EXHIBIT 10.4
NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON,
YOU MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION
FROM THIS INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC
RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER.
DEED OF TRUST AND SECURITY AGREEMENT
(WITH ASSIGNMENT OF RENTS)
THE STATE OF TEXAS ss.
ss.
COUNTY OF XXXXXX xx.
INTRODUCTION
This instrument ("DEED OF TRUST") is a deed of trust from:
Mortgagor Name(s): ___________________________________
Address(es): ___________________________________
(called the "MORTGAGOR", "DEBTOR" and "ASSIGNOR", whether one or more) to:
Trustee Name: Xxxxxxx X. Xxxxxxx
Address: 000 Xxxxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
as trustee (called the "TRUSTEE"), for the use and benefit of:
Mortgagee Name: GCA Strategic Investment Fund Limited
Address: c/o Prime Management Limited
Mechanics Building
00 Xxxxxx Xxxxxx
Xxxxxxxx XX XX, Xxxxxxx
(called the "MORTGAGEE", "SECURED PARTY" and "ASSIGNEE"), a security agreement
between Debtor and Secured Party and an assignment of rents from Assignor to
Assignee.
W I T N E S S E T H:
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ARTICLE 1
IDENTIFICATION OF THE MORTGAGED PROPERTYAND ITS CONVEYANCE TO THE TRUSTEE
Section 1.1 MORTGAGOR'S CONVEYANCE OF THE MORTGAGED PROPERTY TO THE TRUSTEE
TO SECURE THE DEBT. To secure payment of principal, lawful interest and other
elements of the Debt described and defined in ARTICLE 2, in consideration of the
uses and trusts (the "TRUST") established and continued by this Deed of Trust
and in consideration of Ten Dollars ($10) and other valuable consideration paid
before delivery of this Deed of Trust by each of Trustee and Mortgagee to
Mortgagor, who hereby acknowledges its receipt and that it is reasonably
equivalent value for this Deed of Trust and all other security and rights given
by Xxxxxxxxx, Mortgagor hereby Grants, Xxxxx, Conveys, Transfers, Assigns, Sets
Over, Confirms and Delivers unto the Trustee and to his successors or
substitutes in the Trust, the following property (collectively, the "MORTGAGED
PROPERTY"):
(a) REAL PROPERTY. All of the real estate and premises described or
referred to on EXHIBIT A, together with (i) all of Mortgagor's estate, right,
title and interest in and to all easements and rights-of-way for utilities,
ingress or egress to or from said property and (ii) all interests of Mortgagor
in and to all streets, rights-of-way, alleys or strips of land adjoining said
property (collectively, the "REAL PROPERTY").
(b) BUILDINGS AND IMPROVEMENTS. All existing and all future buildings on
the Real Property and other improvements to it, all of which Mortgagor and
Mortgagee hereby irrevocably declare to be real estate and part of the Real
Property, including all water, sewage and drainage facilities, xxxxx, treatment
plants, supply, collection and distribution systems, paving, landscaping and
other improvements (collectively, the "Improvements").
(c) FIXTURES, EQUIPMENT AND SUPPLIES. All fixtures, equipment and
supplies (the "FIXTURES AND EQUIPMENT") now or hereafter attached to, used,
intended or acquired for use for, or in connection with, the construction,
maintenance, operation or repair of the Real Property or Improvements, or for
the present or future replacement or replenishment of used portions of it, and
all related parts, filters and supplies, including, but not limited to, all
heating, lighting, cooling, ventilating, air conditioning, environment control,
refrigeration, plumbing, incinerating, water-heating, cooking, pollution
control, gas, electric, solar, nuclear, computing, monitoring, measuring,
controlling, distributing and other equipment and fixtures, and all renewals and
replacements of them, all substitutions for them and all additions and
accessions to them, all of which Xxxxxxxxx and Mortgagee hereby also irrevocably
declare to be real estate and part of the Real Property.
(d) LEASES. All Leases (as such term is defined in SECTION 9.1 below).
(e) UTILITIES. All wastewater, fresh water and other utilities capacity
and facilities (the "UTILITIES CAPACITY") available or allocable to the Real
Property and Improvements or dedicated to or reserved for them pursuant to any
system, program, contract or other arrangement with any public or private
utility, and all related or incidental licenses, rights and interests, whether
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considered to be real, personal or mixed property, including the right and
authority to transfer or relinquish any or all such rights and the right to any
credit, refund, reimbursement or rebate for utilities facilities construction or
installation or for any reservation fee, standby fee or capital recovery charge
promised, provided or paid for by Mortgagor or any of Mortgagor's predecessors
or Affiliates (defined below), to the full extent now allocated or allocable to
the Real Property or Improvements, plus all additional Utilities Capacity, if
any, not dedicated or reserved to the Real Property or Improvements but which is
now or hereafter owned or controlled by Mortgagor or by anyone (an "AFFILIATE",
whether a natural person or an entity) who directly or through one or more
intermediaries controls, is controlled by or is under common control with
Mortgagor, to the full extent that such additional Utilities Capacity is
necessary to allow development, marketing and use of the Real Property or
Improvements for their highest and best use.
(f) AFTER-ACQUIRED PROPERTY. All estate, right, title and interest
acquired by Xxxxxxxxx in or to the Real Property, Improvements, Fixtures and
Equipment, Leases and Utilities Capacity after execution of this Deed of Trust.
(g) APPURTENANCES. Any and all rights and appurtenances (the
"APPURTENANCES") belonging, incident or appertaining to the Real Property,
Improvements, Fixtures and Equipment, Leases or Utilities Capacity or any part
of them.
(h) OIL AND GAS. All existing and future minerals, oil, gas and other
hydrocarbon substances in, upon, under or through the Real Property.
(i) REVERSIONS AND REMAINDERS. Any and all rights and estates in
reversion or remainder to the Real Property, Improvements, Fixtures and
Equipment, Leases, Utilities Capacity or Appurtenances or any part of them.
(j) CONTRACTUAL RIGHTS. All contracts (including contracts for the sale
or exchange of all or any portion of the Real Property or the Improvements),
franchises, licenses and permits whether executed, granted or issued by a
private person or entity or a governmental or quasi-governmental agency, which
are directly or indirectly related to or connected with the development or sale
of the Real Property or the Improvements, whether now or at any time hereafter
existing, and all amendments and supplements thereto and renewals and extensions
thereof at any time made, and all rebates, refunds, escrow accounts and funds,
or deposits and all other sums due or to become due under and pursuant thereto
and all powers, privileges, options and Mortgagor's other benefits thereunder.
(k) OTHER ESTATES AND INTERESTS. All other estates, easements,
interests, licenses, rights, titles, powers or privileges of every kind and
character which Xxxxxxxxx now has, or at any time hereafter acquires, in and to
any of the foregoing, including the proceeds from condemnation, or threatened
condemnation, and the proceeds of any and all insurance covering any part of the
foregoing; and all related parts, accessions and accessories to any of the
foregoing and all replacements or substitutions therefor, as well as all other
Improvements, Fixtures and Equipment, Leases, Utilities Capacity and
Appurtenances now or hereafter placed thereon or accruing thereto.
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Section 1.2 HABENDUM AND TITLE WARRANTY. TO HAVE AND TO HOLD the Mortgaged
Property, together with every right, privilege, hereditament and appurtenance
belonging or appertaining to it, unto the Trustee, his successors or substitutes
in the Trust and his or their assigns, forever. Xxxxxxxxx represents that
Xxxxxxxxx is the lawful owner of the Mortgaged Property with good right and
authority to mortgage and convey it, and that the Mortgaged Property is free and
clear of all liens, claims and encumbrances except only those expressly referred
to or described in EXHIBIT B. Mortgagor hereby binds Mortgagor and Xxxxxxxxx's
successors and assigns to forever WARRANT and DEFEND the Mortgaged Property and
every part of it unto the Trustee, his successors or substitutes in the Trust,
and his or their assigns, against the claims and demands of every person
whomsoever lawfully claiming or to claim it or any part of it (such warranty to
supersede any provision contained in this Deed of Trust limiting the liability
of Mortgagor).
ARTICLE 2
THE DEBT SECURED
Section 2.1 CONVEYANCE IN TRUST TO SECURE DESIGNATED OBLIGATIONS. This
conveyance to the Trustee is IN TRUST to secure all of the following present and
future debt and obligations:
(a) NOTE. All indebtedness now or hereafter evidenced and to be
evidenced by the Convertible Note of MEMS USA, Inc. ("Borrower"), a Nevada
corporation, dated concurrently herewith in the face amount of $3,530,000,
bearing interest at the rate or rates therein stated, principal and interest
payable to the order of Mortgagee on the dates therein stated, with final
payment due on October __, 2009, executed by Xxxxxxxx; and any and all past,
concurrent or future modifications, extensions, renewals, rearrangements,
replacements and increases of the foregoing note (collectively, the "NOTE").
(b) SECURITIES PURCHASE AGREEMENT. All obligations and indebtedness of
Borrower now or hereafter created or incurred under the Securities Purchase
Agreement dated concurrently herewith between Borrower and Mortgagee, as the
same may be amended, supplemented, restated or replaced from time to time
(collectively, the "SECURITIES PURCHASE AGREEMENT").
(c) OTHER SPECIFIED OBLIGATIONS. All other obligations, if any,
described or referred to in any other place in this Deed of Trust.
(d) GUARANTY. All obligations and liabilities of any guarantor arising
out of or connected to a guaranty issued in connection with any obligations and
liabilities of Borrower to Mortgagee, now existing or hereafter incurred, under,
arising out of or in connection with any Credit Document, including without
limitation, that certain Guaranty dated concurrently herewith executed by
Mortgagor for the benefit of Mortgagee, in connection with the Note and the
Securities Purchase Agreement.
(e) ADVANCES AND OTHER OBLIGATIONS PURSUANT TO THIS DEED OF TRUST'S
PROVISIONS. Any and all sums and the interest which accrues on them as provided
in this Deed of Trust which Mortgagee may advance or which Mortgagor may owe
Mortgagee pursuant to this Deed of Trust on account of Xxxxxxxxx's failure to
keep observe or perform any of Mortgagor's covenants under this Deed of Trust.
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(f) OBLIGATIONS UNDER CREDIT DOCUMENTS. All present and future debts and
obligations under or pursuant to (1) any papers ("CREDIT DOCUMENTS") now or in
the future governing, evidencing, guaranteeing or securing or otherwise relating
to payment of all or any part of the debt evidenced by the Note or (2) all
supplements, amendments, restatements, renewals, extensions, rearrangements,
increases, expansions or replacements of them.
(g) RELATED INDEBTEDNESS. All other loans or advances not otherwise
specifically described in this Section now or hereafter made for the purpose of
paying costs of developing, constructing, improving or operating all or any part
of the Mortgaged Property.
(h) ALL OTHER DEBT. All of any Obligor's other present and future debt
or other obligations now or hereafter held or owned by Mortgagee, whether direct
or indirect, primary or secondary, fixed or contingent, several, joint or joint
and several, and regardless of how incurred, evidenced, guaranteed or otherwise
secured, including any present or future debt under any credit or loan
agreement, any letter of credit application, any reimbursement, repurchase,
reverse repurchase, swap or other agreement which absolutely or contingently
creates any financial obligation, any guaranty or any other papers previously,
concurrently or later executed by any Obligor, or accepted by any Obligor as
binding upon such Obligor. Mortgagor and Mortgagee presently contemplate that
Mortgagee may at Mortgagee's election lend sums or extend other financial
accommodations to Borrower or for Borrower's account or benefit in the future
and may acquire and become the owner and holder of other debt or obligations of
Mortgagor from time to time, but that Mortgagee has no obligation to do so.
Xxxxxxxxx agrees that if Borrower should thus become indebted to Mortgagee in
any such additional sums (except in cases where Mortgagor and Mortgagee have
expressly agreed in writing to a different rate, a different maturity or both)
all such other or future debt shall be due and payable on demand, the principal
of such debt shall bear interest at the Past Due Rate (as defined in ARTICLE 7
below) from the date of its accrual, however it accrues, until paid, and all
such other debt, both principal and interest, shall be secured by this Deed of
Trust as well as by any and all other security which Mortgagee may now or
hereafter hold for it.
Section 2.2 DEBT DEFINED. The term "DEBT" means and includes the Note and
all other debt and obligations described or referred to in SECTION 2.1. The Debt
includes interest and other obligations accruing or arising after (a)
commencement of any case under any bankruptcy or similar laws by or against
Mortgagor or any other person or entity now or hereafter primarily or
secondarily obligated to pay all or any part of the Debt (Mortgagor and each
such other person or entity being herein called an "OBLIGOR") or (b) the
obligations of any Obligor shall cease to exist by operation of law or for any
other reason. The Debt also includes all reasonable attorneys' fees and any
other expenses incurred by Mortgagee in enforcing any of the Credit Documents.
All liens, assignments and security interests created, represented or continued
by this Deed of Trust, both present and future, shall be first, prior and
superior to any lien, assignment, security interest, charge, reservation of
title or other interest heretofore, concurrently or subsequently suffered or
granted by Xxxxxxxxx or Xxxxxxxxx's successors or assigns, except only statutory
super priority liens for nondelinquent taxes and those other liens (if any)
expressly identified and stated in this Deed of Trust to be senior.
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ARTICLE 3
SECURITY AGREEMENT
Section 3.1 GRANT OF SECURITY INTEREST. Without limiting any of the
provisions of this Deed of Trust, Mortgagor, as Debtor, and referred to in this
Article as "DEBTOR" (whether one or more) hereby grants to Mortgagee, as Secured
Party, and referred to in this Article as "SECURED PARTY" (whether one or more),
a security interest in all of Debtor's remedies, powers, privileges, rights,
titles and interests (including all of Debtor's power, if any, to pass greater
title than it has itself) of every kind and character now owned or hereafter
acquired, created or arising in and to (i) the Mortgaged Property (including
both that now and that hereafter exist) to the full extent that the Mortgaged
Property may be subject to the Uniform Commercial Code (the "UCC") of the state
or states where the Mortgaged Property is situated; (ii) all equipment,
accounts, general intangibles, fixtures, inventory, chattel paper, notes,
documents and other personal property used, intended or acquired for use, on--or
in connection with the use or operation of--the Mortgaged Property, or otherwise
related to the Mortgaged Property, and all products and proceeds of it,
including all security deposits under Leases now or at any time hereafter held
by or for Debtor's benefit, all monetary deposits which Debtor has been required
to give to any public or private utility with respect to utility services
furnished to the Mortgaged Property, all funds, accounts, instruments, accounts
receivable, documents, trademarks, trade names and symbols used in connection
therewith, and notes or chattel paper arising from or by virtue of any
transactions related to the Mortgaged Property, all permits, licenses,
franchises, certificates, and other rights and privileges obtained in connection
with the Mortgaged Property, and all guaranties and warranties obtained with
respect to all improvements, equipment, furniture, furnishings, personal
property and components of any thereof located on or installed at the Mortgaged
Property; and (iii) the following described property:
(a) CONTRACTS. All contracts now or hereafter entered into by and
between Debtor and any Original Contractor (as such term is defined in Section
53.001(7) of the Texas Property Code) or between Debtor and any other party, as
well as all right, title and interest of Debtor under any subcontracts,
providing for the construction (original, restorative or otherwise) of any
improvements to or on any of the Mortgaged Property or the furnishing of any
materials, supplies, equipment or labor in connection with any such
construction.
(b) PLANS. All of the plans, specifications and drawings (including plot
plans, foundation plans, floor plans, elevations, framing plans, cross-sections
of walls, mechanical plans, electrical plans and architectural and engineering
plans and architectural and engineering studies and analyses) heretofore or
hereafter prepared by any architect, engineer or other design professional, in
respect of any of the Mortgaged Property.
(c) DESIGN, ETC. AGREEMENTS. All agreements now or hereafter entered
into with any person or entity in respect of architectural, engineering, design,
management, development or consulting services rendered or to be rendered in
respect of planning, design, inspection or supervision of the construction,
management or development of any of the Mortgaged Property.
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(d) LENDER OR INVESTOR COMMITMENTS. Any commitment issued by any lender
or investor other than Mortgagee to finance or invest in any of the Mortgaged
Property.
(e) BONDS. Any completion bond, performance bond and labor and material
payment bond and any other bond relating to the Mortgaged Property or to any
contract providing for construction of improvements to any of the Mortgaged
Property.
together with all substitutions for and proceeds of any of the foregoing
received upon the rental, sale, exchange, transfer, collection or other
disposition or substitution of it and together with all general intangibles now
owned by Debtor or existing or hereafter acquired, created or arising (whether
or not related to any of the foregoing Property). All the property described or
referred to in this Section is collectively referred to as the "COLLATERAL". The
Mortgaged Property and the Collateral are collectively referred to as the
"PROPERTY". In the event of any express inconsistency between the provisions of
this Section and ARTICLE 9 regarding any Lease, the provisions of ARTICLE 9, to
the extent valid, enforceable and in effect, shall govern and control.
Section 3.2 DEBTOR'S COVENANTS CONCERNING PERSONALTY SUBJECT TO THE UCC.
Debtor covenants and agrees with Secured Party that in addition to and
cumulative of any other remedies granted in this Deed of Trust to Secured Party
or the Trustee, upon or at any time after the occurrence of an Event of Default
(defined in ARTICLE 6) or if Secured Party shall deem payment of the Debt to be
insecure:
(a) Secured Party is authorized, in any legal manner and without breach
of the peace, to take possession of the Collateral (Debtor hereby WAIVING all
claims for damages arising from or connected with any such taking) and of all
books, records and accounts relating thereto and to exercise without
interference from Debtor any and all rights which Debtor has with respect to the
management, possession, operation, protection or preservation of the Collateral,
including the right to sell or rent the same for the account of Debtor and to
deduct from such sale proceeds or such rents all costs, expenses and liabilities
of every character incurred by Secured Party in collecting such sale proceeds or
such rents and in managing, operating, maintaining, protecting or preserving the
Collateral and to apply the remainder of such sales proceeds or such rents on
the Debt in such manner as Secured Party may elect. Before any sale, Secured
Party may, at its option, complete the processing of any of the Collateral
and/or repair or recondition the same to such extent as Secured Party may deem
advisable and any sums expended therefor by Secured Party shall be reimbursed by
Xxxxxx. Secured Party may take possession of Debtor's premises to complete such
processing, repairing and/or reconditioning, using the facilities and other
property of Debtor to do so, to store any Collateral and to conduct any sale as
provided for herein, all without compensation to Debtor. All costs, expenses,
and liabilities incurred by Secured Party in collecting such sales proceeds or
such rents, or in managing, operating, maintaining, protecting or preserving
such properties, or in processing, repairing and/or reconditioning the
Collateral if not paid out of such sales proceeds or such rents as hereinabove
provided, shall constitute a demand obligation owing by Debtor and shall bear
interest from the date of expenditure until paid at the Past Due Rate (as
defined in ARTICLE 7 below), all of which shall constitute a portion of the
Debt. If necessary to obtain the possession provided for above, Secured Party
may invoke any and all legal remedies to dispossess Debtor, including
specifically one or more actions for forcible entry and detainer. In connection
with any action taken by Secured Party pursuant to this Section, Secured Party
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shall not be liable for any loss sustained by Debtor resulting from any failure
to sell or let the Collateral, or any part thereof, or from other act or
omission of Secured Party with respect to the Collateral unless such loss is
caused by the willful misconduct and bad faith of Secured Party, nor shall
Secured Party be obligated to perform or discharge any obligation, duty, or
liability under any sale or lease agreement covering the Collateral or any part
thereof or under or by reason of this instrument or the exercise of rights or
remedies hereunder.
(b) Secured Party may, without notice except as hereinafter provided,
sell the Collateral or any part thereof at public or private sale (with or
without appraisal or having the Collateral at the place of sale) for cash, upon
credit, or for future delivery, and at such price or prices as Secured Party may
deem best, and Secured Party may be the purchaser of any and all of the
Collateral so sold and may apply upon the purchase price therefor any of the
Debt and thereafter hold the same absolutely free from any right or claim of
whatsoever kind. Secured Party is authorized at any such sale, if Secured Party
deems it advisable or is required by applicable law so to do, to disclaim and to
refuse to give any warranty, and to impose such other limitations or conditions
in connection with any such sale as Secured Party deems necessary or advisable
in order to comply with applicable law. Upon any such sale Secured Party shall
have the right to deliver, assign and transfer to the purchaser thereof the
Collateral so sold. Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right of whatsoever kind, including any equity
or right of redemption, stay or appraisal which Debtor has or may have under any
rule of law or statute now existing or hereafter adopted. To the extent notice
is required by applicable law, Secured Party shall give Debtor written notice at
the address set forth herein (which shall satisfy any requirement of notice or
reasonable notice in any applicable statute) of Secured Party's intention to
make any such public or private sale. Such notice (if any is required by
applicable law) shall be personally delivered or mailed, postage prepaid, at
least ten (10) calendar days before the date fixed for a public sale, or at
least ten (10) calendar days before the date after which the private sale or
other disposition is to be made, unless the Collateral is of a type customarily
sold on a recognized market, is perishable or threatens to decline speedily in
value. Such notice (if any is required by applicable law), in case of public
sale, shall state the time and place fixed for such sale or, in case of private
sale or other disposition other than a public sale, the time after which the
private sale or other such disposition is to be made. Any public sale shall be
held at such time or times, within the ordinary business hours and at such place
or places, as Secured Party may fix in the notice of such sale. At any sale the
Collateral may be sold in one lot as an entirety or in separate parcels as
Secured Party may determine. Secured Party shall not be obligated to make any
sale pursuant to any such notice. Secured Party may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at any time and place fixed for the
sale, and such sale may be made at any time or place to which the same may be so
adjourned. In case of any sale of all or any part of the Collateral on credit or
for future delivery, the Collateral so sold may be retained by Secured Party
until the selling price is paid by the purchaser thereof, but Secured Party
shall incur no liability in case of the failure of such purchaser to take up and
pay for the Collateral so sold, and in case of any such failure, such Collateral
may again be sold upon like notice. Each and every method of disposition
described in this Section shall constitute disposition in a commercially
reasonable manner. Each Obligor, to the extent applicable, shall remain liable
for any deficiency.
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(c) Secured Party shall have all the rights of a secured party after
default under the Uniform Commercial Code of Texas and in conjunction with, in
addition to or in substitution for those rights and remedies:
(i) Secured Party may require Debtor to assemble the Collateral
and make it available at a place Secured Party designates which is
mutually convenient to allow Secured Party to take possession or dispose
of the Collateral; and
(ii) it shall not be necessary that Secured Party take possession
of the Collateral or any part thereof before the time that any sale
pursuant to the provisions of this Article is conducted and it shall not
be necessary that the Collateral or any part thereof be present at the
location of such sale; and
(iii) before application of proceeds of disposition of the
Collateral to the Debt, such proceeds shall be applied to the reasonable
expenses of retaking, holding, preparing for sale or lease, selling,
leasing and the like and the reasonable attorneys' fees and legal expenses
incurred by Secured Party, each Obligor, to the extent applicable, to
remain liable for any deficiency; and
(iv) the sale by Secured Party of less than the whole of the
Collateral shall not exhaust the rights of Secured Party hereunder, and
Secured Party is specifically empowered to make successive sale or sales
hereunder until the whole of the Collateral shall be sold; and, if the
proceeds of such sale of less than the whole of the Collateral shall be
less than the aggregate of the indebtedness secured hereby, this Deed of
Trust and the security interest created hereby shall remain in full force
and effect as to the unsold portion of the Collateral just as though no
sale had been made; and
(v) in the event any sale hereunder is not completed or is
defective in the opinion of Secured Party, such sale shall not exhaust the
rights of Secured Party hereunder and Secured Party shall have the right
to cause a subsequent sale or sales to be made hereunder; and
(vi) any and all statements of fact or other recitals made in any
bill of sale or assignment or other instrument evidencing any foreclosure
sale hereunder as to nonpayment of any indebtedness or as to the
occurrence of any default, or as to Secured Party having declared all of
such indebtedness to be due and payable, or as to notice of time, place
and terms of sale and the Collateral to be sold having been duly given, as
to any other act or thing having been duly done by Secured Party, shall be
taken as prima facie evidence of the truth of the facts so stated and
recited; and
(vii) Secured Party may appoint or delegate any one or more persons
as agent to perform any act or acts necessary or incident to any sale held
by Secured Party, including the sending of notices and the conduct of
sale, but in the name and on behalf of Secured Party; and
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(viii) demand of performance, advertisement and presence of property
at sale are hereby WAIVED and Secured Party is hereby authorized to sell
hereunder any evidence of debt it may hold as security for the secured
indebtedness. All demands and presentments of any kind or nature are
expressly WAIVED by Xxxxxx. Debtor WAIVES the right to require Secured
Party to pursue any other remedy for the benefit of Debtor and agrees that
Secured Party may proceed against any Obligor for the amount of the Debt
owed to Secured Party without taking any action against any other Obligor
or any other person or entity and without selling or otherwise proceeding
against or applying any of the Collateral in Secured Party's possession.
Section 3.3 UCC RIGHTS ARE NOT EXCLUSIVE. Should Secured Party elect to
exercise its rights under the UCC as to part of the personal property or
fixtures described in this Deed of Trust, such election shall not preclude
Secured Party or the Trustee from exercising any or all of the rights and
remedies granted by the other Articles of this Deed of Trust as to the remaining
personal property or fixtures.
Section 3.4 DEED OF TRUST IS ALSO FINANCING STATEMENT. Secured Party may, at
its election, at any time after delivery of this Deed of Trust, file an original
of this Deed of Trust as a financing statement or sign one or more copies of
this Deed of Trust to use as a UCC financing statement. Secured Party's
signature may be placed between the last sentence of this Deed of Trust and
Xxxxxx's acknowledgment or may follow Xxxxxx's acknowledgment. Secured Party's
signature need not be acknowledged and is not necessary to the effectiveness of
this Deed of Trust as a deed of trust, mortgage, assignment, pledge, security
agreement or (unless otherwise required by applicable law) as a financing
statement.
Section 3.5 NO OTHER FINANCING STATEMENTS ON THE COLLATERAL. So long as any
amount remains unpaid on the Debt, Xxxxxx will not execute and there will not be
filed in any public office any financing statements affecting the Collateral
other than financing statements in favor of Secured Party under this Deed of
Trust, unless prior written specific consent and approval of Secured Party shall
have been first obtained.
Section 3.6 SECURED PARTY MAY FILE FINANCING AND CONTINUATION STATEMENTS.
Secured Party is authorized to file this Deed of Trust, a financing statement or
statements and one or more continuation statements in any jurisdiction where
Secured Party deems it necessary, and at Secured Party's request, Xxxxxx will
join Secured Party in executing one or more financing statements, continuation
statements or both pursuant to the UCC, in form satisfactory to Secured Party,
and will pay the costs of filing or recording them, in all public offices at any
time and from time to time whenever filing or recording of this Deed of Trust,
any financing statement or any continuation statement is deemed by Secured Party
or its counsel to be necessary or desirable.
Section 3.7 FIXTURES. Certain of the Collateral is or will become "FIXTURES"
(as that term is defined in the UCC) on the Real Property, and when this Deed of
Trust is filed for record in the real estate records of the county where such
fixtures are situated, it shall also automatically operate as a financing
statement upon such of the Collateral which is or may become fixtures.
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Section 3.8 ASSIGNMENT OF NON-UCC PERSONAL PROPERTY. To the extent that any
of the Collateral is not subject to the UCC of the state or states where it is
situated, Debtor hereby assigns to Secured Party all of Debtor's right, title
and interest in the Collateral to secure the Debt. Release of the lien of this
Deed of Trust shall automatically terminate this assignment.
Section 3.9 DEBTOR'S WARRANTIES CONCERNING COLLATERAL. Debtor warrants and
represents to Secured Party that Debtor is the legal and equitable owner and
holder of the Collateral free of any adverse claim and free of any security
interest or encumbrance except only for the security interest granted hereby in
the Collateral and those other security interests (if any) expressly referred to
or described in this Deed of Trust (such warranty to supersede any provision
contained in this Deed of Trust limiting the liability of Mortgagor). Xxxxxx
agrees to defend the Collateral and its proceeds against all claims and demands
of any person at any time claiming the Collateral, its proceeds or any interest
in either. Debtor also warrants and represents that Debtor has not heretofore
signed any financing statement directly or indirectly affecting the Collateral
or any part of it which has not been completely terminated of record, and no
such financing statement signed by Debtor is now on file in any public office
except only those statements (if any) true and correct copies of which Debtor
has actually delivered to Secured Party.
Section 3.10 CERTAIN POWERS OF SECURED PARTY. Debtor hereby authorizes and
directs each account debtor and each other person or entity obligated to make
payment in respect of any of the Collateral (each a "COLLATERAL OBLIGOR") to pay
over to Secured Party, its officers, agents or assigns, upon demand by Secured
Party, all or any part of the Collateral without making any inquiries as to the
status or balance of the secured indebtedness and without any notice to or
further consent of Debtor. Debtor hereby agrees to indemnify each Collateral
Obligor and hold each Collateral Obligor harmless from all expenses and losses
which it may incur or suffer as a result of any payment it makes to Secured
Party pursuant to this paragraph. To facilitate the rights of Secured Party
hereunder, Debtor hereby authorizes Secured Party, its officers, employees,
agents or assigns:
(a) to notify Collateral Obligors of Secured Party's security interest
in the Collateral and to collect all or any part of the Collateral without
further notice to or further consent by Xxxxxx, and Debtor hereby constitutes
and appoints Secured Party the true and lawful attorney of Debtor (such agency
being coupled with an interest), irrevocably, with power of substitution, in the
name of Debtor or in its own name or otherwise, to take any of the actions
described in the following clauses (b), (c), (d), (e), (f) and (g);
(b) to ask, demand, collect, receive, receipt for, sue for, compound and
give acquittance for any and all amounts which may be or become due or payable
under the Collateral and to settle and/or adjust all disputes and/or claims
directly with any Collateral Obligor and to compromise, extend the time for
payment, arrange for payment in installments, otherwise modify the terms of, or
release, any of the Collateral, on such terms and conditions as Secured Party
may determine (without thereby incurring responsibility to or discharging or
otherwise affecting the liability of Debtor to Secured Party under this Deed of
Trust or otherwise);
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(c) to direct delivery of, receive, open and dispose of all mail
addressed to Debtor and to execute, sign, endorse, transfer and deliver (in the
name of Debtor or in its own name or otherwise) any and all receipts or other
orders for the payment of money drawn on the Collateral and all notes,
acceptances, commercial paper, drafts, checks, money orders and other
instruments given in payment or in part payment thereof and all invoices,
freight and express bills and bills of lading, storage receipts, warehouse
receipts and other instruments and documents in respect of any of the Collateral
and any other documents necessary to evidence, perfect and realize upon the
security interests and obligations of this Deed of Trust;
(d) in its discretion to file any claim or take any other action or
proceeding which Secured Party may deem necessary or appropriate to protect and
preserve the rights, titles and interests of Secured Party hereunder;
(e) to sign the name of Debtor to financing statements, drafts against
Collateral Obligors, assignments or verifications of any of the Collateral and
notices to Collateral Obligors;
(f) to station one or more representatives of Secured Party on Debtor's
premises for the purpose of exercising any rights, benefits or privileges
available to Secured Party hereunder or under any of the Credit Documents or at
law or in equity, including receiving collections and taking possession of books
and records relating to the Collateral; and
(g) to cause title to any or all of the Collateral to be transferred
into the name of Secured Party or any nominee or nominees of Secured Party.
The powers conferred on Secured Party pursuant to this Section are conferred
solely to protect Secured Party's interest in the Collateral and shall not
impose any duty or obligation on Secured Party to perform any of the powers
herein conferred. No exercise of any of the rights provided for in this Section
shall constitute a retention of collateral in full or partial satisfaction of
the indebtedness as provided for in the Uniform Commercial Code of Texas.
Section 3.11 STANDARD OF CARE. Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of any of the
Collateral in its possession if it takes such action for that purpose as Debtor
requests in writing, but failure of Secured Party to comply with such request
shall not of itself be deemed a failure to exercise reasonable care, and no
failure of Secured Party to take any action not so requested by Debtor shall be
deemed a failure to exercise reasonable care in the custody or preservation of
any such Collateral.
Section 3.12 CHANGE TERMS, RELEASE COLLATERAL. Secured Party may extend the
time of payment, arrange for payment in installments, otherwise modify the terms
of, or release, any of the Collateral, without thereby incurring responsibility
to Debtor or discharging or otherwise affecting any liability of Debtor. Secured
Party shall not be required to take steps necessary to preserve any rights
against prior parties to any of the Collateral.
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ARTICLE 4
MORTGAGOR'S COVENANTS
Section 4.1 COVENANTS FOR THE BENEFIT OF MORTGAGEE. To better secure the
Debt, Mortgagor covenants and agrees with the Trustee and his substitutes and
successors in the Trust, for the use and benefit of Mortgagee and with the
intent that the Trustee, Mortgagee or both may enforce these covenants, that:
(a) LIENS, ETC. AND REMEDIES CUMULATIVE. No lien, assignment, security
interest, guaranty, right or remedy in favor of Mortgagee granted in, secured by
or ancillary to this Deed of Trust shall be considered as exclusive, but each
shall be cumulative of all others which Mortgagee or the Trustee may now or
hereafter have.
(b) XXXXXXXXX XXXXXX XXXXXXXXXXX OF ASSETS AND SALE IN INVERSE ORDER OF
ALIENATION RIGHTS. Mortgagor hereby irrevocably WAIVES all rights of marshalling
of assets or sale in inverse order of alienation in the event of foreclosure of
this or any other security.
(c) MORTGAGOR WILL CORRECT TITLE DEFECTS. If at any future time any
defect should be found to exist in the title to any of the Property, Xxxxxxxxx
agrees to promptly commence and thereafter diligently proceed to cure the defect
and defend the title. If any lien or encumbrance junior, equal or superior in
rank or priority to the lien of this Deed of Trust should be discovered or arise
at any time in the future then, unless Mortgagee is the only holder of it, or
Mortgagee has given specific prior written consent to it, Xxxxxxxxx agrees to
promptly discharge and remove it from the Mortgaged Property. Mortgagor will
notify Mortgagee in writing within five (5) days of the time that Xxxxxxxxx
becomes aware of the filing of any mortgage, lien, security interest, financing
statement or other security device whatsoever against the Property.
(d) INSURANCE REQUIREMENTS. At all times before the final termination of
this Deed of Trust, Xxxxxxxxx agrees to provide, maintain and keep in force
title, casualty, liability and other insurance for the Property as required by
Mortgagee and in any event Mortgagor will maintain the following specifically
described insurance coverages:
(i) CASUALTY COVERAGE. An all-risk policy of permanent property
insurance insuring the Property against all risks of any kind or character
except those permitted by Mortgagee in writing to be excluded from
coverage thereunder.
(ii) BOILER COVERAGE. A boiler and machinery insurance policy
covering loss or damage to all portions of the Property comprised of
air-conditioning and heating systems, other pressure vessels, machinery,
boilers or high pressure piping.
(iii) LOSS OF EARNINGS COVERAGE. An all-risk policy of insurance
covering loss of earnings and/or rents from the Property in the event that
the Property is not available for use or occupancy due to casualty, damage
or destruction required to be covered by the policies of insurance
described in (1) and (2) above.
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(iv) LIABILITY INSURANCE. Commercial general liability, auto
liability, umbrella or excess liability and worker's compensation
insurance against claims for bodily injury, death or property damage
occurring on, in or about the Mortgaged Property in an amount and
containing terms acceptable to Mortgagee.
(v) COVERAGE DURING CONSTRUCTION. If all or any portion of the
Property consists of improvements under construction: (i) a builder's
all-risk form insurance policy on a completed value, non-reporting form,
insuring the Property against all risks of any kind or character except
those permitted by Mortgagee in writing to be excluded from coverage
thereunder, and an all-risk policy of insurance covering loss of future
earnings and/or rents from the Property in the event the Property is not
ready or available for use or occupancy due to casualty, damage or
destruction required to be covered by such builder's all-risk insurance
policy, (ii) policies of insurance to be carried by each contractor
performing work in connection with the Property covering worker's
compensation, employers' liability, commercial general liability and
comprehensive automobile liability, including a broad form umbrella/excess
liability insurance policy and (iii) policies of professional liability
insurance to be carried by each design professional performing work in
connection with the Property covering each such party against claims for
actual or alleged errors, omissions or negligent acts in the performance
of their respective services rendered in respect of the Property.
(vi) OTHER INSURANCE REQUIRED. Such other insurance against other
insurable hazards, risks or casualties which at the time are commonly
insured against in the case of owners and premises similarly situated, due
regard being given to the financial condition of Mortgagor, the height and
type of the Property, its construction, location, use and occupancy.
(e) INSURANCE COMPANIES, POLICIES, ENDORSEMENTS AND PREMIUM PAYMENTS.
Xxxxxxxxx agrees that all required insurance will be written on forms acceptable
to Mortgagee and by companies having a Best's Insurance Guide Rating of not less
than A or A+ and which are otherwise acceptable to Mortgagee, and that such
insurance (other than third party liability insurance) shall be written or
endorsed so that all losses are payable to Mortgagee. The original policies
evidencing such insurance shall be delivered by Mortgagor to Mortgagee and held
by Mortgagee, unless Mortgagee expressly consents to accept insurance
certificates instead. Each such policy shall expressly prohibit cancellation or
modification of insurance without thirty (30) days' written notice to Mortgagee.
Xxxxxxxxx agrees to furnish due proof of payment of the premiums for all such
insurance to Mortgagee promptly after each such payment is made and in any case
at least fifteen (15) days before payment becomes delinquent.
(f) MORTGAGEE'S RIGHTS TO COLLECT INSURANCE PROCEEDS. Mortgagor hereby
assigns to Mortgagee the exclusive right to collect any and all monies that may
become payable under any insurance policies covering any part of the Property,
or any risk to or about the Property.
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(g) EFFECTS OF FORECLOSURE ON INSURANCE POLICIES AND POST-FORECLOSURE
EVENT CLAIMS. Foreclosure of this Deed of Trust shall automatically constitute
foreclosure upon all policies of insurance insuring any part of or risk to the
Property and all claims thereunder arising from post-foreclosure events. The
successful bidder or bidders for the Property at foreclosure, as their
respective interests may appear, shall automatically accede to all of
Mortgagor's rights in, under and to such policies and all post-foreclosure event
claims, and such bidder(s) shall be named as insured(s) on request, whether or
not the trustee's deed or bill of sale to any such successful bidder mentions
insurance.
(h) APPLICATION OF INSURANCE PROCEEDS COLLECTED BEFORE FORECLOSURE.
Unless an Event of Default has occurred and so long as Mortgagee is satisfied
that the applicable proceeds (together with other funds deposited with Mortgagee
by or on behalf of Mortgagor for the purpose of repair and restoration of the
applicable damage or destruction) are sufficient to pay all costs of repair and
restoration of the applicable damage or destruction, Mortgagee will hold all
proceeds of insurance which was paid for by Mortgagor or by anyone other than
Mortgagee or another holder of any of the Debt and which proceeds are actually
received by Mortgagee before foreclosure (and such other funds deposited with
Mortgagee) and will disburse the same as such repairs or restoration are made,
upon such terms and conditions as Mortgagee may elect, and upon presentation of
satisfactory evidence to Mortgagee that payment is being requested for
permissible repair and restoration and without the imposition of any lien on the
Property. Any insurance proceeds remaining if Mortgagor and Mortgagee do not
agree to the terms of the advance of the funds for repair and restoration within
thirty (30) days after the event producing such funds, or if an Event of Default
occurs, or after completion of the repair and restoration, shall be applied in
payment of the Debt or, at the option of Mortgagee, shall be paid to Mortgagor
or to such other person as is legally entitled to them.
(i) APPLICATION OF INSURANCE PROCEEDS COLLECTED AFTER FORECLOSURE.
Unless Mortgagee or Mortgagee's representative reserves at the foreclosure sale
the right to collect any uncollected insurance proceeds recoverable for events
occurring before foreclosure (in which event the successful bidder at the sale,
if not Mortgagee, shall have no interest in such proceeds and Mortgagee shall
apply them, if and when collected, to the Debt in such order and manner as
Mortgagee shall then elect and remit any remaining balance to Mortgagor or to
such other person or entity as is legally entitled to them), all proceeds of all
such insurance which are not so reserved by Mortgagee at the foreclosure sale
and are not actually received by Mortgagee until after foreclosure shall be the
property of the successful bidder or bidders at foreclosure, as their interests
may appear, and Xxxxxxxxx shall have no interest in them and shall receive no
credit for them.
(j) MORTGAGEE NOT OBLIGATED TO REQUIRE, PROVIDE OR EVALUATE INSURANCE.
Mortgagee shall have no duty to Mortgagor or anyone else to either require or
provide any insurance or to determine the adequacy or disclose any inadequacy of
any insurance.
(k) MORTGAGEE MAY ELECT TO INSURE ONLY ITS OWN INTERESTS. If Mortgagee
elects at any time or for any reason to purchase insurance relating to the
Property, it shall have no obligation to cause Mortgagor or anyone else to be
named as an insured, to cause Xxxxxxxxx's or anyone else's interests to be
insured or protected or to inform Mortgagor or anyone else that his or its
interests are uninsured or underinsured.
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(l) MORTGAGOR WILL CORRECT DEFECTS, PROVIDE FURTHER ASSURANCES AND
PAPERS. Upon Mortgagee's request, Xxxxxxxxx will promptly correct any defect
which hereafter may be discovered in the text, execution or acknowledgment of
the Note, this Deed of Trust or any Credit Document or in the description of any
of the Property, and will deliver such further assurances and execute such
additional papers as in the opinion of Mortgagee or its legal counsel shall be
necessary, proper or appropriate (1) to better convey and assign to the Trustee
and Mortgagee all the Property intended or promised to be conveyed or assigned
or (2) to properly evidence or give notice of the Debt or its intended or
promised security.
(m) MORTGAGOR WILL PAY TAXES AND IMPOSITIONS AND FURNISH RECEIPTS. At
Mortgagor's own cost and expense, Xxxxxxxxx agrees to pay and discharge all
taxes, assessments, maintenance charges, permit fees, impact fees, development
fees, capital recovery charges, utility reservation and standby fees and all
other similar and dissimilar impositions of every kind and character
("IMPOSITIONS") charged, levied, assessed or imposed against any interest in any
of the Property, as they become payable and before they become delinquent.
Xxxxxxxxx agrees to furnish due proof of such payment to Mortgagee promptly
after payment and before delinquency.
(n) MORTGAGOR TO PAY MONTHLY TAX AND INSURANCE DEPOSITS ON REQUEST. If
and after Mortgagee requests it, Xxxxxxxxx agrees to pay the monthly tax and
insurance premium deposits required by ARTICLE 8 and to provide Mortgagee any
additional sums needed to pay the taxes and insurance premiums for the Property
when due.
(o) MORTGAGOR WILL MAINTAIN PROPERTY AND WON'T REMOVE IMPROVEMENTS.
Xxxxxxxxx agrees to keep, preserve and maintain all elements of the Property in
a good state of repair and condition and to keep all equipment and stores of
supplies needed for its proper and full operation on the Property, well stocked
and in good operating condition. Mortgagor will not tear down, damage or attempt
to remove, demolish or materially alter or enlarge any elements of the Property,
or construct any new Improvements, without Mortgagee's prior written consent.
Mortgagor shall have the right, without such consent, to remove and dispose of,
free from the lien, assignments and security interests of this Deed of Trust,
such Fixtures and Equipment as from time to time become worn out or obsolete,
provided that either (a) simultaneously with or before such removal any such
equipment shall be replaced with other equipment of a value at least equal to
that of the replaced equipment and free from any title retention or security
agreement or other encumbrance and from any reservation of title, and by such
removal and replacement Mortgagor shall be deemed to have subjected such
equipment to the lien, assignments and security interests of this Deed of Trust
or (b) any net cash proceeds received from such disposition shall be paid over
promptly to Mortgagee to be applied to the Debt in the order determined by
Mortgagee in its sole discretion. Mortgagor shall not grant, join in or consent
to any lien, security interest, easement, license, use or other charge or
interest covering or affecting all or any part of the Property or initiate, join
in and consent to the change in any private restrictive covenant, zoning
ordinance or other public or private restrictions limiting or defining the uses
which may be made of the Property or any part thereof without the prior written
consent of Mortgagee.
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(p) XXXXXXXXX WILL PROTECT PROPERTY FROM MECHANIC'S LIENS. Xxxxxxxxx
agrees to promptly pay all bills for labor and materials incurred in connection
with the Property and to prevent the fixing of any lien against any part of the
Property, even if it is inferior to this Deed of Trust, for any such bill which
may be legally due and payable. Xxxxxxxxx agrees to furnish due proof of such
payment to Mortgagee after payment and before delinquency.
(q) MORTGAGEE'S INSPECTION AND DISCUSSION RIGHTS. Xxxxxxxxx agrees to
permit Mortgagee and its agents, representatives and employees at all reasonable
times to go upon, examine, inspect and remain on the Mortgaged Property, to
assist and cooperate, and require Xxxxxxxxx's employees, agents and contractors
to cooperate, with Mortgagee and to furnish to Mortgagee on request all
pertinent information concerning the physical and economic condition,
development and operation of the Mortgaged Property. Mortgagee may discuss the
Mortgaged Property directly with any of Mortgagor's officers and managers.
(r) MORTGAGEE MAY GRANT RELEASES WITHOUT IMPAIRING OTHER COLLATERAL OR
RIGHTS. At all times, Mortgagee shall have the right to release any part of the
Property or any other security from this Deed of Trust or any other security
instrument or device without releasing any other part of the Property or any
other security, without affecting Mortgagee's lien, assignment or security
interest as to any property or rights not released and without affecting or
impairing the liability of any maker, guarantor or surety on the Note or other
obligation.
(s) MORTGAGOR WILL NOTIFY MORTGAGEE OF LEGAL PROCEEDINGS AND DEFEND
LIEN; MORTGAGEE MAY ACT IF XXXXXXXXX DOESN'T. Xxxxxxxxx will notify Mortgagee in
writing promptly of the commencement of any legal proceedings affecting any part
of the Property and will engage and pay legal counsel to answer and to defend
and preserve Mortgagee's liens, rights and interests and their rank and
priority. If Xxxxxxxxx fails or refuses to promptly begin or to diligently
continue any such acts, then Mortgagee may elect to do so and may take such
action in behalf of Xxxxxxxxx, in Xxxxxxxxx's name and at Xxxxxxxxx's expense.
(t) IF MORTGAGOR IS NOT A NATURAL PERSON. If Xxxxxxxxx has represented
to Mortgagee that Mortgagor is not a natural person, then it and its directors,
partners, venturers, trustee(s) or principals agree to maintain its existence as
such and to obtain and maintain all franchises and permits necessary for it
continuously to be in good standing in the State of Texas and in the state of
its organization (if not Texas) with full power and authority to conduct its
regular business and to own and operate the Mortgaged Property until final
termination of this Deed of Trust.
(u) VENDOR'S LIEN AND PURCHASE MONEY SECURITY INTEREST. Xxxxxxxxx agrees
that to the full extent that any of the proceeds of the Note have been or are
paid or applied towards the purchase of any real or personal property, it shall
be conclusively presumed to have been done at Mortgagor's special instance and
request, and Mortgagor hereby acknowledges and recognizes the existence of a
vendor's lien and a purchase money security interest in favor of Mortgagee
against such property, as security for the Note in addition to and cumulative of
the lien, assignments and security interest of this Deed of Trust, in the same
manner in the case of real property as if an express vendor's lien and the
superior title had been reserved in the deed from the seller of such property
and expressly therein assigned by the seller to Mortgagee. Foreclosure under
this Deed of Trust shall also constitute foreclosure of said vendor's lien or
purchase money security interest.
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(v) SIGN. Mortgagor will permit Mortgagee and its duly authorized agents
to place and maintain a sign on the Mortgaged Property at a suitable location
selected by Mortgagee, containing such information regarding the financing of
the Mortgaged Property as Mortgagee may deem appropriate.
(w) LEGAL COMPLIANCE, GOVERNMENTAL NOTICES. Mortgagor will operate the
Property and conduct its business in full compliance with all requirements of
governmental and quasi-governmental authorities having jurisdiction over
Mortgagor or the Property and will comply with and punctually perform all of the
covenants, agreements and obligations imposed upon it or the Property. Mortgagor
will furnish to Mortgagee copies of notices and reports received or sent by
Xxxxxxxxx to or from each governmental and quasi-governmental authority within
three (3) days of the receipt or giving thereof.
(x) PERFORM OTHER OBLIGATIONS. Mortgagor will pay punctually and
discharge when due, or renew or extend, any debt incurred by it and will
discharge, perform and observe the covenants, provisions and conditions to be
performed, discharged and observed on the part of Mortgagor in connection
therewith, or in connection with any agreement or other instrument relating
thereto or in connection with any mortgage, pledge or lien existing at any time
upon any of the property or assets of Mortgagor; provided, however, that nothing
contained in this subsection shall require Mortgagor to pay, discharge, renew or
extend any such indebtedness or to discharge, perform or observe any such
covenants, provisions and conditions so long as Mortgagor shall be diligently
and in good faith contesting any claims which may be asserted against it with
respect to any such indebtedness or any such covenants, provisions and
conditions and shall set aside on its books reserves with respect thereto deemed
adequate by Mortgagee.
(y) NOTICE OF MATERIAL CHANGE. Immediately upon acquiring knowledge of
any material adverse change in the assets, liabilities, financial condition,
business, operations, affairs or circumstances of any Obligor, Xxxxxxxxx will
notify Mortgagee in writing thereof, setting forth the nature of such change in
reasonable detail. Mortgagor will take, and will cause to be taken, all such
steps as are necessary or appropriate to remedy promptly any such change.
(z) NOTICE OF DEFAULT TO MORTGAGEE. Immediately upon acquiring knowledge
thereof, Xxxxxxxxx will notify Mortgagee by telephone (and confirm such notice
in writing within two (2) days) of the existence of any Event of Default,
specifying the nature and duration thereof and what action Xxxxxxxxx has taken,
is taking and proposes to take with respect thereto. In no event shall silence
by Mortgagee be deemed a waiver of a default or of an Event of Default.
Mortgagor will take all such steps as are necessary or appropriate to remedy
promptly any such default or Event of Default.
(aa) NOTICE OF CONDEMNATION AND OTHER PROCEEDINGS. Immediately upon
obtaining knowledge of the institution of any proceedings for the condemnation
of the Property or any portion thereof, or any other proceedings arising out of
injury or damage to the Property, or any portion thereof, Xxxxxxxxx will notify
Mortgagee in writing of the pendency of such proceedings. Mortgagee may
participate in any such proceedings, and Xxxxxxxxx shall from time to time
deliver to Mortgagee all instruments requested by it to permit such
participation. Mortgagor shall, at its expense, diligently prosecute any such
proceedings, and shall consult with Mortgagee, its attorneys and experts, and
cooperate with them in the carrying on or defense of any such proceedings.
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(bb) NOTICE OF NAME OR ADDRESS CHANGE. Mortgagor will not change
Xxxxxxxxx's name or the location of its chief executive office (or residence if
a natural person) without first notifying Mortgagee in writing of such change at
least thirty (30) days before its effective date.
(cc) ADDITIONAL INFORMATION. Mortgagor shall furnish to Mortgagee from
time to time such information relating to the Property or Xxxxxxxxx's financial
condition and affairs as Mortgagee may from time to time request or as may be
required from time to time by any Credit Document.
(dd) PROPER BOOKS. Mortgagor shall at all times maintain proper books of
record and account in accordance with sound accounting practice in which true,
full and correct entries will be made of all its dealings and business affairs,
and will set aside on its books adequate reserves for depletion, depreciation,
obsolescence and/or amortization of its property, and all other reserves which,
in accordance with sound accounting practice, should be set aside, and will
write down, to the estimated salvage value thereof, all property not useful in
its business. Mortgagee shall be entitled to have such books examined and
audited at any time by Xxxxxxxxx's agents.
(ee) MANAGER. Mortgagor will, or will cause its managers to, do and
perform any and all acts and things relating to the management, upkeep and
operation of the Property as are customarily performed by managing agents and
owners of properties comparable to the Property, similarly situated, and shall
otherwise operate the Property, or cause the Property to be operated, in a
first-class efficient manner and in accordance with all legal requirements and
the terms and conditions of this Deed of Trust and the other Credit Documents.
No management agreement shall be executed with any manager unless the manager
and management agreement are previously approved in writing by Mortgagee.
Section 4.2 MORTGAGOR AGREES TO PAY OR REIMBURSE MORTGAGEE'S EXPENSES. To
the extent not prohibited by applicable law, Xxxxxxxxx will pay all costs and
expenses and reimburse Mortgagee for any and all expenditures of every character
incurred or expended from time to time, regardless of whether an Event of
Default shall have occurred, in connection with:
(a) the preparation, negotiation, documentation, closing, renewal,
revision, modification, increase, review or restructuring of any loan or credit
facility secured by this Deed of Trust, including legal, accounting, auditing,
architectural, engineering and inspection services and disbursements, or in
connection with collecting or attempting to enforce or collect the Note or this
Deed of Trust.
(b) Mortgagee's evaluating, monitoring, administering and protecting the
Property.
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(c) Mortgagee's creating, perfecting and realizing upon Mortgagee's
security interest in and liens on the Property, and all costs and expenses
relating to Mortgagee's exercising any of its rights and remedies under this
Deed of Trust or any Credit Document or at law, including all appraisal fees,
consulting fees, filing fees, taxes, brokerage fees and commissions, title
review and abstract fees, litigation report fees, UCC search fees, other fees
and expenses incident to title searches, reports and security interests, escrow
fees, attorneys' fees, legal expenses, court costs, other fees and expenses
incurred in connection with any complete or partial liquidation of the Property,
and all fees and expenses for any professional services relating to the Property
or any operations conducted in connection with it.
PROVIDED, that no right or option granted by Mortgagor to Mortgagee or otherwise
arising pursuant to any provision of this Deed of Trust, the Note or any Credit
Document shall be deemed to impose or admit a duty on Mortgagee to supervise,
monitor or control any aspect of the character or condition of the Property or
any operations conducted in connection with it for the benefit of Mortgagor or
any person or entity other than Mortgagee. Xxxxxxxxx agrees to indemnify, defend
and hold Mortgagee, its shareholders, directors, officers, agents, attorneys,
advisors and employees (collectively "INDEMNIFIED PARTIES") harmless from and
against any and all loss, liability, obligation, damage, penalty, judgment,
claim, deficiency, expense, action, suit, cost and disbursement of any kind or
nature whatsoever (including interest, penalties, attorneys' fees and amounts
paid in settlement), REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE
NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES, imposed on, incurred by or
asserted against the Indemnified Parties growing out of or resulting from any
Credit Document or any transaction or event contemplated therein (except that
such indemnity shall not be paid to any Indemnified Party to the extent that
such loss, etc. directly results from the gross negligence or willful misconduct
of that Indemnified Party). If any person or entity (including Mortgagor or any
of its affiliates) ever alleges gross negligence or willful misconduct by an
Indemnified Party, the full amount of indemnification provided for in this
Section shall nonetheless be paid upon demand, subject to later adjustment or
reimbursement at such time--if any--as a court of competent jurisdiction enters
a final judgment as to the extent and effect of the alleged gross negligence or
willful misconduct. Any amount to be paid under this Section by Mortgagor to
Mortgagee shall be a demand obligation owing by Mortgagor to Mortgagee and shall
bear interest from the date of expenditure until paid at the Past Due Rate.
ARTICLE 5
XXXXXXXXX'S REPRESENTATIONS AND WARRANTIES
To induce Mortgagee to extend financial accommodations, including credit under
the Note, Xxxxxxxxx makes the warranties and representations set forth in this
Article.
Section 5.1 ORGANIZATION. If Mortgagor is not a natural person, (i)
Mortgagor is duly organized, validly existing and in good standing under the
laws of the state of its organization and has full legal right, power and
authority to carry on its business as presently conducted and to execute,
deliver and perform its obligations under this Deed of Trust and any other
Credit Documents to which Mortgagor is a party, (ii) Mortgagor is duly qualified
to do business and in good standing in each jurisdiction in which the nature of
the business it conducts makes such qualification necessary or desirable and
(iii) Xxxxxxxxx's execution, delivery and performance of this Deed of Trust and
any other Credit Documents to which Xxxxxxxxx is a party have been duly
authorized by all necessary action under Xxxxxxxxx's organizational documents
and otherwise.
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Section 5.2 CONSENTS. Mortgagor's execution, delivery and performance of
this Deed of Trust and any other Credit Documents to which Mortgagor is a party
do not and will not require (i) any consent of any other person or entity or
(ii) any consent, license, permit, authorization or other approval (including
foreign exchange approvals) of any court, arbitrator, administrative agency or
other governmental authority, or any notice to, exemption by, any registration,
declaration or filing with or the taking of any other action in respect of, any
such court, arbitrator, administrative agency or other governmental authority.
Section 5.3 NO CONFLICT. Neither execution or delivery of this Deed of Trust
or any other Credit Document to which Mortgagor is a party, nor the fulfillment
of or compliance with the terms and provisions hereof or thereof will (i)
violate any constitutional provision, law or rule, or any regulation, order or
decree of any governmental authority or the basic organizational documents of
Mortgagor or (ii) conflict with or result in a breach of the terms, conditions
or provisions of, or cause a default under, any agreement, instrument,
franchise, license or concession to which Mortgagor is a party or bound.
Section 5.4 ENFORCEABILITY. Xxxxxxxxx has duly and validly executed, issued
and delivered this Deed of Trust and any other Credit Documents to which
Xxxxxxxxx is a party. This Deed of Trust and each other Credit Document to which
Mortgagor is a party is in proper legal form for prompt enforcement and is
Mortgagor's valid and legally binding obligation, enforceable in accordance with
its terms. Xxxxxxxxx's obligations under this Deed of Trust and any other Credit
Documents to which Xxxxxxxxx is a party rank and will rank at least equal in
priority of payment with all of Xxxxxxxxx's other debt (except only for debt
preferred by operation of law or debt disclosed in writing to Mortgagee to be
senior before Xxxxxxxxx's execution and delivery of this Deed of Trust or the
other applicable Credit Document).
Section 5.5 INFORMATION ACCURATE. All information supplied to Mortgagee, and
all statements made to Mortgagee by or on behalf of Mortgagor before,
concurrently with or after Xxxxxxxxx's execution of this Deed of Trust are and
will be true, correct, complete, valid and genuine in all material respects.
Each of Mortgagor's financial statements furnished to Mortgagee fairly present
the financial condition of Mortgagor as of its date and for the period then
ended. No material adverse change has occurred in the financial condition
reflected in any such statement since its date, and all assets listed on such
statements are subject to Mortgagor's management, control and disposition
and--except as shown therein--are available to satisfy any claims rightfully
made pursuant to this Deed of Trust and any other Credit Documents to which
Xxxxxxxxx is a party.
Section 5.6 TAXES. Xxxxxxxxx has filed all tax returns required to be filed
and paid all taxes shown thereon to be due, including interest and penalties,
except for taxes being diligently contested in good faith and for payment of
which adequate reserves have been set aside.
Section 5.7 LITIGATION. There is no condemnation or other action, suit or
proceeding pending--or, to the best of Mortgagor's knowledge,
threatened--against or affecting Mortgagor or the Property, at law or in equity,
or before or by any governmental authority, which might result in any material
adverse change in Mortgagor's business or financial condition or in the Property
or in Mortgagor's other property or Xxxxxxxxx's interest in it.
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Section 5.8 NO DEFAULTS. Mortgagor is not in default with respect to any
order, writ, injunction, decree or demand of any court or other governmental
authority, in the payment of any debt for borrowed money or under any agreement
or other papers evidencing or securing any such debt.
Section 5.9 OTHER CONTRACTS. Mortgagor is not a party to any contract or
agreement which materially and adversely affects its business, property, assets
or financial condition.
Section 5.10 MORTGAGOR SOLVENT. Mortgagor is now solvent, and no bankruptcy
or insolvency proceedings are pending or contemplated by or--to Xxxxxxxxx's
knowledge--against Mortgagor. Xxxxxxxxx's liabilities and obligations under this
Deed of Trust and any other Credit Documents to which Xxxxxxxxx is a party do
not and will not render Mortgagor insolvent, cause Xxxxxxxxx's liabilities to
exceed Xxxxxxxxx's assets or leave Mortgagor with too little capital to properly
conduct all of its business as now conducted or contemplated to be conducted.
Section 5.11 NO FALSE REPRESENTATION. No representation or warranty contained
in this Deed of Trust or any other Credit Document to which Xxxxxxxxx is a party
and no statement contained in any certificate, schedule, list, financial
statement or other papers furnished to Mortgagee by or on behalf of Mortgagor
contains--or will contain--any untrue statement of material fact, or omits--or
will omit--to state a material fact necessary to make the statements contained
herein or therein not misleading.
Section 5.12 TITLE. Mortgagor has good and marketable title to the Property,
free and clear of any lien or security interest except only for liens and
security interests which are either established or expressly permitted by this
Deed of Trust or other Credit Documents. Except as otherwise expressly permitted
by this Deed of Trust, the lien and security interest of this Deed of Trust will
constitute valid and perfected first and prior liens and security interests on
the Property, subject to no other liens, security interests or charges
whatsoever. The Property is free from damage caused by fire or other casualty.
Section 5.13 REGULATION U. Except as disclosed to Mortgagee in writing prior
to the date of this Deed of Trust, none of the proceeds of the Note or the other
Debt will be used for the purpose of purchasing or carrying, directly or
indirectly, any margin stock or for any other purpose which would make such
credit a "purpose credit" within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System.
Section 5.14 MORTGAGOR HAS ALL NECESSARY RIGHTS. Mortgagor possesses all
permits, licenses, patents, trademarks, trade names and copyrights required to
conduct its business. All easements, rights-of-way, utilities and other rights
necessary to maintenance and operation of the Property have been obtained and
are in full force and effect.
Section 5.15 LEGAL REQUIREMENTS. Mortgagor and the Property are in compliance
with all applicable legal requirements and Mortgagor manages and operates (and
will continue to manage and operate) the Property and its other businesses in
accordance with good industry practices.
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Section 5.16 ERISA. No event has occurred which could result in Mortgagor's
liability to the Pension Benefit Guaranty Corporation ("PBGC"). Xxxxxxxxx has
met all requirements with respect to funding of each plan (a "PLAN") maintained
for any of Mortgagor's or the Note maker's employees subject to Title IV of the
Employee Retirement Benefit Act of 1974, as amended, and related regulations
("ERISA"), if any exists. No event or condition has occurred that would permit
any lien under ERISA to attach to any of the Property.
Section 5.17 STATEMENTS BY OTHERS. All statements made on behalf of Mortgagor
in connection with this Deed of Trust, the Note or any Credit Document shall
constitute the joint and several representations and warranties of the person
making the statement and Mortgagor.
Section 5.18 THIRD PARTY MORTGAGOR. The value of the consideration received
and to be received by Xxxxxxxxx is reasonably worth at least as much as the
liability and obligation of Mortgagor incurred or arising under this Deed of
Trust and all related papers and arrangements. Xxxxxxxxx has determined that
such liability and obligation may reasonably be expected to substantially
benefit Mortgagor directly or indirectly (or if Mortgagor is not a natural
person, Xxxxxxxxx's board of directors, general partners or other governors have
made that determination). Xxxxxxxxx has had full and complete access to the
underlying papers relating to the Debt and all other papers executed by any
Obligor or any other person or entity in connection with the Debt, has reviewed
them and is fully aware of the meaning and effect of their contents. Xxxxxxxxx
is fully informed of all circumstances which bear upon the risks of executing
this Deed of Trust and which a diligent inquiry would reveal. Mortgagor has
adequate means to obtain from the makers of the Note on continuing basis
information concerning such makers' financial condition, and is not depending on
Mortgagee to provide such information, now or in the future. Xxxxxxxxx agrees
that Mortgagee shall have no obligation to advise or notify Mortgagor or to
provide Mortgagor with any data or information. The execution and delivery of
this Deed of Trust is not a condition precedent (and Xxxxxxxxx has not in any
way implied that the execution of this Deed of Trust is a condition precedent)
to Mortgagee's making, extending or modifying any loan to Mortgagor or to any
other financial accommodation to or for Mortgagor.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.1 RELEASE FOR FULL PAYMENT AND PERFORMANCE. Subject to the
automatic reinstatement provisions of SECTION 10.22 below, this Deed of Trust
shall terminate and be of no further force or effect (and shall be released on
Mortgagor's written request and at Mortgagor's cost and expense) upon full
payment of the Debt, complete performance of all of the obligations of the
Obligors under the Credit Documents and final termination of Mortgagee's
obligations--if any--to make any further advances under the Note or to provide
any other financial accommodations to any Obligor.
Section 6.2 EVENTS OF DEFAULT. The occurrence of any of the following events
shall constitute an EVENT OF DEFAULT (herein so called) under this Deed of
Trust:
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(a) any condemnation proceeding is commenced relating to all or, in the
judgment of Mortgagee, any material part of, the Property.
(b) any substantial damage to or destruction of the Property occurs and
insurance proceeds (together with other funds deposited with Mortgagee by or on
behalf of Mortgagor for the purpose of repair and restoration of such damage or
destruction) are not, in the opinion of Mortgagee, sufficient to repair and
restore the Property, or if insurance proceeds are not paid within a reasonable
time.
(c) any part of the Debt is not paid when due, whether by lapse of time
or acceleration or otherwise.
(d) any Obligor fails to perform, observe or comply with--or defaults
under--any of the terms, covenants, conditions or provisions of any Credit
Document.
(e) any Obligor fails to perform, observe or comply with--or defaults
under--any negative covenant or agreement under any Credit Document or any other
covenant or agreement under any Credit Document which prohibits or restricts the
taking or omitting to take any action without the consent of Mortgagee or which
requires the taking of action upon the request of Mortgagee
(f) any representation or warranty made in any Credit Document or in any
other report or other paper now or hereafter provided to Mortgagee pursuant or
incident to any Credit Document or the Debt proves to have been untrue or
misleading in any material respect as of the date made or deemed made.
(g) any Obligor: (i) voluntarily suspends transaction of business; (ii)
becomes insolvent or unable to pay its debts as they mature; (iii) commences a
voluntary case in bankruptcy or a voluntary petition seeking reorganization or
to effect a plan or other arrangement with creditors; (iv) makes an assignment
for the benefit of creditors; (v) applies for or consents to the appointment of
a receiver or trustee for any such person or entity or for any substantial
portion of its property; or (vi) makes an assignment to an agent authorized to
liquidate any substantial part of its assets.
(h) in respect of any Obligor: (i) an involuntary case shall be
commenced with any court or other authority seeking liquidation, reorganization
or a creditor's arrangement of any such person or entity; (ii) an order of any
court or other authority shall be entered appointing any receiver or trustee for
any such person or entity or for any substantial portion of its property; or
(iii) a writ or warrant of attachment or any similar process shall be issued by
any court or other authority against any substantial portion of the property of
any such person or entity and such petition seeking liquidation, reorganization
or a creditor's arrangement or such order appointing a receiver or trustee is
not vacated or stayed, or such writ, warrant of attachment or similar process is
not vacated, released or bonded off within thirty (30) days after its entry or
levy.
(i) a conveyance, transfer, assignment or pledge of any interest in any
Obligor shall occur, without Mortgagee's prior written consent.
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(j) the death, legal incompetency, dissolution, liquidation or
termination of any Obligor.
(k) any action, suit or proceeding shall be commenced against or
affecting any Obligor or involving the validity or enforceability of any Credit
Document, at law or in equity, or before any governmental authority, which in
Mortgagee's judgment, impairs or would impair Mortgagee's ability to collect the
Debt when due or the enforceability of any Credit Document.
(l) any one or more final judgments for the payment of money shall be
rendered against any Obligor and the same shall remain unstayed or undischarged
for a period of thirty (30) days.
(m) any Obligor shall be prevented or relieved by any governmental
authority from performing or observing any material term, covenant or condition
of any Credit Document.
(n) any material adverse change shall occur in the assets, financial
condition, business, operations, affairs or circumstances of any Obligor.
(o) any Obligor shall fail to pay when due any principal of or interest
on any borrowed money obligation or the holder of such other obligation
declares--or has the right to declare--such obligation due before its stated
maturity because of default.
(p) any Obligor shall be in default under or in violation of any law,
statute, ordinance, decree, requirement, order, judgment, rule or regulation (or
interpretation of any of them) of the United States of America, any State of the
United States of America or any political subdivision of any of them, or of any
agency, department, commission, board, bureau or court or other tribunal having
jurisdiction over any such party or any such party's property.
(q) any Obligor shall claim--or any court shall find or rule--that
Mortgagee does not have a valid lien on the Property or any other security which
may have been provided by such Obligor.
(r) the sale, encumbrance or abandonment (except as otherwise expressly
agreed to in writing by Mortgagee) of any property now or hereafter covered by
any instrument now or hereafter securing the Debt, the making of any levy,
seizure or attachment of or on any such property or the loss, theft, substantial
damage or destruction of any such property.
(s) any Obligor shall have concealed, removed, or permitted to be
concealed or removed, any part of its property, with intent to hinder, delay or
defraud any of its creditors, or made or suffered a transfer of any of its
property which may be fraudulent under any bankruptcy, fraudulent conveyance or
similar law, or shall have made any transfer of its property to or for the
benefit of a creditor at a time when other creditors similarly situated have not
been paid, or, while insolvent, shall have suffered or permitted any creditor to
obtain a lien upon any of its property through legal proceedings or distraint
which is not vacated within thirty (30) days from its date.
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(t) any Obligor fails to pay when due any amount which he or it is
liable to pay to the PBGC or its successor or to a Plan, or notice of intent to
terminate any Plan is filed under ERISA, or PBGC commences proceedings under
ERISA to terminate any Plan or to cause a trustee to be appointed to administer
any Plan, or a proceeding is commenced by any fiduciary of any Plan to enforce
Section 515 or Section 4219(c)(5) of ERISA, or PBGC becomes entitled to obtain a
decree adjudicating that any Plan must be terminated.
(u) a default, an event of default or a similar event (however
denominated) shall occur under any Credit Document, unless such default, event
of default or similar event is fully cured within any applicable cure period
agreed to in writing by Mortgagee.
Section 6.3 REMEDIES. Upon the occurrence of any Event of Default, and at
any time thereafter:
(a) DEBT DUE. All Debt in its entirety shall, at the option of
Mortgagee, become immediately due and payable without presentment, demand,
notice of intention to accelerate or notice of acceleration, or other notice of
any kind, all of which are hereby expressly WAIVED, and the liens and security
interests created or intended to be created hereby shall be subject to
foreclosure, repossession and sale in any manner provided for herein or provided
for by law, as Mortgagee may elect, and Mortgagee may exercise any and all of
its rights under this Deed of Trust, the Note and any of the other Credit
Documents.
(b) LEGAL PROCEEDINGS. Trustee and Mortgagee shall have the right and
power to proceed by suit or suits in equity or at law, whether for the specific
performance of any covenant or agreement of Mortgagor contained herein or in aid
of the execution of the powers herein granted, or for foreclosure or the sale of
the Property or any part thereof under the judgment or decree of any court of
competent jurisdiction, or for the enforcement of any other appropriate legal or
equitable remedy.
(c) TRUSTEE'S SALE. It shall be the duty of the Trustee and of his
successors and substitutes in the Trust, on Mortgagee's request (which request
is hereby presumed) to enforce the Trust by selling the Mortgaged Property as is
provided in this Deed of Trust.
Section 6.4 TIME AND PLACE OF SALE AND NOTICES. The sale shall be a public
sale at auction held between 10 A.M. and 4 P.M. of the first Tuesday of a month.
The sale shall take place at the county courthouse in the county in which the
Real Property is located, or if it is located in more than one county, the sale
will be made at the courthouse in one of those counties. The sale shall occur at
the area at that courthouse which the commissioners' court of that county has
designated as the place where such sales are to take place by designation
recorded in the real property records of that county, or if no area is so
designated, then the notice of sale shall designate the area at the courthouse
where the sale covered by that notice is to take place, and the sale shall occur
in that area. Notice of the sale shall include a statement of the earliest time
at which the sale will occur and shall be given at least twenty-one (21) days
before the date of the sale (i) by posting at the courthouse door of each county
in which the Real Property is located a written notice designating the county in
which the Real Property will be sold; (ii) by filing in the Office of the County
Clerk of each county in which the Real Property is located a copy of the notice
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posted under subsection (i) above; and (iii) by the holder of the Debt to which
the power of sale is related serving written notice of the sale by certified
mail on each debtor who, according to the records of a holder of the Debt, is
obligated to pay that Debt. The sale shall begin at the time stated in the
notice of sale or not later than three (3) hours after that time. If and to the
extent that Texas Property Code Section 51.001 requires it, if any of the Real
Property to be sold is used as a debtor's residence, a holder of the Debt shall
serve that debtor with written notice by certified mail stating that debtor is
in default under this Deed of Trust, and that debtor shall have at least twenty
(20) days to cure the default before the entire Debt is due and notice of sale
is given. Service of any notice under this Section by certified mail is complete
when the notice is deposited in the United States mail, postage prepaid and
addressed to the debtor entitled to it at that debtor's last known address as
shown by the records of a holder of the Debt. The affidavit of a person
knowledgeable of the facts to the effect that service was completed is prima
facie evidence of service. After such written notice shall have been posted and
filed, as aforesaid, and such notice shall have been served upon such debtor or
debtors, as aforesaid, the Trustee (or his successor or substitute then acting)
shall perform his duty to enforce the Trust by selling the Mortgaged Property,
either as an entirety or in parcels as the Trustee acting may elect, all rights
to a marshalling of assets or sale in inverse order of alienation being waived,
as aforesaid to the highest bidder or bidders for cash, and make due conveyance
to the purchaser or purchasers, with general warranty, and the title to such
purchaser or purchasers, when so made by the Trustee acting, Mortgagor binds
itself, its successors and assigns, to warrant and forever defend against the
claims and demands of every person whomsoever lawfully claiming or to claim the
same or any part thereof (such warranty to supersede any provision contained in
this Deed of Trust limiting the liability of Mortgagor). The provisions of this
Deed of Trust with respect to posting and giving notices of sale are intended to
comply with the provisions of Section 51.002 of the Texas Property Code as in
force and effect on the date hereof, and in the event the requirement for any
notice under such Section 51.002 shall be eliminated or the prescribed manner of
giving it shall be modified by future amendment to, or adoption of any statute
superseding, such Section 51.002, the requirement for such particular notice
shall be deemed stricken from or modified in of this Deed of Trust in conformity
with such amendment or superseding statute, effective as of its effective date.
The manner prescribed in this Deed of Trust for serving or giving any notice,
other than that to be posted or caused to be posted by the Trustee acting, shall
not be deemed exclusive but such notice or notices may be given in any other
manner permitted by applicable law. Said sale shall forever be a bar against
Xxxxxxxxx, its heirs, legal representatives, successors and assigns, and all
other persons claiming under it. It is expressly agreed that the recitals in
each conveyance to the purchaser shall be full evidence of the truth of the
matters therein stated, and all lawful prerequisites to said sale shall be
conclusively presumed to have been performed. Trustee may require minimum bids
at any foreclosure sale and may cancel and abandon the sale if no bid is
received equal to or greater than any such minimum bid.
Section 6.5 APPLICATION OF FORECLOSURE SALE PROCEEDS. The proceeds of any
sale of the Mortgaged Property, and any rents and other amounts collected by
Mortgagee from Mortgagee's holding, leasing, operating or making any other use
of the Mortgaged Property, shall be applied by Mortgagee (or by the receiver, if
one is appointed) to the extent that funds are available therefrom in the
following order of priority:
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(a) TO EXPENSES AND SENIOR OBLIGATION PAYMENTS. First, to the payment of
the costs and expenses of taking possession of the Mortgaged Property and of
holding, maintaining, using, leasing, repairing, equipping, xxxxxxx, improving,
marketing and selling it, including (i) trustees' and receivers' fees; (ii)
court costs; (iii) attorneys' and accountants' fees; (iv) costs of advertisement
and brokers' commissions; and (v) payment of any and all Impositions, liens,
security interests or other rights, titles or interests superior to the lien and
security interest of this Deed of Trust, whether or not then due and including
any prepayment penalties or fees and any accrued or required interest (except,
in the case of foreclosure proceeds, those senior liens and security interests,
if any, subject to which the Mortgaged Property was sold at such trustee's sale,
and without in any way implying Mortgagee's consent to the creation or existence
of any such prior liens);
(b) TO OTHER OBLIGATIONS OWED TO MORTGAGEE. Second, to the payment of
all amounts, other than the principal balance and accrued but unpaid interest,
which may be due to Mortgagee under the Note or any other Credit Document,
together with interest thereon as provided therein;
(c) TO ACCRUED INTEREST ON THE DEBT. Third, to the payment of all
accrued but unpaid interest due on the Debt;
(d) TO DEBT PRINCIPAL. Fourth, to the payment of the principal balance
on the Debt and the principal owing under this Deed of Trust and any other
Credit Document, irrespective of whether then matured, and if it is payable in
installments and not matured, then to the installments in such order as
Mortgagee shall elect;
(e) TO JUNIOR LIENHOLDERS. Fifth, to the extent funds are available
therefor out of the sale proceeds or any rents and, to the extent known by
Mortgagee, to the payment of any debt or obligation secured by a subordinate
deed of trust on or security interest in the Mortgaged Property; and
(f) TO MORTGAGOR. Sixth, to Mortgagor, its successors and assigns, or to
whomsoever may be lawfully entitled to receive such proceeds.
Section 6.6 MORTGAGEE MAY REQUIRE ABANDONMENT AND RECOMMENCEMENT OF SALE. If
the Trustee or his substitute or successor should commence the sale, Mortgagee
may at any time before the sale is completed direct the Trustee to abandon the
sale, and may at any time or times thereafter direct the Trustee to again
commence foreclosure; or, irrespective of whether foreclosure is commenced by
the Trustee, Mortgagee may at any time after an Event of Default institute suit
for collection of the Debt or foreclosure of this Deed of Trust. If Mortgagee
should institute suit for collection of the Debt or foreclosure of this Deed of
Trust, Mortgagee may at any time before the entry of final judgment dismiss it
and require the Trustee to sell the Mortgaged Property in accordance with the
provisions of this Deed of Trust.
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Section 6.7 MULTIPLE SALES; DEED OF TRUST CONTINUES IN EFFECT. No single
sale or series of sales by the Trustee or by any substitute or successor and no
judicial foreclosure shall extinguish the lien or exhaust the power of sale
under this Deed of Trust except with respect to the items of property sold, nor
shall it extinguish, terminate or impair Mortgagor's contractual obligations
under this Deed of Trust, but such lien and power shall exist for so long as,
and may be exercised in any manner by law or in this Deed of Trust provided as
often as the circumstances require to give Mortgagee full relief under this Deed
of Trust, and such contractual obligations shall continue in full force and
effect until final termination of this Deed of Trust.
Section 6.8 MORTGAGEE MAY BID AND PURCHASE. Mortgagee shall have the right
to become the purchaser at any sale made under this Deed of Trust, being the
highest bidder, and credit given upon all or any part of the Debt shall be the
exact equivalent of cash paid for the purposes of this Deed of Trust.
Section 6.9 SUCCESSOR OR SUBSTITUTE TRUSTEE. In case of absence, death,
inability, refusal or failure of the Trustee in this Deed of Trust named to act,
or in case he should resign (and he is hereby authorized to resign without
notice to or consent of Xxxxxxxxx), or if Mortgagee shall desire, with or
without cause, to replace the Trustee in this Deed of Trust named, or to replace
any successor or substitute previously named, Mortgagee or any agent or
attorney-in-fact for Mortgagee may name, constitute and appoint a successor and
substitute trustee (or another one) without other formality than an appointment
and designation in writing, which need not be acknowledged, filed or recorded to
be effective, except only in those circumstances--if any--where acknowledgment,
filing and/or recording is required by applicable law and such law also
precludes Mortgagor from effectively waiving such requirement. Upon such
appointment, this conveyance shall automatically vest in such substitute
trustee, as Trustee, the estate in and title to all of the Mortgaged Property,
and such substitute Trustee so appointed and designated shall thereupon hold,
possess and exercise all the title, rights, powers and duties in this Deed of
Trust conferred on the Trustee named and any previous successor or substitute
Trustee, and his conveyance to the purchaser at any such sale shall be equally
valid and effective as if made by the Trustee named in this Deed of Trust. Such
right to appoint a substitute Trustee shall exist and may be exercised as often
and whenever from any of said causes, or without cause, as aforesaid, Mortgagee
or Mortgagee's agent or attorney-in-fact elects to exercise it.
Section 6.10 RIGHT TO RECEIVER. Upon the occurrence of an Event of Default or
at any time after commencement of a Trustee's foreclosure sale or any legal
proceedings under this Deed of Trust, Mortgagee may, at Mortgagee's election and
by or through the Trustee or otherwise, make application to a court of competent
jurisdiction for appointment of a receiver of the Property, as a matter of
strict right, without notice to Mortgagor and without regard to the adequacy of
the value of the Property for the repayment of the Debt, and Xxxxxxxxx hereby
irrevocably consents to such an appointment. Any receiver shall have all the
usual powers and duties of receivers in similar cases, including the full power
to possess, rent, maintain, repair and operate the Property upon such terms and
conditions as may be approved by the court, and shall apply the rents realized
in the same manner and order as foreclosure proceeds in accordance with SECTION
6.5 hereof.
Section 6.11 TENANTS AT WILL. Xxxxxxxxx agrees for itself and its heirs,
legal representatives, successors and assigns, that if any of them shall hold
possession of the Property or any part thereof subsequent to foreclosure
hereunder, Mortgagor, or the parties so holding possession, shall become and be
considered as tenants at will of the purchaser or purchasers at such foreclosure
sale; and any such tenant failing or refusing to surrender possession upon
demand shall be guilty of forcible detainer and shall be liable to such
29
purchaser or purchasers for rental on said premises, and shall be subject to
eviction and removal, forcible or otherwise, with or without process of law, all
damages which may be sustained by any such tenant as a result thereof being
hereby expressly waived.
Section 6.12 LIFTING OF AUTOMATIC STAY. In the event that Mortgagor or any
other Obligor is the subject of any insolvency, bankruptcy, receivership,
dissolution, reorganization or similar proceeding, federal or state, voluntary
or involuntary, under any present or future law or act, Mortgagee is entitled to
the automatic and absolute lifting of any automatic stay as to the enforcement
of its remedies under the Credit Documents against the security for the Debt,
including specifically the stay imposed by Section 362 of the United States
Federal Bankruptcy Code, as amended. Mortgagor hereby consents to the immediate
lifting of any such automatic stay, and will not contest any motion by Mortgagee
to lift such stay. Xxxxxxxxx expressly acknowledges that the security for the
Debt is not now and will never be necessary to any plan of reorganization of any
type.
ARTICLE 7
MORTGAGEE'S RIGHT TO PERFORM MORTGAGOR'S OBLIGATIONS
Section 7.1 MORTGAGEE MAY ELECT TO PERFORM DEFAULTED OBLIGATIONS. If
Mortgagor should fail to comply with any of its agreements, covenants or
obligations under this Deed of Trust, the Note, or any other Credit Document,
then Mortgagee (in Mortgagor's name or in Mortgagee's own name) may perform them
or cause them to be performed for Xxxxxxxxx's account and at Xxxxxxxxx's
expense, but shall have no obligation to perform any of them or cause them to be
performed. Any and all expenses thus incurred or paid by Mortgagee shall be
Mortgagor's obligations to Mortgagee due and payable on demand, or if no demand
is sooner made, then they shall be due on or before four (4) years after the
respective dates on which they were incurred, and each shall bear interest from
the date Mortgagee pays it until the date Mortgagor repays it to Mortgagee, at
the maximum nonusurious rate of interest from time to time permitted by
whichever of applicable Texas or federal law from time to time permits the
higher nonusurious interest rate (the "CEILING RATE"), or, only if applicable
law imposes no maximum nonusurious rate, then at the same rate as is provided
for in the Note or Securities Purchase Agreement for interest on past due
principal (the "PAST DUE RATE"). At all times, if any, as the Texas Finance Code
shall establish the Ceiling Rate for any purpose under this Deed of Trust, the
Ceiling Rate shall be the "weekly ceiling" as defined in the Texas Finance Code
from time to time in effect. Upon making any such payment or incurring any such
expense, Mortgagee shall be fully and automatically subrogated to all of the
rights of the person, corporation or body politic receiving such payment. Any
amounts owing by Mortgagor to Mortgagee pursuant to this or any other provision
of this Deed of Trust shall automatically and without notice be and become a
part of the Debt and shall be secured by this and all other instruments securing
the Debt. The amount and nature of any such expense and the time when it was
paid shall be fully established by the affidavit of Mortgagee or any of
Mortgagee's officers or agents or by the affidavit of any original, substitute
or successor Trustee acting under this Deed of Trust. Without notice to
Mortgagor or any other person or entity, the Ceiling Rate and the Past Due Rate
shall automatically fluctuate upward and downward as and in any amount by which
the maximum nonusurious rate of interest permitted by such applicable law and
the rate of interest as provided for in the Note for interest on past due
principal fluctuate, respectively.
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Section 7.2 EXERCISE OF RIGHTS IS NOT WAIVER OR CURE OF DEFAULT. The
exercise of the privileges granted to Mortgagee in this Article shall in no
event be considered or constitute a cure of the default or a waiver of
Mortgagee's right at any time after an Event of Default to declare the Debt to
be at once due and payable, but is cumulative of such right and of all other
rights given by this Deed of Trust, the Note and the Credit Documents and of all
rights given Mortgagee by law.
ARTICLE 8
TAX AND INSURANCE DEPOSITS
In addition to the Debt payments, promptly after Mortgagee requests it,
Xxxxxxxxx agrees to deposit with Mortgagee each month an amount equal to
one-twelfth (1/12) of the aggregate of (i) the next succeeding premiums (or
payments in respect of them, if premiums are financed) on all insurance policies
which Mortgagor is required by or pursuant to this Deed of Trust to maintain on
the Property, and (ii) the amount of the next succeeding annual tax payments,
assessment installments, maintenance charges and other Impositions to become due
and payable with respect to the Property, as estimated by Mortgagee, plus, with
the first of such monthly deposits, an additional month's share (a twelfth) of
such premiums and taxes for each month less than twelve remaining before the
next payment thereof falls due. At least fifteen (15) days before the date on
which any such insurance premium (or payment in respect of it, if premiums are
financed) or any of the Impositions must be paid to avoid delinquency, promptly
after Mortgagee's request, Xxxxxxxxx agrees to deliver to Mortgagee a statement
or statements showing the amount of the premium (or payment in respect of it, if
premiums are financed) or Impositions required to be paid and the name and
mailing address of the concern or authority to which it is payable and, at the
same time, Xxxxxxxxx agrees to deposit with Mortgagee such amounts as will, when
added to the amount of such deposits previously made and then remaining
available for the purpose, be sufficient to pay such insurance obligations or
Impositions. Mortgagee shall have the right to and will, if, as and when
requested by Xxxxxxxxx to do so, apply such deposits in payment of such
insurance obligations and Impositions.
ARTICLE 9
ASSIGNMENT OF RENTS
Section 9.1 ASSIGNMENT OF RENTS, REVENUES, INCOME AND PROFITS. Mortgagor
hereby assigns and transfers to Mortgagee all rents, revenues, income and
profits ("RENTAL") payable under each Lease (hereinafter defined) now or at any
time hereinafter existing, such assignment being upon the terms set forth in
SECTION 9.2 below. The term "LEASE" or "LEASES" means any oral or written
agreement between Mortgagor and another person or entity to use or occupy all or
any portion of the Property, together with any guaranties or security for the
obligations of any tenant, lessee, sublessee or other person or entity having
the right to occupy, use or manage any part of the Property under a Lease. Each
time Mortgagor enters into a Lease, such Lease shall automatically become
subject to this Article without further action.
Section 9.2 ASSIGNMENT IS ABSOLUTE; GRANT OF REVOCABLE LICENSE TO MORTGAGOR
TO COLLECT RENTAL BEFORE AN EVENT OF DEFAULT. The transfer of Rental to
Mortgagee shall be upon the following terms: (a) until receipt from Mortgagee of
notice of the occurrence of an Event of Default, Mortgagor shall have the right
under a retained and reserved license (but limited as provided herein) to
collect Rental and each tenant may pay Rental directly to Mortgagor; but after
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an Event of Default, Xxxxxxxxx's license shall automatically terminate and be
revoked and to the extent Mortgagor collects any Rental thereafter accruing or
paid, Mortgagor covenants to hold all such Rental in trust for the use and
benefit of Mortgagee; (b) upon receipt from Mortgagee of notice that an Event of
Default exists, each tenant is hereby authorized and directed to pay directly to
Mortgagee all Rental thereafter accruing or payable and receipt of Rental by
Mortgagee shall be a release of such tenant to the extent of all amounts so
paid; (c) Rental so received by Mortgagee shall be applied by Mortgagee, first
to the expenses, if any, of collection and then in accordance with SECTION 6.5
hereof; (d) without impairing its rights hereunder, Mortgagee may, at its
option, at any time and from time to time, release to Mortgagor Rental so
received by Mortgagee, or any part thereof; (e) Mortgagee shall not be liable
for its failure to collect or its failure to exercise diligence in the
collection of Rental, but shall be accountable only for Rental that it shall
actually receive; and (f) the assignment contained in this Article shall
terminate upon the release of this Deed of Trust, but no tenant shall be
required to take notice of termination until a copy of such release shall have
been delivered to such tenant. The assignment contained in this Article is
intended to be absolute, unconditional and presently effective. It shall never
be necessary for Mortgagee to institute legal proceedings of any kind whatsoever
to enforce the provisions of this Article. It is agreed that any Rental retained
and reserved by Mortgagor pursuant to the aforementioned license will not
constitute a payment by the Mortgagor to Mortgagee of any portion of the Debt
(and hence will not be credited to the Debt) until the Rental is actually paid
to the Mortgagee and retained by the Mortgagee and then, in such event, the
Rental so received shall be applied in accordance with this SECTION 9.2.
Section 9.3 REMEDIES. Should an Event of Default occur, Xxxxxxxxx agrees to
deliver to Mortgagee possession and control of all Rental held by Xxxxxxxxx in
trust for the benefit of Mortgagee. Mortgagor specifically agrees that Mortgagee
may upon the occurrence of any Event of Default or at any time thereafter,
personally or through an agent selected by Mortgagee, take--or have the Trustee
take--possession and control of all or any part of the Property and may receive
and collect all Rental theretofore accrued and all thereafter accruing therefrom
until the final termination of this Deed of Trust or until the foreclosure of
the lien of this Deed of Trust, applying so much thereof as may be collected
before sale of the Property by the Trustee or judicial foreclosure of this Deed
of Trust first to the expenses of Mortgagee incurred in obtaining the Rental and
then applying the Rental so received in accordance with the provisions of
SECTION 6.5 hereof. Any such action by Mortgagee shall not operate as a waiver
of the Event of Default in question, or as an affirmance of any Lease or of the
rights of any tenant in the event title to that part of the Property covered by
the Lease or held by the tenant should be acquired by Mortgagee or other
purchaser at foreclosure sale. Mortgagee, Mortgagee's agent or the Trustee may
use against Mortgagor or any other person such lawful or peaceable means as the
person acting may see fit to enforce the collection of any such Rental or to
secure possession of the Property, or any part of it and may settle or
compromise on any terms as Mortgagee, Mortgagee's agent or the Trustee sees fit,
the liability of any person or persons for any such Rental. In particular,
Mortgagee, Mortgagee's agent or the Trustee may institute and prosecute to final
conclusion actions of forcible entry and detainer, or actions of trespass to try
title, or actions for damages, or any other appropriate actions, in the name of
Mortgagee, Mortgagor, or the Trustee, and may settle, compromise or abandon any
such actions as Mortgagee, Mortgagee's agent or the Trustee may see fit; and
Mortgagor binds itself and its successors and assigns to take whatever lawful or
peaceable steps Mortgagee, Mortgagee's agent or the Trustee may ask of it or any
such person or concern so claiming to take for such purposes, including the
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institution and prosecution of actions of the character above stated. However,
neither Mortgagee, Mortgagee's agent nor the Trustee shall be obligated to
collect any such Rental or be liable or chargeable for failure to do so. Upon
any sale of the Property or any part thereof in foreclosure of the lien or
security interest created by this Deed of Trust, such Rental so sold which
thereafter accrues shall be deemed included in such sale and shall pass to the
purchaser free and clear of the assignment made in this Article. Nothing in this
Section is intended to require the Mortgagee to institute any legal proceedings
or engage in any self help remedies in order to make the absolute assignment of
the Rental to Mortgagee operative.
Section 9.4 MORTGAGEE IN POSSESSION; NO LIABILITY OF MORTGAGEE. Mortgagee's
acceptance of this assignment shall not, before entry upon and taking possession
of the Property by Mortgagee, be deemed to constitute Mortgagee a "mortgagee in
possession," nor obligate Mortgagee to appear in or defend any proceeding
relating to any of the Leases or to the Property, take any action hereunder,
expend any money, incur any expenses or perform any obligation or liability
under the Leases, or assume any obligation under the Leases including the
obligation to return any deposit delivered to Mortgagor by any tenant. Mortgagee
shall not be liable for any injury or damage to person or property in or about
the Property. Neither the collection of Rental due under the Leases herein
described nor possession of the Property by Mortgagee shall render Mortgagee
liable with respect to any obligations of Mortgagor under any of the Leases.
Section 9.5 ADDITIONAL COVENANTS, WARRANTIES AND REPRESENTATIONS CONCERNING
LEASES AND RENTAL. Mortgagor covenants, warrants and represents that:
(a) Neither Mortgagor nor any previous owner has entered into any prior
oral or written assignment, pledge or reservation of the Rental, entered into
any prior assignment or pledge of Mortgagor's landlord interests in any Lease or
performed any act or executed any other instruments which might prevent or limit
Mortgagee from operating under the terms and conditions of this Article;
(b) Mortgagor has good title to the Leases and Xxxxxx hereby assigned
and the authority to assign same, and no other person or entity has any right,
title or interest in and to the landlord's interests therein;
(c) All existing Leases are valid, unmodified and in full force and
effect, except as indicated herein, and no default exists thereunder;
(d) No Rental has been, nor does Mortgagor anticipate that any Rental
will be, waived, released, discounted, set off or compromised, except as
disclosed to Mortgagee in writing before the date hereof;
(e) Except as disclosed to Mortgagee in writing before the date hereof,
Xxxxxxxxx has not received any funds or deposits from any tenant for which
credit has not already been made on account of accrued Rental;
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(f) Mortgagor shall (i) perform all of the terms and conditions of the
Leases; (ii) upon Mortgagee's request, execute an additional assignment to
Mortgagee of all Leases then affecting the Property and all Rental and other
sums due thereunder by assignment(s) in form and substance satisfactory to
Mortgagee; and (iii) at the request of Mortgagee, record such Leases and the
assignment(s) thereof to Mortgagee. Mortgagor will not, without the prior
written consent of Mortgagee, amend, modify, extend, renew, terminate, cancel or
surrender any Lease or suffer or permit any of the foregoing, orally or in
writing;
(g) Mortgagor shall not execute any Lease unless the form of the Lease
has been approved by Mortgagee and the tenant under such Lease and the terms of
such Lease shall comply with leasing standards for the Property from time to
time approved by Mortgagee in writing;
(h) Mortgagor shall give immediate notice to Mortgagee of any notice
Mortgagor received from any tenant or subtenant under any Leases specifying any
claimed default by any party under such Leases;
(i) Mortgagor shall enforce the tenants' obligations under the Leases;
(j) Mortgagor shall defend, at Xxxxxxxxx's expense, any proceeding
pertaining to the Leases, including, if Mortgagee so requests, any such
proceeding to which Mortgagee is a party;
(k) Mortgagor shall neither create nor permit any encumbrance upon its
interest as landlord under the Leases, except for this Deed of Trust and any
other encumbrances permitted by this Deed of Trust;
(l) Mortgagor shall not encumber or assign, or permit the encumbrance or
assignment of, any Leases or Rental without the prior written consent of
Mortgagee;
(m) Mortgagor shall not waive or release any obligation of any tenant
under the Leases without Mortgagee's prior written consent;
(n) Each Lease executed after the date hereof shall contain a statement
signed by the Mortgagor that such Lease is subject to this Deed of Trust;
(o) Mortgagor shall from time to time furnish to Mortgagee, within
thirty (30) days after demand therefor, true, correct and complete copies of all
Leases or any portion of the Leases specified by Mortgagee; and
(p) Mortgagor shall not in any event collect any Rental more than one
(1) month in advance of the time it will be earned (and if Mortgagor does so, in
addition to any other rights or remedies available by reason of such Event of
Default, all Rental so collected more than one (1) month in advance of the time
it is earned shall be delivered to Mortgagee to be applied to the Debt).
Section 9.6 MERGER. There shall be no merger of the leasehold estates
created by the Leases with the fee or any other estate in the Property without
the prior written consent of Mortgagee.
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Section 9.7 REASSIGNMENT. By Mortgagee's acceptance of this Deed of Trust,
it is understood and agreed that a full and complete release of this Deed of
Trust shall operate as a full and complete reassignment to Mortgagor of the
Mortgagee's rights and interests under this Article (subject to the automatic
reinstatement provisions of SECTION 10.22 below).
Section 9.8 SUBORDINATION OF DEED OF TRUST TO LEASES. It is agreed and
understood that Mortgagee hereby reserves the right and shall have the right, at
any time and from time to time, without the consent or joinder of any other
party, to subordinate this Deed of Trust and the liens, assignments and security
interests created by this Deed of Trust to all or any of the Leases regardless
of the respective priority of any of such Leases and this Deed of Trust. Upon
doing so and filing evidence of such subordination in the real property records
in the county or counties where the Real Property is located, a foreclosure of
Mortgagee's liens, assignments and security interests under this Deed of Trust
shall be subject to and shall not operate to extinguish any of said Leases as to
which such subordination is operative.
ARTICLE 10
GENERAL AND MISCELLANEOUS PROVISIONS
Section 10.1 SENIOR LIEN. If and only if EXHIBIT B to this Deed of Trust
includes a description of an existing lien or liens (the "SENIOR LIENS") against
any part of the Property which Mortgagee has agreed in writing may continue to
burden it and remain unreleased, then, in that event only, only as to the
portion of the Property covered by the Senior Liens, and for only so long as any
balance remains unpaid on the debt (the "SENIOR LIEN DEBT") secured by the
Senior Liens, the lien of this Deed of Trust is and shall be second, subordinate
and inferior to the Senior Liens to the extent (but no further) that property
covered by the Senior Liens is also covered by this Deed of Trust. Any default
by Mortgagor in the timely payment of any sum due under the terms of the Senior
Lien Debt, or any default under the provisions of any instrument evidencing,
guaranteeing or securing or otherwise relating to the Senior Lien Debt, shall
constitute an Event of Default authorizing Mortgagee, at its option (a) to
accelerate maturity of the Debt and to cause the lien and security interests of
this Deed of Trust to be foreclosed and (b) without waiving such rights of
acceleration and foreclosure, to pay or perform the defaulted obligation for the
account of Mortgagor and at Mortgagor's expense, and Mortgagee shall be deemed
to have done so at Mortgagor's special instance and request and shall be fully
subrogated to all the rights, liens, remedies, equities, superior title and
benefits at any time held, owned, possessed and enjoyed by any holder of the
Senior Lien Debt or any promissory note, bond or other papers evidencing it, to
the greatest extent permitted by law, and all sums advanced and expenses
incurred by Mortgagee in so doing shall constitute sums advanced pursuant to
SECTION 7.1 of this Deed of Trust.
Section 10.2 DEBT MAY BE CHANGED WITHOUT AFFECTING THIS DEED OF TRUST. Any of
the Debt may be extended, rearranged, renewed, increased or otherwise changed in
any way, and any part of the security described in this Deed of Trust or any
other security for any part of the Debt may be waived or released without in
anyway altering or diminishing the force, effect or lien of this Deed of Trust,
and the lien, assignment and security interest granted by this Deed of Trust
shall continue as a prior lien, assignment and security interest on all of the
Property not expressly so released, until the final termination of this Deed of
Trust.
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Section 10.3 SECURITY IS CUMULATIVE. No other security now existing or
hereafter taken to secure any part of the Debt or the performance of any
obligation or liability whatever shall in any manner affect or impair the
security given by this Deed of Trust. All security for any part of the Debt and
the performance of any obligation or liability shall be taken, considered and
held as cumulative.
Section 10.4 USURY NOT INTENDED; SAVINGS PROVISIONS. Notwithstanding any
provision to the contrary contained in any Credit Document, it is expressly
provided that in no case or event shall the aggregate of any amounts accrued or
paid pursuant to this Deed of Trust which under applicable laws are or may be
deemed to constitute interest ever exceed the maximum nonusurious interest rate
permitted by applicable Texas or federal laws, whichever permit the higher rate.
In this connection, Mortgagor and Mortgagee stipulate and agree that it is their
common and overriding intent to contract in strict compliance with applicable
usury laws. In furtherance thereof, none of the terms of this Deed of Trust
shall ever be construed to create a contract to pay, as consideration for the
use, forbearance or detention of money, interest at a rate in excess of the
maximum rate permitted by applicable laws. Mortgagor shall never be liable for
interest in excess of the maximum rate permitted by applicable laws. If, for any
reason whatever, such interest paid or received during the full term of the
applicable indebtedness produces a rate which exceeds the maximum rate permitted
by applicable laws, Mortgagee shall credit against the principal of such
indebtedness (or, if such indebtedness shall have been paid in full, shall
refund to the payor of such interest) such portion of said interest as shall be
necessary to cause the interest paid to produce a rate equal to the maximum rate
permitted by applicable laws. All sums paid or agreed to be paid to Mortgagee
for the use, forbearance or detention of money shall, to the extent required to
avoid or minimize usury and to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full term of the
applicable indebtedness so that the interest rate thereon does not exceed the
Ceiling Rate. The provisions of this Section shall control all agreements,
whether now or hereafter existing and whether written or oral, between Mortgagor
and Mortgagee.
Section 10.5 MORTGAGOR WAIVES ALL STAY, EXTENSION, APPRAISEMENT AND
REDEMPTION RIGHTS. Mortgagor will not at any time insist upon or plead or in any
manner whatever claim or take the benefit or advantage of any stay or extension
law now or at any time hereafter in force in any locality where the Property or
any part thereof may or shall be situated, nor will Mortgagor claim, take or
insist on any benefit or advantage from any law now or hereafter in force
providing for the valuation or appraisement of the Property or any part thereof
before any sale or sales thereof to be made pursuant to any provision of this
Deed of Trust, or to decree of any court of competent jurisdiction, nor after
any such sale or sales made pursuant to any provision of this Deed of Trust, or
to decree of any court of competent jurisdiction, nor after any such sale or
sales will Mortgagor claim or exercise any right conferred by any law now or at
any time hereafter in force to redeem the property so sold or any part of it,
and Mortgagor hereby WAIVES all benefit and advantage of any such law or laws
and WAIVES the appraisement of the Property or any part of it and covenants that
Mortgagor will not hinder, delay or impede the execution of any power in this
Deed of Trust granted and delegated to the Trustee or Mortgagee, but that
Xxxxxxxxx will suffer and permit the execution of every such power as though no
such law or laws had been made or enacted.
Section 10.6 SUBROGATION TO LIENS DISCHARGED. Xxxxxxxxx hereby agrees that
Mortgagee shall be subrogated to all rights, titles, interests, liens, benefits,
remedies, equities, superior title and security interests (the "SUBROGATED
LIENS") owned, claimed or held as security for any debt or other obligation (the
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"DISCHARGED OBLIGATIONS") directly or indirectly satisfied, discharged or paid
with money or other property advanced by Mortgagee. Irrespective of any formal
or informal acknowledgment of partial or complete satisfaction or release of the
Discharged Obligations, the Subrogated Liens shall be continued, renewed,
extended, brought forward and rearranged as security for the Debt in addition to
and cumulative of the lien and security interest of this Deed of Trust.
Foreclosure under this Deed of Trust shall constitute foreclosure of the
Subrogated Liens.
Section 10.7 CONSTRUCTION MORTGAGE. If funds are to be advanced by Mortgagee
against the Note as construction progresses on the Real Property, then this is a
construction mortgage, as such term is defined in the Texas Business and
Commerce Code, and such funds are to be used to pay the costs of such
construction, which may with the express prior written consent of Mortgagee
include the acquisition costs of the Real Property.
Section 10.8 DUE ON SALE. Xxxxxxxxx agrees that if, without Mortgagee's prior
written consent, (a) any part of the Property or any interest either in the
Property or in the beneficial equity ownership of any Mortgagor which is not a
natural person (an "EQUITY INTEREST") should be directly or indirectly
transferred, conveyed or mortgaged, voluntarily or involuntarily, absolutely or
as security, or (b) Mortgagor should enter into any contractual arrangement to
transfer, convey or mortgage any part of the Property or any interest either in
the Property or in an Equity Interest, Mortgagee shall have the right and option
(except only in those circumstances, if any, where the exercise of such right is
expressly prohibited by applicable law and such law also precludes Mortgagor
from effectively waiving such prohibition) to declare the Note or the entire
amount of the Debt to be due and payable. Mortgagee shall have such right and
option absolutely and irrespective of whether or not the transfer, conveyance or
mortgage would or might (i) diminish the value of any security for the Debt;
(ii) increase the risk of default under this Deed of Trust; (iii) increase the
likelihood of Mortgagee's having to resort to any security for the Debt after
default; or (iv) add or remove the liability of any person or entity for payment
of the Debt or performance of any covenant or obligation under this Deed of
Trust. To exercise such right and option, Mortgagee shall give written notice to
Xxxxxxxxx and to the person or entity to whom such property was transferred,
conveyed or mortgaged that the Note or Debt has been declared due and payable
and that Mortgagee demands that its maker pay it. If Mortgagee's consent to a
proposed transfer, conveyance or mortgaging is requested, Mortgagee shall have
the right (in addition to its absolute right to refuse to consent to any such
transaction) to condition its consent upon satisfaction of any one or more of
the following requirements: (1) that the interest rate(s) on all or any part of
the Debt be increased to a rate which is then acceptable to Mortgagee; (2) that
a reasonable transfer fee, in an amount determined by Mortgagee, be paid; (3)
that a principal amount deemed appropriate by Mortgagee be paid against the Debt
to reduce the ratio that the outstanding balance of the Debt bears to the value
of the Property as determined by Mortgagee to a level which is then acceptable
to Mortgagee; (4) that Mortgagor and each proposed transferee execute an
assumption agreement and such other instruments as Mortgagee or its counsel
shall reasonably require and in form and substance satisfactory to Mortgagee and
its counsel; (5) that the proposed transferee's creditworthiness and experience
in owning and operating similar properties be demonstrable and proven to
Mortgagee's reasonable satisfaction to be at least as good as Mortgagor's and
Xxxxxxxxx's managers' at the time each Note was first funded; (6) that the
liability to Mortgagee of Mortgagor and all makers and guarantors of all or any
part of the Debt will be confirmed by them in writing to be unaffected and
unimpaired by such transfer, conveyance or mortgaging; and (7) that any existing
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or proposed junior mortgagee expressly subordinate to all liens and security
interests securing the Debt as to both lien and payment right priority and
consent to the proposed transaction in a writing addressed to Mortgagee.
Section 10.9 CONDEMNATION. If before final termination of this Deed of Trust,
all or a portion of the Property is taken for public or quasi-public purposes,
either through eminent domain or condemnation proceedings, by voluntary
conveyance under threat of condemnation with Mortgagee's express written consent
and joinder or otherwise, Xxxxxxxxx hereby agrees that any and all sums of money
awarded or allowed as damages, payments in lieu of condemnation awards or
otherwise to or for the account of the owner of the Property or any portion of
it on account of such taking shall be paid and delivered to Mortgagee, and they
are hereby assigned to Mortgagee, and shall be paid directly to Mortgagee. All
proceeds of condemnation awards or proceeds of sale in lieu of condemnation with
respect to the Property and all judgments, decrees and awards for injury or
damage to the Property shall be applied, first, to reimburse Mortgagee or the
Trustee for all costs and expenses, including reasonable attorneys' fees,
incurred in connection with collection of such proceeds and, second, the
remainder of said proceeds shall be applied, at the discretion of Mortgagee, to
the payment of the Debt in the order determined by Mortgagee in its sole
discretion, or paid out to repair or restore the Property so affected by such
condemnation, injury or damage in the same manner as provided in SECTION 4.1(H)
above. Xxxxxxxxx agrees to execute such further assignments of all such
proceeds, judgments, decrees and awards as Mortgagee may request. Mortgagee is
hereby authorized, in the name of Xxxxxxxxx, to execute and deliver valid
acquittances for, and to appeal from, any such judgment, decree or award.
Mortgagee shall not be, in any event or circumstances, liable or responsible for
failure to collect, or exercise diligence in the collection of, any such
proceeds, judgments, decrees or awards.
Section 10.10 APPRAISALS AND REPORTS TO BE PROVIDED. Mortgagee (by its
officers, employees, directors or agents) at any time and from time to time, and
at Xxxxxxxxx's sole cost and expense (to the extent not prohibited by applicable
law), may contract for the services of an appraiser approved by Mortgagee in its
sole discretion to perform a written appraisal of the Property (or such parts of
it as are designated in Mortgagee's request). Any such appraisal may be
performed at any time or times upon reasonable notice to Xxxxxxxxx, as long as
it does not unreasonably interfere with Xxxxxxxxx's use of the Property.
Specifically, any such appraiser is authorized to enter upon, and Mortgagor
shall allow such appraiser access to, the Property as may be necessary in the
opinion of such appraiser to perform its professional services. Mortgagor will
also furnish such appraiser such historical and operational information
regarding the Property as may be reasonably requested by such appraiser to
facilitate preparation of an appraisal and will make available for meetings with
such appraiser appropriate personnel having knowledge of such matters. Mortgagor
will permit Mortgagee and its agents, independent contractors, representatives,
employees and officers at all reasonable times to go upon, examine, inspect and
remain on the Property for any lawful purpose and will furnish to Mortgagee on
request all pertinent information in regard to the development, operation, use
and status of the Property. Promptly upon Mortgagee's request, Xxxxxxxxx agrees,
at Xxxxxxxxx's sole cost and expense (to the extent not prohibited by applicable
law):
(a) to cause an inspection and written appraisal of the Property (or
such parts of it as are designated in Mortgagee's request) to be made by a
qualified appraiser approved by Mortgagee; and
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(b) to cause to be conducted or prepared any other written report,
summary, opinion, inspection, review, survey, audit or other professional
service relating to the Property or any operations in connection with it (all as
designated in Mortgagee's request), including any accounting, architectural,
consulting, engineering, design, legal, management, pest control, surveying,
toxic or hazardous materials survey, inspection, removal or cleanup work, title
abstracting or other technical, managerial or professional service relating to
the Property or its operations.
Mortgagee may elect to deliver any such request orally, by telegram, telex or
telefax, by mail or by hand delivery addressed to Xxxxxxxxx as provided in the
Introduction to this Deed of Trust or by any other legally effective method, and
it may be given at any time and from time to time before the complete and final
release and discharge of this Deed of Trust. Any amount to be paid under this
Section by Mortgagor to Mortgagee shall be a demand obligation owing by
Mortgagor to Mortgagee and shall bear interest from the date of expenditure at
the Past Due Rate.
Section 10.11 NOTICES. Except where certified or registered mail notice is
required by applicable law, service of any notice to Mortgagor required or
permitted under this Deed of Trust shall be completed upon deposit of the
notice, enclosed in a first class postage prepaid wrapper, properly addressed to
Mortgagor at Mortgagor's address designated in the Introduction to this Deed of
Trust (or if no address is so designated, or such address has changed, to
Mortgagor's most recent address as shown by the records of Mortgagee) in a post
office or official depository under the care and custody of the United States
Postal Service, and the affidavit of any person having knowledge of the facts
concerning such mailing shall be conclusive evidence of the fact of such
service. Such method of giving notice shall not be exclusive, but instead any
notice may be given to Mortgagor in any manner permitted or recognized by law.
Section 10.12 MORTGAGEE AND MORTGAGOR. The term "Mortgagee" as used in this
Deed of Trust shall mean and include the holder or holders of the Debt from time
to time, and upon acquisition of the Debt by any holder or holders other than
the named Mortgagee, effective as of the time of such acquisition, the term
"Mortgagee" shall mean all of the then holders of the Debt, to the exclusion of
all prior holders not then retaining or reserving an interest in the Debt from
time to time, whether such holder acquires the Debt through succession to or
assignment from a prior Mortgagee. The term "Mortgagor, its successors and
assigns" shall also include the heirs and legal representatives of each
Mortgagor who is a natural person and the receivers, conservators, custodians
and trustees of each Mortgagor, PROVIDED that no Mortgagor may assign or
delegate any of its or his rights, interests or obligations under this Deed of
Trust, the Note or any Credit Document without Mortgagee's express prior written
consent, and any attempted assignment or delegation without it shall be void or
voidable at Mortgagee's election.
Section 10.13 ARTICLE, SECTION AND EXHIBIT REFERENCES, NUMBERS AND HEADINGS.
References in this Deed of Trust to Articles, Sections and Exhibits refer to
Articles, Sections and Exhibits in and to this Deed of Trust unless otherwise
specified. The Article and Section numbers, Exhibit designations and headings
used in this Deed of Trust are included for convenience of reference only and
shall not be considered in interpreting, applying or enforcing this Deed of
Trust.
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Section 10.14 EXHIBITS INCORPORATED. All exhibits, annexes, appendices and
schedules referred to any place in the text of this Deed of Trust are hereby
incorporated into it at that place in the text, to the same effect as if set out
there VERBATIM.
Section 10.15 "INCLUDING" IS NOT LIMITING. Wherever the term "including" or a
similar term is used in this Deed of Trust, it shall be read as if it were
written, "including by way of example only and without in any way limiting the
generality of the clause or concept referred to."
Section 10.16 GENDER. The masculine and neuter pronouns used in this Deed of
Trust each includes the masculine, feminine and neuter genders.
Section 10.17 SEVERABILITY. If any provision of this Deed of Trust is held to
be illegal, invalid or unenforceable under present or future laws, the legality,
validity and enforceability of the remaining provisions of this Deed of Trust
shall not be affected thereby, and this Deed of Trust shall be liberally
construed so as to carry out the intent of the parties to it. Each waiver in
this Deed of Trust is subject to the overriding and controlling rule that it
shall be effective only if and to the extent that (a) it is not prohibited by
applicable law and (b) applicable law neither provides for nor allows any
material sanctions to be imposed against Mortgagee for having bargained for and
obtained it.
Section 10.18 ANY UNSECURED DEBT IS DEEMED PAID FIRST. If any part of the Debt
cannot lawfully be secured by this Deed of Trust, or if the lien, assignments
and security interest of this Deed of Trust cannot be lawfully enforced to pay
any part of the Debt, then and in either such event, at the option of Mortgagee,
all payments on the Debt shall be deemed to have been first applied against that
part of the Debt.
Section 10.19 NOUN, PRONOUN AND VERB NUMBERS. When this Deed of Trust is
executed by more than one person, corporation, partnership, joint venture, trust
or other legal entity, it shall be construed as though "Mortgagor" were written
"Mortgagors" and as though the pronouns and verbs in their number were changed
to correspond, and in such case, (a) each of Mortgagors shall be bound jointly
and severally with one another to keep, observe and perform the covenants,
agreements, obligations and liabilities imposed by this Deed of Trust upon the
"Mortgagor"; (b) a release of one or more persons, corporations or other legal
entities comprising "Mortgagor" shall not in any way be deemed a release of any
other person, corporation or other legal entity comprising "Mortgagor"; and (c)
a separate action hereunder may be brought and prosecuted against one or more of
the persons, corporations or other legal entities comprising "Mortgagor" without
limiting any liability of or impairing Mortgagee's right to proceed against any
other person, corporation or other legal entity comprising "Mortgagor".
Section 10.20 HOMESTEAD DISCLAIMER. Mortgagor warrants and represents that at
the time of execution and delivery of this Deed of Trust, no part of the
Mortgaged Property forms any part of any property owned, used or claimed by
Mortgagor or Xxxxxxxxx's spouse or children either as a residence or a business
homestead, or as otherwise exempt from forced sale under the laws of the State
of Texas or the United States.
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Section 10.21 HOUSEHOLD GOODS NOT COVERED. If Mortgagee is a state or national
bank and if any natural person executing this Deed of Trust is a "consumer" as
defined in Regulation AA of the Board of Governors of the Federal Reserve
System, no lien or security interest created or evidenced by this Deed of Trust
shall extend to, cover or affect "household goods" as also defined therein and
no waiver of the rights of Mortgagor contained in this or any other instrument
shall extend to, or be effective as to, any right the waiver of which is
prohibited by Regulation AA. If Mortgagee is not a state or national bank and if
any natural person executing this Deed of Trust is a "consumer" as defined in 16
C.F.R. ss. 444.1(d), as amended, no lien or security interest created or
evidenced by this Deed of Trust shall extend to, cover or affect "household
goods" as defined in 16 C.F.R. ss. 444.1(a), as amended and no waiver of the
rights of Mortgagor contained in this or any other instrument shall extend to,
or be effective as to, any right the waiver of which is prohibited by 16 C.F.R
ss. 444.
Section 10.22 PAYMENTS RETURNED. Xxxxxxxxx agrees that, if at any time all or
any part of any payment previously applied by Mortgagee to the Debt is or must
be returned by Mortgagee--or recovered from Mortgagee--for any reason (including
the order of any bankruptcy court)), this Deed of Trust shall automatically be
reinstated to the same effect as if the prior application had not been made,
and, in addition, Mortgagor hereby agrees to indemnify Mortgagee against, and to
save and hold Mortgagee harmless from any required return by Mortgagee--or
recovery from Mortgagee--of any such payment because of its being deemed
preferential under applicable bankruptcy, receivership or insolvency laws, or
for any other reason.
Section 10.23 AMENDMENTS IN WRITING. This Deed of Trust shall not be changed
orally but shall be changed only by agreement in writing signed by Xxxxxxxxx and
Mortgagee. Any waiver or consent with respect to this Deed of Trust shall be
effective only in the specific instance and for the specific purpose for which
given. No course of dealing between the parties, no usage of trade and no parole
or extrinsic evidence of any nature shall be used to supplement or modify any of
the terms or provisions of this Deed of Trust.
Section 10.24 MORTGAGEE'S OFFSET RIGHTS. Mortgagee is hereby authorized at any
time and from time to time, without notice to any person or entity (and
Mortgagor hereby WAIVES any such notice) to the fullest extent permitted by law,
to set-off and apply any and all monies, securities and other properties of
Mortgagor now or in the future in the possession, custody or control of
Mortgagee, or on deposit with or otherwise owed to Mortgagor by
Mortgagee--including all such monies, securities and other properties held in
general, special, time, demand, provisional or final accounts or for safekeeping
or as collateral or otherwise (but excluding those accounts clearly designated
as escrow or trust accounts held by Xxxxxxxxx for others unaffiliated with
Mortgagor)--against any and all of Mortgagor's obligations to Mortgagee now or
hereafter existing under this Deed of Trust, irrespective of whether Mortgagee
shall have made any demand under this Deed of Trust. Mortgagee agrees to use
reasonable efforts to promptly notify Mortgagor after any such set-off and
application, PROVIDED that failure to give--or delay in giving--any such notice
shall not affect the validity of such set-off and application or impose any
liability on Mortgagee. Mortgagee's rights under this Section are in addition to
other rights and remedies (including other rights of set-off) which Mortgagee
may have.
Section 10.25 VENUE. This Deed of Trust is performable in Xxxxxx County,
Texas, which shall be a proper place of venue for suit on or in respect of this
Deed of Trust. Mortgagor irrevocably agrees that any legal proceeding in respect
of this Deed of Trust shall be brought in the district courts of Xxxxxx County,
Texas or the United States District Court for the Southern District of Texas,
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Houston Division (collectively, the "SPECIFIED COURTS"). Xxxxxxxxx hereby
irrevocably submits to the nonexclusive jurisdiction of the state and federal
courts of the State of Texas. Mortgagor hereby irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to any Credit Document brought in any Specified Court, and hereby
further irrevocably waives any claims that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum. Xxxxxxxxx
further irrevocably consents to the service of process out of any of the
Specified Courts in any such suit, action or proceeding by the mailing of copies
thereof by certified mail, return receipt requested, postage prepaid, to
Mortgagor at its address as provided in this Deed of Trust or as otherwise
provided by Texas law. Nothing herein shall affect the right of Mortgagee to
commence legal proceedings or otherwise proceed against Mortgagor in any
jurisdiction or to serve process in any manner permitted by applicable law.
Xxxxxxxxx agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. THIS DEED OF TRUST SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE APPLICABLE LAWS OF THE STATE OF TEXAS EXCEPT TO
THE EXTENT (A) OF PROCEDURAL AND SUBSTANTIVE MATTERS RELATING ONLY TO THE
CREATION, PERFECTION AND FORECLOSURE OF LIENS, AND ENFORCEMENT OF RIGHTS AND
REMEDIES AGAINST THE MORTGAGED PROPERTY, WHICH MATTERS SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF TEXAS, AND (B) THAT THE LAWS OF THE UNITED STATES OF
AMERICA AND ANY RULES, REGULATIONS, OR ORDERS ISSUED OR PROMULGATED THEREUNDER,
APPLICABLE TO THE AFFAIRS AND TRANSACTIONS ENTERED INTO BY MORTGAGEE, OTHERWISE
PRE-EMPT TEXAS LAW, IN WHICH EVENT SUCH FEDERAL LAW SHALL CONTROL.
Section 10.26 ENTIRE AGREEMENT. This Deed of Trust embodies the entire
agreement and understanding between Mortgagor and Mortgagee with respect to its
subject matter and supersedes all prior conflicting or inconsistent agreements,
consents and understandings relating to such subject matter. Xxxxxxxxx
acknowledges and agrees that there is no oral agreement between Mortgagor and
Mortgagee which has not been incorporated in this Deed of Trust.
Section 10.27 SUBROGATION. Xxxxxxxxx agrees that it shall never be entitled to
be subrogated to any of Mortgagee's rights against any Obligor or any other
person or entity or any collateral or offset rights held by Mortgagee for
payment of the Debt until final termination of this Deed of Trust.
Section 10.28 RELEASE OF CLAIMS. XXXXXXXXX XXXXXX RELEASES, DISCHARGES AND
ACQUITS FOREVER MORTGAGEE AND TRUSTEE AND THEIR OFFICERS, DIRECTORS, TRUSTEES,
AGENTS, EMPLOYEES AND COUNSEL (IN EACH CASE, PAST, PRESENT OR FUTURE) FROM ANY
AND ALL CLAIMS EXISTING AS OF THE DATE HEREOF (OR THE DATE OF ACTUAL EXECUTION
HEREOF BY XXXXXXXXX, IF LATER). AS USED HEREIN, THE TERM "CLAIM" SHALL MEAN ANY
AND ALL LIABILITIES, CLAIMS, DEFENSES, DEMANDS, ACTIONS, CAUSES OF ACTION,
JUDGMENTS, DEFICIENCIES, INTEREST, LIENS, COSTS OR EXPENSES (INCLUDING COURT
COSTS, PENALTIES, ATTORNEYS' FEES AND DISBURSEMENTS, AND AMOUNTS PAID IN
SETTLEMENT) OF ANY KIND AND CHARACTER WHATSOEVER, INCLUDING CLAIMS FOR USURY,
BREACH OF CONTRACT, BREACH OF COMMITMENT, NEGLIGENT MISREPRESENTATION OR FAILURE
TO ACT IN GOOD FAITH, IN EACH CASE WHETHER NOW KNOWN OR UNKNOWN, SUSPECTED OR
42
UNSUSPECTED, ASSERTED OR UNASSERTED OR PRIMARY OR CONTINGENT, AND WHETHER
ARISING OUT OF WRITTEN DOCUMENTS, UNWRITTEN UNDERTAKINGS, COURSE OF CONDUCT,
TORT, VIOLATIONS OF LAWS OR REGULATIONS OR OTHERWISE. TO THE MAXIMUM EXTENT
PERMITTED BY APPLICABLE LAW, XXXXXXXXX XXXXXX XXXXXX ALL RIGHTS, REMEDIES,
CLAIMS AND DEFENSES BASED UPON OR RELATED TO SECTIONS 51.003, 51.004 AND 51.005
OF THE TEXAS PROPERTY CODE, TO THE EXTENT THE SAME PERTAIN OR MAY PERTAIN TO ANY
ENFORCEMENT OF THIS DEED OF TRUST.
ARTICLE 11
ENVIRONMENTAL MATTERS
Section 11.1 CERTAIN DEFINITIONS. When used in this Article, the following
capitalized terms shall have the meanings set forth below:
(a) "ABOVEGROUND STORAGE TANK" means a nonvehicular device constructed
of nonearthen materials located above the ground surface or above the floor of a
structure that is below the ground and is designed to contain liquids.
(b) "ACM" means asbestos or any material containing more than one
percent (1%) asbestos (as determined under Environmental Laws) that is friable
or which bears a risk of becoming friable if not abated.
(c) "CERCLA" means the Comprehensive Environmental Response Compensation
and Liability Act, 42 U.S.C. ss. 9601 ET. SEQ.
(d) "COSTS" means all liabilities, losses, costs, damages, punitive
damages, expenses, claims, loss of lien priority, diminution in value,
attorneys' fees, experts' fees, consultants' fees, penalties, fines,
obligations, judgments and disbursements, as well as expenses of Remediation and
any other remedial, removal, response, abatement, cleanup, legal, investigative,
monitoring, or record keeping costs and all expenses related thereto.
(e) "DISPOSAL" (or "DISPOSED") shall have the meaning specified in RCRA.
(f) "ENVIRONMENTAL AUDIT" means a comprehensive analysis prepared by
consultants approved by Mortgagee, the form, scope, and substance of which shall
be acceptable to Mortgagee in its sole discretion of (i) Mortgagor's compliance
with Environmental Laws, and (ii) Mortgagor's activities or any activities
conducted at the Property for the purpose of determining whether there exists
any condition that could give rise to any Environmental Claim against Mortgagor,
the Property or any operator thereof.
(g) "ENVIRONMENTAL CLAIM" means any claim; demand; action; cause of
action; suit; loss; cost; damage; punitive damage; fine, penalty, expense,
liability, criminal liability, judgment, governmental or private investigation
relating to Remediation or compliance with Requirements of Environmental Laws;
proceeding; lien; personal injury, or property damage, whether threatened,
sought, brought or imposed, that is related to or that seeks to recover Costs
related to, or seeks to impose liability regarding Mortgagor, the Property or
operations conducted at the Property for (i) improper use or treatment of
43
wetlands, pinelands or other protected land or wildlife; (ii) noise; (iii)
radioactive materials (including naturally occurring radioactive materials);
(iv) explosives; (v) pollution, contamination, preservation, protection,
remediation or clean-up of the air, surface water, ground water, soil or
wetlands; (vi) solid, gaseous or liquid waste generation, handling, discharge,
release, threatened release, treatment, storage, disposal or transportation;
(vii) exposure of persons or property to Hazardous Substances and the effects
thereof; (viii) the manufacture, processing, distribution in commerce, use,
treatment, storage, disposal or Remediation of Hazardous Substances; (ix) injury
to, death of or threat to the health or safety of any person or persons caused
directly or indirectly by Hazardous Substances; (x) destruction caused directly
or indirectly by Hazardous Substances or the release of any Hazardous Substance
on any property (whether real or personal); (xi) the implementation of spill
prevention and/or disaster plans relating to Hazardous Substances; (xii)
community right-to-know and other disclosure laws or (xiii) maintaining,
disclosing or reporting information to governmental authorities under any
Environmental Law. The term "Environmental Claim" also includes any Costs
incurred in responding to efforts to require Remediation and any claim based
upon any asserted or actual breach or violation of any Requirements of
Environmental Law, or upon any event, occurrence or condition as a consequence
of which, pursuant to any Requirements of Environmental Law, (y) any owner,
operator or person having any interest in the Property, including any mortgagee
of the Property or the beneficiary of any deed of trust of the Property, shall
be liable with respect to any Environmental Claim or otherwise suffer any loss
or disability or (z) the Property shall be subject to any restriction on use,
ownership or transferability. An "Environmental Claim" further includes a
proceeding to issue, modify, revoke or terminate an Environmental Permit, or to
adopt or amend a regulation to the extent that such a proceeding or occurrence
attempts to redress violations of any applicable Environmental Permit or will
materially impair the value of any security for the Debt, the prospects for
timely repayment of the Debt, Xxxxxxxxx's current financial condition or
Xxxxxxxxx's ability to conduct its business operations or to continue in
business as a going concern.
(h) "ENVIRONMENTAL LAWS" means the laws described on EXHIBIT C attached
hereto and incorporated herein for all purposes and any and all other laws,
rules, regulations, ordinances, orders or guidance documents now or hereafter in
effect of any federal, state or local executive, legislative, judicial,
regulatory or administrative agency, board or authority or any judicial or
administrative decision relating thereto that relate to (i) wetlands, pinelands
or other protected land or wildlife species; (ii) noise; (iii) radioactive
materials (including naturally occurring radioactive materials); (iv)
explosives; (v) pollution, contamination, preservation, protection, or clean-up
of the air, surface water, ground water, soil or wetlands; (vi) solid, gaseous
or liquid waste generation, handling, discharge, release, threatened release,
treatment, storage, disposal or transportation; (vii) exposure of persons or
property to Hazardous Substances and the effects thereof; (viii) injury to,
death of or threat to the safety or health of employees and any other persons;
(ix) the manufacture, processing, distribution in commerce, use, treatment,
storage, disposal or Remediation of Hazardous Substances; (x) destruction,
contamination of, or the release onto any property (whether real or personal)
directly or indirectly connected with Hazardous Substances; (xi) the
implementation of spill prevention and/or disaster plans relating to Hazardous
Substances; (xii) community right-to-know and other disclosure laws; or (xiii)
maintaining, disclosing or reporting information to governmental authorities
under any Environmental Law.
44
(i) "ENVIRONMENTAL PERMITS" means any permit, license, registration,
waste identification number, approval or other authorization relating to
Mortgagor, Xxxxxxxxx's business or operations, or the Property required by any
Environmental Law.
(j) "HAZARDOUS SUBSTANCES" means (i) those substances included within
the statutory and/or regulatory definitions of "hazardous substance," "hazardous
waste," "extremely hazardous substance," "regulated substance," "contaminant,"
"hazardous materials" or "toxic substances," under any Environmental Law, (ii)
those substances listed in 49 C.F.R. 172.101 and in 40 C.F.R. Part 302; (iii)
any material, waste or substance which is (A) petroleum, oil or a fraction
thereof, (B) ACM, (C) polychlorinated biphenyls, (D) formaldehyde, (E)
designated as a "hazardous substance" pursuant to 33 U.S.C. ss. 1321 or listed
pursuant to 33 U.S.C. ss. 1317; (F) explosives or (G) radioactive materials
(including naturally occurring radioactive materials); (iv) Solid Wastes that
pose imminent and substantial endangerment to health or the environment; (v) any
material, waste or substance designated, classified or regulated as a "hazardous
material," "hazardous substance," "toxic substance" or as a "Class I" or "Class
II" waste under Title 31 of the Texas Administrative Code, or under any other
Texas law or under any regulation promulgated under any such laws; (vi) radon
gas in an ambient air concentration exceeding four picocuries per liter (4
pCi/l); (vii) such other substances, materials, or wastes that are or become
classified or regulated as hazardous or toxic under any federal, state or local
law or regulation; and (viii) any Underground Storage Tank. For the purposes of
this definition, Hazardous Substances shall not include any substance of a
nature, quantity or concentration that is customarily used, stored or disposed
as part of or incidental to the operation and maintenance of the Property in the
ordinary course of Mortgagor's business currently conducted (or currently
contemplated to be conducted following completion of construction of
improvements, if applicable) at the Property so long as (x) such use, storage or
disposal complies fully with applicable Environmental Laws and good and safe
business practice; (y) any disposal takes place in accordance with applicable
Environmental Laws at disposal facilities and locations other than the Property
and which are fully permitted in accordance with Environmental Laws; and (z)
such use, storage or disposal does not require Mortgagor, any agent or employee
of Mortgagor or any operator of the Property to have a hazardous waste generator
identification number or any other Environmental Permit based primarily on or
related primarily to the Hazardous Substance in question.
(k) "MORTGAGEE INDEMNITEES" means Mortgagee, any subsequent holder or
owner of the Note or any interest in it, any affiliate, successor, assign or
subsidiary of Mortgagee and each of their shareholders, directors, officers,
employees, counsel, agents and contractors, and the Trustee and all successor or
substitute trustees, as well as their respective heirs and personal and legal
representatives.
(l) "RCRA" means the Resource Conservation and Recovery Act, 42 U.S.C.
xx.xx. 6901, ET. SEQ.
(m) "RELEASE" (or "RELEASED") shall have the meaning specified in
CERCLA.
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(n) "REMEDIATION" means any action necessary to ensure compliance with
the Requirements of Environmental Law including (i) the removal and disposal or
containment (if containment is practical under the circumstances and is
permissible within Requirements of Environmental Law) or monitoring of any and
all Hazardous Substances at the Property; (ii) the taking of reasonably
necessary precautions to protect against the release or threatened release of
Hazardous Substances at, on, in, about, under, within or near the air, soil,
surface water, groundwater or soil vapor at the Property or any public domain
affected by the Property or any surrounding areas thereof; (iii) any action
necessary to mitigate the usurpation of wetlands, pinelands or other protected
land or reclaim the same or to protect and preserve wildlife species; (iv) any
action necessary to meet the requirements of an Environmental Permit; or (v) any
other action reasonably required to satisfy Requirements of Environmental Law
imposed upon Mortgagor, the Property and/or any operation thereon.
(o) "REQUIREMENTS OF ENVIRONMENTAL LAW" means all requirements,
conditions, restrictions or stipulations of Environmental Laws imposed upon or
related to Mortgagor, the Property and/or any operation conducted on the
Property.
(p) "SOLID WASTE" shall have the meaning ascribed to it in RCRA.
(q) "UNDERGROUND STORAGE TANK" shall have the meaning ascribed to it in
RCRA.
Notwithstanding the foregoing, if any Environmental Law is amended so as to
broaden the meaning of any term defined in it, such broader meaning shall apply
subsequent to the effective date of such amendment. Where a defined term in this
Article derives its meaning from a statutory reference, for the purposes of this
Article any regulatory definition promulgated pursuant to the applicable statute
shall be deemed to be applicable to the extent its definition is broader than
the statutory reference and any reference or citation to a statute or regulation
shall be deemed to include any amendments to that statute or regulation and
judicial and administrative interpretations of it. To the extent that the laws
or regulations of the State of Texas establish a meaning for a term defined in
this Article through reference to federal Environmental Law that is broader than
the meaning specified in such federal Environmental Law, such broader meaning
set forth in the state Environmental Law shall apply. Any specific references to
a law shall include any amendments to it promulgated from time to time.
Section 11.2 ENVIRONMENTAL REPRESENTATION AND WARRANTIES. Xxxxxxxxx
represents and warrants that, except as disclosed by an Environmental Audit:
(a) PRESENCE OF HAZARDOUS SUBSTANCES. There do not exist any Hazardous
Substances on the Property or any property contiguous to the Property;
(b) ON-SITE RELEASE OF HAZARDOUS SUBSTANCES. There has been no spill,
release, threatened release, discharge or disposal of Hazardous Substances that
have occurred or are presently occurring on or onto the Property or from any
adjacent properties;
(c) OFF-SITE RELEASE OF HAZARDOUS SUBSTANCES. There has been no spill,
release, threatened release, discharge or disposal of Hazardous Substances that
has occurred or is presently occurring (i) on any tract neighboring the Property
or (ii) off the Property as a result of any construction on or operation or use
of the Property;
(d) ENVIRONMENTAL CLAIMS. There are no presently existing or threatened
Environmental Claims.
46
(e) COMPLIANCE WITH REQUIREMENTS OF ENVIRONMENTAL LAW. There has been no
failure by Mortgagor or, to the best of Xxxxxxxxx's knowledge, any predecessor
in interest to Mortgagor, to comply with all applicable Requirements of
Environmental Laws relating to Mortgagor, Xxxxxxxxx's operations, the Property
and Mortgagor's manufacture, processing, distribution, use, treatment,
generation, recycling, reuse, sale, storage, handling, transportation or
disposal of any Hazardous Substance and Mortgagor is not aware of any facts or
circumstances which could materially impair such compliance with all applicable
Environmental Laws.
(f) ENVIRONMENTAL PERMITS. Mortgagor is not currently and, to the best
of Xxxxxxxxx's knowledge, no predecessor in interest to Mortgagor was required
to obtain any Environmental Permit to construct, demolish, renovate, occupy,
operate or use any buildings, improvements, fixtures or equipment forming a part
of the Property that have not been obtained and fully disclosed to Mortgagee.
(g) DISCLOSURE TO GOVERNMENTAL AUTHORITY. The present and past uses of
the Property satisfy all Requirements of Environmental Laws and Mortgagor is
aware of no fact or circumstance which upon disclosure to any governmental
authority would render this representation to be false or misleading in any
respect.
(h) ACM, UNDERGROUND STORAGE TANKS AND ABOVEGROUND STORAGE TANKS. There
is no ACM, Aboveground Storage Tank or Underground Storage Tank located on, in
(including, with respect to ACM, within building materials) or about the
Property nor has any ACM, Aboveground Storage Tank or Underground Storage Tank
at any time been removed from the Property. Each Aboveground Storage Tank and
Underground Storage Tank located on, in or about the Property has been
registered with the Texas Commission on Environmental Quality, all
registration/facility fees for each such Aboveground Storage Tank and
Underground Storage Tank have been fully paid and any release or leak with
respect to each such Aboveground Storage Tank and Underground Storage Tank has
been reported to and confirmed by the Texas Commission on Environmental Quality.
(i) NOTICE OF ENVIRONMENTAL CLAIM. There are no liens affecting
Mortgagor, the Property or, to the best of Xxxxxxxxx's knowledge, any real
property contiguous to the Property arising out of or in connection with
Environmental Claim and Xxxxxxxxx has not received any summons, directive,
citation, notice, letter or other communication, whether written or oral, from
any governmental authority or any other person concerning any intentional or
unintentional action or omission by Mortgagor or any other person which may
result in an Environmental Claim or a breach of any Requirement of Environmental
Law with regard to Mortgagor or the Property.
Section 11.3 ENVIRONMENTAL COVENANTS. Xxxxxxxxx agrees and covenants as
follows:
47
(a) NOTICE TO MORTGAGEE. Mortgagor shall notify Mortgagee in writing
within three (3) business days upon receipt by Xxxxxxxxx from any person of any
inquiry, notice, claim, charge, cause of action or demand relating to
Requirements of Environmental Laws or an Environmental Claim, including any
notice of inspection or assertion of noncompliance with Requirements of
Environmental Laws, stating the basis of such inquiry or notification. Mortgagor
shall promptly deliver to Mortgagee any and all documentation or records as
Mortgagee may request in connection with such notice or inquiry, and shall keep
Mortgagee advised of any subsequent developments at all times.
(b) COMPLIANCE WITH PERMITS. Xxxxxxxxx will obtain, comply with and
properly maintain all Environmental Permits required for the Property and any
operations conducted thereon.
(c) COMPLIANCE WITH REQUIREMENTS OF ENVIRONMENTAL LAWS. Mortgagor will
not do or permit anything that will cause Mortgagor or the Property to be in
violation of any Requirements of Environmental Laws, or do or permit anything to
be done that might subject Mortgagor or the Property to any Remediation
obligations that would materially and adversely affect the financial condition
of Mortgagor or the value or marketability of the Property or to any enforcement
actions under any Environmental Laws or any other Environmental Claim.
(d) REMEDIATION. If any release of Hazardous Substances should exist or
occur at the Premises or if Mortgagor should be ordered or directed by any
governmental authority or any other person to undertake Remediation of any
Hazardous Substances at the Property or take any other action to satisfy
Requirements of Environmental Law, Mortgagor, at no cost or expense to the
Mortgagee Indemnitees, shall comply with all Environmental Laws, conduct and
complete all required sampling, testing and monitoring and undertake such
Remediation promptly upon discovery or notice thereof and thereafter diligently
and continuously pursue such Remediation, completing each element, phase or
stage of it within each applicable period established by any person, agency or
bureau empowered to enforce any applicable Environmental Law (or if no such
period or schedule is established, in accordance with a reasonable schedule
consistent with prudent business practice taking into account potentially
adverse effects to the environment and individuals' health and safety), but in
any case before any lien is created on the Property. If Mortgagor undertakes any
Remediation, or causes it to be undertaken, Mortgagor shall conduct and complete
such Remediation (i) in compliance with Requirements of Environmental Laws, (ii)
in accordance with the directives and orders of all appropriate federal, state
and local governmental authorities and (iii) in accordance with sound business
practice taking into account potentially adverse effects to the environment and
individuals' health and safety.
(e) PROSPECTIVE OBLIGATIONS. If any Remediation fails to comply with
Requirements of Environmental Laws because of changes to said Environmental
Laws, Xxxxxxxxx shall promptly undertake such Remediation and other work as is
necessary to comply with the then-current Environmental Laws in the manner set
forth in this Section.
(f) ENVIRONMENTAL AUDITS. Upon Mortgagee's request, at any time and from
time to time, Xxxxxxxxx will provide, at no cost or expense to the Mortgagee
Indemnitees, an Environmental Audit; PROVIDED, that unless required by any
governmental authority, Mortgagee may not request more than one (1)
48
Environmental Audit in any twelve (12) calendar month period. Any fundings
remaining to be made of the Debt shall be expressly conditioned upon receipt and
approval of the Environmental Audit and Mortgagee being satisfied that it has
disclosed no fact or circumstance which causes Mortgagor to be in default under
this Article. If Xxxxxxxxx fails to provide an Environmental Audit within thirty
(30) days after Mortgagee's written request, Mortgagee may order one, and
Mortgagor grants to Mortgagee and its agents, employees, contractors and
consultants access to the Property and a license to perform such inspections and
tests as are reasonable under the circumstances. At Mortgagee's option, the cost
of such inspections and tests actually incurred by Mortgagee shall be payable by
Mortgagor to Mortgagee upon demand.
(g) ASBESTOS CONTAINING MATERIALS. Mortgagor will not install any ACM or
permit any ACM to be installed in or introduced onto the Property; and if any
ACM exists in or on the Property, whether installed by Mortgagor or others,
Mortgagor will, at no cost or expense to the Mortgagee Indemnitees, remove it
(or if removal is prohibited by law or in Mortgagor's reasonable judgment is
impractical, take whatever action is required by law or reasonably necessary to
mitigate adverse impact to the environment and individuals' health and safety,
including encapsulation of the ACM or implementation of an operation and
maintenance program).
Section 11.4 ENVIRONMENTAL INDEMNITY.
(a) SCOPE OF INDEMNITY. Mortgagor hereby agrees, jointly and severally,
unconditionally, absolutely and irrevocably, to indemnify, defend and hold
harmless each Mortgagee Indemnitee from and against any Costs which at any time
or from time to time may be claimed, suffered or incurred in connection with any
Environmental Claim, the violation of any Requirements of Environmental Law, the
breach of any representation or warranty of Mortgagor set forth herein or the
failure of Mortgagor to perform any obligation herein required to be performed
by Xxxxxxxxx. Such indemnification obligations are herein called the
"ENVIRONMENTAL INDEMNIFICATIONS."
(b) SURVIVAL OF INDEMNITY. The provisions of and undertakings and
indemnifications set out in this Article shall survive foreclosure of this Deed
of Trust or acceptance of the Property by Mortgagee in lieu of foreclosure, the
payment of the Debt and satisfaction and release of this Deed of Trust and shall
thereafter continue to be the personal liability, obligation and indemnification
of Mortgagor, binding upon Mortgagor.
(c) MORTGAGOR'S LIABILITY. Xxxxxxxxx's liability under the
indemnification provisions contained in this Article shall accrue upon the
earlier of an Environmental Claim being asserted against any Mortgagee
Indemnitee or upon a Mortgagee Indemnitee's receipt of notice or acquiring
knowledge of any of the events specified in SECTION 11.4(A) hereof. In no event
shall any Mortgagee Indemnitee be required to make any expenditure or bring any
cause of action to enforce Mortgagor's obligations and liability under and
pursuant to the indemnifications set forth in this Article. In addition, actual
threatened action by governmental authority is not a condition or prerequisite
to Mortgagor's obligations under this Agreement. Within five (5) days after
notification from Mortgagee supported by reasonable documentation setting forth
49
the nature of the Environmental Claim, Mortgagor, at no cost or expense to
Mortgagee Indemnitees, shall diligently commence resolution of the Environmental
Claim in a manner reasonably acceptable to Mortgagee and shall diligently and
timely prosecute such resolution to completion. Provided, however, with respect
to those claims that may be satisfied by payment of a liquidated sum of money,
Xxxxxxxxx shall promptly pay the amount so claimed (to the extent supported by
reasonable documentation). If Remediation is required, the provisions of SECTION
11.3(D) above shall control and if litigation or any administrative proceeding
is commenced the provisions of SECTION 11.4(H) below shall control.
(d) EFFECT OF NEGLIGENCE. XXXXXXXXX SHALL INDEMNIFY THE MORTGAGEE
INDEMNITEES REGARDLESS OF WHETHER THE ACT, OMISSION, FACTS, CIRCUMSTANCES OR
CONDITIONS GIVING RISE TO SUCH INDEMNIFICATION WERE CAUSED IN WHOLE OR IN PART
BY MORTGAGEE'S (OR ANY MORTGAGEE INDEMNITEE'S) SIMPLE (BUT NOT GROSS)
NEGLIGENCE.
(e) BURDEN OF PROOF. Notwithstanding any provision contained to the
contrary in this Deed of Trust or any of the other Credit Documents, Mortgagor
shall bear the burden of proof by preponderance of the evidence that the
indemnification contained in this Article is inapplicable to any claim or
assertion made hereunder.
(f) INCONSISTENT PROVISIONS. The provisions of this Article shall govern
and control over any inconsistent provision of the Credit Documents, including
any exculpatory or non-recourse provisions contained in any of them.
(g) PAYMENT OF ATTORNEYS' FEES. If at any time any Mortgagee Indemnitee
employs counsel for advice or other representation (i) with respect to this
Article; (ii) except as otherwise expressly provided herein, to represent any
such Mortgagee Indemnitee in any litigation, contest, dispute, suit or
proceeding (whether instituted by a Mortgagee Indemnitee, Mortgagor or any other
party) in any way or respect relating to this Article; (iii) to evaluate the
existence of an Environmental Claim hereunder; (iv) to defend an Environmental
Claim; or (v) to enforce Xxxxxxxxx's obligations hereunder, then and in any of
such events, all of such Mortgagee Indemnitee's reasonable attorneys' fees and
expenses arising from such services and all expenses, costs and charges in any
way or respect arising in connection therewith or relating thereto shall be paid
by Mortgagor to Mortgagee on demand.
(h) APPOINTMENT OF COUNSEL. If any Environmental Claim shall be brought
against any Mortgagee Indemnitee, then after notification to Mortgagor thereof
as provided in SECTION 11.4(C) above, Mortgagor shall be entitled to participate
in all related proceedings and negotiations and to assume the defense thereof at
the expense of Mortgagor with counsel reasonably acceptable to Mortgagee and to
settle and compromise any such claim or action; PROVIDED, that Mortgagee may
elect to be represented by separate counsel, at Xxxxxxxxx's expense, and if
Mortgagee so elects, any settlement or compromise shall be effected only with
the consent of Mortgagee, which consent shall not be unreasonably withheld.
Xxxxxxxxx's right to participate in the defense or response to any Environmental
Claim should not be deemed to limit or otherwise modify its obligations under
this Article.
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(i) PAYMENT ON DEMAND. Mortgagor shall make any payment required to be
made under this Article in cash and on demand.
(j) INTEREST ON INDEMNIFIED SUMS. Any Costs and other payments required
to be paid by Mortgagor under this Article which are not paid within five (5)
business days of receipt by Indemnitor of Mortgagee's demand therefor shall
thereafter be deemed "Delinquent." In addition to all other rights and remedies
of Mortgagee against Xxxxxxxxx provided herein, under the other Credit Documents
or under any applicable law, Mortgagor shall pay to Mortgagee immediately upon
demand interest at the Past Due Rate from the date such payment becomes
Delinquent to the date of payment of such Delinquent sums.
(k) SUBROGATION OF INDEMNITY RIGHTS. Mortgagee shall be subrogated to
any rights Mortgagor may have under any indemnifications from any present,
future or former owners, tenants or other occupants or users of the Property or
any other person relating to the matters covered by this Article.
(l) MERGER, CONSOLIDATION OR SALE OF ASSETS. Without limiting any other
provision of this Deed of Trust, in the event of a dissolution of Mortgagor or
the disposition of all or substantially all of Mortgagor's assets to one or more
persons or entities, the surviving entity or transferee of assets as the case
may be shall deliver to Mortgagee an acknowledged instrument in recordable form
specifically assuming all obligations, covenants and responsibilities of
Mortgagor under this Article.
(m) SURVIVAL OF PROVISIONS. The representations, warranties and
covenants and indemnities of Mortgagor set forth in this Article shall continue
in effect and, to the extent permitted by law, shall survive the transfer of the
Property pursuant to foreclosure proceedings (whether judicial or nonjudicial),
by deed in lieu of foreclosure or otherwise. Mortgagor acknowledges and agrees
that its covenants and obligations under this Article are separate and distinct
from its other obligations under the Credit Documents.
Section 11.5 RELEASES. Notwithstanding anything to the contrary contained in
this Deed of Trust, in the event that any Underground Storage Tank or any of the
Collateral (exclusive of any real property interest or fixtures deemed to be a
part of any realty) contains or has been contaminated by or releases or
discharges any Hazardous Substance, Mortgagee may from time to time and at any
time, and without the necessity for any notice to or consent by Mortgagor or any
other person or entity, release such Underground Storage Tank and/or such
Collateral from the lien and security interests of this Deed of Trust.
UNDERGROUND STORAGE TANK NOTICE TO PURCHASERS. In accordance with 30 TAC
ss.334.9, Mortgagee, Mortgagor and Trustee, each of whose address is set forth
in this Deed of Trust, hereby notify and advise each purchaser of any part of
the Property pursuant to the rights and powers granted under this Deed of Trust
that there exists on the Real Property no Underground Storage Tank(s). The Real
Property has not been designated under any Facility Number.
51
EXECUTED effective as of October 27, 2006.
MORTGAGOR:
MEMS USA, INC.
By: /s/ Xxxxx X. Xxxxx
----------------------
Attached:
Exhibit A--Property Description
Exhibit B--Existing Encumbrances
Exhibit C--Environmental Laws
52
NOTICE PURSUANT TO TEX. BUS. & COMM. CODE SS.26.02
THIS DEED OF TRUST AND THE OTHER CREDIT DOCUMENTS TOGETHER CONSTITUTE A
WRITTEN LOAN AGREEMENT AND REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
MORTGAGOR:
MEMS USA, INC.
--------------
By: /s/ Xxxxx X. Xxxxx
-----------------------
MORTGAGEE:
GCA STRATEGIC INVESTMENT FUND LIMITED
By: /s/ Xxxxx X. Xxxxxx
-------------------
53
THE STATE OF _________ ss.
ss.
COUNTY OF ____________ ss.
This instrument was acknowledged before me on this ___ day of October __,
2006, by ______________, ____________ of ______________________, a
_____________________, on behalf of said ______________.
------------------------------------------------
Notary Public in and for the State of Texas
Name printed:
-----------------------------------
My Commission Expires:
--------------------------
54
Exhibit A
---------
Property Description
--------------------
EXHIBIT A
to
Deed of Trust
Exhibit B
---------
Permitted Exceptions
--------------------
1. The following restrictive covenants of record itemized below:
2. The following matters:
EXHIBIT B
to
Deed of Trust
Exhibit C
---------
Environmental Laws
------------------
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. xx.xx. 9601 ET SEQ. as amended by the Superfund Amendments and
Reauthorization Act of 1986.
Toxic Substances Control Act, 15 U.S.C. ss. 2601 ET SEQ.
Clean Water Act, 33 U.S.C. ss. 1251 ET SEQ., as amended by the Oil Pollution Act
of 1990, Pub.L. No. 101-380, 104 Stat. 484 (1990).
Safe Drinking Water Act, 42 U.S.C. xx.xx. 300f-300j.
Clean Air Act, 42 U.S.C. ss. 7401 ET SEQ.
Resource Conservation and Recovery Act of 1976, 42 U.S.C. xx.xx. 6901 ET. SEQ.
The Oil Pollution Act of 1990, Pub.L. No. 101-380, 104 Stat. 484 (1990).
Hazardous Materials Transportation Act, 49 U.S.C. ss. 1801 ET SEQ.
Xxxxxxxx-Xxxxxxx Occupational Safety and Health Act
Texas Water Code
Texas Health and Safety Code
Texas Natural Resources Code
Statewide Rules for Oil, Gas and Geothermal Operations (promulgated by the
Railroad Commission of Texas).
The laws cited above shall be deemed to include any amendments to them and
regulations promulgated under them from time to time.
EXHIBIT C
to
Deed of Trust
