EXHIBIT 10.102
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
Xxxxx & Xxxxx
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxx
______________________________________________________________________________
DEED OF TRUST, SECURITY AGREEMENT,
ASSIGNMENT OF LEASES AND
RENTS AND FIXTURE FILING
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THIS DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND
FIXTURE FILING ("Deed of Trust") is made as of December 31, 1997, among INCO
DEVELOPMENT CORPORATION, whose address is set forth below, as Trustor, the
parties listed on Exhibit A-1 attached hereto, as tenants in common, whose
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address is set forth below, as Beneficiary, and LAWYERS TITLE OF NEVADA, whose
address is set forth below, as Trustee.
ARTICLE 1
DEFINITIONS
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As used herein, the following terms shall have the following meanings:
1.1 Assignment. The assignment, contained in Article 4 of this Deed
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of Trust, from Trustor to Beneficiary, of all of Trustor's right, title and
interest in and to the Leases and the Rents.
1.2 Awards. All awards and payments made or hereafter to be made by
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any municipal, township, county, state, Federal or other governmental agencies,
authorities or boards or any other entity having the power of eminent domain to
Trustor, including any awards and payments for any taking of all or a portion of
the Mortgaged Property, as a result of, or by agreement in anticipation of, the
exercise of the right of condemnation or eminent domain, or for any change or
changes of grade of streets affecting the Mortgaged Property.
1.3 Beneficiary. The parties listed on Exhibit A-1 attached hereto,
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as tenants in common, and their respective successors and assigns and the
holders, from time to time, of the Note.
1.4 Beneficiary's Address. c/o USA Commercial Mortgage Company,
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Inc., 0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxx 00000.
1.5 Buildings. All buildings, improvements (including, without
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limitation, all on-site and off-site infrastructure improvements), alterations
or appurtenances now, or at any time hereafter, located upon the Land or any
part thereof.
1.6 Borrower. Inco Homes Corporation, a Delaware corporation.
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1.7 Event(s) of Default. The happenings and occurrences described in
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Article 6 of this Deed of Trust.
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1.8 Fixtures. All fixtures now or hereafter affixed or attached to,
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or installed in, or used in connection with, the Land or Buildings, whether or
not permanently affixed thereto, together with all accessions, replacements and
substitutions thereto or therefor and the proceeds thereof.
1.9 Intentionally Deleted.
1.10 Intentionally Deleted.
1.11 Impositions. All (i) real estate and personal property taxes and
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other taxes and assessments, water and sewer rates and charges, and all other
governmental charges and any interest or costs or penalties with respect
thereto, and charges for an easement or agreement maintained for the benefit of
the Mortgaged Property which at any time prior to or after the execution of the
Loan Documents may be assessed, levied, or imposed upon the Mortgaged Property
or the rent or income received therefrom or any use or occupancy thereof, and
(ii) other taxes, assessments, fees and governmental charges levied, imposed or
assessed upon or against Trustor or any of its properties.
1.12 Indebtedness. The principal of and interest on and all other
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amounts, payments and premiums due under the Note (including any future
advances), and all indebtedness of Trustor to Beneficiary, whether under and/or
secured by the Loan Documents, including, without limitation any indebtedness
owing under the Indemnity Agreement, or evidenced by some other document that
recites by its terms that it is secured by this Deed of Trust, and any
amendments, modifications, renewals and extensions of any of the foregoing.
1.13 Indemnity Agreement. The Environmental Agreement and Indemnity,
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dated as of even date herewith, by Trustor in favor of Beneficiary, as the same
may be amended or otherwise modified.
1.14 Land. The real property described in Exhibit A attached hereto.
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1.15 Leases. Any and all leases, subleases, licenses, concessions or
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grants of other possessory interest now or hereafter in force, oral or written,
covering or affecting the Mortgaged Property, or any part thereof, together with
all rights, powers, privileges, options and other benefits of Trustor
thereunder.
1.16 Intentionally Deleted
1.17 Mortgaged Property. The Land, the Buildings, the Fixtures, the
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Personalty, the Awards, the Rents and the Leases, together with:
(i) all rights, privileges, permits, licenses, rights-of-way,
easements, appendages and appurtenances of the Land and/or the
Buildings belonging or in any way appertaining thereto and all right,
title and interest of Trustor in and to any streets, ways, alleys, or
strips of land adjoining the Land or any part thereof;
(ii) all the estate, right, title, interest, claim or demand
whatsoever of Trustor, either at law or in equity, in and to the Land,
the Buildings, the Fixtures, the Awards, the Rents, the Leases and the
Personalty; and
(iii) all the estate, right, title, interest, claim or demand
whatsoever of Trustor, either at law or in equity, in and to the
Awards, or payments with respect to casualties.
1.18 Note. The promissory note, dated of even date with this Deed of
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Trust, made by Inco Homes Corporation, a Delaware corporation, to the order of
Beneficiary, in the original principal amount of $2,350,000, secured by this
Deed of Trust and by the Vista Verde Deed of Trust (as defined in Section 6.11
below), together with all extensions, renewals, modifications and amendments
thereof.
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1.19 Obligations. Any and all of the covenants, promises and other
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obligations (other than the Indebtedness) made or owing by Trustor to or due to
Beneficiary under this Deed of Trust and/or the Loan Documents, including,
without limitation, any such covenants, promises and obligations made by or
owing by Trustor under the Indemnity Agreement, or evidenced by some other
document that recites by its terms that it is secured by this Deed of Trust, and
any and all extensions, renewals, modifications and amendments of any of the
foregoing.
1.20 Permitted Encumbrances. The encumbrances described, with
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particularity, in Exhibit B attached hereto.
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1.21 Personalty. All furniture, furnishings, equipment, machinery,
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trade fixtures and all other tangible and intangible personal property (other
than the Fixtures) now owned or hereafter acquired by Trustor which are now or
hereafter used or owned in connection with the Land and/or the Buildings or
located in, upon or about the Land and/or the Buildings, together with all
accessions, replacements and substitutions thereto or therefor and the proceeds
and products thereof, including without limitation: (1) all personal property
located on the Land or Buildings and used in the operation or occupancy of the
Land or Buildings or in any construction on the Land or Buildings, including,
but not limited to, all furniture and furnishings, machinery, fixtures, goods,
office equipment, machine tools, apparatus, supplies, materials, trade fixtures,
building service equipment, boilers, equipment (including, without limitation,
all equipment for the generation or distribution of air, water, heat,
electricity, light, fuel or refrigeration, or for ventilating or air
conditioning purposes, or for sanitary or drainage purposes, or for the removal
of dust, refuse or garbage), partitions, appliances, ranges, refrigerators,
cabinets, laundry equipment, radios, televisions, awnings, window shades,
venetian blinds, drapes and drapery rods and brackets, screens, carpeting and
other floor coverings, lobby furnishings, games, recreational and swimming pool
equipment and incinerators, and all vehicles and accessories, tools,
appurtenances, dies, jigs, chattels and parts; (2) all general intangibles
relating to the development or use of the Land or Buildings, including, but not
limited to, all governmental permits relating to construction on the Land or
Buildings, all development agreements, management agreements, franchise
agreements, service contracts, other contracts or agreements, all names under or
by which the Land or Buildings may at any time be operated or known, and all
rights to carry on business under any such names or any variant thereof, all
trademarks and goodwill and all interests in any owner's or member's association
in any way relating to the Land or Buildings; (3) all water stock relating to
the Land or Buildings, all shares of stock or other evidence of ownership of any
part of the Land or Buildings that is owned by the Trustor in common with
others, and all documents of membership in any owners' or members' association
or similar group having responsibility for owning, managing or operating any
part of the Land or Buildings; (4) all plans and specifications prepared for
construction of improvements on the Land or Buildings and all studies, data and
drawings related thereto; and also all contracts and agreements of Trustor
relating to the plans and specifications or to the studies, data and drawings,
or to the construction of improvements on the Land or Buildings; (5) all sales
agreements, deposit receipts, escrow agreements and other ancillary documents
and agreements entered into with respect to the sale to any purchasers of any
part of the Land or Buildings, together with all deposits and other proceeds of
the sale thereof; (6) all damages, royalties and revenues of every kind, nature
and description whatsoever that Trustor may be entitled to receive from any
person or entity owning or having or hereafter acquiring a right to the oil, gas
or mineral rights and reservations of the Land; (7) all deposits made with or
other security given to utility companies by Trustor with respect to the Land or
Buildings, and all advance payments of insurance premiums made by Trustor with
respect thereto and all claims or demands with respect to insurance; (8) any
funds held by or in the name of Beneficiary; (9) any causes of action deemed to
be assigned to Beneficiary under this Deed of Trust; (10) all substitutions,
renewals, improvements, attachments, accessions, additions and replacements to
any of the foregoing; and (11) all collections, proceeds, insurance proceeds and
products of any of the foregoing, including, without limitation, proceeds of any
voluntary or involuntary disposition or claim respecting any part thereof
(pursuant to judgment, condemnation award or otherwise), insurance proceeds paid
or owing as a result of any damage to any of the foregoing, and all documents,
instruments, general intangibles, chattel paper and accounts which may arise
from the sale or disposition of any of the foregoing, all guaranties of and
security for any of the foregoing, and all books and records relating to any of
the foregoing. "Personalty" shall also include all insurance policies that
cover any of the Land, the Buildings, the Fixtures, any other Personalty
described in this paragraph, and any rights, benefits and proceeds arising from
such insurance policies.
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1.22 Loan Documents. This Deed of Trust, the Security Agreement, the
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Indemnity Agreement, the Vista Verde Deed of Trust (as defined in Section 6.11
below), the "Loan Documents" as defined in the Vista Verde Deed of Trust, and
any and all other documents executed by Trustor now or hereafter evidencing,
securing or relating to the payment of the Indebtedness or the observance or
performance of the Obligations, as any of the same may be amended or otherwise
modified.
1.23 Rents. All of the rents, revenues, income, profits, deposits,
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tenders and other benefits payable under the Leases and/or arising from the use
or enjoyment of all or any portion of the Mortgaged Property.
1.24 Security Agreement. The Security Agreement, contained in this
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Deed of Trust, wherein and whereby Trustor grants a security interest in the
Personalty, the Awards and the Fixtures to Beneficiary.
1.25 Intentionally Deleted.
1.26 Trustee. The person, persons, or entity named as such in the
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preamble of this Deed of Trust and, as the case may be, his, their or its
successors and assigns.
1.27 Trustee's Address. 0000 Xxxx Xxxxxxxx Xxxx, Xxxxx 000, Xxx
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Vegas, Nevada 89109. Facsimile: (000) 000-0000.
1.28 Trustor. The entity named as such in the preamble of this Deed
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of Trust, and its heirs, administrators, executors, successors and assigns and
its successors in interest in and to the Mortgaged Property.
1.29 Trustor's Address. c/o Inco Development Corporation, 1282 West
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Arrow Highway, Upland, California 91786.
ARTICLE 2
GRANT
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2.1 Grant. To secure the payment of the amounts owing under the
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Note, the payment of the Indebtedness and the performance and discharge of the
Obligations, Trustor by these presents hereby grants, bargains, sells, assigns,
mortgages, conveys and warrants unto Trustee, in trust for Beneficiary, with
power of sale and right of entry and possession, the Mortgaged Property, to have
and to hold the Mortgaged Property unto Trustee, its successors and assigns
forever.
2.2 Condition of Xxxxx. Provided always, that if Trustor and/or
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Borrower shall pay or cause to be paid all amounts owing under the Note and the
entire Indebtedness as and when the same shall become due and payable and shall
observe, perform and discharge the Obligations, then the Loan Documents and the
estate and rights granted by Trustor shall cease, terminate and become void, and
shall be released or reconveyed by Beneficiary, at the cost and expense of
Trustor.
ARTICLE 3
SECURITY AGREEMENT AND FIXTURE FILING
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3.1 Security Agreement. This Deed of Trust shall also constitute a
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"Security Agreement" within the meaning of, and shall create a security interest
under, the Uniform Commercial Code as adopted by the state in which the
Mortgaged Property is located (the "UCC") in the Personalty, the Awards, the
Leases, the Rents and the Fixtures.
3.2 Security Interest. In order to further secure payment of the
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Note, the Indebtedness and the observance, performance and discharge of the
Obligations, Trustor hereby grants to Beneficiary a security interest under the
UCC in the Personalty, the Award, the Leases, the Rents and the Fixtures, and
Beneficiary shall
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have all the rights with respect to the Personalty, the Awards, the Leases, the
Rents and the Fixtures afforded to it by the UCC, in addition to, but not in
limitation of, the other rights afforded Beneficiary by the Loan Documents.
3.3 Financing Statements. Trustor agrees to and shall execute and
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deliver to Beneficiary, in form 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
liens upon the Personalty, the Awards, the Leases, the Rents and the Fixtures,
and Beneficiary, at the expense of Trustor, may or shall cause such statements
and assurances to be recorded and re-recorded, filed and re-filed, at such times
and places as may be required or permitted by law to so create, perfect and
preserve such liens.
3.4 Fixture Filing. This Deed of Trust is being recorded as a
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fixture filing and covers goods which are or are to become fixtures on the Land
and/or the Buildings. This fixture filing is governed by the UCC. An address
of Beneficiary from which information concerning the security interest created
under this Article 3 may be obtained by contacting Beneficiary at Beneficiary's
address.
ARTICLE 4
ASSIGNMENT OF RENTS AND LEASES
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4.1 Assignment of Rents. All of Trustor's rights, title and interest
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in and to the Rents are hereby absolutely and irrevocably assigned to
Beneficiary to be applied against the Note, the Indebtedness and the
Obligations. Trustor hereby appoints Beneficiary its true and lawful attorney-
in-fact, with the right, at Beneficiary's option at any time, to demand, receive
and enforce payment, to give receipts, releases and satisfactions, and to sue,
either in Trustor's or Beneficiary's name, for all Rents. Notwithstanding the
foregoing Assignment of Rents, so long as no Event of Default has occurred which
remains uncured, Trustor is given a license to collect, receive, take, use and
enjoy such Rents, as they become due and payable, but not more than one month in
advance thereof. This assignment, and the assignment given in Article 4.2
below, shall be fully operative without any further action on the part of either
party; and specifically, Beneficiary shall be entitled at its option, upon the
occurrence of an Event of Default hereunder and for so long as such Event of
Default is continuing, to collect all Rents from the Mortgaged Property whether
or not Beneficiary takes possession of the Mortgaged Property and to exercise
any other remedies allowed by statute or under common law including, without
limitation, any remedy allowed under California Civil Code Section 2938. Upon
the occurrence of an Event of Default hereunder, the license hereby given to
Trustor to collect the Rents from the Mortgaged Property shall terminate. The
license given by Beneficiary to Trustor shall be reinstated upon a cure of such
Event of Default with Beneficiary's specific consent which shall not be
unreasonably withheld. This Assignment shall not be deemed or construed to
constitute Beneficiary or Trustee as a mortgagee in possession nor obligate
Beneficiary or Trustee to take any action or to incur expenses or perform or
discharge any obligation, duty or liability. Exercise of any rights under this
Section and the application of the Rents to the Indebtedness or the Obligations
shall not cure or waive any Event of Default but shall be cumulative of all
other rights and remedies.
4.2 Assignment of Leases. Trustor hereby grants and assigns to
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Beneficiary all right, title and interest of Trustor in and to all Leases,
together with all security therefor and all monies payable thereunder, subject,
however, to the license given to Trustor above to collect the rentals under any
such Lease. The foregoing assignment of any Lease shall not be deemed to impose
upon Beneficiary any of the obligations or duties of Trustor provided in any
such Lease; and Trustor agrees to fully perform all obligations of the Lessor
under all such Leases. Upon Beneficiary's request, Trustor shall deliver to any
new lessee a notice of this assignment in form satisfactory to Beneficiary in
its sole discretion. Beneficiary may deliver such a notice to new lessees if
Trustor fails to do so within a reasonable time after Beneficiary's request.
From time to time, upon request of Beneficiary, Trustor shall specifically
assign to Beneficiary, by an assignment in writing in form approved by
Beneficiary, all right, title and interest of Trustor in and to any and all
Leases, together with all security therefor and all monies payable thereunder,
subject to the license given to Trustor above to collect the rentals under any
such Lease. Trustor shall also execute and deliver to Beneficiary any
notification, financing statement, or other document reasonably required by
Beneficiary to perfect the foregoing assignment as to any such Lease.
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4.3 Effect of Assignments. This instrument constitutes an absolute
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and present assignment of the rents, royalties, issues, profits, revenue, income
and other benefits from the Mortgaged Property; subject, however, to the license
given to Trustor to collect, receive, take, use and enjoy the same as provided
above; provided, further, that the existence or exercise of such right of
Trustor shall not operate to subordinate this assignment to any subsequent
assignment by Trustor, in whole or in part, and any such subsequent assignment
by Trustor shall be subject to the rights of Trustee and Beneficiary hereunder.
4.4 No Merger of Leasehold Estates. If both the lessor's and
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lessee's estate under any Lease, or any portion thereof, becomes vested at any
time in one owner, this Deed of Trust and the lien created hereby shall not be
adversely affected by the application of the doctrine of merger unless
Beneficiary so elects in writing by recording a written declaration so stating.
Unless and until Beneficiary so elects, Beneficiary and any lessor and lessee
shall continue to have and enjoy all of the rights and privileges to the
separate estates. In addition, upon the foreclosure of the lien created by this
Deed of Trust on the Mortgaged Property, any Leases then existing and affecting
all or any portion of the Mortgaged Property shall not be destroyed or
terminated by merger or by the foreclosure unless Beneficiary or any purchaser
at the sale so elects. No act by or on behalf of Beneficiary or such purchaser
shall constitute a termination of any Lease unless Beneficiary gives written
notice thereof to the tenant or subtenant affected.
4.5 Assignment to Beneficiary Controlling. The rights of Trustee in
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the Leases and Rents created under Article 2 shall be subject to the rights of
Beneficiary in the Leases and Rents created under this Article 4.
ARTICLE 5
COVENANTS AND REPRESENTATIONS AND WARRANTIES
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5.1 Covenants. Until the entire Indebtedness shall have been paid in
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full and all of the Obligations shall have been performed in full, Trustor
hereby covenants and agrees as follows:
5.1.1 Compliance with Laws. Trustor will promptly and
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faithfully comply with, conform to, and obey all present and future laws,
ordinances, rules, regulations and requirements of every duly constituted
governmental authority or agency and of every Board of Fire Underwriters having
jurisdiction, or similar body exercising similar functions, which may be
applicable to it or to the Mortgaged Property, or any part thereof, or to the
use or manner of use, occupancy, possession, operation, maintenance, alteration,
repair or reconstruction of the Mortgaged Property, or any part thereof, whether
or not such law, ordinance, rule, order, regulation or requirement shall
necessitate structural changes or improvements or interfere with the use or
enjoyment of the Mortgaged Property.
5.1.2 Payment of Impositions. Trustor will duly pay and
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discharge, or cause to be paid and discharged, the Impositions, such Impositions
or installments thereof to be paid prior to the day before any fine, penalty,
interest or cost may be added thereto or imposed by law for the non-payment
thereof; provided, however, that if, by law, any Imposition may be paid in
installments, Trustor may pay the same in such installments.
5.1.3 Repair and Alterations.
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(a) Trustor will keep the Mortgaged Property in good
order and condition and make all necessary or appropriate repairs, replacements
and renewals thereof and will use its best efforts to prevent any act or thing
which might impair the value or usefulness of the Mortgaged Property.
(b) Trustor will not commit or knowingly permit any
waste of the Mortgaged Property or any part thereof, or make or permit to be
made any alterations or additions to the Mortgaged Property which would have the
effect of materially diminishing the value thereof, or make or permit to be made
any
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other alterations or additions to the Mortgaged Property, of a material nature,
without the prior written consent of Beneficiary.
(c) Trustor will not permit any of the Fixtures or
Personalty to be removed at any time from the Land and/or Buildings, without the
prior written consent of Beneficiary unless actually replaced by an article of
equal suitability and value and owned by Trustor free and clear of any lien or
security interest except such as may be approved in writing by Beneficiary.
5.1.4 Insurance. Trustor will maintain insurance upon the
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Mortgaged Property against loss by fire, windstorms, flood (if the Mortgaged
Property is located in a designated flood plain) and such other hazards,
casualties and contingencies as are normally and usually covered by All Risk
Property policies in effect in the locality where the Mortgaged Property is
situated and such other risks as may be specified by Beneficiary, from time to
time, in amounts and with insurers acceptable to Beneficiary (including
earthquake if requested by Beneficiary), but in any event not less than the full
replacement cost of all insured real property, fixtures leasehold improvements,
contents, equipment and other personal property, and business interruption or
loss-of-rents limits shall be sufficient to meet loss of one year's anticipated
revenues. No primary deductible or retention greater than $5,000 shall be
called for in any such policies, unless agreed to in writing by Beneficiary.
Policies shall contain endorsements providing for course of construction, breach
of warranty, adjustment of value for inflation, increased costs of replacement
due to changes in code requirements, costs of demolition, and such other
conditions as may be required by Beneficiary. Policies shall be endorsed with
form 438BFUNS, or a similar endorsement acceptable to Beneficiary, showing
Beneficiary as an additional insured and loss payee as its interests may appear,
such loss payments to be applied to the restoration, repair or replacement of
the Mortgaged Property under terms and conditions acceptable to Beneficiary;
provided, however, that if an Event of Default has occurred and is continuing or
an event has occurred and is continuing which with the passage of time or the
giving of notice would constitute an Event of Default, then Beneficiary may, in
its sole discretion, apply such payments to the payment of the Indebtedness.
Trustor shall also maintain Commercial General Liability
insurance which shall respond to third-party claims involving bodily injury,
property damage and personal injury arising out of Trustor's alleged actions or
inactions; such policies shall also include Garagekeepers Legal Liability
coverage. All such policies shall provide limits of coverage as Beneficiary may
specify, but in any event not less than One Million Dollars ($1,000,000) per
occurrence and annual aggregate as to liability for bodily injury, property
damage and personal injury. No primary deductible or retention shall be called
for in the policies. Trustor shall also maintain, or cause its contractors to
maintain, Worker's Compensation and Employer's Liability insurance.
All insurance policies required by Beneficiary under this Deed of
Trust shall be issued by companies acceptable to Beneficiary, but in no event
shall the company(ies) have ratings in the current Best's Insurance Rating
Manual of less than "A/XI." All liability insurance policies shall be endorsed
as to name Beneficiary as an additional insured under the policy as respects its
interests as mortgagee/secured party of the Mortgaged Property. All policies of
insurance shall provide that the policies may not be cancelled, materially
modified or terminated without at least thirty (30) days' prior written notice
to Beneficiary. Trustor shall furnish to Beneficiary duplicate executed copies
of each such policy at the time of execution hereof, and copies of each renewal
policy not less than thirty (30) days prior to the expiration of the original
policy or the preceding renewal policy (as the case may be), together with
receipts or other evidence that the premiums have been paid; and furnish to
Beneficiary certificates of insurance prepared by Trustor's insurance broker or
agent which show evidence of the required coverages and endorsements, and
payment of premiums thereon. Trustor will furnish to Beneficiary on or before
120 days after the close of each fiscal year of Trustor a statement of Trustor
of the amounts of insurance maintained in compliance with this Section 5.1.4, of
the risks covered by such insurance and of the insurance company or companies
which carry such insurance. In the event insurance proceeds received on account
of loss or damage to the Buildings, Personalty or Fixtures are insufficient to
effectuate full repair or replacement of such loss or damage, Beneficiary may
apply such insurance proceeds in reduction of the Indebtedness without
prepayment premium, unless Trustor shall provide or cause to be provided
additional funds in an amount not less than such deficiency and Trustor shall
place in escrow said funds in order to assure to Beneficiary's reasonable
satisfaction full repair of the damaged or destroyed Mortgaged Property or
portion thereof.
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5.1.5 Restoration Following Casualty. In the event of the
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happening of any casualty of any kind or nature (whether insured against or
not), resulting in damage to or destruction of the Mortgaged Property, Trustor
will give prompt notice thereof to Beneficiary, and, subject to the following
sentence, Trustor will promptly restore, repair, replace, rebuild or alter the
Mortgaged Property as nearly as possible to its value and condition immediately
prior to such damage or destruction.
In the event that the Mortgaged Property has been destroyed such that
the value of the Mortgaged Property has been materially impaired, even if
insurance proceeds are made available to Trustor to rebuild the damaged
property, then Beneficiary need not provide such insurance proceeds to Trustor
and may instead apply such insurance proceeds to prepay the Indebtedness in
whole.
5.1.6 Lease Agreement; Attornment. Trustor agrees not to
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terminate, amend, or modify any of the Leases or subleases, or grant any
concessions in connection therewith, or to accept a surrender thereof without
the written consent of Beneficiary. All Leases shall be in form and substance
satisfactory to Beneficiary. Trustor agrees not to execute any future Lease or
Leases or subleases pertaining to the Mortgaged Property without the prior
written consent of Beneficiary. Trustor shall deliver to Beneficiary a complete
copy of each future Lease within 3 days after execution of such Lease. Trustor
shall provide to Beneficiary a subordination, attornment and non-disturbance
agreement executed by each tenant in a form satisfactory to Beneficiary in its
sole discretion.
5.1.7 Performance of Leases and Other Agreements. Trustor will
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duly and punctually perform all covenants and agreements expressed as binding
upon it under the Leases and under any other agreements to which it is a party
with respect to the Mortgaged Property or any part thereof (including, without
limitation, all construction loan documents (other than the Loan Agreement)
relating to the Mortgaged Property, all sales agreements entered into with
respect to all or any portion of the Mortgaged Property), and will use its best
efforts to enforce or secure the performance of each and every obligation and
undertaking of the respective lessees under the Leases and will appear and
defend, at its cost and expense, any action or proceeding arising under or in
any manner connected with the Leases or the obligations and undertakings of any
lessee or other party thereunder. Trustor will immediately notify Beneficiary
in writing of any notice of default received by Trustor from any tenant
thereunder.
5.1.8 Payment of Rents. Trustor hereby agrees that the
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respective lessees under the Leases, upon notice from Beneficiary of the
occurrence of an Event of Default, shall thereafter pay to Beneficiary the Rents
due and to become due under the Leases without any obligation to determine
whether an Event of Default in fact exists.
5.1.9 Inspection. Trustor will permit Beneficiary, at all
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reasonable times and with reasonable notice, to inspect the Mortgaged Property.
Beneficiary shall have the right to enter onto the Mortgaged Property, at all
reasonable times, to inspect the Mortgaged Property for the existence of
Hazardous Materials (as defined in the Indemnity Agreement) on the Mortgaged
Property and to determine the compliance of the Mortgaged Property and its use
with any law, rule or regulation relating to industrial hygiene or environmental
conditions, including soil and ground water conditions and the compliance of the
Trustor and the Mortgaged Property with the conditions and covenants set forth
herein with respect to Hazardous Materials.
5.1.10 Hold Harmless. Trustor will indemnify, defend and hold
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Beneficiary harmless from any liability, loss, action, proceeding or claim
affecting the Mortgaged Property, or the value of the Note or the Loan
Documents. Trustor shall appear in and defend (or pay the expenses of
Beneficiary to defend, if Beneficiary gives Trustor notice of its election to
handle such defense) any action or proceeding purporting to affect the security
of this Deed of Trust and/or the rights and/or powers of Beneficiary hereunder,
and Trustor shall pay all costs and expenses (including costs of evidence of
title and attorneys' fees) in any action or proceeding in which Beneficiary may
so appear and/or any suit by Beneficiary to foreclose this Deed of Trust, to
enforce any obligations secured by this Deed of Trust, and/or to prevent the
breach hereof. Trustor's obligations under this Section 5.1.10 shall survive
payment of the Indebtedness.
8
5.1.11 Books and Records. Trustor will maintain full and
-----------------
complete books of account and other records reflecting the results of its
operations (in conjunction with its other operations as well as its operations
of the Mortgaged Property). If the Mortgaged Property consists of rental
property, Trustor will furnish or cause to be furnished to Beneficiary (a)
within 30 days after the end of each calendar quarter, detailed statements of
income and expenses relating to the Mortgaged Property for such period; (b)
within 90 days after the end of each calendar year, detailed statements of
income and expenses relating to the Mortgaged Property for such year; (c) within
30 days after the end of each calendar quarter, a rent roll for the Mortgaged
Property; and (d) within 30 days after the end of each calendar month, a
delinquency report and accounts receivable aging for the Mortgaged Property for
such month. If the Mortgaged Property consists of single-family lots or homes,
condominiums or other residential properties to be sold, Trustor will furnish or
will cause to be furnished to Beneficiary weekly written reports reflecting all
information relevant to the marketing and sale of such units, in such form as
Beneficiary may request. Within forty-five (45) days after the end of such
fiscal quarter of Trustor and within ninety (90) days after each fiscal year of
Trustor, Trustor will furnish or cause to be furnished to Beneficiary an income
statement, balance sheet and statement of changes in financial position for
Trustor. All financial information to be delivered to Beneficiary hereunder
shall in detail reasonably acceptable to Beneficiary, shall be prepared in
accordance with generally accepted accounting principles applied on a consistent
basis and, with respect to that information regarding Trustor, shall be
certified by the chief financial officer of Trustor as being true, correct and
complete. At any time more frequently than as specified above, and from time to
time, Trustor shall deliver to Beneficiary such other financial data and other
information, including, without limitation, copies of all Leases, as Beneficiary
shall, from time to time, reasonably request with respect to Trustor and the
ownership and operation of the Mortgaged Property, and Beneficiary shall have
the right, at reasonable times and upon reasonable notice, to audit Trustor's
books of account and records.
5.1.12 Awards. Trustor will file and prosecute its claim or
------
claims for any Awards in good faith and with due diligence and cause the same to
be collected and paid over to Beneficiary, and hereby irrevocably authorizes and
empowers Beneficiary, if its so desires, to file such claim and collect any
Awards and agrees that the proceeds of any Awards will be applied by Beneficiary
in reduction of any portion of the Indebtedness as Beneficiary may determine in
accordance with Article 8 hereof.
5.1.13 Licenses. Trustor shall keep in full force and effect
--------
all licenses, permits and other governmental approvals which are necessary for
the construction, marketing and operation of the Mortgaged Property and related
facilities, and furnish evidence satisfactory to Beneficiary that the Mortgaged
Property and the use thereof comply with all applicable zoning and building
laws, regulations, ordinances and other applicable laws.
5.1.14 No Further Encumbrance. Trustor shall not, without the
----------------------
prior written consent of Beneficiary, incur any additional indebtedness or
create or permit to be created or to remain, any mortgage, pledge, lien,
encumbrance or charge on, or conditional sale or other title retention agreement
with respect to, the Mortgaged Property or any part thereof or income therefrom,
other than the Loan Documents and the Permitted Encumbrances and except as
provided in Section 5.1.18 below.
5.1.15 Mechanic's Lien. Trustor shall not permit or suffer any
---------------
mechanic's, materialman's or other lien to be created or to remain a lien upon
any of the Mortgaged Property.
5.1.16 Management. If Trustor seeks to have the Mortgaged
----------
Property managed by a management company, the management company must be
approved by Beneficiary under a management contract satisfactory in form and
substance to Beneficiary. The interests of the Trustor and the management
company under such contract shall be subordinate to the rights of Beneficiary
hereunder, and the management agreement shall provide that Beneficiary may, at
its option, terminate such contract upon the occurrence of an Event of Default.
5.1.17 Use of Mortgaged Property. Trustor shall not use the
-------------------------
Mortgaged Property or any part thereof, or allow the same to be used or
occupied, for any purpose other than the uses for which the Mortgaged Property
is currently zoned or for any unlawful purpose, or in violation of any
certificate of occupancy or other permit or certificate, or any law, ordinance
or regulation, covering or affecting the use or occupancy
9
thereof. Trustor will not suffer any act to be done or any condition to exist on
the Mortgaged Property or any part thereof or any article to be brought thereon,
which may be dangerous (unless safeguarded as required by law) or which may
constitute a nuisance, public or private, or which may void or make voidable any
insurance then in force with respect thereto.
5.1.18 Transfer of Mortgaged Property. Trustor shall not,
------------------------------
without the prior written consent of Beneficiary, directly or indirectly sell,
transfer, convey, further encumber assign, grant any option, subordinate,
convert to condominiums or grant any further lien or easement on all or any part
of the Mortgaged Property, or enter into any agreement for any of the foregoing,
whether by operation of law recorded or unrecorded, or voluntarily or
involuntarily; provided, however, that if the Mortgaged Property consists of
single-family lots or homes, condominiums or other residential properties to be
sold, Trustor may accept sales reservations and enter into purchase and sales
contracts so long as such actions are consistent with the Loan Documents, all
rules and regulations of the California Department of Real Estate and all other
applicable laws, rules and regulations. Trustor shall promptly notify
Beneficiary in writing of any such intended event or agreement for which
Beneficiary's consent may be required.
5.2 Representations and Warranties of Trustor. Trustor hereby
-----------------------------------------
represents and warrants to Beneficiary as follows, and agrees to give written
notice to Beneficiary of any breach of such representations and warranties.
5.2.1 Good Standing/Licensing. Trustor is duly organized,
-----------------------
validly existing and in good standing under the laws of its state of
organization, is duly licensed or qualified to do business and is in good
standing and is authorized to do business in every jurisdiction in which the
nature of its businesses or properties makes such licensing or qualification
necessary and where a failure to so qualify or be licensed would have a
materially adverse effect on the business or operations of the Trustor, and is
in compliance with all laws, regulations, ordinances and orders of public
authorities applicable to Trustor. If Trustor is a corporation or partnership,
the execution of the Note and the Loan Documents are within Trustor's corporate
or partnership powers.
5.2.2 No Conflict. The Note and the Loan Documents will not
-----------
violate any provision of law (including, but not limited to any law relating to
usury), any order of any court or other agency or government, or any indenture,
agreement or other instrument to which Trustor is a party or by which Trustor or
any of its property is bound, or be in conflict with, result in a breach of or
constitute (with due notice and/or lapse of time) a default under any such
indenture, agreement or other instrument, or violate the partnership agreement
of the Trustor or result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the property or assets of
Trustor, except as contemplated by the Note and the Loan Documents, and no
action with respect thereto by Trustor is required.
5.2.3 Consents. No consent or approval of any regulatory body
--------
to the execution, delivery and performance of the Note and the Loan Documents or
the transactions contemplated thereby is required by law.
5.2.4 Suits. There are no suits, proceedings or investigations
-----
pending or threatened against or affecting Trustor, at law or in equity, or
before or by any governmental or administrative agency or instrumentality which,
if adversely determined, would have a material adverse effect on the business or
condition of Trustor.
5.2.5 Judgments. No judgment, decree or order of any court or
---------
governmental or administrative agency or instrumentality has been issued against
Trustor which has or may have any material adverse effect on the business or
condition of Trustor.
5.2.6 Information. All information, reports, papers and data
-----------
given to Beneficiary with respect to Trustor or others obligated under the terms
of the Loan Documents are accurate and correct in all
10
material respects and complete insofar as completeness may be necessary to give
Beneficiary a true and accurate knowledge of the subject matter thereof.
5.2.7 Title/Right to Assign Leases. Trustor has good and
----------------------------
marketable title in fee simple to the Land and Buildings, and good and
marketable title to the Fixtures, the Awards and Personalty, and the right to
assign the Leases and Rents to Beneficiary free and clear of any prior
assignment, liens, charges, encumbrances, security interests and adverse claims
whatsoever except the Permitted Encumbrances.
5.2.8 Leases. Trustor has not executed any prior assignment of
------
the Leases or of its right, title and interest therein or in the Rents to accrue
thereunder, Trustor has delivered to Beneficiary a true and complete copy of all
of the existing Leases assigned hereunder, together with all amendments,
supplements and other modifications, and to the best of Trustor's knowledge, no
material default by Trustor or any other person under any existing Lease remains
uncured.
5.2.9 Permitted Encumbrances. The Permitted Encumbrances have
----------------------
not materially interfered with the operation of the Mortgaged Property, nor does
Trustor reasonably foresee any material interference arising from the Permitted
Encumbrances during the term of the Note. Without limiting the foregoing,
Trustor represents that it is not in default under the terms of any liens that
are secured by deeds of trust whose liens are junior to the lien of this Deed of
Trust.
5.2.10 Taxes. Trustor has filed all Federal, state, county and
-----
municipal income tax returns required to have been filed by them and have paid
all taxes which have become due pursuant to any assessments received by them,
and Trustor does not know of any basis for additional assessment in respect to
such taxes.
5.2.11 Use of Borrowed Funds. Trustor hereby represents and
---------------------
warrants to Beneficiary that it intends to use the funds it is borrowing from
Beneficiary under the terms of the Note primarily for other than personal,
family or household purposes.
5.2.12 Electromagnetic Fields. There are no electrical
----------------------
transformers or electrical stations or substations within 100 yards of any
portion of the Land.
ARTICLE 6
EVENTS OF DEFAULT
-----------------
The term "Event(s) of Default", as used herein and in the Loan
Documents and the Note, shall mean the occurrence or happening, from time to
time, of any one or more of the following:
6.1 Payment of Indebtedness. If Trustor shall default in the due and
-----------------------
punctual payment of all or any portion of any installment of the Indebtedness,
whether at the due date thereof or by acceleration or otherwise, as and when the
same shall become due and payable and such failure continues for a period of
five (5) days.
6.2 Performance of Obligations. If Trustor shall default in the due
--------------------------
observance or performance of any of the Obligations other than payment of money
and such default shall not be cured within twenty (20) days after such default.
6.3 Bankruptcy, Receivership, Insolvency, Etc. If voluntary or
------------------------------------------
involuntary proceedings under the Federal Bankruptcy Code, as amended, shall be
commenced by or against Trustor or the general partner of Trustor (if any), or
bankruptcy, receivership, insolvency, reorganization, dissolution, liquidation
or other similar proceedings shall be instituted by or against Trustor or the
general partner of Trustor (if any) with respect to all or any part of Trustor's
property or the property of the general partner of Trustor under the Federal
Bankruptcy Code, as amended, or other law of the United States or of any state
or other competent jurisdiction, and if such
11
proceedings are instituted against Trustor or the general partner of Trustor (if
any) and it shall consent thereto or shall fail to cause the same to be
discharged within sixty (60) days.
6.4 Laws Affecting Obligations and Indebtedness. If subsequent to
-------------------------------------------
the date of this Deed of Trust, any governmental entity in which the Mortgaged
Property is located passes any law (a) which renders payment of the Indebtedness
and/or performance of the Obligations by Trustor unlawful, or (b) which
prohibits Beneficiary from exercising any of its rights and remedies under the
Note and Loan Documents.
6.5 False Representation. If any representation or warranty made by
--------------------
Trustor or others in, under or pursuant to the Note or the Loan Documents
(including, but not limited to, any representation or warranty made in Section
5.2 hereof) shall prove to have been false or misleading in any material respect
as of the date on which such representation or warranty was made.
6.6 Destruction of Improvements. If any of the Buildings is
---------------------------
demolished or removed or demolition or removal thereof is imminent, eminent
domain proceedings excepted.
6.7 Default Under Other Deed of Trust. If the holder of any senior
---------------------------------
or junior deed of trust or any other lien on the Mortgaged Property (without
hereby implying Beneficiary's consent to any such junior deed of trust or lien)
institutes foreclosure or other proceedings for the enforcement of its remedies
thereunder, or if a default exists under any other deed of trust or lien on the
Mortgaged Property or any documents that evidence or relate to the loans secured
by any of the foregoing deeds of trust or liens.
6.8 Loan Documents. If a default shall occur under the Note or any
--------------
of the Loan Documents.
6.9 Due on Sale. If, without the prior written consent of
-----------
Beneficiary, (a) there is any sale, transfer, assignment, conveyance or
encumbrance, whether voluntary or involuntary, of all or part of the Mortgaged
Property or any interest therein or any other event or agreement referred to in
Section 5.1.18, (b) Trustor or any one or more of the persons comprising Trustor
is a partnership and the interest of any general partner (or the interest of any
general partner in a partnership that is a partner) is assigned or transferred,
except for an assignment or transfer resulting from the death or physical or
mental incapacity of a general partner; (c) transfer, assignment or
hypothecation of more than 25% of the corporate stock of Trustor; (d) change in
ownership (including the hypothecation or encumbrance thereof) of a majority of
the stock of Inco Homes Corporation held by Xxx Xxxxxx (Inco Homes Corporation
being the sole shareholder of Inco Development Corporation); (e) Trustor is a
trust and there is a change in beneficial ownership with respect to more than
twenty-five percent (25%) of the trust; (f) Trustor consists of several persons
or entities holding fractional undivided interest in the Mortgaged Property and
there is a cumulative change in ownership with respect to more than a twenty-
five percent (25%) fractional undivided interest in the Mortgaged Property; (g)
there is a seizure of the Mortgaged Property, or attachment of any lien on the
Mortgaged Property, whether voluntary or involuntary, which has not been removed
or bonded off to Beneficiary's satisfaction within thirty (30) days of such
attachment; or (h) there is a change in the controlling executives and directors
of Trustor.
6.10 Judgment. If a final judgment for the payment of money in excess
--------
of Ten Thousand Dollars ($10,000) shall be rendered against Trustor and the same
shall remain unpaid for a period of thirty (30) consecutive days during which
period execution shall not be effectively stayed.
6.11 Vista Verde Deed of Trust. If there should occur any Event of
-------------------------
Default under that certain Deed of Trust, Security Agreement, Assignment of
Leases and Rents, and Fixture Filing dated of even date herewith given by Inco
Homes Corporation, as trustor, for the benefit of Beneficiary and encumbering
certain real property located in San Bernardino County, California (the "Vista
Verde Deed of Trust"). Inco Homes Corporation has given the Vista Verde Deed of
Trust as additional security for the Note, the Indebtedness and the Obligations.
ARTICLE 7
DEFAULT AND FORECLOSURE
-----------------------
7.1 Remedies. If an Event of Default shall occur, Beneficiary may,
--------
at its option, by or through Trustee or otherwise, exercise one or more or all
of the following remedies:
12
7.1.1 Acceleration. Declare the unpaid portion of the Note and
------------
Indebtedness to be immediately due and payable, without further notice or demand
(each of which hereby is expressly waived by Trustor), whereupon the same shall
become immediately due and payable.
7.1.2 Entry on Mortgaged Property. Enter upon the Mortgaged
---------------------------
Property and take possession thereof and of all books, records, and accounts
relating thereto.
7.1.3 Operation of Mortgaged Property. Hold, lease, operate or
-------------------------------
otherwise use or permit the use of the Mortgaged Property, or any portion
thereof, in such manner, for such time and upon such terms as Beneficiary may
deem to be in its best interest (making such repairs, alterations, additions and
improvements thereto, from time to time, as Beneficiary shall deem necessary or
desirable) and collect and retain all earnings, rents, profits or other amounts
payable in connection therewith.
7.1.4 Judicial Proceedings. Institute proceedings for the
--------------------
complete or partial foreclosure of this Deed of Trust or 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 (without being required to foreclose 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 elect.
7.1.5 Sale of Mortgaged Property. Cause the Mortgaged Property
--------------------------
and all estate, right, title and interest, claim and demand therein, or any part
thereof to be sold as follows:
(a) Beneficiary may proceed as if all of the
Mortgaged Property were real property, in accordance with subparagraph (d)
below, or Beneficiary may elect to treat any of the Mortgaged Property which
consists of a right in action or which is property that can be severed from the
premises without causing structural damage thereto as if the same were personal
property, and dispose of the same in accordance with subparagraph (c) below,
separate and apart from the sale of real property, with the remainder of the
Mortgaged Property being treated as real property.
(b) Beneficiary may cause any such sale or other
disposition to be conducted immediately following the expiration of any grace
period, if any, herein provided (or required by law) or Beneficiary may delay
any such sale or other disposition for such period of time as Beneficiary deems
to be in its best interest. Should Beneficiary desire that more than one such
sale or other disposition be conducted, Beneficiary may at its option, cause the
same to be conducted simultaneously, or successively on the same day, or at such
different days or times and in such order as Beneficiary may deem to be in its
best interest.
(c) Should Beneficiary elect to cause any of the
Mortgaged Property to be disposed of as personal property as permitted by
subparagraph (a) above, it may dispose of any part thereof in any manner now or
hereafter permitted by Division 9 of the UCC or in accordance with any other
remedy provided by law. Both Trustor and Beneficiary shall be eligible to
purchase any part of all of such property at any such disposition. Any such
disposition may be either public or private as Beneficiary may so elect, subject
to the provisions of the UCC. Beneficiary shall give Trustor at least five (5)
days prior written notice of the time and place of any public sale or other
disposition of such property or of the time at or after which any private sale
or any other intended disposition is to be made, and if such notice is sent to
Trustor it shall constitute reasonable notice to Trustor.
(d) Should Beneficiary elect to sell the Mortgaged
Property which is real property or which Beneficiary has elected to treat as
real property, upon such election Beneficiary or Trustee shall give such Notice
of Default and Election to Sell as may then be required by law. Thereafter, upon
the expiration of such time and the giving of such Notice of Sale as may then be
required by law, Trustee, at the time and place specified in the Notice of Sale,
shall sell such Mortgaged Property, or any portion thereof specified by
Beneficiary, at public auction to the highest bidder for cash in lawful money of
the United States, subject, however, to the provisions of Section 7.1.5(e)
hereof. Trustee for good cause may, and upon request of Beneficiary shall, from
time to time, postpone the sale by public announcement thereof at the time and
place noticed therefor. If the
13
Mortgaged Property consists of several lots or parcels, Beneficiary may
designate the order in which such lots or parcels may be offered for sale or
sold, and may direct that such property be sold in one parcel, as an entirety,
or in such parcels as Beneficiary, in its sole discretion, may elect. Trustor
expressly waives any right which it may have to direct the order in which any of
the Mortgaged Property shall be sold, and its rights, if any, to require the
Mortgaged Property be sold as separate tracts, lots, units, or parcels. Any
person, including Trustor, Trustee or Beneficiary, may purchase at the sale.
Upon any sale Trustee shall execute and deliver to the purchaser or purchasers a
deed or deeds conveying the property so sold, but without any covenant or
warranty whatsoever, express or implied, whereupon such purchaser or purchasers
shall be let into immediate possession.
(e) Upon any sale of the Mortgaged Property, whether
made under a power of sale herein granted or pursuant to judicial proceedings,
if the holder of the Note is a purchaser at such sale, it shall be entitled to
use and apply all or any portion of the indebtedness then secured hereby for or
in settlement or payment of all or any portion of the purchase price of the
property purchased, and, in such case, this Deed of Trust, the Note and
documents evidencing expenditures secured hereby shall be presented to the
person conducting the sale in order that the amount of said indebtedness so used
or applied may be credited xxxxxxx as having been paid.
(f) In the event of a sale or other disposition of
any such Mortgaged Property or any part thereof, and the execution of a deed or
other conveyance pursuant thereto, the recitals in the deed or deeds of facts
(such as of a default, the giving of notice of default and notice of sale,
demand that such sale should be made, postponement of sale, terms of sale, sale,
purchaser, payment of purchase money, and any other fact affecting the
regularity or validity of such sale or disposition) shall be conclusive proof of
the truth of such facts; and any such deed or conveyance shall be conclusive
against all persons as to such facts recited therein.
7.1.6 Receiver. Beneficiary shall be entitled, as a matter of
--------
strict right, without notice and ex parte, and without regard to the value or
occupancy of the security, or the solvency of the Trustor, or the adequacy of
the Mortgaged Property as security for the Note, to have a receiver appointed to
enter upon and take possession of the Mortgaged Property, collect the Rents and
profits therefrom and apply the same as the court may direct, such receiver to
have all the rights and powers permitted under the laws of the jurisdiction in
which the Mortgaged Property is located. Trustor hereby waives any requirements
on the receiver or Beneficiary to post any surety or other bond. Beneficiary or
the receiver may also take possession of, and for these purposes use, any and
all Personalty which is a part of the Mortgaged Property and used by Trustor in
the rental or leasing thereof or any part thereof. The expense (including the
receiver's fees, counsel fees, costs and agent's compensation) incurred pursuant
to the powers herein contained shall be secured by this Deed of Trust.
Beneficiary shall (after payment of all costs and expenses incurred) apply such
Rents, issues and profits received by it on the Indebtedness in the order set
forth in Section 7.7 hereof. The right to enter and take possession of the
Mortgaged Property, to manage and operate the same, and to collect the Rents,
issues and profits thereof, whether by receiver or otherwise, shall be
cumulative to any other right or remedy hereunder or afforded by law, and may be
exercised concurrently therewith or independently thereof. Beneficiary shall be
liable to account only for such Rents, issues and profits actually received by
Beneficiary.
7.1.7 Additional Rights and Remedies. With or without notice,
------------------------------
and without releasing Trustor from the Indebtedness or Obligations, and without
becoming a mortgagee in possession, Beneficiary and Trustee shall have the right
to cure any breach or default of Trustor and, in connection therewith, to enter
upon the Mortgaged Property and to do such acts and things as Beneficiary or
Trustee deem necessary or desirable to protect the security hereof including,
but without limitation, to appear in and defend any action or proceedings
purporting to affect the security hereof or the rights or powers of Beneficiary
or Trustee hereunder; to pay, purchase, contest or compromise any encumbrance,
charge, lien or claim of lien which, in the judgment of either Beneficiary or
Trustee, is prior or superior hereto, the judgment of Beneficiary or Trustee
being conclusive as between the parties hereto; to obtain insurance; to pay any
premiums or charges with respect to insurance required to be carried hereunder;
and to employ counsel, accountants, contractors and other appropriate persons to
assist them. All sums so paid by Beneficiary, and all costs and expenses,
including, without limitation, reasonable attorneys' fees and expenses so
incurred together with interest thereon at the interest rate provided in the
note, from the date of payment or incurring, shall constitute additions to the
Indebtedness secured by the Loan Documents, and
14
shall be paid by Trustor to Beneficiary, on demand. If Beneficiary shall elect
to pay any Imposition, Beneficiary may do so in reliance on any bill, statement
or assessment procured from the appropriate public office, without inquiring
into the accuracy thereof or into the validity of such Imposition. Trustor shall
indemnify Beneficiary for all losses and expenses, including reasonable
attorneys' fees, incurred by reason of any acts performed by Beneficiary
pursuant to the provisions of this Section 7.1.7 or by reason of the Loan
Documents, and any funds expended by Beneficiary to which it shall be entitled
to be indemnified, together with interest thereon at the interest rate provided
in the Note from the date of such expenditures, shall constitute additions to
the Indebtedness and shall be secured by the Loan Documents and shall be paid by
Trustor to Beneficiary upon demand.
7.1.8 Other. Exercise any other remedy specifically granted
-----
under the Note and the Loan Documents, or now or hereafter existing in equity,
at law, by virtue of statute or otherwise, including the rights described below.
7.1.9 Late Charge and Default Interest. Impose the late
--------------------------------
charges and the default interest rate as provided for in the Note.
7.2 Separate Sales. Any real property or any interest or estate
--------------
therein sold pursuant to any writ of execution issued on a judgment obtained by
virtue of the Note, this Deed of Trust or the other Loan Documents, or pursuant
to any other judicial proceedings under this Deed of Trust or the other Loan
Documents, or pursuant to the power of sale granted herein, may be sold in one
parcel, as an entirety, or in such parcels, and in such manner or order as
Beneficiary, in its sole discretion, may elect.
7.3 Remedies Cumulative and Concurrent. The rights and remedies of
----------------------------------
Beneficiary as provided in the Note, this Deed of Trust and in the Loan
Documents shall be cumulative and concurrent and may be pursued separately,
successively or together against Trustor or against other obligors or against
the Mortgaged Property, or any one or more of them, at the sole discretion of
Beneficiary, and may be exercised as often as occasion therefor shall arise.
The failure to exercise any such right or remedy shall in no event be construed
as a waiver or release thereof, nor shall the choice of one remedy be deemed an
election of remedies to the exclusion of other remedies. Without limiting the
foregoing, Beneficiary may foreclose, either judicially or non-judicially, under
the Vista Verde Deed of Trust either prior to, concurrently with or after
completing a judicial or non-judicial foreclosure under this Deed of Trust.
7.4 No Cure or Waiver. Neither Beneficiary's nor Trustee's nor any
-----------------
receiver's entry upon and taking possession of all or any part of the Mortgaged
Property nor any collection of rents, issues, profits, insurance proceeds,
condemnation proceeds or damages, other security or proceeds of other security,
or other sums, nor the application of any collected sum to any Indebtedness and
Obligations, nor the exercise of any other right or remedy by Beneficiary or
Trustee or any receiver shall impair the status of the security, or cure or
waive any default or notice of default under this Deed of Trust, or nullify the
effect of any notice of default or sale (unless all Indebtedness and Obligations
which are then due have been paid and performed and Trustor has cured all other
defaults), or prejudice Beneficiary or Trustee in the exercise of any right or
remedy, or be construed as an affirmation by Beneficiary of any tenancy, lease
or option or a subordination of the lien of this Deed of Trust.
7.5 Payment of Costs, Expenses and Attorneys Fees. Trustor agrees to
---------------------------------------------
pay to Beneficiary immediately and without demand all costs and expenses
incurred by Trustee and Beneficiary in exercising the remedies under the Note
and Loan Documents (including but without limitation, court costs and attorneys'
fees, whether incurred in litigation or not) with interest at the greater of the
interest rate provided in the Note or the highest rate payable under any
Indebtedness and Obligations, from the date of expenditure until said sums have
been paid. Beneficiary shall be entitled to bid, at the sale of the Mortgaged
Property held pursuant to the power of sale granted herein or pursuant to any
judicial foreclosure of this instrument, the amount of said costs, expenses and
interest in addition to the amount of the other Indebtedness and Obligations as
a credit bid, the equivalent of cash.
7.6 Waiver of Redemption, Notice, Marshalling, Etc. Trustor hereby
-----------------------------------------------
waives and releases (a) all benefit that might accrue to Trustor by virtue of
any present or future law exempting the Mortgaged Property, or any part of the
proceeds arising from any sale thereof, from attachment, levy or sale on
execution, or providing for any redemption or extension of time for payment, (b)
unless specifically required herein, all notices of Trustor's
15
default or of Beneficiary's election to exercise, or Beneficiary's actual
exercise, of any option or remedy under the Note or the Loan Documents; (c) any
right to have the liens against the Mortgaged Property marshaled; and (d) the
right to plead or assert any statute of limitations as a defense or bar to the
enforcement of the Note or the Loan Documents.
7.7 Application of Proceeds. The proceeds of any sale of all or any
-----------------------
portion of the Mortgaged Property and the amounts generated by any holding,
leasing, operation or other use of the Mortgaged Property shall be applied by
Beneficiary in the following order, or in such other order or proportion as
Beneficiary shall decide in its sole discretion:
(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 payment of any
Impositions or other taxes);
(b) second, to the extent allowed by law, to the payment of
attorneys' fees and other legal expenses, including expenses and fees incurred
on appeals, and legal expenses and fees of a receiver;
(c) third, to the payment of all amounts advanced under this
Deed of Trust or any other Loan Document (except for the Indemnity Agreement) to
preserve the value of the Mortgaged Property;
(d) fourth, to the payment of late charges and accrued and
unpaid interest on the Indebtedness;
(e) fifth, to the payment of the unpaid balance of the
Indebtedness (except for that portion of the Indebtedness that arises out of the
Indemnity Agreement); and
(f) sixth, to the payment of any amounts owing to Beneficiary or
the other Indemnified Parties (as defined in the Indemnity Agreement) under the
Indemnity Agreement.
The balance, if any, shall be paid to the parties entitled to
receive it.
7.8 Strict Performance. Any failure by Beneficiary to insist upon
------------------
strict performance by Trustor of any of the terms and provisions of the Loan
Documents, or of the Note shall not be deemed to be a waiver of any of the terms
or provisions of the Loan Documents, or the Note and Beneficiary shall have the
right thereafter to insist upon strict performance by Trustor of any and all of
them.
7.9 No Conditions Precedent to Exercise of Remedies. Neither Trustor
-----------------------------------------------
nor any other person now or hereafter obligated for payment of all or any part
of the Indebtedness shall be relieved of such obligation by reason of the
failure of Beneficiary to comply with any request of Trustor or of any other
person so obligated to take action to foreclose on this Deed of Trust or
otherwise enforce any provisions of the Loan Documents or the Note, or by reason
of the release, regardless of consideration, of all or any part of the security
held for the Indebtedness, or by reason of any agreement or stipulation between
any subsequent owner of the Mortgaged Property and Beneficiary extending the
account of the occurrence of an Event of Default, including but not limited to
any transfer or disposition as prohibited by Sections 5.1.14 and 5.1.18.
7.10 Environmental Default and Remedies. In the event that any
----------------------------------
portion of the Mortgaged Property is determined to be "environmentally impaired"
(as "environmentally impaired" is defined in California Code of Civil Procedure
Section 726.5(e)(3)) or to be an "affected parcel" (as "affected parcel" is
defined in California Code of Civil Procedure Section 726.5(e)(1)), then,
without otherwise limiting or in any way affecting Beneficiary's or Trustee's
rights and remedies under this Deed of Trust, Beneficiary may elect to exercise
its right under California Code of Civil Procedure Section 726.5(a) to (1) waive
its lien on such environmentally impaired or affected portion of the Mortgaged
Property and (2) exercise (i) the rights and remedies of an unsecured creditor,
including reduction of its claim against Trustor to judgment, and (ii) any other
rights and remedies permitted by law. For purposes of determining Beneficiary's
right to proceed as an unsecured creditor under California Code of Civil
Procedure Section 726.5(a), Trustor shall be deemed to have
16
willfully permitted or acquiesced in a release or threatened release of
hazardous materials, within the meaning of California Code of Civil Procedure
Section 726.5(d)(1), if the release or threatened release of hazardous materials
was knowingly or negligently caused or contributed to by any lessee, occupant or
user of any portion of the Mortgaged Property and Trustor knew or should have
known of the activity by such lessee, occupant or user which caused or
contributed to the release or threatened release. All costs and expenses,
including, but not limited to, attorneys' fees, incurred by Beneficiary in
connection with any action commenced under this Section 7.10, including any
action required by California Code of Civil Procedure Section 726.5(b) to
determine the degree to which the Mortgaged Property is environmentally
impaired, plus interest thereon at the interest rate provided in the Note until
paid, shall be added to the Indebtedness secured by this Deed of Trust and shall
be due and payable to Beneficiary upon its demand made at any time following the
conclusion of such action.
ARTICLE 8
CONDEMNATION
------------
8.1 Condemnation. Trustor hereby assigns, transfers and sets over to
------------
Beneficiary all rights of Trustor to any award or payment in respect of (a) any
taking of all or a portion of the Mortgaged Property as a result of, or by
agreement in anticipation of, the exercise of the right of condemnation or
eminent domain; (b) any such taking of any appurtenances to the Mortgaged
Property or of vaults, areas or projections outside the boundaries of the
Mortgaged Property, or rights in, under or above the alleys, streets or avenues
adjoining the Mortgaged Property, or rights and benefits of light, air, view or
access to said alleys, streets, or avenues or for the taking of space or rights
therein, below the level of, or above the Mortgaged Property; and (c) any damage
to the Mortgaged Property or any part thereof due to governmental action, but
not resulting in, a taking of any portion of the Mortgaged Property, such as,
without limitation, the changing of the grade of any street adjacent to the
Mortgaged Property. Trustor hereby agrees to file and prosecute its claim or
claims for any such award or payment in good faith and with due diligence and
cause the same to be collected and paid over to Beneficiary, and hereby
irrevocably authorizes and empowers Beneficiary, in the name of Trustor or
otherwise, to collect and receipt for any such award or payment and, in the
event Trustor fails to act, or in the event that an Event of Default has
occurred and is continuing, to file and prosecute such claim or claims.
8.2 Application of Proceeds. All proceeds received by Beneficiary
-----------------------
with respect to a taking of all or any part of the Mortgaged Property or with
respect to damage to all or any part of the Mortgaged Property from governmental
action not resulting in a taking of the Mortgaged Property, shall be applied as
follows, in the order of priority indicated or in such other order or proportion
as Beneficiary shall decide in its sole discretion:
(a) to reimburse Beneficiary for all costs and expenses,
including reasonable attorneys' fees incurred in connection with collecting the
said proceeds;
(b) to the payment of late charges, if any, owing under the Note
or the Loan Documents;
(c) to the payment of accrued and unpaid interest on the Note;
(d) to the prepayment of the unpaid principal of the Note,
without premium;
(e) to the payment of the balance of the Indebtedness; and
(f) to the payment of any amounts owing to Beneficiary or the
other Indemnified Parties (as defined in the Indemnity Agreement) under the
Indemnity Agreement.
The balance, if any, will be paid to Trustor.
17
ARTICLE 9
MISCELLANEOUS
-------------
9.1 Further Assurances. Trustor, upon the reasonable written request
------------------
of Beneficiary, will execute, acknowledge and deliver, or arrange for the
execution, acknowledgment and delivery of, such further instruments (including,
without limitation, financing statements, estoppel certificates and declarations
of no set-off, attornment agreements and acknowledgments of the Assignment) and
do such further acts as may be necessary, desirable or proper to carry out more
effectively the purpose of the Loan Documents, to facilitate the assignment or
transfer of the Note and the Loan Documents and to subject to the liens of the
Loan Documents any property intended by the terms thereof to be covered thereby,
and any renewals, additions, substitutions, replacements or betterments thereto.
Upon any failure of Trustor to execute and deliver such instruments,
certificates and other documents on or before fifteen (15) days after receipt of
written request therefor, Beneficiary may make, execute and record any and all
such instruments, and certificates and Trustor irrevocably appoints Beneficiary
the agent and attorney-in-fact of Trustor to do so.
9.2 Recording and Filing. Trustor, at its expense, will cause the
--------------------
Loan Documents, all supplements thereto and any financing statements at all
times to be recorded and filed and re-recorded and re-filed in such manner and
in such places as Beneficiary shall reasonably request, and will pay all such
recording, filing, re-recording and re-filing taxes, fees and other charges.
9.3 Notice. Trustor hereby requests that a copy of any notice of
------
default and every notice of sale hereunder be mailed to it as provided by law at
the Trustor's Address. All notices, demands, requests and other communications
required under the Loan Documents and the Note shall be in writing and shall be
deemed effective (i) upon mailing by U.S. certified or registered mail, postage
prepaid, addressed to the party for whom it is intended at the Trustor's Address
or the Trustee's Address, as the case may be, or in the case of notices to
Beneficiary, to Beneficiary at the Beneficiary's Address, or (ii) upon receipt,
if personally delivered or sent by facsimile. Any party may designate a change
of address or facsimile number by written notice to the other, given at least 10
business days before such change of address is to become effective. Trustor
may, from time to time, change the address to which notice of default and notice
of sale hereunder shall be sent by both recording a request therefor and sending
a copy of such request to Beneficiary.
9.4 Beneficiary's Right to Perform the Obligations. If Trustor shall
----------------------------------------------
fail to make any payment or perform any act required by the Note or the Loan
Documents, then, at any time thereafter, without notice to or demand upon
Trustor and without waiving or releasing any obligation or default, Beneficiary
may make such payment or perform such act for the account of and at the expense
of Trustor, and shall have the right to enter the Mortgaged Property for such
purpose and to take all such action thereon and with respect to the Mortgaged
Property as may be necessary or appropriate for such purpose. All sums so paid
by Beneficiary, and all costs and expenses, including, without limitation,
reasonable attorneys' fees and expenses so incurred together with interest
thereon at the interest rate provided in the Note, from the date of payment or
incurring, shall constitute additions to the Indebtedness secured by the Loan
Documents, and shall be paid by Trustor to Beneficiary, on demand. If
Beneficiary shall elect to pay any Imposition, Beneficiary may do so in reliance
on any bill, statement or assessment procured from the appropriate public
office, without inquiring into the accuracy thereof or into the validity of such
Imposition. Trustor shall indemnify Beneficiary for all losses and expenses,
including reasonable attorneys' fees, incurred by reason of any acts performed
by Beneficiary pursuant to the provisions of this Section 9.4 or by reason of
the Loan Documents, and any funds expended by Beneficiary to which it shall be
entitled to be indemnified, together with interest thereon at the interest rate
provided in the Note from the date of such expenditures, shall constitute
additions to the Indebtedness and shall be secured by the Loan Documents and
shall be paid by Trustor to Beneficiary upon demand.
9.5 Covenants Running with the Land. All covenants contained in the
-------------------------------
Loan Documents shall run with the Mortgaged Property.
9.6 Severability. In case the Indebtedness or any one or more of the
------------
Obligations shall be invalid, illegal or unenforceable in any respect, the
validity of the Note, this Deed of Trust, the Loan Documents, the
18
Indemnity Agreement and remaining Indebtedness or Obligations shall be in no way
affected, prejudiced or disturbed thereby.
9.7 Modification. The Loan Documents and the terms of each of them
------------
may not be changed, waived, discharged or terminated orally, but only by an
instrument or instruments in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is asserted.
9.8 Due on Sale. The loan evidenced by the Note and secured by this
-----------
Deed of Trust is personal to Trustor, and Beneficiary made such loan to Trustor
based upon the credit of Trustor and Beneficiary's judgment of the ability of
Trustor to repay the entire Indebtedness and therefore this Deed of Trust may
not be assumed by any subsequent holder of an interest in the Mortgaged Property
without Beneficiary's prior written consent.
9.9 Tax on Indebtedness or Deed of Trust. In the event of the
------------------------------------
passage, after the date of this Deed of Trust, of any law deducting from the
value of land for the purposes of taxation, any lien thereon, or imposing upon
Beneficiary the obligation to pay the whole, or any part, of the taxes or
assessments or charges or liens herein required to be paid by Trustor, or
changing in any way the laws relating to the taxation of deeds of trust,
mortgages or debts as to affect the Deed of Trust or the Indebtedness, the
entire unpaid balance of the Indebtedness shall, at the option of Beneficiary,
after thirty (30) days written notice to Trustor, become due and payable;
provided, however, that if, in the opinion of Beneficiary's counsel, it shall be
lawful for Trustor to pay such taxes, assessments, or charges, or to reimburse
Beneficiary therefor, then there shall be no such acceleration of the time for
payment of the unpaid balance of the Indebtedness if a mutually satisfactory
agreement for reimbursement, in writing, is executed by Trustor and delivered to
Beneficiary within the aforesaid period.
9.10 Maximum Rate of Interest. Notwithstanding any provision in this
------------------------
Deed of Trust, or in any instrument now or hereafter relating to or securing the
Indebtedness evidenced by the Note, the total liability for payments of interest
and payments in the nature of interest, including, without limitation, all
charges, fees, exactions, or other sums which may at any time be deemed to be
interest, shall not exceed the limit, if any, imposed by Beneficiary by
applicable usury laws. In the event the total liability for payments of
interest and payments in the nature of interest, including, without limitation,
all charges, fees, exactions, or other sums which may at any time be deemed to
be interest, shall for any reason whatsoever, result in an effective rate of
interest, which for any month or other interest payment period exceeds the limit
imposed by the applicable usury laws, all sums in excess of those lawfully
collectible as interest for the period in question shall, without further
agreement or notice by, between, or to any party hereto, be applied to the
reduction of the Indebtedness immediately upon receipt of such sums by
Beneficiary, with the same force and effect as though Trustor had specifically
designated such excess sums to be so applied to the reduction of the
Indebtedness and Beneficiary had agreed to accept such sums as a payment of the
Indebtedness not subject to any prepayment penalty, provided, however, that
Beneficiary may, at any time and from time to time, elect, by notice in writing
to Trustor, to waive, reduce, or limit the collection of any sums (or refund to
Trustor any sums collected) in excess of those lawfully collectible as interest
rather than accept such sums as a prepayment of the Indebtedness.
9.11 Survival of Warranties and Covenants. The warranties,
------------------------------------
representations, covenants and agreements set forth in the Loan Documents shall
survive the making of the loan and the execution and delivery of the Note, and
shall continue in full force and effect until the Indebtedness and Obligations
shall have been paid and performed in full. Notwithstanding the foregoing, (i)
the obligations specified in Section 5.1.10 hereof, (ii) the obligations under
the Indemnity Agreement, and (iii) any other obligation contained in the Note or
the Loan Documents that expressly so provides, shall survive the full payment
and performance of the Indebtedness and Obligations.
9.12 Applicable Law. This instrument and the rights and obligations
--------------
of the parties hereunder shall be governed by and construed in accordance with
the laws of the State of California.
9.13 Loan Expenses. Trustor shall pay all costs and expenses in
-------------
connection with the preparation, execution, delivery and performance of the Note
and the Loan Documents and the transactions contemplated thereby, including (but
not limited to) costs and fees incurred by Beneficiary's independent inspector,
19
fees and disbursements of its and Beneficiary's counsel, broker's fees, costs
and expenses of procuring any environmental audits required to be procured by
Trustor, recording costs and expenses, conveyance fees, documentary stamp,
intangible and other taxes, and costs and expenses of surveys, appraisals and
policies of title insurance, physical damage insurance, and liability insurance.
9.14 Substitution of Trustee. Beneficiary, acting alone, may, from
-----------------------
time to time, by instrument in writing, substitute a successor or successors to
any Trustee named herein or acting hereunder. Such instrument, executed,
acknowledged and recorded in the manner required by law, shall be conclusive
proof of proper substitution of such successor Trustee or Trustees, who shall
(without conveyance from the preceding Trustee) succeed to all of the title,
estate, rights, powers and duties of such preceding Trustee. Such instrument
shall contain the name of the original Trustor, Trustee and Beneficiary
hereunder, the book and page or instrument number where this Deed of Trust is
recorded and the name and address of the new Trustee. If a notice of default
has been recorded, this power of substitution cannot be exercised until after
the costs, fees, and expenses, of the then acting Trustee have been paid to such
Trustee, who shall endorse receipt thereof upon such instrument of substitution.
9.15 No Representations by Beneficiary. By accepting or approving
---------------------------------
anything required to be observed, performed or fulfilled or to be given to
Beneficiary, pursuant to the Loan Documents, including (but not limited to) any
officer's certificate, survey, appraisal or insurance policy, Beneficiary shall
not be deemed to have warranted or represented the sufficiency, legality,
effectiveness or legal effect of the same, or of any term, provision or
condition thereof, and such acceptance or approval thereof shall not be or
constitute any warranty or representation with respect thereto by Beneficiary.
9.16 Acceptance of Trust. Trustee accepts the Trust created by this
-------------------
Deed of Trust when this Deed of Trust, duly executed and acknowledged, is made a
public record a provided by law.
9.17 Waiver of Statute of Limitations and Rights to Trial by Jury.
------------------------------------------------------------
The pleading of any statute of limitations as a defense to any and all
obligations secured by this Deed of Trust and the right to a jury trial in any
action under or relating to the Loan Documents is hereby waived, to the fullest
extent allowed by law.
9.18 Partial Reconveyance. Upon the prior written request by Trustor
--------------------
to Beneficiary requesting that a portion of the Mortgaged Property that
constitutes a separate legal parcel (hereinafter referred to as a "Parcel") be
reconveyed, Beneficiary shall cause such Parcel(s) to be released from the lien
of this Deed of Trust by depositing a request for such reconveyance into an
escrow opened by or for Trustor in connection with the sale or refinance of such
Parcel(s) provided that:
-------- ----
(a) No Event of Default has occurred and is continuing and no
event has occurred which, with notice or lapse of time or both, would constitute
an Event of Default;
(b) Beneficiary is paid the "Release Price" for such Parcel, as
that term is defined in the Note;
(c) Trustor shall be responsible for obtaining (and providing
evidence of such to Beneficiary's satisfaction) all governmental approvals which
may be required in order that the reconveyance or a subsequent foreclosure of
the Mortgaged Property remaining subject to the lien of this Deed of Trust will
not result in a disposition of property constituting a violation of any
ordinance, law or regulation of any public authority relating to the
subdivision, development or sale or resale of real property;
(d) Beneficiary shall not be required to direct Trustee to
reconvey any Parcel if:
(i) Such reconveyance would, in the opinion of
Beneficiary, (A) result in a disposition of property constituting the
violation of any ordinance, law or regulation of any public authority
or covenant, condition or restriction affecting the Mortgaged Property
relating to the subdivision, development, sale or resale of real
property, or (B) result in the violation of any ordinance, law or
regulation of any public authority or covenant, condition or
restriction affecting
20
the Mortgaged Property relating to the subdivision, development, sale
or resale of real property upon foreclosure by Beneficiary of any
portion of the Mortgaged Property remaining subject to the lien of
this Deed of Trust; or
(ii) Such reconveyance would, in the opinion of
Beneficiary, deny any portion of the Mortgaged Property remaining
subject to the lien of this Deed of Trust the right of ingress and
egress to and from any dedicated street to which such Mortgaged
Property would otherwise be entitled or the right of access to any
public utility services, lines and facilities to which such Mortgaged
Property would otherwise be entitled or would restrict or adversely
affect any such rights of ingress, egress or access.
(e) Beneficiary shall have obtained a form CLTA 111 endorsement to
its lender's policy of title insurance, and if requested by Beneficiary, an
endorsement ensuring that the partial reconveyance does not constitute a
violation of the California Subdivision Map Act, all at the cost and expense of
Trustor;
(f) Trustor shall have reimbursed Beneficiary for all its costs and
expenses incurred in effectuating the release requested by Trustor; and
(g) For the release of the last Parcel remaining subject to the lien
of this Deed of Trust, the total amount of the Indebtedness shall be reduced to
zero and all Obligations then outstanding shall be performed in full.
9.19 Compensation of Trustee. Trustee shall be entitled to reasonable
-----------------------
compensation for all services rendered or expenses incurred in the
administration or execution of the trusts hereby created and Trustor hereby
agrees to pay same. Trustee and Beneficiary shall be indemnified, held harmless
and reimbursed by Trustor for any liability, damage or expense, including
attorneys' fees and amounts paid in settlement, which they or either of them may
incur or sustain in the execution of this trust or in the doing of any act which
they, or either of them are required or permitted to do by the terms hereof or
by law.
9.20 Assignability. Trustor acknowledges that Beneficiary may grant
-------------
and assign all or any portion of its beneficial interest under this Deed of
Trust to one or more third parties. Trustor agrees that, upon such grant and
assignment, such third parties shall be entitled to all of the rights, remedies
and benefits provided to the beneficiary hereunder.
9.21 Entire Agreement. This Deed of Trust, Note and the Loan
----------------
Documents constitute the entire agreement between or among the parties hereto
with respect to the matters addressed therein, and supersede all prior oral or
written communications or agreements with respect to such matters.
9.22 Remedies. No right, power or remedy given Beneficiary by the
--------
terms of this Deed of Trust is intended to be exclusive of any other right,
power or remedy. Each and every such right, power or remedy shall be cumulative
and in addition to every other right, power or remedy given to Beneficiary by
the terms of any of the foregoing, by any statute or otherwise against Trustor
or any other person.
9.23 No Waiver. No delay or omission by Beneficiary in exercising any
---------
right or power arising from any default by Trustor shall be construed as a
waiver of such default or as an acquiescence therein, nor shall any single or
partial exercise thereof preclude any further exercise thereof. Beneficiary
may, at its option, waive any of the conditions herein and any such waiver shall
not be deemed to be a modification of the terms hereof. No waiver of any event
of default shall be construed to be a waiver of or acquiescence in or consent to
any preceding or subsequent event of default.
9.24 Headings. The article headings and the section and subsection
--------
captions are inserted for convenience of reference only and shall in no way
alter or modify the text of such articles, sections and subsections.
9.24 Attorneys' Fees. If any action or proceeding is commenced to
---------------
interpret or enforce the terms of this Deed of Trust, the prevailing party shall
be entitled to attorneys' fees and costs, as well as the costs of
21
such action or proceeding, including, without limitation, (a) attorneys' fees,
costs and expenses incurred in appellate proceedings or in any action or
participation in, or in connection with, any case or proceeding under Chapters 7
or 11 of the Bankruptcy Code or any successor thereto, and (b) attorneys' fees,
costs and expenses incurred as a result of Beneficiary exercising its rights to
cure any Event of Default by Borrower under this Deed of Trust or any other Loan
Document, or as a result of the foreclosure of the Deed of Trust, deed in lieu
thereof, or trustee's sale thereunder.
9.25 Time of Essence. Time is of the essence to each and every
---------------
provision of this Deed of Trust, the Note and the other Loan Documents.
9.26 Amendment and Restatement. Trustor acknowledges that the Note
-------------------------
constitutes an amendment and restatement of that certain Amended and Restated
Promissory Note dated June 1, 1996 in the original principal amount of
$2,927,500 given by Inco Homes Corporation for the benefit of Riverside National
Bank (the "Original Note"). The Original Note was secured by, among other
things, (i) a Deed of Trust dated March 24, 1995 given by Inco Homes
Corporation, as trustor, for the benefit of Riverside National Bank, as
beneficiary, and recorded on March 31, 1995 in the Official Records of San
Bernardino County, California as Instrument No. 1995-0100038, as amended and
modified, that encumbers the Land (the "Original Deed of Trust"), and (ii) a
Deed of Trust dated March 24, 1995 given by Palmdale Vistas Housing
Developments, a California limited partnership, as trustor, for the benefit of
Riverside National Bank, as beneficiary, and recorded on March 31, 1995 in the
Official Records of Los Angeles County, California as Instrument No. 95-462578,
as amended and modified, that encumbers certain real property located in Los
Angeles County, California, as more particularly described therein (the
"Palmdale Deed of Trust"). Palmdale Vistas Housing Developments has dissolved,
and a portion of the property encumbered by the Original Palmdale Deed of Trust
has been distributed to Trustor.
Beneficiary has purchased the Original Note from City National Bank,
successor by statutory merger to Riverside National Bank. In connection with
this purchase, City National Bank has endorsed and delivered the Original Note
to Beneficiary and has assigned its beneficial interest under the Original Deed
of Trust and the Palmdale Deed of Trust to Beneficiary.
On the date Beneficiary purchased the Original Note, Borrower was in
default under the terms of the Original Note and the Original Deed of Trust and
Trustor was in default under the Palmdale Deed of Trust. Borrower and Trustor
requested that Beneficiary restructure the terms of the Original Note as
provided in the Note and amend and restate the terms of the Original Deed of
Trust and the Palmdale Deed of Trust. Beneficiary agrees to restructure the
terms of the Original Note and such deeds of trust (this Deed of Trust
constitutes an amendment and restatement of the Palmdale Deed of Trust), and in
consideration of such restructuring and amending, Trustor hereby absolutely and
unconditionally waives and relinquishes all rights, benefits and protections
otherwise afforded to it under California Civil Code Sections 580a, 580b, 580d
and California Code of Civil Procedure Section 726, which waiver and
relinquishment shall include all rights, benefits and protections otherwise
afforded to it under any common law cases that interpret or apply any of the
foregoing statutes.
9.27 Third Party Trustor Waivers.
---------------------------
(a) Definitions. As used in this Section 9.27, "Third Party
-----------
Indebtedness" means the amounts owing under the Note and all other indebtedness
and other obligations owing by Inco Homes Corporation ("Borrower") under the
Vista Verde Deed of Trust and the other documents executed by Xxxxxxxx that
evidence, secure or relate to the Note.
(b) Rights of Beneficiary. Trustor authorizes Beneficiary to perform
---------------------
any or all of the following acts at any time in its sole discretion, all without
notice to Trustor and without affecting Beneficiary's rights or Trustor's
obligations under this Deed of Trust.
(i) Beneficiary may alter any terms of the Third Party
Indebtedness or any part of it, including renewing, comprising, modifying,
extending or accelerating, or otherwise changing the time for payment of or
increasing or decreasing the rate of interest on, the Third Party Indebtedness
or any part of it.
22
(ii) Beneficiary may take and hold security for the Third Party
Indebtedness, accept additional or substituted security for that obligation, and
subordinate, exchange, enforce, waive, release, reconvey, comprise, fail to
perfect and sell or otherwise dispose of any such security.
(iii) Beneficiary may direct the order and manner of any sale of
all or any part of any security now or later to be held for the Third Party
Indebtedness, and Beneficiary may also bid at any such sale and may apply all or
any part of the Third Party Indebtedness against the amount so bid.
(iv) Beneficiary may apply any payments or recoveries from
Borrower, Trustor or any other source, and any proceeds of any security, to the
Third Party Indebtedness in such manner, order and priority as Beneficiary may
elect, whether that obligation is secured by this Deed of Trust or not at the
time of the application.
(v) Beneficiary may release Borrower of its liability for the
Third Party Indebtedness or any part of it.
(vi) Beneficiary may substitute, add or release any one or more
Borrowers, guarantors or endorsers.
(vii) In addition to the Third Party Indebtedness, Beneficiary
may extend other credit to Xxxxxxxx, and may take and hold security for the
credit so extended, whether or not such security is also security for the Third
Party Indebtedness, all without affecting Beneficiary's rights or Trustor's
liability under this Deed of Trust.
(c) Deed of Trust to be Absolute. Trustor expressly agrees that
----------------------------
until the Third Party Indebtedness is paid and performed in full and each and
every term, covenant and condition of this Deed of Trust is fully performed,
Trustor shall not be released by or because of-
(i) Any act or event which might otherwise discharge, reduce,
limit or modify Trustor's obligations under this Deed of Trust;
(ii) Any waiver, extension, modification, forbearance, delay or
other act or omission of Beneficiary, or its failure to proceed promptly or
otherwise against Borrower, any security encumbered by the Vista Verde Deed of
Trust or any security;
(iii) Any action, omission or circumstance which might increase
the likelihood that Trustor may be called upon to perform under this Deed of
Trust or which might affect the rights or remedies of Trustor against Borrower;
(iv) Any dealings occurring at any time between Borrower and
Beneficiary, whether relating to the Third Party Indebtedness or otherwise,
(v) Borrower becoming insolvent or subject to any bankruptcy or
other voluntary or involuntary proceeding, in or out of court, for the
adjustment of debtor-creditor relationships ("Insolvency Proceeding") and as a
result thereof some or all of the Third Party Indebtedness being terminated,
rejected, discharged, modified or abrogated; or
(vi) Any action of Beneficiary described in subsection (b)
above.
Trustor hereby acknowledges that, absent this subsection (c), Trustor
might have a defense to the enforcement of this Deed of Trust as a result of one
or more of the foregoing acts, omissions, agreements, waivers or matters.
Trustor hereby expressly waives and surrenders any defense to any liability
under this Deed of Trust based upon any such acts, omissions, agreements,
waivers or matters. It is the express intent of Trustor that Trustor's
obligations under this Deed of Trust are and shall be absolute, unconditional
and irrevocable.
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(d) Trustor's Waivers. Trustor waives:
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(i) All statutes of limitations as a defense to any action or
proceeding brought against Trustor by Beneficiary, to the fullest extent
permitted by law;
(ii) Any right it may have to require Beneficiary to proceed
against Borrower or any other party, proceed against or exhaust any security
held from Borrower or any other party (including, without limitation, any
security encumbered by the Vista Verde Deed of Trust), or pursue any other
remedy in Beneficiary's power to pursue;
(iii) To the extent permitted by applicable law, the benefit of
all laws now existing or which may hereafter be enacted providing for any
appraisement, valuation, stay, extension, redemption or moratorium;
(iv) For itself and its successors and assigns, all rights of
marshaling in the event of foreclosure;
(v) Any defense based on any claim that Trustor's obligations
exceed or are more burdensome than those of Borrower;
(vi) Any defense based on: (A) any legal disability of
Borrower, (B) any release, discharge, modification, impairment or limitation of
the liability of Borrower to Beneficiary from any cause, whether consented to by
Beneficiary or arising by operation of law or from any Insolvency proceeding and
(C) any rejection disallowance or disaffirmance of the Third Party Indebtedness,
or any part of it, or any security held for it, in any such Insolvency
Proceeding;
(vii) Any defense based on any action taken or omitted by
Beneficiary in any Insolvency Proceeding involving Borrower, including without
limitation, filing, defending, settling or obtaining a judgment or order on any
proof of claim, making any election to have Beneficiary's claim allowed as being
secured, partially secured or unsecured, including any election under 11 U.S.C.
Section 1111 (b), seeking relief from the automatic stay or adequate protection,
including submitting an appraisal of any security, voting to reject or accept or
failing to vote on any reorganization plan, making any extension of credit by
Beneficiary to Borrower in any Insolvency Proceeding, and the taking and holding
by Beneficiary of any security for any such extension of credit, whether or not
such security is also security for the Third Party Indebtedness;
(viii) All presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, notices of
acceptance of this Deed of Trust and of the existence, creation, or incurring of
new or additional indebtedness, and demands and notices of every kind;
(ix) Any defense based on or arising out of any defense that
Borrower may have to the payment or performance of the Third Party Indebtedness
or any part of it; and
(x) Any defense based on or arising out of any action of
Beneficiary described in subsections (b) and (c) above.
(e) Waivers of Subrogation and Other Rights and Defenses.
----------------------------------------------------
(i) The obligations of Trustor hereunder are independent of
the obligations of Xxxxxxxx, and a separate action or actions may be brought
against Trustor whether or not action or suit is brought against Borrower or
Borrower is joined in any such action or actions. At the option of Beneficiary,
Trustor may be joined in any action or proceeding commenced by Beneficiary
against Borrower in connection with or based on the Third Party Indebtedness or
any security for such obligation, and recovery may be had against Trustor in
such action or proceeding without any requirement that Beneficiary first assert,
prosecute or exhaust any remedy or claim against Borrower.
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(ii) Upon a default by Borrower, Beneficiary in its sole
discretion, without prior notice to or consent of Trustor, may elect to: (A)
foreclose either: judicially or nonjudicially against any real or personal
property security it may hold for the Third Party Indebtedness, (B) accept a
transfer of any such security in lieu of foreclosure, (C) compromise or adjust
the Third Party Indebtedness or any part of it or make any other accommodation
with Borrower or Trustor, or (D) exercise any other remedy against Borrower or
any security. With respect to security other than the Mortgaged Property hereby
encumbered, no such action by Beneficiary shall release or limit the liability
of Trustor, who shall remain liable under this Deed of Trust after the action,
even if the effect of the action is to deprive Trustor of any subrogation
rights, rights of indemnity, rights of contribution, or other rights to collect
reimbursement from Borrower for any recovery by Beneficiary against Trustor,
whether contractual or arising by operation of law or otherwise. After any
foreclosure or deed in lieu of foreclosure of any real or personal property
pledged to secure the Third Party Indebtedness, Trustor shall under no
circumstances be deemed to have any right, title, interest or claim in or to
such property, whether it is held by Beneficiary or any third party.
(iii) Regardless of whether Beneficiary may have recovered
against Trustor, Trustor hereby waives: (A) all rights of subrogation, all
rights of indemnity, and any other rights to collect reimbursement or
contribution from Borrower or any other person or entity for any recovery by
Beneficiary against Trustor, whether contractual or arising by operation of law
(including the United States Bankruptcy Code or any successor or similar
statute) or otherwise (collectively, "Reimbursement Rights"), (B) all rights to
enforce any remedy that Beneficiary may have against Xxxxxxxx, and (C) all
rights to participate in any security now or later to be hold by Beneficiary for
the Third Party Indebtedness. Without limiting any other waivers or covenants of
Trustor, this waiver of Reimbursement Rights by Trustor applies before or after
the Third Party Indebtedness has been paid and performed in full, if and to the
extent that any enforcement of this Deed of Trust by itself or in combination
with the previous or subsequent exercise by Beneficiary of any right or remedy
hereunder or under any other Loan Document, would directly or indirectly result
in or be deemed to be a violation of California Civil Code Sections 580a, 580b,
580d or California Code of Civil Procedure Section 726. To the extent Trustor's
waiver of Reimbursement Rights is found by a court of competent jurisdiction to
be void or voidable for any reason, any Reimbursement Rights Trustor may have
against Borrower or any collateral or security shall be junior and subordinate
to any rights Beneficiary may have against Borrower and to all right, title and
interest Beneficiary may have in any such collateral or security. If any amount
should be paid to Trustor on account of any Reimbursement Rights at any time
when the Third Party Indebtedness has not been paid in full, such amount shall
be held in trust for Beneficiary and shall immediately be paid over to
Beneficiary to be credited and applied against the Third Party Indebtedness,
whether matured or not yet mature, in accordance with the terms of the Loan
Documents. The covenants and waivers of Trustor set forth in this subsection
(e)(iii) shall be effective until the Third Party Indebtedness has been paid and
performed in full and are made solely for the benefit of Beneficiary.
(iv) Trustor understands and acknowledges that if Beneficiary
forecloses judicially or nonjudicially against any real property securing the
Third Party Indebtedness other than the Property hereby encumbered, that
foreclosure could impair or destroy any ability that Trustor may have to seek
reimbursement, contribution or indemnification from Borrower or others based on
any Reimbursement Right Trustor may have for any recovery by Beneficiary under
this Deed of Trust. Trustor further understands and acknowledges that in the
absence of this subsection (e), such potential impairment or destruction of
Trustor's rights, if any, may entitle Trustor to assert a defense to this Deed
of Trust based on Section 580d of the California Code of Civil Procedure as
interpreted in Union Bank x. Xxxxxxx, 265 Cal.App.2d 40 (1968). By executing
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this Deed of Trust, Trustor freely, irrevocably and unconditionally: (A) waives
and relinquishes that defense and agrees that Trustor will be fully liable under
this Deed of Trust even though Beneficiary may foreclose judicially or
nonjudicially against any real property security for the Third Party
Indebtedness other than the Property; (B) agrees that Trustor will not assert
that defense in any action or proceeding which Beneficiary may commence to
enforce this Deed of Trust; (C) acknowledges and agrees that the rights and
defenses waived by Trustor under this Deed of Trust include any right or defense
that Trustor may have or be entitled to assert based upon or arising out of any
one or more of California Civil Code Sections 580a, 580b, 580d or 2848, or
California Code of Civil Procedure Section 726; and (D) acknowledges and agrees
that Beneficiary is relying on this waiver in extending credit to Borrower in
the form of the Third Party Indebtedness, and that this waiver is a material
part of the consideration which Beneficiary is receiving for extending such
credit to Borrower.
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(v) Trustor waives any rights and defenses described in
Section 2856(a) of the California Civil Code that are or may become available to
Trustor, including without limitation, any rights and defenses by reason of
Sections 2787 to 2855, inclusive, of the California Civil Code.
(vi) Trustor waives all rights and defenses that Trustor may
have because the Third Party Indebtedness may be secured by real property other
than the Mortgaged Property hereby encumbered. This means, among other things:
(A) Beneficiary may collect from Trustor (including
enforcing this Deed of Trust against Trustor) without first foreclosing on any
real or personal property collateral pledged by Borrower including, without
limitation, any real or personal property collateral pledged under the Vista
Verde Deed of Trust.
(B) If Beneficiary forecloses on any real property
collateral pledged by Borrower:
(a) The amount of the Third Party Indebtedness may be
reduced only by the price for which that collateral is sold at the foreclosure
sale, even if the collateral is worth more than the sale price. The "price" that
collateral is sold at a foreclosure sale shall mean the credit bid made by
Beneficiary, if such credit bid is the winning bid at such foreclosure sale.
(b) Beneficiary may collect from Trustor (including
enforcing this Deed of Trust against Trustor) even if Beneficiary, by
foreclosing on the real property collateral pledged by Xxxxxxxx, has destroyed
any right Trustor may have to collect from Borrower.
This subsection (e)(vi) is an unconditional and irrevocable
waiver of any rights and defenses Trustor may have because the Third Party
Indebtedness may be secured by real property other than the Property hereby
encumbered. These rights and defenses include, but are not limited to, any
rights or defenses based upon Section 580a, 580b, 580d, or 726 of the California
Code of Civil Procedure.
(vii) Trustor waives any right or defense it may have at law or
equity, including California Code of Civil Procedure Section 580a, to a fair
market value hearing or action to determine a deficiency judgment after a
foreclosure of any property other than the Property hereby encumbered.
(viii) No provision or waiver in this Deed of Trust shall be
construed as limiting the generality of any other provision or waiver contained
in this Deed of Trust.
(f) Revival and Reinstatement. If Beneficiary is required to pay,
-------------------------
return or restore to Borrower or any other person any amounts previously paid on
the Third Party Indebtedness because of any Insolvency Proceeding of Borrower,
any stop notice or any other reason, the obligations of Trustor shall be
reinstated and revived and the rights of Beneficiary shall continue with regard
to such amounts, all as though they had never been paid, and this Deed of Trust
shall continue to be effective or be reinstated, as the case may be.
(g) Information Regarding Borrower. Trustor acknowledges that the
------------------------------
Deed of Trust secures, among other things, credit extended to Borrower. Trustor
represents that: (i) this Deed of Trust is executed at Borrower's request, (ii)
Beneficiary has made no representation to Trustor as to the creditworthiness of
Borrower, and (iii) no oral promises, assurances, representations or warranties
have been made by or on behalf of Beneficiary to induce Trustor to execute and
deliver this Deed of Trust. Trustor has received and approved copies of all
other requested Loan Documents. Before signing this Deed of Trust, Trustor
investigated the financial condition and business operations of Borrower and
such other matters as Trustor deemed appropriate to assure itself of Borrower's
ability to discharge its obligations in connection with the Third Party
Indebtedness. Trustor assumes full responsibility for that due diligence and
for keeping informed of all matters which may affect Xxxxxxxx's ability to pay
and perform its obligations to Beneficiary. Beneficiary has no duty to disclose
to Trustor any information which Beneficiary may have or receive about
Xxxxxxxx's financial condition or business operations or any other circumstances
bearing on Borrower's ability to perform.
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(h) Counsel. Trustor acknowledges that Trustor has had adequate
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opportunity to carefully read this Deed of Trust and to consult with an attorney
of Trustor's choice prior to signing it. No consent, approval or authorization
of or notice to any person or entity is required in connection with Trustor's
execution of and obligations under this Deed of Trust, and Trustor acknowledges
its execution and delivery of this Deed of Trust is made voluntarily without any
duress or undue influence of any kind.
9.28 Loan Servicing Agent. Trustor acknowledges that Beneficiary may
--------------------
engage a loan servicing agent to service the Note and protect and enforce
Beneficiary's rights under this Deed of Trust, the Note and the other Loan
Documents. Trustor agrees that it shall cooperate with such loan servicing
agent and recognize it as Beneficiary's representative with respect to all
rights and benefits under this Deed of Trust, the Note, the Loan Agreement, and
the other Loan Documents upon being notified in writing of the appointment of
such loan servicing agent by Beneficiary.
IN WITNESS WHEREOF, Xxxxxxx has executed this Deed of Trust as of the
date first above written.
TRUSTOR: PALMDALE VISTAS HOUSING DEVELOPMENTS,
a California limited partnership
By: Inco Development Corporation,
a California corporation,
General Partner
By: ___________________________
Xxx X. Xxxxxx,
President
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