8. DISSOLUTION OR CHANGE OF OWNERSHIP (APPLICABLE TO CORPORATE OR
PARTNERSHIP GRANTOR). If Grantor shall dissolve or liquidate, or merge with or
be consolidated into any other entity, or shall attempt to do any of the same,
or if any Guarantor, shareholder or partner of Grantor shall sell, assign,
transfer, convey, pledge, mortgage, encumber or grant a security interest in all
or so much of the stock or partnership interest in Grantor owned by any
Guarantor, shareholder or partner of Grantor; provided, however that transfers
of interests in Grantor among the current partners in Grantor shall be
permitted.
6..9. DESTRUCTION OF IMPROVEMENTS. If the Mortgaged Property is so
demolished, destroyed or substantially damaged so that (in Beneficiary's
judgment) it cannot be restored or rebuilt with available funds to a profitable
condition within a reasonable period of time.
6..10. FORECLOSURE OF OTHER LIENS. If the holder of any lien or
security interest on the Mortgaged Property (without hereby implying
Beneficiary's consent to the existence, placing, creating or permitting of any
such lien or security interest) institutes foreclosure or other proceedings for
the enforcement of its remedies thereunder.
6..11. SALES, LEASES OR OTHER TRANSFERS. If Grantor, without the prior
written consent of Beneficiary, sells, leases, exchanges, assigns, conveys,
transfers possession of or otherwise disposes of the Mortgaged Property or any
part thereof. To assist Beneficiary in determining whether or not to consent to
any such sale, lease, exchange, assignment, conveyance, transfer or other
disposition, Grantor shall furnish Beneficiary, at no expense to Beneficiary,
detailed and complete financial statements of the proposed transferee, audited
by a certified public accountant satisfactory to Beneficiary, together with
detailed and complete information about the business of the proposed transferee,
the use to be made of the Mortgaged Property by the proposed transferee,
projections by the proposed transferee of the sources of funds to be used to
repay the Indebtedness secured hereby and other claims upon and requirements for
such funds, and an appraisal of the Mortgaged Property in such form and by an
appraiser satisfactory to Beneficiary, together with such other information as
Beneficiary may reasonably require. Any determination by Beneficiary that its
security would be impaired by such transfer shall be conclusive and binding on
all persons affected thereby. Beneficiary may grant or deny such consent in its
sole discretion and, if consent should be given, any such transfer shall be
subject to this Deed of Trust, and any such transferee shall assume all
obligations hereunder and agree to be bound by all provisions contained herein.
Such assumption shall not, however, release Grantor or any maker or guarantor of
the Note from any liability thereunder or hereunder. Consent to one such
transaction shall not be deemed to be a waiver of the right to require consent
to future or successive transactions. As used herein "sell, lease, exchange,
assign, convey, transfer possession of or otherwise dispose of" includes the
sale, agreement to sell, assignment, conveyance or transfer of the Mortgaged
Property, or any portion thereof or interest therein, whether voluntary,
involuntary, by operation of law or otherwise, or the lease of all or any
portion of the
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Mortgaged Property. The term "sell" shall also include (i) the transfer,
assignment or conveyance or other change in ownership of the capital stock of
Grantor, if Grantor is a corporation, or (ii) a withdrawal or change of any
Partner of Grantor, if Grantor is a General or Limited Partnership; provided,
however that transfers of interests in Grantor among the current partners in
Grantor shall be permitted.
ARTICLE 7.
DEFAULT AND FORECLOSURE
7..1. REMEDIES. If an Event of Default shall occur, Beneficiary may,
at Beneficiary's election and by or through Trustee or otherwise, exercise any
or all of the following rights, remedies and recourses:
A. ACCELERATION. Declare the Principal Balance (defined
hereby as meaning the then unpaid principal balance on the Note), the
accrued interest and any other accrued but unpaid portion of the
Indebtedness to be immediately due and payable, without further notice,
presentment, protest, demand, notice of intent to accelerate or action
or notice of any nature whatsoever (each of which hereby is expressly
waived by Grantor), whereupon the same shall become immediately due and
payable.
B. ENTRY ON MORTGAGED PROPERTY. Enter upon the Mortgaged
Property and take exclusive possession thereof and of all books, records
and accounts relating thereto. If Grantor remains in possession of all
or any part of the Mortgaged Property after an Event of Default and
without Beneficiary's prior written consent thereto, Grantor shall be
deemed to be a tenant at will or sufferance of Beneficiary, and
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 writ of restitution. Nothing
contained in the foregoing sentence shall, however, be construed so as
to impose any greater obligation or any prerequisites to acquiring
possession of the Mortgaged Property after an Event of Default than
would have existed in the absence of such sentence.
C. OPERATION OF MORTGAGED PROPERTY. Hold, lease, manage,
operate or otherwise use or permit the use of the Mortgaged Property,
either itself or by other persons, firms or entities, in such manner,
for such time and upon such other terms as Beneficiary may deem to be
prudent and reasonable under the circumstances (making such repairs,
alterations, additions and improvements thereto and taking any and all
other action with reference thereto, from time to time, as Beneficiary
shall deem necessary or desirable), and apply all Rents and Incomes and
other amounts collected by Trustee in connection therewith in accordance
with the provisions of Paragraph 7.7. hereinbelow.
D. FORECLOSURE AND SALE. Sell or offer for sale the
Mortgaged Property in such portions, order and parcels as Beneficiary
may determine, with or without having first taken possession of same, to
the highest bidder for cash at public auction at the courthouse door of
any county in which any of the Land to be sold is situated, on the first
Tuesday of any month between the hours of 10:00 a.m. and 4:00 p.m.,
after giving legally adequate notice of the time, place and terms of
sale and that portion of the Mortgaged Property to be sold, by (i) (1)
posting or causing to be posted written or printed notices thereof for
at least twenty-one (21) consecutive days prior to the date of said sale
at the county courthouse door of each county or counties wherein the
Land (or any portion thereof) is located and filing such notices with
the county clerk of each such county or counties, and (2) at least
twenty-one (21) days preceding the date of sale, serving written notice
(by the Beneficiary or any person chosen by the Beneficiary) of such
proposed sale by certified mail on each debtor obligated to pay the
indebtedness evidenced by the Note to the address of Grantor set forth
hereinabove, which may not be changed by Grantor except by written
notice to Beneficiary via certified mail, return receipt requested, 30
days prior to the effective date of such address change; service of such
notice to each debtor to be completed upon deposit of the notice,
enclosed in a postpaid wrapper, properly addressed as aforesaid, in a
post office or official depository under the care and custody of the
United States Postal
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Service (it being expressly understood that the affidavit of any person
having knowledge of the facts to the effect that such service was
completed shall be prima facie evidence of the fact of such service), or
(ii) accomplishing all or any of the aforesaid in such manner as
permitted or required by Section 51.002 of the Texas Property Code of
the State of Texas relating to the sale of real estate or by Chapter 9
of the Texas Business and Commerce Code relating to the sale of
collateral after default by a debtor (as said statutes now exist or as
may be hereinafter amended), or by any other present or subsequent
articles or enactments relating to same; provided, however, that nothing
contained in this Paragraph 7.1.D. shall be construed so as to limit in
any way Trustee's rights to sell the Mortgaged Property, or any portion
thereof, by private sale if, and to the extent that, such private sale
is permitted under the laws of the State of Texas or by public or
private sale after entry of a judgment by any court of competent
jurisdiction ordering same. At any such sale (i) whether made under the
power herein contained, the aforesaid Section 51.002, the Texas Business
and Commerce Code or any other legal enactment, or by virtue of any
judicial proceedings or any other legal right, remedy or recourse, it
shall not be necessary for Trustee to have physically present, or to
have constructive possession of, the Mortgaged Property (Grantor hereby
covenanting and agreeing to deliver to Trustee any portion of the
Mortgaged Property not actually or constructively possessed by Trustee
immediately upon demand by Trustee) and the title to and right of
possession of any such property shall pass to the purchaser thereof as
completely as if the same had been actually present and delivered to
purchaser at such sale, (ii) each instrument of conveyance executed by
Trustee shall contain a general warranty of title, binding upon Grantor
and its successors and assigns, (iii) each and every recital contained
in any instrument of conveyance made by Trustee shall conclusively
establish the truth and accuracy of the matters recited therein,
including, without limitation, nonpayment of the Indebtedness,
advertisement and conduct of such sale in the manner provided herein and
otherwise by law and appointment of any successor Trustee hereunder,
(iv) any and all prerequisites to the validity thereof shall be
conclusively presumed to have been performed, (v) the receipt of Trustee
or of such other party or officer making the sale shall be a sufficient
discharge to the purchaser or purchasers for its purchase money and no
such purchaser or purchasers, or its assigns or personal
representatives, shall thereafter be obligated to see to the application
of such purchase money, or be in any way answerable for any loss,
misapplication or nonapplication thereof, (vi) to the fullest extent
permitted by law, Grantor shall be completely and irrevocably divested
of all of its right, title, interest, claim and demand whatsoever,
either at law or in equity, in and to the property sold and such sale
shall be a perpetual bar both at law and in equity against Grantor, and
against any and all other persons claiming or to claim the property sold
or any part thereof, by, through or under Grantor, and (vii) to the
extent and under such circumstances as are permitted by law, Beneficiary
may be a purchaser at any such sale.
E. TRUSTEE OR RECEIVER. Upon, or at any time after,
commencement of foreclosure of the lien and security interest provided
for herein or any legal proceedings hereunder, make application to a
court of competent jurisdiction as a matter of strict right and without
notice to Grantor or regard to the adequacy of the Mortgaged Property
for the repayment of Indebtedness, for appointment of a receiver of the
Mortgaged Property and Grantor does hereby irrevocably consent to such
appointment. Any such receiver shall have all the usual powers and
duties of receivers in similar cases, including the full power to rent,
maintain and otherwise operate the Mortgaged Property upon such terms as
may be approved by the court, and shall apply such Rents in accordance
with the provisions of Paragraph 7.7. hereinbelow.
F. OTHER. Exercise any and all other rights, remedies and
recourses granted under the Security Documents or now or hereafter
existing in equity, at law, by virtue of statute or otherwise.
7..2. SEPARATE SALES. The Mortgaged Property may be sold in one or
more parcels and in such manner and order as Trustee, in his sole discretion,
may elect, it being expressly understood and agreed that the right of sale
arising out of any Event of Default shall not be exhausted by any one or more
sales but other and
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successive sales may be made until all of the Mortgaged Property has been sold
or until the Indebtedness has been fully satisfied.
7..3. REMEDIES CUMULATIVE, CONCURRENT AND NON-EXCLUSIVE. Beneficiary
shall have all rights, remedies and recourses granted in the Security Documents
and available at law or equity (including specifically those granted by the
Uniform Commercial Code in effect and applicable to the Mortgaged Property, or
any portion thereof), and same (a) shall be cumulative and concurrent, (b) may
be pursued separately, successively or concurrently against Grantor, any
Guarantor or others obligated under the Note, or against the Mortgaged Property,
or against any one or more of them, at the sole discretion of Beneficiary, (c)
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, and (d) are intended to be, and shall be, non-exclusive.
7..4. RELEASE OF AND RESORT TO COLLATERAL. 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 created in or evidenced by the Security Documents or
their stature as a first and prior lien and security interest in and to the
Mortgaged Property. For payment of the Indebtedness, Beneficiary may resort to
any other security therefor held by Trustee in such order and manner as
Beneficiary may elect.
7..5. WAIVER OF REDEMPTION, NOTICE AND MARSHALLING OF ASSETS. To the
fullest extent permitted by law, Grantor hereby irrevocably and unconditionally
waives and releases (a) 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 for any appraisement, valuation, stay of
execution, exemption from civil process, redemption or extension of time for
payment, (b) all notices of any Event of Default (except as may be provided for
in Paragraph 6.2. hereinabove) or of Trustee's election to exercise or his
actual exercise of any right, remedy or recourse provided for under the Security
Documents, and (c) any right to a marshalling of assets or a sale in inverse
order of alienation.
7..6. DISCONTINUANCE OF PROCEEDINGS. In case Beneficiary shall have
proceeded to invoke any right, remedy or recourse permitted under the Security
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 an
event, Grantor and Beneficiary shall be restored to their former positions with
respect to the Indebtedness, the Obligations, the Security Documents, the
Mortgaged Property and otherwise, and the rights, remedies, recourses and powers
of Beneficiary shall continue as if same had never been invoked.
7..7. APPLICATION OF PROCEEDS. The proceeds of any sale of, and the
Rents and Incomes and other amounts generated by the holding, leasing, operation
or other use of, the Mortgaged Property shall be applied by Beneficiary (or the
receiver, if one is appointed) to the extent that funds are so available
therefrom in the following order of priority:
A. First, to the payment of the costs and expenses of
taking possession of the Mortgaged Property and of holding, using,
leasing, repairing, improving and selling the same, including, without
limitation, (i) trustees' and receivers' fees, (ii) court costs, (iii)
attorneys' and accountants' fees, (iv) costs of advertisement, and (v)
the payment of any and all Impositions, liens, security interests or
other rights, titles or interests equal or superior to the lien and
security interest of this Deed of Trust (except those to which the
Mortgaged Property has been sold subject to and without in any way
implying Beneficiary's prior consent to the creation thereof);
B. Second, to the payment of all amounts, other than the
Principal Balance and accrued but unpaid interest, which may be due to
Beneficiary under the Security Documents, together with interest thereon
as provided therein;
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C. Third, to the payment of all accrued but unpaid interest
due on the Note;
D. Fourth, to the payment of the Principal Balance;
E. Fifth, to the extent funds are available therefor out of
the sale proceeds or the Rents and Incomes and, to the extent known by
Beneficiary, to the payment of any indebtedness or obligation secured by
a subordinate Deed of Trust on or security interest in the Mortgaged
Property; and
X. Xxxxx, to Grantor.
7..8. PREPAYMENT. If, following the occurrence of an Event of Default
and an acceleration of the Indebtedness but prior to a sale of the Mortgaged
Property, Grantor shall tender to Beneficiary payment of an amount sufficient to
satisfy the entire Indebtedness, such tender shall be deemed to be a voluntary
prepayment under the Note and, accordingly, Grantor shall (to the extent
permitted by law) also pay to Beneficiary the premium (if any) then required
under the Note in order to exercise the prepayment privilege contained therein.
7..9. OCCUPANCY AFTER FORECLOSURE. The purchaser at any foreclosure
sale pursuant to Paragraph 7.1.D. shall become the legal owner of the Mortgaged
Property. All occupants of the Mortgaged Property or any part thereof shall
become tenants at sufferance of the purchaser at the foreclosure sale and shall
deliver possession thereof immediately to the purchaser upon demand. It shall
not be necessary for the purchaser at said sale to bring any action for
possession of the Mortgaged Property other than the statutory action of forcible
detainer in any Justice Court having jurisdiction over the Mortgaged Property.
7..10. RELATIONSHIP OF MULTIPLE BENEFICIARIES. If and so long as there
shall be more than one Beneficiary under this Deed of Trust (the
"Beneficiaries"), it is agreed that in the exercise of all of such
Beneficiaries' rights and remedies under this Article 7. and elsewhere in this
Deed of Trust and in the Security Documents, such Beneficiaries (unless
otherwise expressly provided herein to the contrary) shall be governed and
controlled by the decision of the holder or holders of not less than fifty-one
percent (51%) of the aggregate principal amount owing (at the time in question)
on the Note or Notes secured hereby, which decision shall be conclusive and
binding on all such Beneficiaries.
ARTICLE 8.
CONDEMNATION
8..1. GENERAL. Immediately upon Xxxxxxx's obtaining knowledge of the
institution of any proceeding for the condemnation of the Mortgaged Property,
Grantor shall notify Trustee and Beneficiary of such fact. Grantor shall then,
if requested by Beneficiary, file or defend its claim thereunder and prosecute
same with due diligence to its final disposition and shall cause any award or
settlements to be paid over to Beneficiary for disposition pursuant to the terms
of this Deed of Trust. Grantor may be the nominal party in such proceeding, but
Beneficiary shall be entitled to participate in and to control same and to be
represented therein by counsel of its own choice, and Grantor will deliver, or
cause to be delivered, to Beneficiary such instruments as may be requested by it
from time to time to permit such participation. If the Mortgaged Property is
taken or diminished in value, or if a consent settlement is entered, by or under
threat of such proceeding, the award or settlement payable to Grantor by virtue
of its interest in the Mortgaged Property shall be, and by these presents is,
assigned, transferred and set over unto Beneficiary to be held by it, in trust,
subject to the lien and security interest of this Deed of Trust, and disbursed
as follows:
A. If (i) all of the Mortgaged Property is taken, (ii) so
much of the Mortgaged Property is taken, or the Mortgaged Property is so
diminished in value, that the remainder thereof cannot (in Beneficiary's
judgment) continue to be operated profitably for the purpose it was
being used immediately prior to such taking or diminution, (iii) an
Event of Default shall have occurred, or (iv)
14
the Mortgaged Property is partially taken or diminished in value and (in
Beneficiary's judgment) need not be rebuilt, restored or repaired in any
manner, then in any such event the entirety of the sums so paid to
Beneficiary shall be applied by it in the order recited in Paragraph
8.2. hereinbelow; or
B. If (i) only a portion of the Mortgaged Property is taken
and the portion remaining can (in Beneficiary's judgment), with
rebuilding, restoration or repair, be profitably operated for the
purpose referred to in Paragraph 8.1.A.(ii) hereinabove, (ii) none of
the other facts recited in Paragraph 8.1.A. hereinabove exists, (iii)
Grantor shall deliver to Beneficiary plans and specifications for such
rebuilding, restoration or repair acceptable to Beneficiary; and (iv)
Grantor shall thereafter commence the rebuilding, restoration or repair
and complete same, all in accordance with the plans and specifications
and within three (3) months after the date of the taking or diminution
in value, then such sums shall be paid to Grantor to reimburse Grantor
for money spent in the rebuilding, restoration or repair; otherwise,
same shall be applied by Beneficiary in the order recited in Paragraph
8.2. hereinbelow.
8..2. APPLICATION OF PROCEEDS. All proceeds received by Beneficiary
with respect to a taking or a diminution in value of the Mortgaged Property
shall be applied in the following order of priority:
A. First, to reimburse Trustee or Beneficiary for all costs
and expenses, including reasonable attorney's fees, incurred in
connection with collection of the said proceeds; and
B. Thereafter, if there shall be any balance, to the order
of priority recited in Paragraphs 7.7.B. through 7.7.F. hereinabove;
subject, however, to the provisions of Paragraph 8.1.B. hereinabove
requiring (under the circumstances therein specified) that such proceeds
be applied to the rebuilding, restoration or repair of the Mortgaged
Property.
ARTICLE 9.
SECURITY AGREEMENT
9..1. SECURITY INTEREST. This Deed of Trust shall be construed as a
Deed of Trust on real property and it 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 2. hereinabove, a first and prior security interest under, the Uniform
Commercial Code (being Chapter 9 of the Texas Business and Commerce Code, as now
in effect or as hereinafter amended, as to property within the scope thereof and
situated in the State of Texas) with respect to the Personalty, Fixtures, Leases
and Agreements and Rents and Incomes. 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 Beneficiary, a
first and prior security interest in and to all of Grantor's right, title and
interest in, to and under the Personalty, Fixtures, Leases and Agreements and
Rents and Incomes, in trust, to secure the full and timely payment of the
Indebtedness and the full and timely performance and discharge of the
Obligations. As to the Leases and Agreements and Rents and Incomes, this
assignment is present, absolute and unconditional; provided however, that only
the benefits (not the burdens) of the Leases and Agreements are assigned to
Beneficiary.
9..2. FINANCING STATEMENTS. Grantor hereby agrees with Beneficiary to
execute and deliver to Beneficiary, in form and substance satisfactory to
Beneficiary, such "Financing Statements" and such further assurances as
Beneficiary may, from time to time, consider reasonably necessary to create,
perfect, and preserve Beneficiary's security interest herein granted, and
Beneficiary 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.
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9..3. AUTHORIZATION TO FILE FINANCING STATEMENTS. Grantor hereby
irrevocably authorizes Beneficiary at any time and from time to time to prepare
and file one or more financing statements (and any continuation statements and
amendments thereto) with respect to the Personalty, Fixtures, Leases and
Agreements and Rents and Incomes whether or not Grantor's signature appears
thereon.
9..4. UNIFORM COMMERCIAL CODE REMEDIES. Beneficiary (or Trustee in
Beneficiary's behalf) shall have all the rights, remedies and recourses with
respect to the Personalty, Fixtures, Leases and Agreements and Rents and Incomes
afforded a Secured Party by the aforesaid Uniform Commercial Code (being Chapter
9 of the Texas Business and Commerce Code, as to property within the scope
thereof and situated in the State of Texas) in addition to, and not in
limitation of, the other rights, remedies and recourses afforded Beneficiary
and/or Trustee by the Security Documents.
9..5. NO OBLIGATION OF TRUSTEE. The assignment and security interest
herein granted shall not be deemed or construed to constitute Trustee or
Beneficiary as a trustee in possession of the Mortgaged Property, to obligate
Trustee or Beneficiary to lease the Mortgaged Property or attempt to do same, or
to take any action, incur any expenses or perform or discharge any obligation,
duty or liability whatsoever under any of the Leases and Agreements or
otherwise.
9..6. PAYMENT OF RENTS AND INCOMES TO GRANTOR UNTIL DEFAULT. Unless
and until an Event of Default occurs, Grantor shall be entitled to collect the
Rents and Incomes as and when, but not before, they become due and payable, as
trustee with full fiduciary obligations for and to Beneficiary. Grantor hereby
agrees with Beneficiary that the other parties under the Leases and Agreements
may, upon notice from Trustee or Beneficiary of the occurrence of an Event of
Default, thereafter pay directly to Beneficiary the Rents and Incomes due and to
become due under the Leases and Agreements and attorn all other obligations
thereunder direct to Beneficiary without any obligation on their part to
determine whether an Event of Default does in fact exist.
9..7. FIXTURE FILING. Portions of the Mortgaged Property are or are to
become fixtures relating to the above-described real estate, and Grantor herein
expressly covenants and agrees that the filing of this Deed of Trust in the Real
Estate Records in the county where the Mortgaged Property is located shall also
operate from the time of filing therein as a financing statement filed as a
fixture filing in accordance with Section 9.402(f) of the Uniform Commercial
Code - Secured Transactions of the State of Texas.
ARTICLE 10.
CONCERNING THE TRUSTEE
10..1. NO LIABILITY. Trustee shall not be liable 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 negligence
or bad faith. Trustee shall not be personally liable in case of entry by him, or
anyone entering by virtue of the powers herein granted him, upon the Mortgaged
Property for debts contracted 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 nature authorizing or supporting any action taken or
proposed to be taken by him hereunder, believed by him in good faith to be
genuine. Trustee shall be entitled to reimbursement for expenses incurred by him
in the performance of his duties hereunder and to reasonable compensation for
such of his 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 him harmless against, any and all liability and expenses which may be
incurred by him in the performance of his duties.
10..2. RETENTION OF MONIES. 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
monies (except to the extent required by law), and Trustee shall be under no
liability for interest on any monies received by him hereunder.
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10..3. SUCCESSOR TRUSTEES. Trustee may resign by the giving of notice
of such resignation in writing to Beneficiary. If Trustee shall die, resign or
become disqualified from acting in the execution of this trust or shall fail or
refuse to execute the same when requested by Beneficiary so to do, or if, for
any reason, Beneficiary shall prefer to appoint a substitute trustee
("Substitute" or "Successor Trustee") to act instead of the aforenamed Trustee,
Beneficiary shall have full power to appoint a Substitute Trustee and, if
preferred, several Substitute Trustees in succession who shall succeed to all
the estates, rights, powers and duties of the aforenamed Trustee.
10..4. SUCCESSION INSTRUMENTS. Any new 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 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 Successor Trustee, the Trustee ceasing to act shall execute and deliver an
instrument transferring to such Successor 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 monies held by such Trustee to the Successor Trustee so appointed
in his place.
ARTICLE 11.
MISCELLANEOUS
11..1. SURVIVAL OF OBLIGATIONS. Each and all of the Obligations shall
survive the execution and delivery of the Security Documents, and the
consummation of the loan called for therein, and shall continue in full force
and effect until the Indebtedness shall have been paid in full.
11..2. FURTHER ASSURANCES. Grantor, upon the request of Trustee or
Beneficiary, will execute, acknowledge, deliver and record and/or file, such
further instruments and do such further acts as may be necessary, desirable or
proper to carry out more effectively the purposes of the Security Documents and
to subject to the liens and security interests thereof any property intended by
the terms thereof to be covered thereby, including specifically, but without
limitation, any renewals, additions, substitutions, replacements or
appurtenances to the then Mortgaged Property.
11..3. RECORDING AND FILING. Grantor will cause the Security Documents
and all amendments and supplements thereto and substitutions therefor, to be
recorded, filed, re-recorded and re-filed in such manner and in such places as
Trustee or Beneficiary shall reasonably request, and will pay all such
recording, filing, re-recording and re-filing taxes, fees and other charges.
11..4. NOTICES. All notices or other communications required or
permitted to be given pursuant to this Deed of Trust shall be in writing and
shall be considered as properly given if mailed by first class United States
Mail, postage prepaid, registered or certified mail, with return receipt
requested, or by delivering same in person to the intended addressee or by
prepaid telegram. Notice so mailed shall be effective upon its deposit in an
official depository of the United States Postal Service. Notice given in any
other manner shall be effective only if and when received by the addressee. For
purposes of notice, the addresses of the parties shall be as set forth in
Paragraph 1.1.A. and the opening recital hereinabove; provided, however, that
either party shall have the right to change its address for notice hereunder to
any other location within the continental United States by the giving of thirty
(30) days' notice to the other party in the manner set forth hereinabove.
Guarantor shall be included on notices to be given to Grantor.
11..5. NO WAIVER. Any failure by Trustee or Beneficiary to insist, or
any election by Trustee or Beneficiary not to insist, upon strict performance by
Grantor of any of the terms, provisions or conditions of the Security Documents
shall not be deemed to be a waiver of same or of any other term, provision or
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condition thereof, and Trustee or Beneficiary shall have the right at any time
or times thereafter to insist upon strict performance by Grantor of any and all
of such terms, provisions and conditions.
11..6. BENEFICIARY'S RIGHT TO PERFORM THE OBLIGATIONS. If Grantor shall
fail, refuse or neglect to make any payment or perform any act required by the
Security Documents, then at any time thereafter, and without notice to or demand
upon Grantor and without waiving or releasing any other right, remedy or
recourse Beneficiary may have because of same, Beneficiary may (but shall not be
obligated to) make such payment or perform such act for the account of and at
the expense of Grantor, and shall have the right to enter the Land and
Improvements for such purpose and to take all such action thereon and with
respect to the Mortgaged Property as it may deem necessary or appropriate.
Grantor shall indemnify Beneficiary for all losses, expenses, damage, claims and
causes of action, including reasonable attorney's fees, incurred or accruing by
reason of any acts performed by Beneficiary pursuant to the provisions of this
Paragraph 11.6., or by reason of any other provision in the Security Documents.
All sums paid by Beneficiary pursuant to this Paragraph 11.6., and all other
sums expended by Beneficiary to which it shall be entitled to be indemnified,
together with interest thereon at the maximum rate allowed by law from the date
of such payment or expenditure, shall constitute additions to the Indebtedness,
shall be secured by the Security Documents and shall be paid by Grantor to
Beneficiary upon demand.
11..7. COVENANTS RUNNING WITH THE LAND. All Obligations contained in
the Security Documents are intended by the parties to be, and shall be construed
as, covenants running with the Mortgaged Property.
11..8. SUCCESSORS AND ASSIGNS. All of the terms of the Security
Documents shall apply to, be binding upon and inure to the benefit of the
parties hereto, their permitted respective successors, assigns, heirs and legal
representatives, and all other persons claiming by, through or under them.
11..9. SEVERABILITY. The Security Documents are intended to be
performed in accordance with, and only to the extent permitted by, all
applicable Legal Requirements. If any provision of any of the Security Documents
or the application thereof to any person or circumstance shall, for any reason
and to any extent, be invalid or unenforceable, neither the remainder of the
instrument in which such provision is contained, nor the application of such
provision to other persons or circumstances, nor the other instruments referred
to hereinabove, shall be affected thereby, but rather shall be enforceable to
the greatest extent permitted by law. If any portion of the Note cannot be
lawfully secured by this Deed of Trust, payments shall be applied first to
discharge that portion. It is the intention of the parties to conform strictly
to applicable usury laws now in force. Accordingly, if the transactions
contemplated hereby would be usurious under applicable law, then, in that event,
notwithstanding anything to the contrary in the Note or the Security Documents
or in any other instrument or agreement entered into in connection with or as
security for the Note and the loan evidenced thereby, it is agreed as follows:
A. The aggregate of all consideration that constitutes
interest under applicable law and that is contracted for, charged or
received under the Note or the Security Documents or under any of the
aforesaid instruments or agreements or otherwise (whether designated as
interest, fees, indemnities, payments or otherwise) shall under no
circumstances exceed the maximum amount of interest permitted by
applicable law and any excess shall be canceled automatically and if
theretofore paid, shall be credited on the Note by Beneficiary (or, if
the Note has been paid in full refunded to Grantor); and
B. In the event that the maturity of the Note is
accelerated by reason of an election of Beneficiary resulting from an
Event of Default hereunder or in the event of any required or permitted
prepayment, then such consideration that constitutes interest may never
include more than the maximum amount permitted by applicable law, and
excess interest, if any, provided for in the Note or Security Documents
shall be canceled automatically as of the date of such acceleration or
prepayment
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and, if theretofore paid, shall be credited on the Note (or, if the Note
has been paid in full, refunded to Grantor).
C. All interest paid or agreed to be paid to Beneficiary
shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full period until payment
in full of the Indebtedness (including the period of any renewal or
extension thereof) so that the interest so computed shall not exceed the
Maximum Rate, as that term is defined in the Note. This paragraph shall
control all agreements between Grantor and Beneficiary.
11..10. ENTIRE AGREEMENT AND MODIFICATION. The Security Documents
contain the entire agreements between the parties relating to the subject matter
hereof and thereof and all prior agreements relative thereto which are not
contained herein or therein are terminated. The Security Documents may be
amended, revised, waived, discharged, released or terminated only by a written
instrument or instruments executed by the party against which enforcement of the
amendment, revision, waiver, discharge, release or termination is asserted. Any
alleged amendment, revision, waiver, discharge, release or termination which is
not so documented shall not be effective as to any party.
11..11. COUNTERPARTS. This Deed of Trust may be executed in any number
of counterparts, each of which shall be an original but all of which together
shall constitute but one instrument.
11..12. APPLICABLE LAW. This Deed of Trust, the Note and the other
Security Documents shall be deemed to be contracts made under and shall be
construed in accordance with and governed by the State of Texas and of the
United States of America; and Grantor agrees that the sole and exclusive forum
for the determination of any action relating to the validity and enforceability
of the Note, this Deed of Trust and the other Security Documents shall be either
an appropriate court of the State of Texas or that court of the United States
which includes within its territorial jurisdiction the State of Texas.
11..13. HEADINGS. The Article, Paragraph and Subparagraph 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,
Paragraphs or Subparagraphs.
11..14. GENDER. Each gender used herein shall include and apply to all
genders, including the neuter.
11..15. TAX AND INSURANCE ESCROW. After the occurrence of an Event of
Default, in order to implement the provisions of Paragraphs 4.3. and 4.5.
hereinabove, Grantor shall pay to Beneficiary, as and when directed by
Xxxxxxxxxxx, and as escrowed sums, an amount equal to the sum of (a) the annual
Impositions (estimated wherever necessary) to become due for the tax year during
which such payment is so directed and (b) the insurance premiums for the same
year for those insurance policies as are required hereunder. If Beneficiary
determines that any amounts theretofore paid by Grantor are insufficient for the
payment in full of such Impositions and insurance premiums, Beneficiary shall
notify Grantor of the increased amounts required to provide a sufficient fund,
whereupon Grantor shall pay to Beneficiary within thirty (30) days thereafter
the additional amount as stated in Beneficiary's notice. The escrowed sums may
be held by Beneficiary in noninterest-bearing accounts and may be commingled
with Beneficiary's other funds. Upon assignment of this Deed of Trust,
Beneficiary shall have the right to pay over the balance of the escrowed sums
then in its possession to its assignee, whereupon Beneficiary and its Trustee
shall then become completely released from all liability with respect thereto.
Upon full payment of the Indebtedness, or at such earlier time as Beneficiary
may elect, the balance of the escrowed sums in its possession shall be paid over
to Grantor and no other party shall have any right or claim thereto. If no Event
of Default shall have occurred and be continuing hereunder, the escrowed sums
shall, at the option of Beneficiary, be repaid to Grantor in sufficient time to
allow Grantor to satisfy Grantor's obligations under the Security Documents to
pay the Impositions and the required insurance premiums or be paid directly to
the Governmental Authority and the insurance company entitled thereto. If an
Event of Default shall have occurred and be continuing hereunder, however,
Beneficiary shall
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have the additional option of crediting the full amount of the escrowed sums
against the Indebtedness. Notwithstanding anything to the contrary contained in
this Paragraph 11.15. or elsewhere in this Deed of Trust, Beneficiary hereby
reserves the right to waive the payment by Grantor to Beneficiary of the
escrowed sums, and, in the event Beneficiary does so waive such payment, it
shall be without prejudice to Beneficiary's right to insist, at any subsequent
time or times that such payments be made in accordance herewith.
11..16. 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 such funds are so used, the
Indebtedness and this Deed of Trust shall be subrogated to all of the rights,
claims, liens, titles and interests heretofore existing against the Mortgaged
Property to secure the indebtedness so extinguished, extended or renewed and the
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
merged with the lien and security interest created herein as cumulative security
for the repayment of the Indebtedness and the satisfaction of the Obligations.
11..17. VENDOR'S LIEN. The proceeds of the loan evidenced by the Note
was advanced as purchase money for the Mortgaged Property, for which a
coextensive and cumulative vendor's lien is retained in favor of Beneficiary in
Deed dated as of the Date Hereof from MSDL, Inc., a Texas corporation, to
Grantor.
11..18. HOMESTEAD. Grantor hereby declares and represents to Beneficiary
that the Mortgaged Property forms no part of any property by Grantor owned, used
or claimed as a business or residence homestead under the Constitution and Laws
of the State of Texas.
11..19. LOAN AGREEMENT. This Deed of Trust is executed and delivered
pursuant to the Loan Agreement, the terms and provisions of which are
incorporated herein by reference.
Executed as of the Date Hereof.
GRANTOR:
BHDGI, Ltd., a Texas limited partnership
By: Graybird Developers, LLC, a Texas limited
liability company, its sole General Partner
By:________________________________________
Xxxxx X. Xxxx, Manager
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THE STATE OF TEXAS ss.
ss.
COUNTY OF ____________ ss.
Before me ________________________ (Notary printed name) on this day
personally appeared Xxxxx X. Xxxx, Manager of Graybird Developers, LLC, a Texas
limited liability company, the sole General Partner of BHDGI, Ltd., a Texas
limited partnership, known to me or proved to me to be the person whose name is
subscribed to the foregoing instrument and acknowledged to me that he executed
the same for the purposes and consideration therein expressed and in the
capacity stated.
Given under my hand and seal of office this ______ day of ____________,
2005.
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Notary Public, State of Texas
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