1
EXHIBIT 10.25
RECORDED AT THE REQUEST OF AND
WHEN RECORDED MAIL TO:
The Frost National Bank
X.X. Xxx 0000
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxx Xxxxxxxx
Loan Department
Location RB-2
DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
________________________
THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE
FILING (this "DEED OF TRUST") is made as of the 15th day of September, 1997, by
and between SOUTHWESTERN ICE, INC., a Texas corporation, a wholly owned
subsidiary of Packaged Ice, Inc., a Texas corporation ("TRUSTOR"), whose
mailing address is 0000 Xxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, in favor
of Xxxxx X. Xxxxx, of Bexar County, Texas, or any successor or substitute
appointed and designated as herein provided from time to time acting hereunder,
as trustee ("TRUSTEE"), whose mailing address is The Frost National Bank, X.X.
Xxx 0000, Xxx Xxxxxxx, XX 00000-0000, for the benefit of THE FROST NATIONAL
BANK, a national banking association, agent for each of the banks under the
Credit Agreement (as defined below), as beneficiary ("BENEFICIARY"), whose
mailing address is X.X. Xxx 0000, Xxx Xxxxxxx, Xxxxx 00000.
ARTICLE 1
BACKGROUND
1.01 Credit Agreement. Beneficiary has made, or agreed to make,
various loans to Packaged Ice, Inc., a Texas corporation (the "BORROWER") as
more fully described in the Credit Agreement, of even date herewith, by and
between Borrower, Beneficiary, and certain Banks named therein, as amended,
supplemented, modified, restated or extended from time to time (the "CREDIT
AGREEMENT"). All undefined capitalized terms used herein shall have the
meaning given them in the Credit Agreement.
1.02 Notes. Each Revolving Credit Note (as such term is defined in
the Credit Agreement) executed by Borrower payable to the order of any Bank,
evidencing loans advanced to Borrower under the Credit Agreement, in an
aggregate principal face amount of $20,000,000, bearing interest as therein
provided, containing a provision for the payment of a reasonable additional
amount as attorneys' fees, and finally maturing on April 15, 2003, together
with any renewals, increases, extensions, restatements, or modifications
thereof (collectively the "NOTE").
1.03 Security Documents. The loans described in the Credit Agreement,
including, but not limited to, the Revolving Credit Loans, are secured by the
collateral described in, among other things: (a) this Deed of Trust; and (b)
the Security Agreement, of even date herewith, by and between Trustor, as
SWI ARIZONA DEED OF TRUST
2
debtor, and Beneficiary, as secured party (the "SECURITY AGREEMENT"). The
loans described in the Credit Agreement are also secured by other collateral as
described in the Credit Agreement.
1.04 Loan Documents. The Credit Agreement, Revolving Credit Loan, the
Note, this Deed of Trust, the Security Agreement, and assignments, agreements,
documents or instruments executed by or on behalf of Trustor with respect to
the foregoing documents or the transactions contemplated thereby, each as may
hereafter be modified, amended, extended, renewed or replaced, shall be
collectively referred to herein as the "LOAN DOCUMENTS."
ARTICLE 2
GRANT IN TRUST; SECURITY INTEREST
The Secured Obligations as defined in Article 3 below shall be secured
by the Real Property Collateral described in Section 2.01 below and the
Personal Property Collateral described in Section 2.02 below. The Real
Property Collateral and the Personal Property Collateral are hereinafter
collectively referred to as the "PROPERTY".
2.01 Real Property Collateral. For the purpose of securing payment and
performance of the Secured Obligations, Trustor hereby irrevocably and
unconditionally grants, conveys, transfers and assigns to Trustee, in trust for
the benefit of Beneficiary, with power of sale, all rights, title, interest,
estates, powers and privileges of Trustor in or to all of the following, now or
hereafter acquired (the "REAL PROPERTY COLLATERAL"):
A. The real property situated in Pima County, Arizona
described on Exhibit A attached hereto and incorporated herein by this
reference (the "LAND").
B. The interest that Trustor possesses in the buildings,
structures and improvements now or hereinafter located or constructed on the
Land, together with all water and water rights (whether riparian,
appropriative, or otherwise, and whether or not appurtenant), pumps and pumping
stations used in connection therewith and all shares of stock evidencing the
same, all machinery, equipment, appliances, fixtures and other property,
including, but not limited to, all storage tanks and pipe lines, all gas,
electric, heating, cooling air conditioning, filtration, hot water,
refrigeration, plumbing and lighting fixtures and equipment, all floor
coverings, all xxxxx, pumps, pipes, motors, and engines and pumping apparatus
and equipment, which have been or may later be attached or affixed in any
manner to any building, structure or improvement now or hereafter located or
later to be constructed on the Land (collectively, the "IMPROVEMENTS");
C. All the rights, rights of way, easements, licenses,
profits, privileges, tenements, hereditaments and appurtenances, now or
hereafter in any way appertaining and belonging to or used in connection with
the Land, the Improvements, and any part thereof or as a means of access
thereto, including, but not limited to, any claim at law or in equity, and any
after acquired title and reversion in or to each and every part of all streets,
roads, highways and alleys adjacent to and adjoining the same;
D. All leases, subleases, licenses and concessions or other
agreements relating to, or affecting the use, occupancy or maintenance of, or
services provided to, the Property, now or hereafter affecting the Property or
any portion thereof (collectively, the "ANCILLARY RIGHTS").
2 SWI ARIZONA DEED OF TRUST
3
E. Any strips or gores adjacent, used in connection with or
pertaining, to the Land or the Improvements.
F. All rentals, earnings, income, receipts, royalties,
revenues, issues and profits (the "RENTS") which, after the date hereof, and
while Secured Obligations remain unpaid, may accrue from the Land, the
Improvements or any part of the foregoing, subject, however, to the right,
power and authority conferred upon Trustor to collect and apply such proceeds
set forth herein; and
2.02 Personal Property Collateral. For the purpose of securing
payment and performance of the Secured Obligations, Trustor grants to
Beneficiary a security interest in all rights, title, interest, estates, powers
and privileges of Trustor in or to all of the following, now or hereafter
acquired, to the extent constituting personal property (the "PERSONAL PROPERTY
COLLATERAL"):
A. The Improvements;
B. All "goods" (as defined in Chapter 9 of the Uniform
Commercial Code of the State of Arizona (Title 47, Arizona Revised Statutes
("A.R.S.")) or any successor or similar statute (the "UCC"));
C. All (i) plans and specifications for the Improvements,
(ii) Trustor's rights, but not liability for any breach by Trustor, under all
commitments (including any commitment for financing to pay any of the Secured
Obligations (hereafter defined), insurance policies and other contracts and
general intangibles directly relating to the development or operation of the
Real Property Collateral (including, but not limited to trademarks, trade names
and symbols); (iii) deposits (including, but not limited to Trustor's rights in
tenants' security deposits, deposits with respect to utility services to the
Real Property Collateral, and any deposits or reserves hereunder or under any
other Loan Document, taxes, insurance or otherwise), money, accounts,
instruments, documents, notes and chattel paper arising from or by virtue of
any transactions related to the Real Property Collateral; (iv) permits,
licenses, franchises, certificates, development rights, commitments and rights
for utilities, and other rights and privileges obtained in connection with the
Real Property Collateral; (v) leases, rents, royalties, bonuses, issues,
profits, revenues and other benefits of the Real Property Collateral; (vi) oil,
gas and other hydrocarbons and other minerals produced from or allocated to the
Land and all products processed or obtained therefrom, and the proceeds
thereof; and (vii) engineering, accounting, title, legal, and other technical
or business data concerning the Real Property Collateral which are in the
possession of Trustor or in which Trustor can otherwise grant a security
interest;
D. All rights of Trustor under any policy or policies of
hazard or liability insurance relating to the Property and any and all riders,
amendments, extensions, renewals, supplements, or extensions thereof, and all
proceeds, loss payments, and premium refunds which may become payable with
respect to such insurance policies;
E. All construction, service, engineering, consulting,
architectural, and other similar contracts of any nature (including, but not
limited to, those of any general contractors and subcontractors) as such may be
modified, amended, or supplemented from time to time, concerning the design,
construction, management, operation, occupancy, use, and/or disposition of any
or all of the Real Property Collateral;
F. All blueprints, architectural drawings, plans,
specifications, soil tests, feasibility studies, appraisals, engineering
reports, and similar materials owned by Trustor relating to any or all of the
Real Property Collateral;
3 SWI ARIZONA DEED OF TRUST
4
G. All payment and performance bonds or guaranties and any
and all modifications and extensions thereof relating to the Real Property
Collateral;
H. All assignable governmental permissions, environmental
clearances, rights, licenses, permits, approvals, consents, and materials
prepared for filing with any governmental agency, as are necessary for the
development, design, commencement, continuation, completion, operation,
occupancy, use, and disposition of any or all of the Real Property Collateral;
I. All sales contracts and proceeds, whether cash, promissory
notes, contracts rights or otherwise, escrow agreements, broker's agreements,
instruments, notes, and agreements for sale concerning the sale or disposition
of any or all of the Real Property Collateral;
J. All rights under, and all proceeds of, any commitment by
any lender to extend financing to Trustor relating to the Real Property
Collateral;
K. All shares of water stock relating to the Real Property
Collateral;
L. All of the outstanding warranties and guaranties from
manufacturers, vendors, and contractors relating to the Real Property
Collateral;
M. All prepaid expenses, all deposits made with or other
security given to utility companies by Trustor with respect to the Real
Property Collateral and all advance payments of insurance premiums made by
Trustor and all claims or demands relating thereto;
N. All deposits relating to the construction, design,
development, operation, occupancy, use and disposition of any portion of or all
of the Real Property Collateral;
O. All proceeds and claims arising on account of any damage
to or taking of the Real Property Collateral or any part thereof, and all
causes of action and recoveries for any loss or diminution in the value of the
Real Property Collateral;
P. All judgments, awards of damages, royalties and revenue 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 Real Property
Collateral; and
Q. All proceeds, whether cash, promissory notes, and other
property, real or personal or otherwise, resulting from the sale or other
disposition of all or any part of the foregoing whether now or hereafter
existing.
4 SWI ARIZONA DEED OF TRUST
5
ARTICLE 3
SECURED OBLIGATIONS
Trustor has granted, conveyed, transferred and assigned its interest in
the Property in Article 2 above for the purpose of securing the following
obligations (collectively, the "SECURED OBLIGATIONS"):
3.01 Payment and performance of all obligations of Trustor
under the terms of the Credit Agreement (including, but not limited to, the
Revolving Credit Loan), together with all extensions, modifications,
substitutions or renewals thereof or other advances made thereunder;
3.02 Payment and performance of all obligations of Trustor
under the terms of the Revolving Credit Loan and the Note, and all other notes
given in substitution therefor, together with all extensions, modifications,
supplement, increase, substitutions, extensions, or renewals thereof or other
advances made thereunder, in whole or in part (such other Banks, or the
subsequent holders at the time in question of the Note or any of the Secured
Obligations being collectively herein called "HOLDERS" and individually a
"HOLDER";
3.03 All indebtedness and other obligations owed by Trustor (or
any of them) to any Holder now or hereafter incurred or arising pursuant to or
permitted by the provisions of the Notes, this Deed of Trust, or any other
document now or hereafter evidencing, governing, guaranteeing, securing, or
otherwise executed in connection with the loans evidenced by the Notes,
including, but not limited to any loan or credit agreement, tri-party financing
agreement or other agreement between Trustor (or any of them) and Holders, or
among Trustor (or any of them), Holders and any other party or parties,
pertaining to the repayment or use of the proceeds of the loan evidenced by the
Note or any of the Loan Documents.
3.04 All other loans and future advances made by any Holder to
any Trustor and/or Borrower (or any of them) and all other debts, obligations
and liabilities of Trustor of every kind and character now or hereafter
existing in favor of any Holder, and arising under the Credit Agreement, the
Note, or any of the other Loan Documents, and whether direct or indirect,
primary or secondary, joint or several, fixed or contingent, secured or
unsecured, and whether originally payable to such Holder or to a third party
and subsequently acquired by such Holder, it being contemplated that Trustor
may hereafter become indebted to one or more Holders for such other debts,
obligations and liabilities arising from the Credit Agreement, the Note, or any
of the other Loan Documents; provided, however, and notwithstanding the
foregoing provisions of this Section 3.04, this Deed of Trust shall not secure
any such other loan, advance, debt, obligation or liability with respect to
which any such Holder is by applicable law prohibited from obtaining a lien on
real estate nor shall this Section 3.04 operate or be effective to constitute
or require any assumption or payment by any person, in any way, of any debt of
any other person to the extent that the same would violate or exceed the limit
provided in any applicable usury or other law.
3.05 Payment and performance of every obligation, covenant and
agreement of Trustor contained in this Deed of Trust, together with all
extensions, modifications, substitutions or renewals hereof;
3.06 Payment and performance of every obligation, covenant and
agreement of Trustor contained in each of the other Loan Documents, together
with all extensions, modifications, substitutions or renewals thereof or other
advances made thereunder; and
5 SWI ARIZONA DEED OF TRUST
6
3.07 Payment and performance of all other obligations and
liabilities of Trustor to Beneficiary, whether now existing or hereafter
incurred or created, whether voluntary or involuntary, whether due or not due,
whether absolute or contingent, or whether incurred directly or acquired by
Beneficiary by assignment or otherwise.
THE OBLIGATIONS SECURED BY THIS DEED OF TRUST MAY INCLUDE INTEREST AT A
VARIABLE RATE. SOME OF THE OBLIGATIONS SECURED BY THIS DEED OF TRUST INCLUDE A
SERIES OF ADVANCES THAT WILL BE OF A REVOLVING NATURE THAT MAY BE MADE, REPAID
AND REMADE FROM TIME TO TIME, EVEN IF THE UNPAID BALANCE OWED ON SUCH
OBLIGATION HAS PREVIOUSLY BEEN REDUCED TO ZERO.
ARTICLE 4
COVENANTS AND AGREEMENTS OF TRUSTOR
4.01 Payment of Secured Obligations. Trustor shall pay when due the
principal, interest and all other amounts due to Beneficiary as provided in the
Note or the other Loan Documents.
4.02 Maintenance, Repair, Alterations. Trustor: (a) shall maintain,
keep and preserve the Property in good condition and repair; (b) shall not
remove, demolish or substantially alter any of the Improvements (other than (i)
repairs in the ordinary course of business of a non-structural nature which
serve to preserve or increase the value of the Property and (ii) alterations
that are required by law), in whole or in part, without the prior written
consent of Beneficiary; (c) shall complete promptly and in a good and
workmanlike manner any Improvements which may be now or hereafter constructed
on the Property and promptly restore (unless expressly provided to the contrary
in any Loan Document) in like manner any Improvements which may be damaged or
destroyed thereon from any cause whatsoever, and pay when due all claims for
labor performed and materials furnished therefor, whether or not insurance or
other proceeds are available for such restoration; (d) shall comply with all
laws, ordinances, rules, regulations, covenants, conditions and restrictions
now or hereafter affecting the Property or any part thereof or requiring any
alteration or improvement to be made thereon or thereto; (e) shall not commit,
suffer or permit any act to be done in, upon or to the Property or any part
thereof in violation of any law, ordinance, rule, regulation or order; (f)
shall not commit or permit any waste or deterioration of the Property; (g)
shall keep and maintain grounds, sidewalks, roads, parking and landscape areas
located on or abutting the Land in good and neat order and repair; (h) will not
take (or fail to take) any action, which if taken (or not so taken) would
increase in any way the risk of fire or other hazard occurring to or affecting
the Property or otherwise would impair the security of Beneficiary in the
Property; (i) shall not abandon the Property or any portion thereof or leave
the Property unprotected, unguarded, vacant or deserted for a period of time
greater than thirty (30) days; (j) shall not initiate, join in or consent to
any change in any zoning ordinance, general plan, specific plan, private
restrictive covenant or other public or private restriction limiting the uses
which may be made of the Property; (k) shall secure and maintain in full force
and effect all permits necessary for the use, occupancy and operation of the
Property; (l) except as permitted in the Credit Agreement, shall not cause or
permit any fixture or any article of Personal Property Collateral to be removed
from the Property without the prior written consent of Beneficiary unless the
same shall have been replaced in the ordinary course of business by
substantially equivalent property; (m) shall submit to Beneficiary a duplicate
set of plans and specifications, which must be approved or waived by
Beneficiary, before any material improvements, repairs or alterations are begun
which affect the Property; (o) except as otherwise prohibited or restricted by
any of the Loan Documents, shall do any and all other acts which may be
reasonably necessary to protect and preserve the value of the Property and the
rights of Trustee and Beneficiary with respect thereto.
6 SWI ARIZONA DEED OF TRUST
7
4.03 Taxes and Other Impositions. Trustor will pay, or cause to be
paid, all taxes, assessments and other charges or levies imposed upon or
against or with respect to the Property or the ownership, use, occupancy or
enjoyment of any portion thereof, or any utility service thereto, as the same
become due and payable, including, but not limited to all ad valorem taxes
assessed against the Property or any part thereof, except for any such taxes or
charges being contested in good faith and by proper proceedings for which
adequate reserves in accordance with generally accepted accounting principles
have been taken, and shall deliver promptly to Beneficiary such evidence of the
payment thereof as Beneficiary may reasonably required.
4.04 Insurance. Trustor shall obtain and maintain at Trustor's sole
expense: (1) all-risk insurance with respect to all insurable Property,
against loss or damage by fire, lighting, windstorm, explosion, hail, tornado
and such hazards as are presently included in so-called "all risk" coverage and
against such other insurable hazards as Beneficiary may require, in an amount
not less than 100% of the full replacement cost, including the cost of debris
removal, without deduction for depreciation and sufficient to prevent Trustor
and Beneficiary from becoming a coinsurer, such insurance to be in Builder's
Risk (non-reporting) form during and with respect to any construction on the
Land; (2) if and to the extent any portion of the Land is in a special flood
hazard area, a flood insurance policy in an amount equal to the lesser of the
principal face amount of the Notes or the maximum amount available; (3)
commercial general public liability insurance, on an "occurrence" basis, for
the benefit of Trustor and Beneficiary as named insured: (4) statutory workers'
compensation insurance with respect to any work on or about the Land; and (5)
such other insurance on the Property as may from time to time be reasonably
required by Beneficiary (including, but not limited to business interruption
insurance, boiler and machinery insurance, earthquake insurance, and war risk
insurance) and against other insurable hazards or casualties which at the time
are commonly insured against in the case of premises similarly situated, due
regard being given to the height, type, construction, location, use and
occupancy of buildings and improvements. All insurance policies shall be
issued and maintained by insurers, in amounts, with deductibles, and in form
satisfactory to Beneficiary, and shall require not less than thirty (30) days'
prior written notice to Beneficiary of any cancellation or change of coverage.
All insurance policies maintained, or caused to be maintained, by Trustor with
respect to the Property, except for public liability insurance, shall provide
that each such policy shall be primary without right of contribution from any
other insurance that may be carried by Trustor or Beneficiary and that all of
the provisions thereof, except the limits of liability, shall operate in the
same manner as if there were a separate policy covering each insured. If any
insurer which has issued a policy of title, hazard, liability or other
insurance required pursuant to this Deed of Trust or any other Loan Document
becomes insolvent or the subject of any bankruptcy, receivership or similar
proceeding or if in the Beneficiary's reasonable opinion the financial
responsible of such insurer is or becomes inadequate, Trustor shall, in each
instance promptly upon the request of Beneficiary and at Trustor's expense,
obtain and deliver to Beneficiary a like policy (or, if and to the extent
permitted by Beneficiary, a certificate of insurance) issued by another
insurer, which insurer and policy meet the requirements of this Deed of Trust or
such other Loan Document, as the case may be. Without limiting the discretion
of Beneficiary with respect to required endorsements to insurance policies for
loss of or damage to the Property shall contain a standard mortgage clause
(without contribution) naming Beneficiary, as agent for the Banks, as mortgagee
with loss proceeds payable to Beneficiary notwithstanding (i) any act, failure
to act or negligence of or violation of any warranty, declaration or condition
contained in any such policy by any named insured; (ii) the occupation or use
of the Property for purposes more hazardous than permitted by the terms of any
such policy; (iii) any foreclosure or other action by Beneficiary under the
Loan Documents; or (iv) any change in title to or ownership of the Property or
any portion thereof, such proceeds to be held for application as provided in
the Loan Documents. The originals of each initial insurance policy (or to the
extent permitted by Beneficiary, a copy of the original policy and a
satisfactory certificate of insurance) shall be delivered to Beneficiary at the
7 SWI ARIZONA DEED OF TRUST
8
time of execution of this Deed of Trust, with premiums fully paid, and each
renewal or substitute policy (or certificate) shall be delivered to
Beneficiary, with premiums fully paid, at least ten (10) days before the
termination of the policy it renews or replaces. Trustor shall pay all
premiums on policies required hereunder as they become due and payable and
promptly deliver to Beneficiary evidence satisfactory to Beneficiary of the
timely payment thereof. If any loss occurs at any time when Trustor has failed
to perform Trustor's covenants and agreements in this paragraph, Beneficiary
shall nevertheless be entitled to the benefit of all insurance covering the
loss and held by or for Trustor, to the same extent as if it had been made
payable to Beneficiary. Upon any foreclosure hereof or transfer of title to
the Property in extinguishment of the whole or any part of the secured
indebtedness, all of Trustor's right, title and interest in and to the insurance
policies referred to in this Article 4.04 (including unearned premiums) and all
proceeds payable thereunder shall thereupon vest in the purchaser at
foreclosure or other such transferee, to the extent permissible under such
policies. Beneficiary shall have the right (but not the obligation) to make
proof of loss for, settle and adjust any claim under, and receive the proceeds
of, all insurance for loss of or damage to the Property, and the expenses
incurred by Beneficiary in the adjustment and collection of insurance proceeds
shall be a part of the secured indebtedness and shall be due and payable to
Beneficiary on demand. Beneficiary shall not be, under any circumstances,
liable or responsible for the obtaining, maintaining or adequacy of any
insurance or for failure to collect or exercise diligence in the collection of
any of such proceeds or for failure to see to the proper application of any
amount paid over to Trustor. Any such proceeds received by Beneficiary shall,
after deduction therefrom of all reasonable expenses actually incurred by
Beneficiary, including attorneys' fees, at Beneficiary's option be (1) released
to Trustor, or (2) applied (upon compliance with such terms and conditions as
may be required by Beneficiary) to repair or restoration, either partly or
entirely, of the Property so damaged, or (3) applied to the payment of the
secured indebtedness in such order and manner as Beneficiary, in its sole
discretion, may elect, whether or not due. Trustor shall at all times comply
with the requirements of the insurance policies required hereunder and of the
issuers of such policies and of any board of fire underwriters or similar body
as applicable to or affecting the Property.
4.05 Casualties. Trustor shall give prompt written notice thereof to
Beneficiary after the happening of any casualty to or in connection with the
Property or any part thereof, whether or not covered by insurance if the
damages caused thereby exceed $25,000. In the event of such casualty, the
gross proceeds of the insurance relating to such Property (the "PROCEEDS"),
less all expenses (including attorneys' fees) incurred in the collection of
such Proceeds, shall be payable to Beneficiary, and Trustor hereby authorizes
and directs any affected insurance company to make payment of such Proceeds in
such a case directly to Beneficiary. If Trustor receives any Proceeds
resulting from such casualty, Trustor shall promptly pay over such Proceeds to
Beneficiary. Beneficiary is hereby authorized and empowered by Trustor, at
Beneficiary's option and in Beneficiary's sole discretion, as attorney-in-fact
for Trustor, with full power of substitution, to make proof of loss, to appear
in and prosecute any action arising from any policy or policies of insurance,
and upon the occurrence of an Event of Default (as defined in Section 8.01
below), to settle, adjust, or compromise any material claim for loss, damage or
destruction under any policy or policies of insurance. The appointment granted
herein shall be deemed to be a power coupled with an interest. Trustor shall
not settle, adjust or compromise any claim for loss, damage or destruction of
the Property or any part thereof under any policy or policies of insurance
without the prior written consent of Beneficiary to such settlement, adjustment
or compromise. In the event of any damage to or destruction of the Property,
all, or any part, of the proceeds may be applied to the Secured Obligations or
to the restoration and repair of the Property, as Beneficiary may determine in
its sole and absolute discretion; provided, however, that if Beneficiary
requires Trustor to restore and repair the Property, then Beneficiary shall pay
to Trustor all Proceeds up to the amount required to complete such restoration
and repair. Nothing herein contained shall be deemed to excuse Trustor from
repairing or maintaining the Property as provided in Section 4.02 above, or
restoring all damage or destruction to the Property, regardless of whether or
not there
8 SWI ARIZONA DEED OF TRUST
9
are Proceeds available to Trustor or whether any such Proceeds are sufficient
in amount; provided, however, if Proceeds are applied to the restoration or
repair of the Property by Beneficiary, Trustor shall not be obligated to pay
for repair and restoration up to the amount of Proceeds so available, but shall
be nevertheless liable for any amounts exceeding available Proceeds for the
restoration and repair of the Property. Application or release by Beneficiary
of any Proceeds shall not cure or waive any default, notice of default or Event
of Default under this Deed of Trust or invalidate any act done pursuant to any
notice of default.
4.06 Assignment of Policies Upon Foreclosure. In the event of a
trustee's sale, judicial foreclosure of this Deed of Trust or other transfer of
title or assignment of the Property in satisfaction, in whole or in part, of
the debt secured hereby, all right, title and interest of Trustor in and to all
policies of insurance required by Section 4.03 above and any unearned premiums
paid thereon shall, without further act, be assigned to and shall inure to the
benefit of and pass to the successor in interest to Trustor or the purchaser or
grantee of the Property, and Trustor hereby irrevocably appoints Beneficiary
its lawful attorney-in-fact, with full power of substitution, to execute an
assignment thereof and any other document necessary to effect such transfer.
The appointment granted herein shall be deemed to be a power coupled with an
interest.
4.07 Indemnification; Subrogation; Waiver of Offset.
A. If Beneficiary is made a party to any litigation
concerning this Deed of Trust, any of the other Loan Documents, the Property or
any part thereof or interest therein, or the occupancy of the Property by
Trustor or a tenant of Trustor, then Trustor shall indemnify, protect, defend
and hold Beneficiary harmless for, from and against any and all liability by
reason of said litigation, including attorneys' fees and expenses incurred by
Beneficiary as a result of any such litigation, whether or not any such
litigation is prosecuted to judgment; provided, however, that Trustor's
obligations under this sentence shall not apply to liability to Beneficiary
arising as the sole result of the gross negligence or willful misconduct of
Beneficiary. Upon the occurrence of an Event of Default hereunder, Beneficiary
may employ an attorney or attorneys to protect its rights hereunder and under
the other Loan Documents, and in the event of such employment following any
breach by Trustor, Trustor shall pay Beneficiary reasonable attorneys' fees and
expenses incurred by such Beneficiary, whether or not an action is actually
commenced against Trustor by reason of its breach.
B. Trustor waives any and all right to claim or recover
against Beneficiary, its officers, employees, agents and representatives, for
loss of or damage to Trustor, the Property, Trustor's property or the property
of others under Trustor's control from any cause insured against or required to
be insured against by the provisions of this Deed of Trust, unless such loss or
damage was caused solely by Beneficiary's gross negligence or willful
misconduct and then only to the extent that such loss or damage is not covered
by insurance proceeds; provided, however, that this waiver of subrogation shall
not be effective with respect to any policy of insurance permitted or required
by this Deed of Trust if: (i) such policy prohibits, or if coverage thereunder
would be reduced as a result of, such waiver of subrogation; and (ii) Trustor
is unable to obtain from a carrier issuing such insurance a policy that, by
special endorsement or otherwise, permits such a waiver of subrogation.
C. Except as otherwise specifically provided herein, all sums
payable by Trustor pursuant to the Loan Documents, and all Secured Obligations,
shall be paid without notice, demand, counterclaim, setoff, deduction or
defense and without abatement, suspension, deferment, diminution or reduction,
and the obligations and liabilities of Trustor shall in no way be released,
discharged or otherwise affected (except as expressly provided herein) by
reason of: (i) any damage to or destruction of or any
9 SWI ARIZONA DEED OF TRUST
10
condemnation or similar taking of the Property or any part thereof; (ii) any
restriction or prevention of or interference by any third party with any use of
the Property or any part thereof; (iii) any title defect or encumbrance or any
eviction from the Property or any part thereof, by title paramount or
otherwise; (iv) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation of other like proceeding relating to
Beneficiary, or any action taken with respect to this Deed of Trust by any
trustee or receiver of Beneficiary, or by any court, in any such proceeding;
(v) any claim which Trustor has or might have against Beneficiary; (vi) any
default or failure on the part of Beneficiary to perform or comply with any of
the terms hereof or of any other agreement with Trustor; or (vii) any other
occurrence whatsoever, whether similar or dissimilar to the foregoing, whether
or not Trustor shall have notice or knowledge of any of the foregoing. Except
as expressly provided herein, Trustor waives all rights now or hereafter
conferred by statute or otherwise to any abatement, suspension, deferment,
diminution or reduction of any sum secured hereby.
4.08 Reserve for Insurance, Taxes and Assessments. Upon the
occurrence of an Event of Default and upon the written request of Beneficiary,
to secure certain of Trustor's obligations in this Article 4, but not in lieu
of such obligations, Trustor will deposit with Beneficiary a sum equal to ad
valorem taxes, assessments and charges (which charges for the purpose of this
paragraph shall include without limitation any recurring charge which could
result in a lien against the Property) against the Property for the current
year and the premiums for such policies of insurance for the current year, all
as estimated by Beneficiary and prorated to the end of the calendar month
following the month during which Beneficiary's request is made, and thereafter
will deposit with Beneficiary, on each date when an installment of principal
and/or interest is due on the Notes, sufficient funds (as estimated from time
to time by Beneficiary) to permit Beneficiary to pay at least fifteen (15) days
prior to the due date thereof, the next maturing ad valorem taxes, assessments
and charges and premiums for such policies of insurance. Beneficiary shall
have the right to rely upon tax information furnished by applicable taxing
authorities in the payment of such taxes or assessments and shall have no
obligation to make any protest of any such taxes or assessments. Any excess
over the amounts required for such purposes shall be held by Beneficiary for
future use, applied to any secured indebtedness or refunded to Trustor, at
Beneficiary's option, and any deficiency in such funds so deposited shall be
made up Trustor upon demand of Beneficiary. All such funds so deposited shall
bear no interest, may be mingled with the general funds of Beneficiary and
shall be applied by Beneficiary toward the payment of such taxes, assessments,
charges and premiums when statements therefor are presented to Beneficiary by
Trustor (which statements shall be presented by Trustor to Beneficiary a
reasonable time before the applicable amount is due); provided, however, that,
if a default shall have occurred hereunder, such funds may at Beneficiary's
option be applied to the payment of the secured indebtedness in the order
determined by Beneficiary in its sole discretion, and Beneficiary may (but
shall have no obligation) at any time, in its discretion, apply all or any part
of such funds toward the payment of any such taxes, assessments, charges or
premiums which are past due, together with any penalties or late charges with
respect thereto. The conveyance or transfer of Trustor's interest in the
Property for any reason (including without limitation the foreclosure of a
subordinate lien or security interest or a transfer by operation of law) shall
constitute an assignment or transfer of Trustor's interest in and rights to
such funds held by Beneficiary under this paragraph but subject to the rights
of Beneficiary hereunder.
4.09 Utilities. Trustor shall pay or shall cause to be paid when due
all utility charges which are incurred for the benefit of the Property or which
may become a charge or lien against the Property for gas, electricity, water or
sewer services furnished to the Property and all other assessments or charges
of a similar nature, whether public or private, affecting or related to the
Property or any portion thereof, whether or not such taxes, assessments or
charges are or may become liens thereon.
10 SWI ARIZONA DEED OF TRUST
11
4.10 Defense of Actions and Costs. Trustor, at no cost or expense to
Beneficiary or Trustee, shall appear in and defend any action or proceeding
purporting to affect the security or validity of this Deed of Trust or of, the
other Loan Documents, the interest of Beneficiary herein or therein, or the
rights, powers or duties of Beneficiary or Trustee hereunder or thereunder. If
Beneficiary and Trustee, or either of them, elects to become a party to such
action or proceeding, or is made a party thereto or to any other action or
proceeding, of whatever kind or nature, concerning this Deed of Trust, any of
the Loan Documents, the Property or any part thereof or interest therein, or
the occupancy thereof, Trustor shall indemnify, protect, defend and hold
Trustee and Beneficiary harmless for, from and against any and all liability,
damage, cost and expense incurred by Trustee and Beneficiary, or either of
them, by reason of said action or proceeding (including, but not limited to,
Trustee's reasonable fees and expenses, the reasonable fees and expenses of
attorneys for Trustee and for Beneficiary, and other expenses, of whatever kind
or nature, incurred by Trustee or Beneficiary, or either of them, as a result
of such action or proceeding), whether or not such action or proceeding is
prosecuted to judgment or decision. Immediately upon demand therefor by Trustee
or Beneficiary, Trustor shall pay thereto an amount equal to Trustor's
liability to such person under this Section 4.10, together with interest
thereon from date of expenditure at the Default Rate; and until paid, such
sums shall be secured hereby.
4.11 Actions by Beneficiary to Preserve Property. If Trustor fails to
make any payment or to do any act as and in the manner provided herein or in
any of the other Loan Documents, subject to applicable notice and cure periods,
if any, Beneficiary, and Trustee, and each of them each in its own discretion,
without obligation so to do, without releasing Trustor from any obligation, may
make or do the same in such manner and to such extent as either may deem
necessary to protect the security hereof. In connection therewith (without
limiting their general and other powers, whether conferred herein, in any other
Loan Document or by law), Beneficiary and Trustee, and each of them, shall have
and are hereby given the right, but not the obligation: (a) to enter upon and
take possession of the Property; (b) to make additions, alterations, repairs
and improvements to the Property which they or either of them may consider
reasonably necessary or proper to keep the Property in good condition and
repair; (c) to appear and participate in any action or proceeding affecting or
which may affect the security hereof or the rights or powers of Beneficiary or
Trustee; (d) to pay, purchase, contest or compromise any encumbrance, claim,
tax, stamp tax, assessment, water rate, sewer rate, insurance premium, repair,
rent charge, inspection, charge, lien or debt which in the judgment of either
may affect or appears to affect the security of this Deed of Trust or to be
prior or superior hereto or any other agreement given to partially secure the
indebtedness secured hereby; and (e) in exercising such powers, to pay
reasonable, necessary expenses, including employment of counsel or other
necessary or desirable consultants. Trustor shall, immediately upon demand
therefor by Beneficiary, pay to Beneficiary an amount equal to all reasonable
costs and expenses incurred by it in connection with the exercise by
Beneficiary of the foregoing rights including, but not limited to, costs of
evidence of title, court costs, appraisals, surveys, receiver's fees, Trustee's
and attorneys' fees, costs nd expenses, the fees and expenses of attorneys for
Trustee, whether or not an action is actually commenced in connection
therewith, together with interest thereon, from the date of such expenditures
until Beneficiary has been repaid such amount, at the Default Rate and, until
paid, said sums shall be secured hereby.
4.12 Survival of Obligations and Warranties. Trustor shall fully and
faithfully satisfy and perform the obligations of Trustor contained herein and
in the other Loan Documents, each agreement of Trustor incorporated by
reference therein or herein and each agreement the performance of which is
secured hereby or thereby, and any modification or amendment hereof or thereof.
All representations, warranties and covenants of Trustor contained herein or in
any such other Loan Document between Trustor and Beneficiary shall survive the
execution and delivery hereof and shall remain continuing obligations,
warranties and representations of Trustor during any time when any portion of
the Secured Obligations remain outstanding.
11 SWI ARIZONA DEED OF TRUST
12
4.13 Condemnation. Trustor shall notify Beneficiary immediately after
Trustor becomes aware of any threatened or pending proceeding for condemnation
affecting the Property or arising out of damage to the Property, and Trustor
shall, at Trustor's expense, diligently prosecute any such proceedings.
Beneficiary shall have the right (but not the obligation) to participate in any
such proceeding, and to be represented by counsel of its own choice.
Beneficiary shall be entitled to receive all sums which may be awarded or
become payable to Trustor for the condemnation of the Property, or any part
thereof, for public or quasi-public use, or by virtue of private sale in lieu
thereof, and any sums which may be awarded or become payable to Trustor for
injury or damage to the Property, provided it is applied to the secured
indebtedness. Trustor shall, promptly upon request of Beneficiary, execute
such additional assignments and other documents as may be necessary from time
to time to permit such participation and to enable Beneficiary to collect and
receipt for any such sums. All such sums are hereby assigned to Beneficiary,
and shall, after deduction therefrom of all reasonable expenses actually
incurred by Beneficiary, including reasonable attorneys' fees, at Beneficiary's
option be (1) released to Trustor, or (2) applied (upon compliance with such
terms and conditions as may be required by Beneficiary) to repair or
restoration of the Property so affected, or (3) applied to the payment of the
secured indebtedness in such order and manner as Beneficiary, in its sole
discretion, may elect, whether or not due. Beneficiary shall not be, under any
circumstances, liable or responsible for failure to collect or to exercise
diligence in the collection of any such sum or for failure to see to the proper
application of any amount paid over to Trustor. Beneficiary is hereby
authorized, in the name of Trustor, to execute and deliver valid acquittance
for, and to appeal from, any such award, judgment or decree. All reasonable
costs and expenses (including but not limited to reasonable attorneys' fees)
incurred by Beneficiary in connection with any condemnation shall be a demand
obligation owing by Trustor (which Trustor hereby promises to pay) to
Beneficiary pursuant to this Deed of Trust.
4.14 Compliance with Legal Requirements. The Property and the use,
operation and maintenance thereof and all activities thereon do and shall at
all times comply with all applicable Legal Requirements (defined below). The
Property is not, and shall not be, dependent on any other property or premises
or any interest therein other than the Property to fulfill any requirement of
any Legal Requirement. Trustor shall not, by act or omission, permit any
building or other improvement not subject to the lien of this Deed of Trust to
rely on the Property or any interest therein to fulfill any requirement of any
Legal Requirement. No part of the Property constitutes a non-conforming use
under any zoning law or similar law or ordinance applicable thereto. Trustor
has obtained and shall preserve in force all requisite zoning, utility,
building, health and operating permits from the governmental authorities having
jurisdiction over the Property that the Property, or any use, activity,
operation or maintenance thereof or thereon, is not in compliance with any
Legal Requirement, Trustor will promptly furnish a copy of such notice or claim
to Beneficiary. Trustor has received no notice and has no knowledge of any
such noncompliance. As used in this Deed of Trust: (i) the term "LEGAL
REQUIREMENT" means any applicable local, state or federal law, rule or
regulation, agreement, covenant, restriction, easement or condition.
4.15 Additional Security. No other security now existing, or
hereafter taken, to secure the Secured Obligations nor the liability of any
maker, surety, guarantor or endorser with respect to the Secured Obligations,
or any of them, shall be impaired or affected by the execution of this Deed of
Trust; and all additional security shall be taken, considered and held as
cumulative. The taking of additional security, execution of partial releases
of the security, or any extension of the time of payment of the indebtedness
shall not diminish the force, effect or lien of this Deed of Trust and shall
not affect or impair the liability of any maker, surety, guarantor or endorser
for the payment of said indebtedness. In the event Beneficiary at any time
holds additional security for any of the Secured Obligations, it may enforce
the sale thereof or otherwise realize upon the same, at its option, either
before, concurrently, or after a sale is made hereunder.
12 SWI ARIZONA DEED OF TRUST
13
4.16 Inspections. Trustor hereby agrees that Trustee or Beneficiary,
or both, during such times as are reasonable under the then-existing
circumstances, may conduct from time to time, through representatives of their
own choice, on-site inspections and observations of: (a) the maintenance and
repair of the Property, including a review of all maintenance and repair
programs and practices and all reports and records, including the records of
expenditures, relating thereto; and (b) such other facilities, practices and
records of Trustor relating to the Property as Beneficiary deems to be
necessary or appropriate in order to monitor Trustor's compliance with the
provisions of this Deed of Trust and of any of the Loan Documents.
4.17 Liens. Trustor shall pay and promptly discharge when due, at
Trustor's cost and expense, all liens, encumbrances and charges upon the
Property, or any part thereof or interest therein or, alternatively, deposit
with the Beneficiary an acceptable surety bond or provide other security
acceptable to the Beneficiary. If Trustor shall fail either to remove and
discharge any such lien, encumbrance or charge or to deposit security in
accordance with the preceding sentence, if applicable, then, in addition to any
other right or remedy of Beneficiary, Beneficiary may, but shall not be
obligated to, discharge the same, without inquiring into the validity of such
lien, encumbrance or charge, nor into the existence of any defense or offset
thereto, either by paying the amount claimed to be due, or by procuring the
discharge of such lien, encumbrance or charge by depositing in a court a bond
or the amount claimed or otherwise giving security for such claim, or in such
manner as is or may be prescribed by law. Trustor shall, immediately upon
demand therefor by Beneficiary, pay to Beneficiary an amount equal to all
reasonable costs and expenses incurred by Beneficiary in connection with the
exercise by Beneficiary of the foregoing right to discharge any such lien,
encumbrance or charge together with interest therein from the date of such
expenditure at the Default Rate, and, until paid, such sums shall be secured
hereby.
4.18 Beneficiary's Powers. Without affecting the liability of any
other person liable for the payment of the Secured Obligations, and without
affecting the lien or charge of this Deed of Trust upon any portion of the
Property not then or theretofore released as security for the full amount of
the Secured Obligations, Beneficiary may, from time to time and without notice:
(a) release any person so liable; (b) extend the maturity or alter any of the
terms of any such obligation; (c) grant other indulgences; (d) release or
reconvey, or cause to be released or reconveyed at any time, at Beneficiary's
option, any parcel, portion or all of the Property; (e) take or release any
other or additional security for any obligation herein mentioned; or (f) make
compositions or other arrangements with debtors in relation thereto. By
accepting payment or performance of any obligation secured by this Deed of
Trust after the payment or performance thereof is due or after the recording of
a notice of sale, Beneficiary shall not have thereby waived its right to
require prompt payment or performance, when due, of all other Secured
Obligations, or to declare the occurrence of an Event of Default for failure so
to pay or perform, or to proceed with the sale under any notice of the
occurrence of an Event of Default, statement of breach or non-performance and
notice of sale theretofore given by Beneficiary or Trustee, or with respect to
any unpaid balance of the other Secured Obligations. The acceptance by
Beneficiary of any sum in an amount less than the sum then due shall not
constitute a waiver of the obligation of Trustor to pay the entire sum then
due. Trustor's failure to pay the entire sum then due shall continue to be an
Event of Default, notwithstanding the acceptance of partial payment, and, until
the entire sum then due shall have been paid, Beneficiary or Trustee shall at
all times be entitled to declare the occurrence of an Event of Default and to
exercise all the remedies herein conferred, and the right to proceed with a
sale under any notice of the occurrence of an Event of Default, statement of
breach or non-performance or notice of sale shall in no way be impaired,
whether or not such amounts are received prior or subsequent to such notice or
statement. No delay or omission of Trustee or Beneficiary in the exercise of
any right or power hereunder shall impair such right or power or any other
right or power nor shall the same be construed to be a waiver of any Event of
Default or any acquiescence therein.
13 SWI ARIZONA DEED OF TRUST
14
4.19 Other Instruments. Trustor shall punctually pay all amounts due
and payable, and shall promptly and faithfully perform or observe each and
every other obligation or condition to be performed or observed, under each
deed of trust, mortgage or other lien or encumbrance, lease, sublease,
declaration, covenant, condition, restriction, license, order or other
instrument or agreement which affects or appears to affect the Property,
whether at law or in equity. Nothing contained in this Section 4.19 shall give
to or confer upon Trustor any right to place any other deeds of trust,
mortgages or other liens or encumbrances against the Property without obtaining
Beneficiary's prior written consent.
4.20 Transfer of Property by Trustor. Trustor agrees that in the
event the interest of Trustor in the Property, or any part thereof, or any
interest therein is sold, agreed to be sold, conveyed, alienated, encumbered,
leased, assigned, conveyed or otherwise transferred by Trustor, whether by
operation of law or otherwise, without the prior written consent of
Beneficiary, the Secured Obligations, irrespective of the maturity dates
expressed therein, at the option of Beneficiary, and without demand or notice
shall immediately become due and payable. Beneficiary shall not exercise this
option if (a) Trustor causes to be submitted to Beneficiary information
required by Beneficiary to evaluate the intended transferee as if a new loan
were being made to the transferee; and (b) Beneficiary reasonably determines
that Beneficiary's security will not be impaired by the loan assumption and
that the risk of a default under this Deed of Trust is acceptable to
Beneficiary. To the extent permitted by applicable law, Beneficiary may charge
a reasonable fee as a condition to Beneficiary's consent to the loan
assumption. Beneficiary may also require the transferee to sign an assumption
agreement acceptable to Beneficiary that obligates the transferee under this
Deed of Trust. Notwithstanding the assumption by the transferee, the Trustor
named herein shall continue to be obligated under the Loan Documents unless
Beneficiary releases Trustor in writing. This provision shall apply to each
and every sale, transfer or conveyance, regardless of whether or not
Beneficiary has consented to or waived Beneficiary's rights hereunder, whether
by action or non-action, in connection with any previous sale, transfer or
conveyance. Notwithstanding the preceding, to the extent permitted by the
Credit Agreement, Trustor shall be entitled to dispose of items of Personal
Property Collateral which become inadequate, obsolete, worn out, unsuitable,
undesirable or unnecessary for the operation of the Property, provided that
Trustor immediately substitutes and installs replacement Personal Property
Collateral of at least comparable worth, value and utility. All such
substituted items shall be installed free of all liens and encumbrances and
shall become a part of the Property as Personal Property Collateral. Trustor
will cooperate with Beneficiary and Trustee and will pay all costs, including
attorneys' fees, incurred in subjecting to the lien hereof all items so
substituted and Beneficiary will cooperate with Trustor in securing, if
necessary, a release from the lien hereof of the Personal Property Collateral
for which the substitution is made and in providing such other documents as may
be required to facilitate the removal and substitution.
4.21 Beneficiary's Approval. Trustor shall not enter into any lease
or sublease of any portion of the Property without the prior written approval
of Beneficiary. Beneficiary may refuse such approval for any reason or may
condition its approval upon such events or occurrences as Beneficiary deems
appropriate, in its sole and unfettered discretion. Notwithstanding the
foregoing, Trustor may enter into a lease for the Property on market terms and
rates for terms of five (5) years or less (inclusive of all extensions and
renewal options) upon prior written approval of Beneficiary, which approval
shall not be unreasonably withheld. All leases of the Property greater than
one month shall specifically provide that they are subordinate to this Deed of
Trust; that the tenant attorns to Beneficiary, such attornment to be effective
upon Beneficiary's acquisition of title to the Property; that the tenant agrees
to execute such further evidences of attornment as Beneficiary may from time to
time request, that the attornment of the tenant shall not be terminated by
foreclosure; and that Beneficiary may, at Beneficiary's option, accept or
reject such attornments.
14 SWI ARIZONA DEED OF TRUST
15
ARTICLE 5
ASSIGNMENT OF RENTS, ISSUES AND PROFITS
5.01 Assignment of Rents, Issues and Profits. Trustor hereby grants,
transfers and assigns to Beneficiary all of the Rents of the Property and
hereby gives to and confers upon Beneficiary the right, power and authority to
collect such Rents. Trustor irrevocably appoints Beneficiary its true and
lawful attorney-in-fact, with full power of substitution, at the option of
Beneficiary, at any time and from time to time, to demand, receive and enforce
payment, to give receipts, releases and satisfactions, and to xxx, in its name
or in the name of Trustor, for all such Rents, and apply the same to the
Secured Obligations; provided, however, that Trustor shall have the right to
collect such Rents (but not more than one month in advance unless the written
approval of Beneficiary has first been obtained), and to retain and enjoy the
same, so long as an Event of Default, or an event or condition in which, with
notice or lapse of time would constitute an Event of Default, shall not have
occurred hereunder and be continuing. The assignment of the Rents in this
Section 5.01 is intended to be an absolute assignment from Trustor to
Beneficiary and not merely the passing of a security interest. The appointment
granted herein shall be deemed to be a power coupled with an interest.
5.02 Collection Upon Default. To the extent permitted by law, upon
the occurrence of an Event of Default hereunder, Beneficiary may, at any time
without notice, either in person, by agent, or by a receiver appointed by a
court, and without regard to the adequacy of any security for the Secured
Obligations, enter upon and take possession of the Property, or any part
thereof, and, with or without taking possession of the Property
or any portion thereof, in its own name xxx for or otherwise collect such Rents
(including those past due and unpaid, and all prepaid rents and all other
monies which may have been or may hereafter be deposited with Trustor by any
lessee or tenant of Trustor to secure the payment of any rent or for any
services thereafter to be rendered by Trustor for any other obligation of any
tenant to Trustor arising under any lease, and Trustor agrees that, upon the
occurrence of any Event of Default hereunder, Trustor upon the request of
Beneficiary shall promptly deliver all such Rents and other monies to
Beneficiary), and Beneficiary may apply the same, less reasonable costs and
expenses of operation and collection, including, but not limited to, attorneys'
fees and expenses, whether or not suit is brought or prosecuted to judgment,
upon any of the Secured Obligations, notwithstanding that said Secured
Obligation or the performance of said Secured Obligation may not then be due.
The collection of such Rents, or the entering upon and taking possession of the
Property, or the application thereof as aforesaid, shall not cure or waive any
default, notice of default or Event of Default hereunder or invalidate any act
done in response to such default or Event of Default or pursuant to such notice
of default and shall not be deemed or construed to make Beneficiary a
mortgagee-in-possession of the Property or any portion thereof.
5.03 Specific Assignments of Leases. Upon the occurrence of an Event
of Default and following demand of Beneficiary, Trustor shall, from time to
time hereafter, execute and deliver to Beneficiary recordable assignments of
any or all leases affecting the Property (the "LEASES"). Each such assignment
shall be made by an instrument (herein, an "ASSIGNMENT OF LEASE") in form and
substance satisfactory to Beneficiary; provided, however, that no such
Assignment of Lease shall be construed as imposing upon Beneficiary any
obligation with respect to the Leases or any of them. A default by Trustor in
the performance of any covenant of any lease so assigned to Beneficiary, by
reason of which default the lessee or other party thereunder has the right to
cancel such lease or to claim any diminution or offset against future Rents
shall, at the option of Beneficiary, constitute an Event of Default hereunder
and Beneficiary shall have all the rights and remedies set forth herein as if
such Event of Default had occurred hereunder. Beneficiary may, at its option,
exercise its rights hereunder or under any such Assignment of
15 SWI ARIZONA DEED OF TRUST
16
Lease, and such exercise shall not constitute a waiver of any right hereunder
or thereunder. To the extent not inconsistent, all rights and remedies of
Beneficiary under any such Assignment of Lease and under this Deed of Trust
shall be cumulative.
ARTICLE 6
ENVIRONMENTAL
6.01 Definitions. In addition to any terms defined elsewhere in this
Deed of Trust, as used in this Article 6:
A. "HAZARDOUS SUBSTANCE" means any substance, material or
waste which is or becomes designated, classified or regulated as being "toxic"
or "hazardous" or a "pollutant," or which is or becomes similarly designated,
classified or regulated, under any federal, state or local law, regulation or
ordinance, or any petroleum products, including crude oil and any product
derived directly or indirectly from, or any fraction or distillate of, crude
oil.
B. "INDEMNIFIED COSTS" means all actual or threatened
liabilities, claims, actions, causes of action, judgments, orders, damages
(including, but not limited to, foreseeable and unforeseeable consequential
damages), costs, expenses, fines, penalties and losses (including, but not
limited to, sums paid in settlement of claims and all consultant, expert and
legal fees and expenses of Beneficiary's counsel), including, but not limited
to, those incurred in connection with any investigation of site conditions or
any clean-up, remedial, removal or restoration work (whether of the Property or
any other property), or any resulting damages, harm or injuries to
the person or property of any third parties or to any natural resources.
C. "INDEMNIFIED PARTIES" means and includes Beneficiary,
Trustee, their respective parents, subsidiaries and affiliated companies,
assignees of any of Beneficiary's or Trustee's interest in the Loan Documents,
owners of participation or other interests in the Loan Documents, any
purchasers of the Property at any trustee's sale or judicial foreclosure sale
or from Beneficiary or any of its affiliates, and the officers, directors,
employees and agents of each of them.
6.02 Indemnity Regarding Hazardous Substances. Trustor indemnifies
and holds the Indemnified Parties harmless for, from and against any and all
Indemnified Costs directly or indirectly arising out of or resulting from any
Hazardous Substance being present or released in, on or around any part of the
Property, or in the soil, groundwater or soil vapor on or under the Property,
including, but not limited to:
A. Any claim for such Indemnified Costs asserted by any
federal, state or local governmental agency, including the United States
Environmental Protection Agency and the Arizona Department of Environmental
Quality, and including any claim that any Indemnified Party is liable for any
such indemnified Costs as an "owner" or "operator" of the Property under any
law relating to Hazardous Substances; and
B. Any such Indemnified Costs claimed against any Indemnified
Party by any person other than a governmental agency, including any person who
may purchase or lease all or any portion of the Property from Trustor, from any
Indemnified Party, or from any other purchaser or lessee; any person who may at
any time have any interest in all or any portion of the Property; any person
who may at any time be
16 SWI ARIZONA DEED OF TRUST
17
responsible for any clean-up costs or other Indemnified Costs relating to the
Property; and any person claiming to have been injured in any way as a result
of exposure to any Hazardous Substance; and
C. Any such Indemnified Costs which any Indemnified Party
reasonably believes at any time must be incurred to comply with any law,
judgment, order, regulation or regulatory directive relating to Hazardous
Substances, or which any Indemnified Party reasonably believes at any time must
be incurred to protect the public health or safety; and
D. Any such Indemnified Costs resulting from currently
existing conditions in, on or around the Property, whether known or unknown by
Trustor or the Indemnified Parties at the time this Agreement is executed, and
any such Indemnified Costs resulting from the activities of Trustor, Trustor's
tenants, or any other person in, on or around the Property.
6.03 Indemnity Regarding Construction and Other Risks. Trustor
indemnifies and holds the Indemnified Parties harmless for, from and against
any and all Indemnified Costs directly or indirectly arising out of or
resulting from construction of any improvements on the Property, including any
defective workmanship or materials; or any failure to satisfy any requirements
of any laws, regulations, ordinances, governmental policies or standards,
reports, subdivision maps or development agreements that apply or pertain to
the Property; or breach of any representation or warranty made or given by
Trustor to any of the Indemnified Parties or to any prospective or actual buyer
or lessee of all or any portion of the Property; or any claim or cause of
action of any kind by any party that any Indemnified Party is liable for any
act or omission of Trustor or any other person or entity in connection with the
possession, sublease, operation or development of the Property.
6.04 Defense of Indemnified Parties. Upon demand by any Indemnified
Party, Trustor shall defend any investigation, action or proceeding involving
any Indemnified Costs which is brought or commenced against any Indemnified
Party, whether alone or together with Trustor or any other person, all at
Indemnitor's own cost and by counsel to be approved by the Indemnified Party in
the exercise of its sole discretion. In the alternative, any Indemnified Party
may elect to conduct its own defense at the expense of Trustor.
6.05 Representation and Warranty Regarding Hazardous Substances.
Trustor has researched and inquired into the previous uses and operations on
the Property. Based on that due diligence, Trustor represents and warrants
that to the best of its knowledge, no Hazardous Substance has been disposed of
or released, or otherwise now exists, in, on, under or around the Property,
except as Trustor has disclosed to Beneficiary in writing and except as to use,
generation, manufacture, storage, treatment, disposal or release of Hazardous
Substances that are: (a) generally recognized to be appropriate to the normal
business uses of Trustor; and (b) in compliance with applicable local, state
and federal laws, rules and regulations.
6.06 Compliance Regarding Hazardous Substances. Trustor has complied,
and shall comply and cause all tenants and any other persons who may come upon
the Property to comply, with all laws, regulations and ordinances governing or
applicable to Hazardous Substance, including, but not limited to, those
requiring disclosures to prospective and actual purchasers of an interest in
all or any portion of the Property. Trustor also has complied and shall comply
with the recommendations of any qualified environmental engineer or other
expert which apply or pertain to the Property.
6.07 Notices Regarding Hazardous Substances. Trustor shall promptly
notify Beneficiary if it knows, suspects or believes there may be any Hazardous
Substance in or around the Property, or in the soil, groundwater or soil vapor
on or under the Property, or that Trustor or the Property may be subject to any
17 SWI ARIZONA DEED OF TRUST
18
threatened or pending investigation by any governmental agency under any law,
regulation or ordinance pertaining to any Hazardous Substance; provided,
however, that no such notice is required if the Hazardous Substance is: (a)
generally recognized to be appropriate to Trustor's normal business uses; and
(b) in compliance with applicable local, state and federal laws, rules and
regulations.
6.08 Site Visits, Observations and Testing. The Indemnified Parties
and their agents and representatives shall have the right at any reasonable
time to enter and visit the Property for the purposes of observing the
Property, taking and removing soil or groundwater samples, and conducting tests
on any part of the Property. The Indemnified Parties have no duty, however, to
visit or observe the Property or to conduct tests, and no site visit,
observation or testing by any Indemnified Party shall impose any liability on
any Indemnified Party. In no event shall any site visit, observation or
testing by any Indemnified Party be a representation that Hazardous Substances
are or are not present in, on or under the Property, or that there has been or
shall be compliance with any law, regulation or ordinance pertaining to
Hazardous Substances or any other applicable governmental law. Neither
Trustor, nor any other party, is entitled to rely on any site visit,
observation or testing by any Indemnified Party. The Indemnified Parties owe
no duty of care to protect Trustor or any other party against, or to inform
Trustor or any other party of, any Hazardous Substances or any other adverse
condition affecting the Property. Any Indemnified Party shall give Trustor
reasonable notice before entering the Property. The Indemnified Party shall
make reasonable efforts to avoid interfering with Trustor's use of the Property
in exercising any rights provided in this Section 6.08.
6.09 Survival. The provisions of this Article 6 shall survive the
repayment of the Secured Obligations and satisfaction of this Deed of Trust,
trustee's sale or judicial foreclosure of this Deed of Trust. Notwithstanding
anything to the contrary contained in this Article 6, Trustor shall have no
obligation to indemnify any Indemnified Party for Indemnified Costs solely
resulting from such Indemnified Party's gross negligence or willful misconduct,
or for any Indemnified Costs arising solely from actions taken after the
Property has been conveyed via Trustee's sale or judicial foreclosure.
ARTICLE 7
SECURITY AGREEMENT
7.01 Security Interest. This Deed of Trust shall constitute a
security agreement within the meaning of Chapter 9 of the UCC, as to the
Personal Property Collateral and as to any other property covered and
encumbered by this Deed of Trust as to which the provisions of Chapter 9 of the
UCC may apply, and is intended to create a security interest in such property
in favor of Beneficiary. Trustor agrees to execute and deliver on demand such
security agreements, financing statements, continuation statements and other
instruments as Beneficiary may request in order to impose or perfect the
security interest and lien of Beneficiary upon any of the Personal Property
Collateral.
7.02 Remedies Upon Default. Upon the occurrence of any Event of
Default hereunder, Beneficiary shall have the right, in addition to the rights
granted to Beneficiary under the other Loan Documents, to cause any of the
Personal Property Collateral to be sold at any one or more public or private
sales as permitted by the UCC or other applicable law, and Beneficiary shall
further have all other rights and remedies, whether at law, in equity, or by
statute, as are available to secured creditors under applicable law. Any such
disposition may be conducted by an employee or agent of Beneficiary or Trustee.
Any person, including both Trustee and Beneficiary, shall be eligible to
purchase any part or all of such property at any disposition to the extent
permitted by applicable law. All reasonable expenses of retaking, holding,
preparing for sale, selling or the like shall be borne by Trustor and shall
include, Beneficiary's and Trustee's
18 SWI ARIZONA DEED OF TRUST
19
attorneys' fees and expenses. Trustor, upon demand of Beneficiary, shall
assemble such Personal Property Collateral and make it available to Beneficiary
at such place as shall be required by Beneficiary in its sole discretion.
Beneficiary shall give Trustor at least ten days prior written notice of the
time and place of any public sale of such property or after which any private
sale or any other intended disposition is to be made. Notice provided to
Trustor in the manner provided herein shall be deemed to be commercially
reasonable notice of such sale or other disposition.
7.03 Fixture Filing This Deed of Trust constitutes a financing
statement filed as a fixture filing under A.R.S. Section 47-9402.F, or any
successor similar statute, covering any Property which now is or later may
become fixtures attached to the Land or Improvements.
ARTICLE 8
EVENTS OF DEFAULT;
REMEDIES UPON EVENTS OF DEFAULT
8.01 Events of Default. Trustor shall be in default hereunder (an
"EVENT OF DEFAULT") upon the occurrence of any one or more of the following
events: (i) Trustor fails to pay any amount when due under the Note, subject to
applicable notice and cure periods; (ii) Trustor breaches any provision
contained in this Deed of Trust, subject to applicable notice and cure periods;
(iii) Trustor applies for, consents to, or acquiesces in, the appointment of a
trustee, receiver, sequestrator or other custodian for Trustor, or makes a
general assignment for the benefit of creditors; or (iv) Trustor permits or
suffers to exist the commencement of bankruptcy, reorganization, debt
arrangement or other case or proceeding under any bankruptcy or insolvency law,
except for any involuntary proceeding initiated or consented to by Beneficiary,
or dissolution, winding up or liquidation proceeding in respect of Trustor.
8.02 Acceleration Upon Default; Additional Remedies. Upon the
occurrence of an Event of Default hereunder, Beneficiary may, at its option,
declare the Secured Obligations to be immediately due and payable without any
presentment, demand, protest or notice of any kind. Notice of acceleration to
Trustor shall not be required. Whether or not Beneficiary exercises said
option, Beneficiary may, to the extent permitted by law, either in person or by
agent, with or without bringing any action or proceeding, or by a receiver
appointed by a court and without regard to the adequacy of its security, enter
upon and take possession of the Property, or any part thereof, in its own name
or in the name of the Trustee, and do any act which it deems necessary or
desirable to preserve the value, marketability or rentability of the Property,
or part thereof or interest therein, increase the income therefrom or protect
the security thereof and, with or without taking possession of the Property,
xxx for or otherwise collect the Rents including those past due and unpaid, and
apply the same, less reasonable costs and expenses of operation and collection,
including, but not limited to, attorneys' fees and expenses, upon the Secured
Obligations all in such order as Beneficiary may determine. The entering upon
and taking possession of the Property, the collection of such Rents, and the
application thereof as aforesaid, shall not cure or waive any default, notice
of default or Event of Default hereunder or invalidate any act done in response
to such default or Event of Default, or pursuant to such notice of default and,
notwithstanding the continuance in possession by Trustee, Beneficiary or a
receiver of all or any portion of the Property or the collection, receipt and
application of any of the Rents thereby, the Trustee or Beneficiary shall be
entitled to exercise every right provided for in any of the Loan Documents or
by law upon occurrence of any Event of Default, including, but not limited to,
the right to exercise the power of sale. Beneficiary may also exercise all
other rights and remedies provided herein, in any Loan Document or in any other
document or agreement now or hereafter securing all or any portion of the
Secured Obligations, or provided by law.
19 SWI ARIZONA DEED OF TRUST
20
8.03 Trustee's Sale.
A. If any Event of Default hereunder occurs, Beneficiary may
invoke the power of sale by delivering to Trustee a written statement of breach
or non-performance. Trustee shall then record a Notice of Sale in the
Recorder's Office of the county in which the Property is located and shall mail
copies of the Notice of Sale and any other notice as prescribed by applicable
law to Trustor and to the other persons as prescribed by applicable law. After
such time as required by applicable law, and after publication and posting of
the Notice of Sale in accordance with applicable law, Trustee, without demand
on Trustor, shall sell the Property at public auction to the highest bidder for
cash at the time and place designated in the Notice of Sale. Trustee may
postpone sale of the Property by public declaration at the time and place of
any previously scheduled sale unless otherwise required by applicable law.
Beneficiary shall be entitled to a credit against its bid up to and including
the entire amount of the Secured Obligations, to the extent permitted by law.
Trustee shall deliver to the purchaser its Trustee's deed conveying the
Property without any covenant or warranty, expressed or implied. The proceeds
of the sale shall be applied in the following order: (i) to all reasonable
expenses of the sale, including, but not limited to, Trustee's fees and
attorneys' fees; (ii) to all sums secured by this Deed of Trust; and (iii) any
excess to the person or persons legally entitled to it or to the County
Treasurer of the county in which the sale took place, or as otherwise provided
by law.
B. A sale of less than the whole of the Property or any
defective or irregular sale made hereunder shall not exhaust the power of sale
provided for herein; and subsequent sales may be made hereunder until all
Secured Obligations have been satisfied, or the entire Property sold, without
defect or irregularity.
8.04 Judicial Foreclosure. If any Event of Default hereunder occurs,
Beneficiary may commence an action to judicially foreclose this Deed of Trust
in the manner provided by law for foreclosure of a mortgage.
8.05 Appointment of Receiver. If an Event of Default hereunder shall
have occurred and be continuing, Beneficiary, as a matter of right and without
notice to Trustor or anyone claiming under Trustor, and without regard to the
then value of the Property or the interest of Trustor therein, shall have the
right to apply to any court having jurisdiction to appoint a receiver or
receivers of the Property, and Trustor hereby irrevocably consents to such
appointment and waives notice of any application therefor. Any such receiver
or receivers shall have all the usual powers and duties of receivers in like or
similar cases and all the powers and duties of Beneficiary in case of entry as
provided herein and shall continue as such and exercise all such powers until
the date of the sale of the Property unless such receivership is sooner
terminated.
8.06 Application of Funds After Event of Default. Upon the occurrence
of an Event of Default hereunder, Beneficiary may, at any time without notice,
apply any or all sums or amounts received and held by Beneficiary to pay
insurance premiums, Impositions, or any of them, or as rents or income of the
Property, or as insurance or condemnation proceeds, and all other sums or
amounts received by Beneficiary from or on account of Trustor or the Property,
or otherwise, upon any Secured Obligation, in such manner and order as
Beneficiary may elect, notwithstanding that such Secured Obligation may not yet
be due. The receipt, use or application of any such sum or amount shall not be
construed to affect the maturity of any Secured Obligations, or any of the
rights or powers of Beneficiary or Trustee under the terms of the other Loan
Documents, or any of the obligations of Trustor under this Deed of Trust or the
other Loan Documents, or to cure or waive any default, notice of default or
Event of Default hereunder or under any of the other Loan Documents; or to
invalidate any act of Trustee or Beneficiary.
20 SWI ARIZONA DEED OF TRUST
21
8.07 Costs of Enforcement. If any Event of Default hereunder occurs,
Beneficiary and Trustee, and each of them, may employ attorneys to protect
their rights hereunder. Trustor promises to pay to Beneficiary, on demand, the
reasonable fees and expenses of such attorneys and all other costs of enforcing
the Secured Obligations, including, but not limited to, recording fees, the
expense of a Trustee's Sale Guarantee, Trustee's fees and expenses, receivers'
fees and expenses, and all other expenses, of whatever kind or nature, incurred
by Beneficiary and Trustee, and each of them, in connection with the
enforcement of the Secured Obligations, whether or not such enforcement
includes the filing of a lawsuit. Until paid, shall bear interest, from date
of expenditure, at the Default Rate, and shall be secured hereby.
8.08 Remedies Not Exclusive. Trustee and Beneficiary, and each of
them, shall be entitled to enforce payment and performance of any Secured
Obligation and to exercise all rights and powers under this Deed of Trust or
under any other Loan Document or other agreement or any law now or hereafter in
force, notwithstanding some or all of the said Secured Obligations may now or
hereafter be otherwise secured, whether by guaranty, mortgage, deed of trust,
pledge, lien, assignment or otherwise. Neither the acceptance of this Deed of
Trust, nor its enforcement, whether by court action or pursuant to the power of
sale or other powers herein contained, shall prejudice or in any manner affect
Trustee's or Beneficiary's right to realize upon or enforce any other security
now or hereafter held by Trustee or Beneficiary, it being agreed that Trustee
and Beneficiary, and each of them, shall be entitled to enforce this Deed of
Trust and any other security now or hereafter held by Beneficiary or Trustee in
such order and manner as they may in their absolute discretion determine. No
remedy herein conferred upon or reserved to Trustee or Beneficiary is intended
to be exclusive of any other remedy herein or by law provided or permitted, but
each shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute. Every
power or remedy given hereby or by any of the other Loan Documents to Trustee
or Beneficiary or to which either of them may be otherwise entitled may be
exercised, concurrently or independently, from time to time and as often as may
be deemed expedient by Trustee or Beneficiary, and either of them may pursue
remedies as each in their sole discretion shall deem appropriate.
ARTICLE 9
REPRESENTATIONS AND WARRANTIES OF TRUSTOR
Trustor represents and warrants that, except as previously
disclosed to Beneficiary in a writing:
A. Trustor lawfully possesses and holds the Land and
Improvements;
B. Trustor has or will have good title to all Property other
than the Land and Improvements;
C. Trustor has the full and unlimited power, right and
authority to encumber the Property and assign the Rents;
D. This Deed of Trust creates a first and prior lien on the
Property;
E. The Property includes all property and rights which may be
reasonably necessary or desirable to promote the present and any
reasonable future beneficial use and enjoyment of the Land and
Improvements;
21 SWI ARIZONA DEED OF TRUST
22
F. Trustor owns the Personal Property Collateral free and
clear of any security interests, liens, security agreements,
reservations of title or conditional sales contracts, and there is no
financing statement affecting such Personal Property Collateral on file
in any public office; and
G. Trustor's place of business, or its chief executive office
if it has more than one place of business, is located at the address
specified above.
ARTICLE 10
MISCELLANEOUS COVENANTS AND AGREEMENTS
10.01 Amendments. This Deed of Trust cannot be waived, changed,
discharged or terminated orally, but only by an instrument in writing signed by
the party against whom enforcement of any waiver, change, discharge or
termination is sought.
10.02 Trustor's Waiver of Rights. Trustor hereby waives, to the extent
permitted by law: (a) the benefit of all laws now existing or that may
hereafter be enacted providing for any appraisement before sale of any portion
of the Property, and, whether now existing or hereafter arising or created; (b)
all rights of redemption, valuation, stay of execution, notice of election to
mature or declare due the whole of the Secured Obligations and marshaling in
the event of trustee's sale of judicial foreclosure of the liens hereby
created; and (c) all rights and remedies which Trustor may have or be able to
assert by reason of the laws of the State of Arizona pertaining to the rights
and remedies of sureties.
10.03 Statements by Trustor. Trustor shall, within 10 days after
notice thereof from Beneficiary, deliver to Beneficiary a written statement
setting forth the amounts then unpaid and secured by this Deed of Trust and
stating whether any offset or defense exists against such amounts.
10.04 Reconveyance by Trustee. Upon the written request of Beneficiary
stating that all Secured Obligations have been paid and fully performed, and
upon payment by Trustor of Trustee's fees and the costs and expenses of
executing and recording any requested reconveyance, Trustee shall reconvey to
Trustor, or to the person or persons legally entitled thereto, without
warranty, any portion of the Property then held hereunder. The recitals in any
such reconveyance of any matter or fact shall be conclusive proof of the
truthfulness thereof. The grantee in any such reconveyance may be described as
"the person or persons legally entitled thereto." Beneficiary agrees to
execute all documents, instruments, agreements and financing statements in
connection with any such reconveyance of the Property and the security interest
granted pursuant to Section 2.02 above.
10.05 Notices. Whenever Beneficiary, Trustor or Trustee shall desire
to give or serve any notice, demand, request or other communication with
respect to this Deed of Trust, unless otherwise required by applicable law,
each such notice, demand, request or other communication shall be in writing
and shall become effective: (i) upon delivery by hand; (ii) two business days
after being deposited, by the party giving such notice, demand, request or
other communication, with the United States Postal Service, certified, postage
prepaid; or (iii) one business day after being delivered, by the party giving
such notice, demand, request or other communication, to a nationally recognized
overnight courier delivery service, with the charge for such overnight delivery
prepaid, in either case addressed to the parties to whom such notice, demand,
request or other communication is directed, at the addresses for such parties
set forth in the first paragraph of this Deed of Trust, or at such other
addresses as each party may designate from time to time by
22 SWI ARIZONA DEED OF TRUST
23
delivering notice as provided herein. All such notices and other
communications shall be effective when mailed; provided, however, that notices
to Beneficiary shall be effective only when received by Beneficiary. Notice
given in any other manner shall be effective only if and when received by the
addressee.
10.06 Captions. The captions or headings at the beginning of Articles,
Sections and Subsections hereof are for the convenience of the parties and
shall not be used in construing it.
10.07 Invalidity of Certain Provisions. Every provision of this Deed
of Trust is intended to be severable. In the event any term or provision hereof
is declared to be illegal, invalid or unenforceable for any reason whatsoever
by a court of competent jurisdiction, such illegality, invalidity, or
unenforceability shall not affect the balance of the terms and provisions
hereof, which terms and provisions shall remain binding and enforceable. If
the lien of this Deed of Trust is invalid or unenforceable as to any part of
the debt, or if the lien is invalid or unenforceable as to any part of the
Property, the unsecured or partially secured portion of the debt shall be
completely paid prior to the payment of the remaining and secured or partially
secured portion of the debt, and all payments made on the debt, whether
voluntary or by trustee's sale, judicial foreclosure or other enforcement
action or procedure, shall be considered to have been first paid on and applied
to the full payment of that portion of the debt which is not secured or fully
secured by the lien of this Deed of Trust.
10.08 Subrogation. To the extent that proceeds of the Secured
Obligations created under the Loan Documents are used, either directly or
indirectly, to pay any outstanding lien, charge or prior encumbrance against
the Property, Beneficiary shall be subrogated to any and all rights and liens
held by an owner or holder of such outstanding liens, charges and prior
encumbrances, irrespective of whether said liens, charges or encumbrances are
released.
10.09 No Merger of Lease. Upon the trustee's sale or judicial
foreclosure of the lien created by this Deed of Trust on the Property pursuant
to the provisions hereof, any lease or sublease or rental agreement then
existing and affecting all or any portion of the Property shall not be
destroyed or terminated by application of the law of merger or as a matter of
law or as a result of such trustee's sale or judicial foreclosure unless
Beneficiary or any purchaser at such trustee's sale or judicial foreclosure
sale shall so elect. No act by or on behalf of Beneficiary or any such
purchaser shall constitute a termination of any lease or sublease unless
Beneficiary or such purchaser shall give written notice thereof to such tenant
or subtenant. If both the lessor's and lessee's estate under any lease or any
portion thereof which constitutes a part of the Property shall at any time
become vested in one owner, this Deed of Trust and the lien created hereby
shall not be destroyed or terminated by application of the doctrine of merger
unless Beneficiary so elects as evidenced by recording a written declaration so
stating, and, unless and until Beneficiary so elects, Beneficiary shall
continue to have and enjoy all of the rights and privileges of Beneficiary
hereunder as to the separate estates, except as otherwise provided by law.
10.10 Governing Law. This Deed of Trust, and its validity, enforcement
and interpretation, shall be governed by Texas law (without regard to any
conflict of laws principles) and applicable United States federal law, except
to the extent of procedural and substantive matters relating only to the
creation and perfection of liens and security interests in, and the enforcement
of rights and remedies against, the Property, which matters shall be governed
by the laws of the State of Arizona.
10.11 Joint and Several Obligations. Should this Deed of Trust be
signed by more than one party, all obligations herein contained shall be deemed
to be the joint and several obligations of each party executing this Deed of
Trust.
23 SWI ARIZONA DEED OF TRUST
24
10.12 Interpretation. In this Deed of Trust the singular shall include
the plural and the masculine shall include the feminine and neuter and vice
versa, if the context so requires; and the word "person" shall include
corporation, partnership, joint venture, limited liability company or other
form of association or legal entity recognized in law.
10.13 Corrections. Trustor shall, upon request of Beneficiary,
promptly correct any defect, error or omission which may be discovered in the
contents hereof or in the execution or acknowledgment hereof, and will execute,
acknowledge and deliver such further instruments and do such further acts as
may be necessary or as may be reasonably requested by Beneficiary to carry out
more effectively the purposes hereof, to subject to the lien and security
interest hereby created any of Trustor's properties, rights or interest covered
or intended to be covered hereby, or to perfect and maintain such lien and
security interest.
10.14 Further Assurances. Trustor agrees to do or to cause to be done
such further acts and things and to execute and deliver or to cause to be
executed and delivered such additional assignments, agreements, powers and
instruments, as any of them may reasonably require or deem advisable to keep
valid and effective the charges and lien hereof, to carry into effect the
purposes of this Deed of Trust or to better assure and confirm unto Beneficiary
or Trustee their rights, powers and remedies hereunder; and, upon request by
Beneficiary or Trustee, shall supply evidence of fulfillment of each of the
covenants herein contained concerning which a request for such evidence has
been made. In the event that Trustor fails or refuses to execute and deliver
any assignments, agreements, powers or instruments pursuant to this Section
10.14, Trustor irrevocably appoints Beneficiary or Trustee, as applicable, its
true and lawful attorney-in-fact, with full power of substitution, to execute
and deliver any such assignments, agreements, powers and instruments. The
appointment granted herein shall be deemed to be a power coupled with an
interest.
10.15 Execution of Instruments by Trustee. At any time, and from time
to time, without liability therefor and without notice, upon written request of
Beneficiary and without affecting the personal liability of any person for
payment of the indebtedness or the performance of any other obligation secured
hereby, Trustee may: (a) release and reconvey any part of said Property; (b)
consent in writing to the making of any map or plat thereof; (c) join in
granting any easement thereon; or (d) join in any extension agreement,
agreement subordinating the lien or charge hereof, or other agreement or
instrument relating hereto or to the Property or any portion thereof.
10.16 Appointment of Successor Trustee. Beneficiary may, from time to
time remove Trustee and appoint a successor Trustee to any Trustee appointed
hereunder. A Notice of Substitution of Trustee in the form required by
applicable law shall be recorded with the County Recorder of the county in
which the Land is located.
10.17 Successors and Assigns. Subject to Section 4.19 above, this Deed
of Trust applies to, inures to the benefit of and binds Trustor, Trustee and
Beneficiary and their respective legal representatives, successors and assigns.
10.18 Priority. Except as otherwise expressly set forth in the Credit
Agreement, this Deed of Trust is intended to have and retain priority over all
other liens and encumbrances upon the Property, excepting only: (a) such
taxes, assessments, or Impositions as have, or by law gain, priority over the
lien created hereby; (b) covenants, conditions, restrictions, easements, and
rights of way which are of record or are disclosed of record affecting the
Property that have been approved by Beneficiary in writing; (c) leases, liens,
encumbrances and other matters as to which Beneficiary hereafter expressly
subordinates the lien of this Deed of Trust by written instrument in recordable
form. Under no circumstance shall Beneficiary be obligated or required to
subordinate the lien hereof to any lease, lien, encumbrance, covenant or other
24 SWI ARIZONA DEED OF TRUST
25
matter affecting the Property or any portion thereof. Beneficiary may,
however, at Beneficiary's option, exercisable in its sole and absolute
discretion, subordinate the lien of this Deed of Trust, in whole or in part, to
any or all leases, liens, or encumbrances by executing and recording with the
County Recorder of the county in which the Land is located, a unilateral
declaration of such subordination specifying the lease, lien, encumbrance or
other matter or matters to which this Deed of Trust shall thereafter be
subordinate.
10.19 Change of Law. In the event of the passage, after the date of
this Deed of Trust, of any law deducting from the value of the Property, for
the purposes of taxation, any lien thereon, or changing in any way the laws now
in force for the taxation of mortgages, deeds of trust, or debts secured by
mortgage or deed of trust (other than laws imposing taxes on income), or the
manner of the collection of any such taxes so as to affect adversely the rights
of Beneficiary under this Deed of Trust, the Secured Obligations shall become
due and payable at the option of Beneficiary exercised by 30 days notice to
Trustor unless Trustor, within such 30 day period, shall, if permitted by law,
assume the payment of any tax or other charge so imposed upon Beneficiary for
the period remaining until full payment of the Secured Obligations.
10.20 No Waiver. No waiver by Beneficiary of any Event of Default,
default or breach by Trustor hereunder shall be implied from any omission by
Beneficiary to take action on account of such Event of Default, default or
breach if such Event of Default, default or breach persists or is repeated, and
no express waiver shall affect any Event of Default, default or breach other
than the particular Event of Default, default or breach referred to in such
waiver and such waiver shall be operative only for the time and to the extent
therein stated. Waivers of any covenant, term or condition contained herein
shall not be construed as a waiver of any subsequent breach of the same
covenant, term or condition. The consent or approval by Beneficiary to or of
any act by Trustor requiring further consent or approval shall not be deemed to
waive or render unnecessary the consent or approval to or of any subsequent
similar act.
10.21 Abandonment. Subject to such security agreements or other liens
as may exist thereon with the consent of Beneficiary, or any provided for
herein, any and all Personal Property Collateral that upon trustee's sale or
judicial foreclosure of the Property is owned by Trustor and is used in
connection with the operation of the Property, shall be deemed, at the option
of Beneficiary, to have become a part of the Property and abandoned to
Beneficiary in its then condition.
IN WITNESS WHEREOF, Trustor has caused this Deed of Trust to be executed
by its duly authorized officers, agents or representatives as of the date first
above written.
"TRUSTOR"
SOUTHWESTERN ICE, INC., a Texas
corporation
By: ______________________________
Xxxxx X. Xxxxxx, Chief Executive Officer
WITNESS
In accordance with the requirements of A.R.S. Section 14-5503, the
undersigned has executed this Deed of Trust solely for the purpose of
witnessing the grant of a power of attorney by Trustor to Beneficiary as
described in this Deed of Trust.
25 SWI ARIZONA DEED OF TRUST
26
___________________________________
___________________________________
STATE OF TEXAS )
)
COUNTY OF BEXAR )
The foregoing instrument was acknowledged before me this ___ day of
September, 1997, by Xxxxx X. Xxxxxx, as President of SOUTHWESTERN ICE, INC., a
Texas corporation, on behalf of said corporation.
___________________________________
Notary Public
My commission expires:
-----------------------------------
26 SWI ARIZONA DEED OF TRUST
27
EXHIBIT A
Legal Description
SWI ARIZONA DEED OF TRUST
