Exhibit 10.4
DOCUMENT PREPARED BY AND
WHEN RECORDED RETURN TO
Glast, Xxxxxxxx & Xxxxxx, P.C.
13355 Xxxx Road, Suite 0000
Xxx Xxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxx
DEED OF TRUST, ASSIGNMENT OF RENTS
AND SECURITY AGREEMENT
DATE: April 4, 2006
PARTIES: Grantor/Trustor: Xxxx Xxxxxx
Grantor/Trustor 000 Xxxx Xxxxxx
Xxxxxxx: Xxxxxx, Xxxxx 00000
TRUSTEE: Xxxxxx X. Xxxxx
Trustee's Glast, Xxxxxxxx & Xxxxxx, P.C.
Address: 13355 Xxxx Road, Suite 0000
Xxx Xxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
BENEFICIARY: Xxxxxxx Advanced Aesthetics, Inc.
Beneficiary's 000 Xxxxxxx 0, 0xx Xxxxx
Address: Xxxxxxx, XX 00000
THIS INSTRUMENT CONTAINS INDEMNIFICATION PROVISIONS AND
PROVISIONS LIMITING THE BENEFICIARY'S LIABILITY FOR NEGLIGENCE.
DEED OF TRUST, ASSIGNMENT OF RENTS
AND SECURITY AGREEMENT
THIS DEED OF TRUST, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (this
"Deed of Trust") is executed effective as of April 4, 2006, by Xxxx Xxxxxx
(hereinafter referred to whether one or more as "Trustor" or "Grantor"), whose
address for notice hereunder is 000 Xxxx Xxxxxx, Xxxxxx, Xxxxx 00000, to Xxxxxx
X. Xxxxx ("Trustee"), for the benefit of Xxxxxxx Advanced Aesthetics, Inc.
("Beneficiary"), whose address for notice hereunder is 501 Xxxxxxx 7, 5th Floor,
Norwork, Connecticut, Attention: Xxxx Xxxxxx.
DEFINITIONS
As used herein, the following terms shall have the following meanings:
"Financial Statements": The balance sheets, profit and loss
statements, reconciliations of capital and surplus, changes in
financial condition, schedules of sources and applications of funds,
and other financial information of Grantor, Guarantor or Tenants,
heretofore furnished to Beneficiary or required to be furnished to
Beneficiary under the terms of this Deed of Trust or any other of the
Loan Documents from time to time, which statements shall be prepared in
such scope, detail and form as shall be reasonably acceptable to
Beneficiary, and shall be certified by such parties, and annual
unaudited balance sheets for the Guarantor.
"Governmental Authority": The United States, the State of
Texas, the County of Xxxxxxxxxx, the City of Conroe, or any other
political subdivision in which the Mortgaged Property is located, and
any other political subdivision, agency, or instrumentality exercising
jurisdiction over Grantor, the Mortgaged Property or the Improvements.
"Indebtedness": The sum of all principal, interest and all
other amounts evidenced by, due under or secured by the Loan Documents,
together with all other amounts advanced to pay all or any portion of
any indebtedness now or hereafter secured by the Property, it being
contemplated that Grantor may become further indebted to Beneficiary in
the future, and that Beneficiary may make further advances to or for
the benefit or account of Grantor that will be secured by this Deed of
Trust.
"Loan": The Loan made to Grantor by Beneficiary as evidenced
and secured by the Loan Documents.
"Loan Documents": (a) the Promissory Note of even date
herewith, executed by Grantor and Atlantis Laboratories, Inc., a Texas
corporation, payable to the order of Beneficiary, in the stated
principal amount Three Hundred Ninety-Two Thousand Two Hundred and
No/100 Dollars ($392,200.00), (b) this Deed of Trust, (c) all other
documents now or hereafter executed by Grantor, or any other person or
entity, to evidence, secure or guaranty the payment of all or any
portion of the Indebtedness or the
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performance of all or any portion of the Obligations or otherwise
executed in connection with the Note or this Deed of Trust, and (d) all
modifications, restatements, extensions, renewals and replacements of
the foregoing.
"Mortgaged Property": (a) the real property more particularly
described in Exhibit A attached hereto and by this reference made a
part hereof, together with any greater estate therein as hereafter may
be acquired by Grantor (the "Land"), (b) all buildings, structures and
other improvements, now or at any time situated, placed or constructed
upon the Land (the "Improvements"), (c) all materials, supplies,
equipment, apparatus and other items of personal property now owned or
hereafter acquired by Grantor which are now or hereafter attached to,
installed in or used in connection with any of the Improvements or the
Land, and water, gas, electrical, storm and sanitary sewer facilities
and all other utilities on the Land whether or not situated in
easements (the "Fixtures"), (d) all right, title and interest of
Grantor in and to all goods, accounts, general intangibles,
instruments, documents, chattel paper and all other personal property
of any kind or character, including such items of personal property as
defined in the UCC, now owned or hereafter acquired by Grantor and now
or hereafter affixed to, placed upon, used in connection with, arising
from or otherwise related to the Land and Improvements or which may be
used in or relating to the planning, development, financing or
operation of the Mortgaged Property, including, without limitation,
furniture, furnishings, equipment, machinery, money, insurance
proceeds, accounts, contract rights, trademarks, goodwill, chattel
paper, documents, trade names, licenses and/or franchise agreements,
rights of Grantor under leases of Fixtures or other personal property
or equipment, inventory, all refundable, returnable or reimbursable
fees, deposits or other funds or evidences of credit or indebtedness
deposited by or on behalf of Grantor with any governmental authorities,
boards, corporations, providers of utility services, public or private,
including specifically, but without limitation, all refundable,
returnable or reimbursable tap fees, utility deposits, commitment fees
and development costs (the "Personalty"), (e) all reserves, escrows or
impounds required under this Deed of Trust and all deposit accounts
maintained by Grantor with respect to the Mortgaged Property, (f) all
plans, specifications, shop drawings and other technical descriptions
prepared for construction, repair or alteration of the Improvements,
and all amendments and modifications thereof (the "Plans"), (g) all
leases, subleases, licenses, concessions, occupancy agreements, rental
contracts, or other agreements (written or oral) now or hereafter
existing relating to the use or occupancy of all or any part of the
Mortgaged Property, together with all guarantees, letters of credit and
other credit support, modifications, extensions and renewals thereof
(whether before or after the filing by or against Grantor of any
petition of relief under 11 U.S.C. ss. 101 et seq., as same may be
amended from time to time (the "Bankruptcy Code")) and all related
security and other deposits (the "Leases") and all of Grantor's claims
and rights (the "Bankruptcy Claims") to the payment of damages arising
from any rejection by a Tenant of any Lease under the Bankruptcy Code,
(h) all of the rents, revenues, issues, income, proceeds, profits, and
all other payments of any kind under the Leases for using, leasing,
licensing, possessing, operating from, residing in, selling or
otherwise enjoying the Mortgaged Property whether paid or accruing
before or after the filing by or against Grantor of any petition for
relief under the Bankruptcy Code (the "Rents"), (i) all other
agreements, such as
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construction contracts, architects' agreements, engineers' contracts,
utility contracts, maintenance agreements, property management
agreements, franchise agreements, service contracts, permits, licenses,
certificates and entitlements in any way relating to the development,
construction, use, occupancy, operation, maintenance, enjoyment,
acquisition or ownership of the Mortgaged Property (the "Property
Agreements"), (j) all rights, privileges, tenements, hereditaments,
rights-of-way, easements, appendages and appurtenances appertaining to
the foregoing, and all right, title and interest, if any, of Grantor in
and to any streets, ways, alleys, strips or gores of land adjoining the
Land or any part thereof, (k) all accessions, replacements and
substitutions for any of the foregoing and all proceeds thereof, (1)
all insurance policies, unearned premiums therefor and proceeds from
such policies covering any of the above property now or hereafter
acquired by Grantor, (m) all mineral, water, oil and gas rights now or
hereafter acquired and relating to all or any part of the Mortgaged
Property, (n) all trade names, trademarks, service marks, logos,
copyrights, goodwill, books and records and all other general
intangibles relating to or used in connection with the operation of the
Mortgaged Property; and (o) all of Grantor's right, title and interest
in and to any awards, remunerations, reimbursements, settlements or
compensation heretofore made or hereafter to be made by any
governmental authority pertaining to the Land, Improvements, Fixtures
or Personalty. As used in this Deed of Trust, the term "Mortgaged
Property" shall mean all or, where the context permits or requires, any
portion of the above or any interest therein.
"Obligations": All of the agreements, covenants, conditions,
warranties, representations and other obligations (other than to repay
the Indebtedness) made or undertaken by Grantor or any other person or
entity to Beneficiary or others as set forth in the Loan Documents.
"Permitted Encumbrances": The outstanding liens, easements,
restrictions, security interests and other exceptions to title set
forth in the policy of title insurance insuring the lien of this Deed
of Trust which is accepted by Beneficiary, together with the liens and
security interests in favor of Beneficiary created by the Loan
Documents, none of which, individually or in the aggregate, materially
interfere with the benefits of the security intended to be provided by
this Deed of Trust, materially and adversely affect the value of the
Mortgaged Property, impair the use or operations of the Mortgaged
Property or impair Grantor's ability to pay its obligations in a timely
manner.
"State": The State of Texas.
"Tenants": All tenants under the Leases, if any.
"UCC": The Uniform Commercial Code of the State or, if the
creation, perfection and enforcement of any security interest herein
granted is governed by the laws of a state other than the State, then,
as to the matter in question, the Uniform Commercial Code in effect in
that state.
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GRANT
To secure the full and timely payment of the Indebtedness and the full
and timely performance of the Obligations, Grantor hereby GRANTS, BARGAINS,
SELLS, CONVEYS and ASSIGNS to Trustee (and with respect to any portions of the
Mortgaged Property that constitute personal property, to Beneficiary) the
Mortgaged Property subject, however, to the Permitted Encumbrances; TO HAVE AND
TO HOLD the Mortgaged Property to Trustee, IN TRUST, WITH POWER OF SALE, and
Grantor does hereby bind itself, its successors and assigns to WARRANT AND
FOREVER DEFEND the title to the Mortgaged Property unto Trustee and Beneficiary
and their respective successors, substitutes and assigns.
Grantor covenants with and represents and warrants to Trustee and
Beneficiary as follows:
1. PAYMENTS BY GRANTOR. Grantor shall make the following payments: (a)
all amounts required to be paid by Grantor pursuant to the Note and the Loan
Documents; (b) before delinquent, all taxes and assessments of every type or
nature affecting the Trust Property, all rents or charges for electricity,
power, gas, water and other services and utilities, and all assessments on any
water stock; (c) all other adverse claims, liens, charges and encumbrances which
now are or shall hereafter be or appear to be a lien on the Trust Property prior
to the lien of this Deed of Trust; (d) all taxes upon this Deed of Trust or the
interest of Beneficiary herein, or upon the Note or debt secured hereby;
provided, however, that, if Texas law specifies a maximum lawful contract rate
of interest, the total amount so paid for any such taxes pursuant to this
subparagraph 1(d) together with the interest payable on said indebtedness shall,
as provided in the Note, not exceed the highest lawful contract rate of interest
applicable under Texas law. If any law imposing payment of all or any of such
taxes upon Beneficiary is enacted and such taxes cannot legally be paid by
Grantor or upon the rendering by any court of a decision that the undertaking by
Grantor, as herein provided, to pay any tax or taxes is legally inoperative,
then and in any such event the debt hereby secured, without any deduction,
shall, at the option of Beneficiary which shall be exercisable in its sole
discretion, become immediately due and collectible, notwithstanding anything
contained herein or any law heretofore or hereafter enacted.
2. INSURANCE. Grantor shall provide and maintain at its own expense,
for the benefit of Beneficiary, the following insurance on the Trust Property
and all improvements, fixtures and equipment comprising part of the Trust
Property:
(a) Insurance against fire and all hazards contemplated by
extended overage, special extended perils (or other "all-risk" form)
and against vandalism, malicious mischief and violence in companies or
associations of companies approved by Beneficiary and on forms approved
by Beneficiary in the amount of full replacement value (as same may
increase from time to time hereafter and without taking any prior
depreciation into account) of the on-site and off-site improvements
(including but not limited to structure boiler, machinery, heating,
ventilating and air conditioning equipment and plate glass)
(b) Public liability insurance against claims of any and all
persons, firms and corporations for personal injury, death or property
damage occurring in or about the Trust
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Property or in or about the adjoining streets, sidewalks and setbacks
Such insurance shall afford protection in the combined single limit of
Two Million Dollars ($2 000,000 00) in respect to injury or death to
one or more persons, and to the limit of not less than One Hundred
Thousand Dollars ($100,000 00) in respect to property damage
(c) Flood insurance in such amounts as may reasonably be
requested by Beneficiary from time to time if the Trust Property is now
or hereinafter situated in an area designated by the Federal Insurance
Administration as a special flood hazard area.
(d) During the period of any construction on the Trust
Property or renovation or alteration of any improvements located
thereon, a so-called "Builder's All-Risk Completed Value or "Course of
Construction" insurance policy in non-reporting form for any
improvements under construction, renovation or alteration including,
without limitation, for demolition and increased cost of construction
or renovation, in an amount approved by Beneficiary, and worker's
compensation insurance covering all persons engaged in such
construction, renovation or alteration in an amount at least equal to
the minimum required bylaw.
Grantor also agrees, when requested by Beneficiary to provide and
maintain policies of insurance against any other risk as may reasonably be
designated by Beneficiary, all in such amounts as may be reasonably required by
Beneficiary. All policies provided for in this paragraph 2 shall be with
companies or associations of companies approved by Beneficiary shall be on forms
and in the amount approved by Beneficiary, shall contain standard trust deed
beneficiary clauses endorsed thereon making losses payable to Beneficiary and
shall otherwise be in form and substance satisfactory to Beneficiary in its
reasonable discretion. Grantor shall not permit any condition to exist that
would wholly or partially invalidate any such insurance Grantor shall assign and
deliver any and all policies of insurance to Beneficiary or shall provide
Beneficiary with certificates of such insurance coverage that shall be
irrevocable without thirty (30) days' prior written notice by registered mail
having been given to beneficiary and shall not be subject to modification
without Beneficiary's prior written approval. At least twenty (20) days before
expiration of such policies, Grantor shall deliver to Beneficiary renewals
thereof or renewal certificates therefor, premiums paid. No approval required
under this Section 2 shall be unreasonably withheld.
3. CASUALTY LOSS. In the event of loss to any of the Trust Property, Grantor
shall give prompt notice to Beneficiary and Beneficiary may make proof of loss
if not made promptly by Grantor. Each insurance company concerned is hereby
authorized and directed to make payment for such loss directly to Beneficiary
instead of to Grantor or to Grantor and Beneficiary jointly and such insurance
proceeds or any part thereof may be applied by Beneficiary in its sole
discretion to the payment of interest due on the indebtedness secured hereby,
the reduction of the principal amount of said indebtedness (in the inverse order
of maturity) the payment of any other obligation hereby secured or the
restoration or repair of the Trust Property. If Beneficiary elects to have the
Trust Property restored or repaired any insurance proceeds on account of such
toss or damage, less the costs if any, of collecting such proceeds (the `Net
Insurance Proceeds') will be applied toward the restoration and repair of the
Trust Property upon the terms and conditions hereinafter set forth in this
paragraph 3 and in accordance with plans and specifications approved by
Beneficiary. The Net Insurance Proceeds received in connection with any loss or
damage shall be held by Beneficiary. If the Net Insurance Proceeds are placed in
an interest bearing
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account Grantor shall be entitled to receive any interest generated from the
account, which interest shall be paid after completion of the restoration or
repairs Grantor, with due diligence and at its expense, shall prepare or cause
to be prepared by a licensed architect all plans and specifications necessary
for the repair and restoration of the Trust Property (which plans and
specifications shall be subject to Beneficiary's approval which approval shall
not be unreasonably withheld as long as the plans and specifications are
consistent with the original construction and concept for the development of the
Trust Property) and shall submit the same to Beneficiary, together with
evidence, reasonably acceptable to Beneficiary, selling forth the total cost of
such improvements, which shall be based upon one or more contracts proposed to
be entered into by Grantor with one or more reputable, licensed and financially
responsible contractors, each in form and content acceptable to Beneficiary in
its reasonable discretion and each providing for the issuance of a performance
and labor and material payment bond in an amount equal to the cost of the work
provided for therein, naming the contractor as principal and issued by a
corporate surety acceptable to Beneficiary and naming Beneficiary as an obligee
thereunder. Grantor shall be reimbursed from the Net Insurance Proceeds for the
expense of preparation of all plans and specifications, which Beneficiary shall
approve. If Beneficiary, in its reasonable discretion, deems the Net Insurance
Proceeds to be insufficient to complete the work then, prior to the start of
work thereon, Grantor shall deposit with Beneficiary an amount equal to the
difference between the Net Insurance Proceeds received by Beneficiary and the
total contract price for such repair and restoration.
Grantor may then commence the work of repair and restoration of the
Trust Property and disbursements from such funds shall be made to or for the
account of Grantor in accordance with a disbursement schedule, as shall be
acceptable to Beneficiary, and subject to other reasonable requirements, terms
and conditions. Any Net Insurance Proceeds remaining in such fund after the
completion of such work and the payment in full of all costs and expenses
thereby incurred shall be disbursed by Beneficiary to Grantor; provided that the
repairs to and restoration of the Trust Property has been completed (i) to
Beneficiary's reasonable satisfaction, (ii) in accordance with the plans and
specifications approved by Beneficiary, and (iii) free of any liens claims and
charges of any kind and nature, and provided further that all applicable
governmental approvals, certificates, etc. have been obtained by Grantor
evidencing satisfactory completion of the repairs and restoration. Anything to
the contrary notwithstanding, Beneficiary's obligation to disburse moneys from
such fund shall be conditioned upon there being no uncured Event of Default
existing hereunder or under any Loan Documents at the time any such disbursement
is to be made. If Grantor should fail to notify Beneficiary, within thirty (30)
days immediately following the occurrence of such loss or damage, of its desire
to use the Net Insurance Proceeds for the purpose specified herein or if an
Event of Default shall have occurred and be continuing or if Grantor fails to
provide Beneficiary with acceptable plans and specifications for the repair and
restoration of the Trust Property or fails to deposit with Beneficiary the
difference between the Net Insurance Proceeds and the cost of such repair and
restoration, or if Grantor fails to fulfill any of the other conditions
specified herein, within ninety (90) days immediately following the receipt of
the Net Insurance Proceeds by Beneficiary, then any and all amounts received by
Beneficiary under any such policies of insurance may be applied by Beneficiary
upon. the indebtedness secured hereby in such manner as Beneficiary may in its
sole discretion elect (but not to the payment of any interest not yet accrued),
whether or not such amounts are then due or, in Beneficiary's sole discretion,
the entire amount so received or any part thereof may be released to Grantor.
Beneficiary shall not be responsible for such insurance or for the collection
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of any insurance moneys or for the insolvency of any insurer or any insurance
underwriter. Application of insurance proceeds by Beneficiary shall not cure or
waive any default hereunder or invalidate any act done hereunder because of any
such default. In the event of sale of the Trust Property under the power of sale
herein granted to Trustee or foreclosure of this Deed of Trust as a mortgage or
if Beneficiary or a receiver appointed by the court shall take possession of the
Trust Properly without sale, all right, title and interest of Grantor in and to
all transferable insurance policies then in force and any unearned premiums paid
thereon shall inure to the benefit of and pass to the Beneficiary in possession,
receiver or purchaser at such sale, as the case may be, and Beneficiary is
hereby appointed attorney-in-fact for Grantor to assign and transfer said
policies.
4. MAINTENANCE AND INSPECTION. Grantor shall: (a) keep the Trust
Property in good condition and repair and not commit or permit waste thereof (b)
not remove, demolish, alter or impair the design or structural character of any
building, fixture, equipment, fence, canal, well or other improvements
comprising part of the Trust Property; (c) keep all buildings or improvements
comprising part of the Trust Property free of termites, dry rot, fungus, and alt
harmful or destructive insects; (d) keep all plants, trees, shrubs and other
landscaping comprising part of the Trust Property neatly pruned and in good
condition; (e) keep the Trust Property in a clean, safe and sanitary condition
and free of trash, rubbish and other unsightly or unhealthful conditions; (f)
not change. in any way or restrict the use or zoning of the Trust Property
without the prior written consent of Beneficiary which may be withheld in its
sole discretion, and (g) perform all other acts which from the character or use
of the Trust Property may be reasonably necessary to maintain and preserve its
value and utility. Beneficiary or Trustee, or both, may, at any time or from
time to time during normal business hours upon reasonable prior notice to
Grantor, enter and Inspect or protect the Trust Property, in person or by a
representation in such manner and to such extent as it may deem necessary.
5. COMPLETION OF IMPROVEMENTS. Grantor shall complete promptly any
improvements that may be commenced, in a good and workmanlike manner and in
conformity with plans and specifications approved by Beneficiary. Grantor shall,
with reasonable diligence, repair and restore any portions of the Trust Property
that' may be damaged or destroyed, whether or not insurance against the cause of
such damage or destruction is collected. Grantor shall pay when due all claims
for work performed or materials furnished, or both, on or in connection with the
Trust Property or any part thereof and Grantor shall pay, discharge or cause to
be removed all mechanic's, artisan's, laborer's or materialmen's charges, liens,
claims of liens or encumbrances upon the Trust Property.
6. PRIORITY OF DEED OF TRUST. Grantor shall, upon written request by
Beneficiary, appear in and prosecute or defend any action or proceeding that may
affect the priority of this Deed of Trust or the security of Beneficiary and
shall pay all reasonable costs, expenses (including the cost of searching title)
and attorneys' fees incurred in such action or proceeding Beneficiary may, in
its sole discretion, appear in and defend any action or proceeding purporting to
affect the priority of this Deed of Trust or the Trust Property or the rights or
powers of Beneficiary. Beneficiary may, in its sole discretion, pay, purchase,
contest or compromise any adverse claim, encumbrance, charge or lien that in the
reasonable judgment of Beneficiary appears to be prior or superior to the lien
of this Deed of Trust. All amounts paid, or incurred by
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Beneficiary in exercising the authority herein granted, including reasonable
attorneys' fees, shall be payments made pursuant to paragraph 9 hereof.
7. COMPLIANCE WITH LAWS. Grantor shall comply with all laws,
ordinances, regulations, covenants, conditions and restrictions affecting the
Trust Property and Grantor shall not suffer or permit any act to be done in or
upon the Trust Property in violation thereof.
8. ACTIONS ON BEHALF OF GRANTOR. If Grantor fails to do so,
Beneficiary, without demand or notice and as in its sole judgment it may
consider necessary, may do any or all things required of Grantor by any of the
provisions of this Deed of Trust or any Loan Document and incur and pay expenses
in connection therewith.
9. PAYMENT OF COSTS. Grantor shall pay to Trustee and Beneficiary,
promptly upon demand, all sums of money which either shall pay pursuant to any
of the provisions of this Deed of Trust, together with interest upon each of
said a until repaid, from the time of the payment thereof at the Default
Interest Rate specified i the Note.
10. DEFAULTS. Grantor shall be in default hereunder if any of the
following shall occur (any such occurrence is herein referred to as an "Event of
Default"):
(a) Failure to pay on or before its due any indebtedness
secured hereby, and such failure to pay shall have continued following
ten (10) days' written notice thereof to Grantor; or
(b) Any failure in performance of any agreement in this Deed
of Trust or any other Loan Document and such failure shall have
continued for thirty (30) days after giving of written notice thereof;
provided, however, that if the non-monetary event of default is
incapable of being cured within thirty (30) days after written notice
to Grantor, Beneficiary shall not exercise any of its rights or
remedies so long as Grantor have commenced appropriate action to cure
the default within thirty (30) days after written notice from
Beneficiary and Grantor diligently, and continually, pursue a cure of
the non-monetary default in the sole judgment of Beneficiary; or
(c) Upon the filing of an involuntary petition under the
United States Bankruptcy Code or any other national or state bankruptcy
statutes, as now in effect or as hereafter amended, against either
Grantor, or if Grantor shall allow the appointment of a receiver,
trustee, conservator or liquidator of all or any part of the Trust
Property, or if any of the Trust Property be levied upon by virtue of
any execution, attachment, tax levy or other writ, or if liens be filed
against the Trust Property which involuntary petition, appointment,
levy or filing, as the case may be, shall not be released, stayed,
bonded or insured against in favor of Beneficiary, satisfied or vacated
within sixty (60) days after the occurrence thereof: or
(d) Upon the abandonment of all or any material part of the
Trust Property; or
(e) Upon the breach of any material warranty, representation
or certification given in connection herewith or pursuant to any other
Loan Document; or
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(f) Upon the filing of a petition under Title 11 of the United
States Bankruptcy Code or any other national or state bankruptcy
statute, as now in effect or as hereafter amended, by Grantor or if
Grantor shall make an assignment for the benefit of its creditors or
admit in writing his or its inability to pay his or its debts as they
become due.
10A. REMEDIES. If an Event of Default occurs, Beneficiary may, at
Beneficiary's election, and by or through Trustee or otherwise, exercise any or
all of the following rights, remedies and recourses:
(a) ACCELERATION. Declare the Indebtedness to be immediately
due and payable, without further notice, presentment, protest, notice
of intent to accelerate, notice of acceleration, demand or action of
any nature whatsoever (each of which hereby is expressly waived by
Grantor), whereupon the same shall become immediately due and payable.
(b) ENTRY ON MORTGAGED PROPERTY. Enter the Mortgaged Property
and take exclusive possession thereof and of all books, records and
accounts relating thereto. If Grantor remains in possession of the
Mortgaged Property after an Event of Default and without Beneficiary's
prior written consent, Beneficiary may invoke any legal remedies to
dispossess Grantor.
(c) OPERATION OF MORTGAGED PROPERTY. Hold, lease, develop,
manage, operate or otherwise use the Mortgaged Property upon such terms
and conditions as Beneficiary may deem reasonable under the
circumstances (making such repairs, alterations, additions and
improvements and taking other actions, from time to time, as
Beneficiary deems necessary or desirable), and apply all Rents and
other amounts collected by Beneficiary or Trustee in connection
therewith in accordance with the provisions of Section 4.8.
(d) FORECLOSURE AND SALE. Sell or offer for sale the Mortgaged
Property in such portions, order and parcels as Beneficiary may
determine, with or without having first taken possession of same, to
the highest bidder for cash at public auction. Such sale shall be made
in accordance with the applicable provisions of Section 51.002 of the
Texas Property Code, as amended, or, if and to the extent such statute
is not then in force, with the applicable requirements, at the time of
the sale, of the successor statute or statutes, if any, governing sales
of Texas real property under powers of sale conferred by deeds of trust
relating to the sale of real estate or by Chapter 9 of the UCC relating
to the sale of collateral after default by a debtor (as such laws now
exist or may be hereafter amended or succeeded), or by any other
present or subsequent articles or enactments relating to same. At any
such sale (i) whether made under the power herein contained, the UCC,
any other legal requirement or by virtue of any judicial proceedings or
any other legal right, remedy or recourse, it shall not be necessary
for Trustee to be physically present, or to have constructive
possession of, the Mortgaged Property (Grantor shall deliver to Trustee
any portion of the Mortgaged Property not actually or constructively
possessed by Trustee immediately upon demand by Trustee), and the title
to and right of possession of any such property shall pass to the
purchaser thereof as completely as if Trustee had been actually present
and delivered to purchaser at such sale, (ii) each
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instrument of conveyance executed by Trustee shall contain a general
warranty of title, binding upon Grantor, (iii) each recital contained
in any instrument of conveyance made by Trustee shall conclusively
establish the truth and accuracy of the matters recited therein,
including, without limitation, nonpayment of the Indebtedness,
advertisement and conduct of such sale in the manner provided herein
and otherwise by law, and appointment of any successor Trustee
hereunder, (iv) any prerequisites to the validity of such sale shall be
conclusively presumed to have been performed, (v) the receipt of
Trustee or other party making the sale shall be a sufficient discharge
to the purchaser or purchasers for his or their purchase money and no
such purchaser or purchasers, or his or their assigns or personal
representatives, shall thereafter be obligated to see to the
application of such purchase money or be in any way answerable for any
loss, misapplication or non-application thereof, and (vi) to the
fullest extent permitted by law, Grantor shall be completely and
irrevocably divested of all of its right, title, interest, claim and
demand whatsoever, either at law or in equity, in and to the property
sold and such sale shall be a perpetual bar both at law and in equity
against Grantor, and against all other persons claiming or to claim the
property sold or any part thereof, by, through or under Grantor.
Beneficiary may be a purchaser at such sale and if Beneficiary is the
highest bidder, may credit the portion of the purchase price that would
be distributed to Beneficiary against the Indebtedness in lieu of
paying cash.
(e) RECEIVER. Make application to a court of competent
jurisdiction for, and obtain from such court as a matter of strict
right and without notice to Grantor or regard to the adequacy of the
Mortgaged Property for the repayment of the Indebtedness, the
appointment of a receiver of the Mortgaged Property, and Grantor
irrevocably consents to such appointment. Any such receiver shall have
all the usual powers and duties of receivers in similar cases,
including the full power to rent, maintain and otherwise operate the
Mortgaged Property upon such terms as may be approved by the court, and
shall apply such Rents in accordance with the provisions of Section
4.8.
(f) UCC. Exercise any and all rights and remedies granted to a
secured party upon default under the Uniform Commercial Code,
including, without limiting the generality of the foregoing: (i) the
right to take possession of the personal property or any part thereof,
and to take such other measures as Beneficiary may deem necessary for
the care, protection and preservation of the personal property, and
(ii) request Grantor at its expense to assemble the personal property
and make it available to Beneficiary at a convenient place acceptable
to Beneficiary. Any notice of sale, disposition or other intended
action by Beneficiary with respect to the personal property sent to
Grantor in accordance with the provisions hereof at least five (5) days
prior to such action, shall constitute commercially reasonable notice
to Grantor.
(g) OTHER. Exercise all other rights, remedies and recourses
granted under the Loan Documents or otherwise available at law or in
equity (including an action for specific performance of any covenant
contained in the Loan Documents, or a judgment on the Note either
before, during or after any proceeding to enforce this Deed of Trust).
11
11. ASSIGNMENT OF RENTS. All existing and future rents, leases, issues
and profits of the Trust Property or any part thereof are hereby assigned to
Beneficiary as further security for the payment of the indebtedness and
performance of the obligations, covenants, promises and agreements secured
hereby. When requested by Beneficiary from time to time, and within such time as
Beneficiary may reasonably require, Grantor shall execute, deliver and record
separate lease assignments covering any and of all of the leases that may affect
any part or all of the Trust Property. Such separate lease assignments shall be
in such form and contain such provisions as Beneficiary may in its discretion
require and, without limiting the generality of the foregoing, will require any
such tenant to subordinate the tenant's rights to the lien of this Deed of
Trust. Whether or not separate lease assignments are required by Beneficiary,
Grantor hereby authorizes and direct the lessees, tenants and occupants of the
Trust Property that, upon written notice from Beneficiary, all payments required
under said leases, or in any way respecting same, shall be made directly to
Beneficiary as they become due. Grantor hereby relieves said lessees, tenants
and occupants from any liability to Grantor by reason of said payments being
made to Beneficiary. Nevertheless, until Beneficiary notifies in writing said
lessees, tenants and occupants to make such payments to Beneficiary, Grantor
shall be entitled to collect all such rents and/or payments. Beneficiary is
hereby authorized to give such notification upon the occurrence of any Event of
Default.
12. RECEIVER AND POSSESSION OF TRUST PROPERTY. Upon the occurrence of
any Event of Default, Beneficiary shall be entitled at any time without notice,
in its sole discretion, either by its agents, attorneys, employees or by a
receiver to be appointed by a court, and without regard to the adequacy of any
security for the indebtedness hereby secured, to enter upon and take possession
of the Trust Property or any part thereof and Grantor shall upon demand
peaceably surrender possession thereof to Beneficiary or the receiver.
Beneficiary, in its name and/or in the name of the Grantor, may operate and
maintain all or any portion of the Trust Property to such extent as Beneficiary
deems advisable and Grantor agrees that Beneficiary may take whatever action it
deems necessary or proper to conserve the value of the Trust Property and to xxx
for and otherwise collect and receive all rents, issues and profits thereof,
including those past due and unpaid as well as those accruing thereafter and
Beneficiary may rent or lease the Trust Property or any portion thereof to any
person or persons and for such periods of time and on such terms and conditions
as Beneficiary in its sole discretion may determine. Grantor further agrees that
Beneficiary may also take possession of and use any and all personal property
contained in the Trust Property or used by Grantor in the rental or leasing of
the Trust Property or any part thereof. Beneficiary may apply all such rents,
issues and profits collected or received by it to the payment of costs and
expenses incurred in the operation of the Trust Property or to protect and
preserve the security thereof and then in the manner hereinabove specified in
respect of proceeds of sale of the Trust Property or any part of all of such
moneys may be released by Beneficiary in its sole discretion. The reasonable
expense (including receiver's fees, if any, and reasonable compensation to any
agent appointed by Beneficiary and reasonable counsel fees and costs and
disbursements) incurred in taking possession, effecting collection or attempting
to take possession and effect collection shall be deemed an expense of this
trust to be paid by Grantor and secured hereby. Neither the entering upon and
taking possession of the Trust Property nor the collection of such rents, issues
and profits and the application or release thereof as aforesaid, shall cure or
waive any default or notice of trustee's sale hereunder or invalidate any act
done pursuant to such notice. In dealing with the Trust Property or any related
personal property as a beneficiary in possession Beneficiary shall be without an
liability, charge or obligation therefor
12
to Grantor other than for willful misconduct, and all net loss costs and
expenses incurred shall be advancements covered by paragraph 9 hereof.
13. CONDEMNATION. All judgments, awards of damages and settlements
hereafter made as a result of or in lieu of any condemnation or other
proceedings for public use of or for any damage to the Trust Property or any
part hereof and any award for change of grade of streets thereon are hereby
assigned and shall be paid to Beneficiary. Beneficiary shall have the right to
participate in any such proceedings and Grantor shall not settle or otherwise
resolve any such proceedings or execute or deliver any deed in lieu thereof
without the prior written consent of Beneficiary. Grantor shall execute such
further assignments of any such award, judgment or settlement as Beneficiary may
require and Grantor shall deliver to Beneficiary all proceeds of any such award,
judgment or settlement which may be received by Grantor. Beneficiary may, at its
option and in its sole discretion, apply such proceeds or any part thereof to
the payment of interest due on the indebtedness secured hereby, the reduction of
the principal amount of such indebtedness (in the inverse order of maturity) or
the payment of any other obligation hereby secured or Beneficiary may release
such proceeds or any part thereof. Neither the application nor the release of
any such sum shall cure or waive any def or notice of trustee's sale hereunder
or invalidate any act done pursuant to such notice.
14. ACTIONS BY BENEFICIARY. Without affecting the liability of Grantor,
any guarantor or any other person (except any person expressly released in
writing) for payment of any indebtedness secured hereby or for performance of
any obligation contained herein, and without affecting the rights of Beneficiary
with respect to any se not expressly released in writing, Beneficiary may, at
any time and from time to time, either before or after maturity of the Note and
without notice or consent:
(a) Release any guarantor or other person liable for payment
of all or any part of the indebtedness or for performance of any
obligation; or
(a) Make any agreement extending the time or otherwise
altering the terms of payment of all or any part of the indebtedness or
modifying or waiving any obligation or subordinating, modifying or
otherwise dealing with the lien or charge thereof; or,
(c) Exercise or refrain from exercising or waive any right
Beneficiary may have; or
(d) Accept additional security of any kind; or
(e) Release or otherwise deal with any property, real or
personal, securing the indebtedness including all or any part of the
Trust Property herein described.
15. MARSHALLING AND ASSERTION OF REMEDIES. If the indebtedness secured
hereby is now or hereafter further secured by chattel mortgages, security
interests, deed of trusts, pledges, contracts of guaranty or other additional
securities, Beneficiary may in its sole discretion exhaust `any one or more of
said securities as well as the security hereunder, either concurrently or
independently and in such order as it may determine, and may apply the proceeds
received upon the indebtedness secured hereby without affecting the status of,
or waiving any right to exhaust, all or any other security including the
security hereunder and without waiving any breach or
13
default or any right or power, whether exercised hereunder or contained herein
or in any such other security. Grantor hereby waives any right or privilege
which it or its creditors might otherwise have to require Trustee and/or
Beneficiary to proceed against the assets encumbered hereby or by any other
security documents or instruments securing the Note in any particular order or
fashion under any legal or equitable doctrines or principles of marshalling
and/or suretyship and further agrees that upon the occurrence of an Event of
Default and after the expiration of any applicable grace period, Trustee and/or
Beneficiary may proceed to exercise any or all remedies with regard to any or
all assets encumbered hereby or by any other security documents or instruments
securing the Note, in such manner and order as Beneficiary in its sole
discretion may determine.
16. DUE-ON-SALE OR ENCUMBRANCE. Grantor acknowledges that Beneficiary
is relying on the experience, financial condition and management expertise of
Grantor in creating the indebtedness represented by the Note and Grantor agrees
not to sell transfer further encumber pledge assign convey lease or in any other
manner, whether voluntarily involuntarily, or by operation of law, dispose of
the Trust property or any part thereof or turn over the management or operation
of the Trust Property to an person, firm or corporation (any of such events
being referred to herein as a "transfer") without obtaining the prior written
consent of Beneficiary, which consent may be granted or denied in Beneficiary
sole and absolute discretion Any cumulative transfer of more than twenty-five
percent (25%) of the direct or indirect beneficial ownership interest or the
proceeds or profits relating thereto of Grantor shall be deemed to be a transfer
Notwithstanding the foregoing to the contrary, the existing members of Borrower
as of the date hereof may transfer interests in Borrower to and among each
other, as well as to family members or entities or trusts for the benefit of
family members for estate planning purposes
In connection with a proposed transfer, Beneficiary shall have the
right, but not the obligation, to require and give consideration to (i)
financial statements and other information relating to the proposed transferee,
including information as to the financial condition experience and management
expertise of the proposed transferee, (ii) assurances, in form and substance
satisfactory to Beneficiary, from Grantor and all guarantors of the indebtedness
secured hereby that they will continue to be liable to Beneficiary for such
indebtedness, (iii) the payment to Beneficiary of a transfer fee not to exceed
one percent (1%) of the then outstanding principal balance of the Note, plus all
of Beneficiary's expenses incurred in connection with such transfer, and (iv)
that the proposed transferee assume and agree to perform all obligations of
Grantor by execution of an assumption agreement in form and substance
satisfactory to Beneficiary, in its sole discretion.
If a transfer is effected and if Beneficiary does not consent to the
transfer (if such consent is required hereunder), Beneficiary may, at its
option, declare all indebtedness secured hereby to be immediately due and
payable and may avail itself of any and all remedies provided herein for an
Event of Default.
17. NO WAIVER. The acceptance by Beneficiary of any sum in payment, or
part payment, of any indebtedness secured hereby after the same is due or after
the recording of a notice of trustee's sale, shall not constitute a waiver of
the right to require prompt payment, when due, of all other sums so secured, nor
shall such acceptance cure or waive any remaining default
14
or invalidate any sale held pursuant to such notice for any such remaining
default, or prejudice any of the rights of Beneficiary under this Deed of Trust.
18. SUCCESSOR TRUSTEE. Beneficiary may, at any time Beneficiary may
desire, appoint in writing another trustee in the place and stead of Trustee or
any successor in trust and the title herein conveyed to said Trustee shall be
vested in said successor. Trustee may resign by mailing or delivering notice
thereof to Beneficiary and Grantor.
19. TRUSTS IRREVOCABLE. The trusts herein created are irrevocable.
20. OIL, GAS OR MINERAL RIGHTS. Grantor hereby assigns and transfers as
additional security to Beneficiary all damages, royalties and revenue of every
kind, nature and description whatsoever that Grantor may be entitled to receive
from any person, company or corporation owning or having or hereafter acquiring
a right to the oil, gas or mineral rights and reservations of the Trust Property
with the right in Beneficiary to receive and receipt therefor and apply the same
to said indebtedness either before or after any default beyond any notice and
cure period hereunder and Beneficiary may demand, xxx for and recover any such
payments but shall not be required so to do.
21. FURTHER ADVANCES. Upon request of Grantor or their successors in
ownership of the Trust Property, Beneficiary may hereafter, in its sole
discretion, at any time before full payment of the indebtedness secured hereby,
make further advances to Grantor or said successors in ownership, and the same,
with interest and late charges, shall be secured by this Deed of Trust;
provided, however, that the principal secured by this Deed of Trust and
remaining unpaid shall not at the time of and including any such advance exceed
the original principal sum secured hereby; and provided further that if
Beneficiary, in its sole discretion, shall make a further advance or advances as
aforesaid, Grantor or said successors in ownership agree to execute and deliver
to Beneficiary a promissory note to evidence the same, payable on or before the
maturity of the indebtedness secured hereby and bearing such other terms as
Beneficiary shall require. Beneficiary shall under no circumstances be obligated
to make further advances and Grantor acknowledges and agrees that Beneficiary
has made no such commitment, either specifically or by implication.
22. STATUTE OF LIMITATIONS. The pleading of any statute of limitations
as a defense to any and all obligations secured by this Deed of Trust is hereby
waived to the full extent permissible by law.
23. SEVERABILITY. If any one or more of the provisions of this Deed of
Trust or the applicability of any such provision to a specific situation shall
be held invalid or unenforceable, such provision shall be modified to the
minimum extent necessary to make it or its application valid and enforceable and
the validity and enforceability of all other provisions of this Deed of Trust
and all other applications of such provisions shall not be affected thereby. The
invalidity of any one or more of the covenants, phrases, clauses, sentences or
paragraphs of this Deed of Trust shall not affect the remaining portions of this
Deed of Trust or any part thereof and this Deed of Trust shall be construed as
if such invalid covenants, phrases, clauses, sentences or paragraphs, if any,
had not been inserted herein.
15
24. REALTY MORTGAGE. Grantor acknowledges that it is the intent of the
parties hereto that this Deed of Trust qualify and operate as a deed of trust,
and as a realty mortgage, upon real property pursuant to Texas law. In any
proceeding or action to enforce this Deed of Trust, Beneficiary may, at its
option, denominate this Deed of Trust a realty mortgage and initiate a judicial
foreclosure of the Trust Property. If a court of competent jurisdiction finds
this Deed of Trust, ineffective, unenforceable or void as a deed of trust or
that its priority is impaired or reduced, this Deed of Trust shall be construed
as a realty mortgage wherein Grantor is the mortgagor and Beneficiary is
mortgagee, and may thereby be foreclosed after default beyond any notice and
cure period or breach hereunder.
25. CHARGES FOR STATEMENTS. Grantor shall pay Beneficiary's reasonable
charges to the maximum amount permitted by law for any statement regarding the
obligations secured by this Deed of Trust requested by Grantor or in their
behalf.
26. ATTORNEY'S FEES. If it becomes necessary for Beneficiary to employ
legal counsel or to take legal action to collect the indebtedness secured
hereby, to enforce any provision hereof, or to protect any of the Beneficiary's
rights hereunder, Grantor shall pay to Beneficiary, in addition to taxable costs
of any legal proceeding or action, reasonable attorneys' fees actually incurred,
and all costs of preparation and conduct of such proceedings, including costs of
title searches and title policy commitments, all of which shall be a lien upon
the Trust Property and secured hereby.
27. OFFSET. No offset or claim that Grantor now has or may in the
future have against Beneficiary shall relieve Grantor from paying installments
or performing any other obligation herein or secured hereby. Grantor shall,
within ten (10) days any request of Beneficiary, furnish a written statement of
the amount due on the Note end a description of any alleged offsets,
counterclaims or defenses to the payment thereof.
28. FURTHER ASSURANCES. Grantor shall, upon request of Trustee or
Beneficiary, promptly correct any defect, error or omission which may be
discovered in the contents of this Deed of Trust or in the execution or
acknowledgment he and will execute, acknowledge and deliver such further
instruments and do such further act as may be necessary or as may be reasonably
requested by Trustee or by Beneficiary to carry out more effectively the
purposes of this Deed of Trust, to subject to the lien and security interest
hereby created any of Grantor's properties, rights or interests covered or
intended to be covered hereby and to perfect and maintain such lien and security
interest If any rights, easements or other hereditaments shall hereafter become
appurtenant to the Trust Property, or any part thereof, Grantor shall deliver to
Beneficiary, upon demand, a supplemental Deed of Trust in the form approved by
Beneficiary in its sole discretion governing such rights and interests.
29. PERSONAL PROPERTY. The indebtedness and obligations secured by this
Deed of Trust are also secured by security interests in Grantor's right, title
and interest in all fixtures, equipment and other personal property used upon,
in or about or to be incorporated into any of the improvements at any time
situated on the Trust Property or any part thereof or used by Grantor in
connection with said improvements. Grantor covenants and agrees that it will
cause Beneficiary to acquire valid and effectual first security interests in all
such fixtures and equipment, together with all replacements thereof, and
additions thereto, and the proceeds
16
thereof, or of the Grantor' right, title and interest therein. Grantor agrees
that without the written consent of Beneficiary, no security interest will be
created or suffered to be created under the provisions of the Uniform Commercial
Code, as the same together with any amendments or supplements thereto may be in
effect. In the event of a breach of this paragraph 29, Beneficiary may, at its
option, declare all sums secured by this Deed of Trust to be immediately due and
payable and may avail itself of any and all remedies provided in this Deed of
Trust upon the occurrence of an Event of Default. Grantor agrees that all
property of every nature and description covered by the lien and charge of this
Deed of Trust, together with all such property. interest covered by such
security interest or interests, are encumbered as a unit, and upon default
beyond any notice and cure period by Grantor hereunder, or under any security or
other agreement now or hereafter securing the indebtedness hereby secured, in
Beneficiary's sole discretion, may be foreclosed upon or sold in the same
proceedings or at the same time, and all of said property and interest may in
Beneficiary's sole discretion, be sold as such in one unit as a going business
and not in lots or parcels, subject to the provisions of applicable law. The
filing of any financing statement relating to any such property or rights or
interest shall not be construed to diminish or alter any of Beneficiary's rights
or priorities hereunder.
30. IMPOUNDS. At the option of Beneficiary or if Grantor becomes delinquent in
any payment required by any of the Loan Documents, and in order to insure the
payment of taxes assessments, and/or premiums for the insurance required
pursuant to paragraphs 1 and 2 hereof, Grantor shall pay to Beneficiary, at the
time of the making of installments under the Note, and in addition to any other
payments required hereunder, monthly installments of such payments and shall
deliver promptly to Beneficiary all bills and notices for such payments Such
installments shall equal the estimated amounts of such payments next due (as
reasonably estimated by Beneficiary) less all installments already paid
therefor, divided by the number of months that are to elapse before one (1)
month prior to the date when such payments are due If amounts paid to
Beneficiary under provisions of this paragraph 30 are insufficient to discharge
the obligation of Grantor for such payments as the same became due, Grantor
shall pay to Beneficiary upon demand such additional sums as may be required to
fully pay and discharge these items All moneys paid to Beneficiary under the
terms of this paragraph 30 may, at Beneficiary's option: (a) be held by
Beneficiary to pay taxes assessments and insurance before the same become
delinquent, (b) be credited directly to interest and/or principal due upon the
indebtedness secured hereby and upon payment by Beneficiary of such taxes,
assessments or insurance the amount so paid shall be added to the principal of
the indebtedness secured hereby. Nothing in this paragraph 30 shall release
Grantor of his obligation to pay said taxes assessments and insurance as the
same become due and payable under the provisions of this Deed of Trust Deposits
made under this paragraph 30 may be commingled with Beneficiary's general funds
and Beneficiary have no liability to Grantor for any interest on such deposits
31. FINANCIAL STATEMENTS AND REPORTS. Grantor shall deliver to
Beneficiary, or cause to be delivered to Beneficiary, such financial and
operating statements for Grantor and, if applicable, the guarantors (for so long
as any guaranty is in effect), as and when required under the Loan Agreement.
Upon Beneficiary's reasonable request, made from time to time, Grantor shall
deliver to Beneficiary such other reports, financial -statements and information
concerning Grantor, the guarantors, if applicable (for so long as any guaranty
is in effect), and the Trust Property, including without limitation, operating
budgets, rent schedules, leases, and income and expense statements as
Beneficiary may request. All such financial and operating statements shall
17
be prepared using generally accepted accounting principles consistently applied
from applicable period to period.
32. HAZARDOUS SUBSTANCES. Grantor hereby represents, warrants and
covenants to Beneficiary that Grantor has not caused or permitted, nor shall it
cause or permit, the Trust Property to be used to generate, treat, store, handle
or dispose of hazardous substances, waste or material as defined by the Federal
Comprehensive Environmental Response Compensation and Liability Act, the Federal
Resource Conservation and Recovery Act, the Federal Toxic Substances Control
Act, the Texas Environmental Quality Act or any other federal, state or local
law, regulation or ordinance on the Trust Property, and that, no activity has
occurred on the Trust Property which could have toxic results; and there is no
proceeding or inquiry pending or, in Grantor's knowledge, anticipated by any
governmental agency or other authority with respect thereto. Grantor shall
provide Beneficiary upon request such information in Grantor's possession
regarding the disposal of such hazardous substances, waste or material either on
the Trust Property or upon property which Grantor or any other party owns,
controls or leases or of which Grantor has knowledge which may affect the use of
the Trust Property. Grantor further represents and warrants that the Trust
Property is not now, nor, to Grantor's knowledge, and except as disclosed in the
Environmental Report, has ever been, used for the production, treatment,
collection, storage or disposal of any refuse, objectionable waste or any
material:
(a) In a manner inconsistent with the regulations issued by the Texas
Department of Environmental Quality; or
(b) So as to require a permit or approval from the Texas Department of
Environmental Quality; or
(c) In a manner which would cause the [local] Department of Health
Services to inspect the Trust Property or issue orders pursuant to the county
health code.
Grantor agrees to indemnify, defend and save harmless Beneficiary, its
officers, directors, employees, agents and successors in interest from any and
all losses, damages costs, remedial action, expenses, liabilities, penalties,
fines, forfeitures demands claims causes of action and costs or expenses
incidental thereto (including all costs of defense settlement and attorneys'
fees) which any or all of them may hereinafter suffer incur be responsible for,
pay as a result of, arising out of the breach of any representation, warranty or
obligation of Grantor as set forth in this paragraph 32. The provisions of this
paragraph 32 are in addition to those set forth in the Loan Agreement and in the
Certificate and Indemnity Regarding Hazardous Substances executed by Grantor of
even date herewith.
33. RECONVEYANCE. Upon written request of Beneficiary stating that all
sums secured hereby have been paid, and upon surrender of this Deed of Trust and
the Note to Trustee for cancellation and retention and upon payment by Grantor
of its fees, Trustee shall reconvey, without warranty, the estate in the Trust
Property then held by Trustee The grantee in such reconveyance may be designated
and described as the "person or persons legally entitled thereto," or by other
appropriate terms.
18
34. SUCCESSORS. Subject to the provisions of paragraph 16, this Deed of
Trust shall inure to and bind the heirs, legatees, devisees, administrators,
executors, successors and assigns of the parties hereto, and shall be construed
that wherever applicable with reference to any of the parties hereto, the use of
the singular number shall include the plural number, the use of the plural
number shall include the singular number, the use Of the masculine gender shall
include the feminine gender and shall likewise be construed as applicable to and
including a corporation or corporations that may be a party or partied hereto.
The term "Beneficiary" shall mean the owner and holder of the Note, whether or
not named as Beneficiary herein. Any appointment herein of Beneficiary as
attorney-in-fact for Grantor shall be with full power of substitution. This Deed
of Trust was prepared after negotiations by and between Grantor and Beneficiary;
the fact that it has been produced by one party does not require the language of
this Deed of Trust to be strictly construed against either Grantor or
Beneficiary.
35. NOTICE OF TRUSTEE'S SALE. Grantor hereby request that a copy of any
notice of trustee's sale hereunder be mailed to it at its address hereinbefore
set forth.
36. INTEREST LIMITATIONS. If, from any circumstances whatsoever,
payment or performance of any provision of this Deed of Trust or of the Note, at
the time performance of such provision shall be due, shall require payment in
excess of that permitted by any applicable law, the obligation to be paid or
performed shall be reduced to the limit allowed by such law, so that in no event
shall any exaction be possible under this Deed of Trust, the Note, or any other
agreement given in connection herewith, that is in excess of any limitation of
law. By acceptance of this Deed of Trust, Beneficiary expressly waives the right
to demand any such excess. The provisions of this paragraph 31 shall control
every other provision of this Deed of Trust, the Note and any other such
agreement.
37. TIME OF ESSENCE. Time is of the essence of this Deed of Trust and
all of its provisions. Any waiver or consent by Beneficiary shall relate only to
the particular matter or item involved and shall be without prejudice to
Beneficiary; as to any subsequent required for a waiver or consent, Beneficiary
may insist on strict compliance with the terms and conditions hereof.
38. NOTICES. Unless otherwise required by applicable law, all notices
required to be given hereunder shall be either served personally or by U.S.
mail, postage prepaid, and addressed, to Grantor, Trustee and Beneficiary at
their addresses first above written. Such addresses may be changed by notice to
the other parties given in the same manner as provided in this paragraph 38.
Notices given by U.S. mail shall be deemed to have been given upon the deposit
thereof in the U.S. mail.
39. GOVERNING LAW. This Deed of Trust shall be governed by and
construed in accordance with the laws of the State of Texas.
40. DEFINITIONS AND HEADINGS. Unless the context indicates otherwise,
the capitalized terms used in this Deed of Trust shall have the meanings set
forth in the Loan Documents. Headings in this Deed of Trust are solely for the
convenience of Grantor, Trustee and Beneficiary and shall not affect the
interpretation of the provisions hereof.
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41. CROSS-DEFAULT. A default hereunder shall, at Beneficiary's option,
constitute a default under all other Loan Documents and a default under any Loan
Document shall, at Beneficiary's option, constitute a default under this Deed of
Trust.
42. INDEMNIFICATION. Grantor agrees to indemnify, defend and hold Beneficiary
harmless from and against any and all claims, charges, actions, suits,
proceedings, lawsuits, obligations, liabilities, fines, penalties, costs and
expenses, including, but not limited to, reasonable attorneys' fees incurred by
Beneficiary, alleged by or in favor of Grantor or any principal, partner,
stockholder, officer, director, employee or agent thereof, or by or in favor of
any broker, realtor, agent or other party claiming brokerage commissions or
finder's fees in connection with the Loan (other than for claims for commissions
or fees claimed by persons or parties employed or engaged by Beneficiary), or in
connection with making or collecting the Loan or enforcing the Loan Documents.
Grantor shall further indemnify Beneficiary and hold Beneficiary harmless
against any and all liabilities (including any and all taxes and special
assessments levied against the Mortgaged Property or any improvements, fixtures,
or personal property located thereon), obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses, and disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against Beneficiary, in any way relating to, or arising out of, the Loan
Documents or any of the transactions contemplated therein, or the construction
and/or operation of the Mortgaged Property (except claims caused by the gross
negligence or willful misconduct of Beneficiary), to the extent that any such
indemnified liabilities result, directly or indirectly, from any claims made or
actions, suits, or proceedings commenced by or on behalf of any person or entity
other than Beneficiary. The obligations and provisions of this paragraph shall
continue and remain in full force and effect after the Loan and other
obligations of Grantor under this Deed of Trust and under the other Loan
Documents have been paid or discharged in full and shall survive the termination
of this Deed of Trust and the repayment of the Loan.
IN WITNESS WHEREOF, this Deed of Trust has been executed the date first
above written.
/s/ Xxxx Xxxxxx
-----------------------------------
Xxxx Xxxxxx
STATE OF TEXAS ss.
ss.
COUNTY OF XXXXXXXXXX xx.
On April 4, 2006, before me, a Notary public, personally appeared Xxxx
Xxxxxx, who is personally known to me to be the person whose name is subscribed
to the within instrument and acknowledged to me that he executed the same as his
free and voluntary act for the uses and purposes mentioned in the instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
/s/ Xxxxxxx X. XxXxxxx
-----------------------------------------
(SEAL) Printed Name of Notary Xxxxxxx X. XxXxxxx
------------------
Notary Public, State of Texas
My commission expires: September 11, 2009
20
EXHIBIT "A"
LEGAL DESCRIPTION
BEING 9.000 ACRES OF LAND IN THE X.X. XXXXX SURVEY, A-2,
XXXXXXXXXX COUNTY, TEXAS, SAID 9.000 ACRES BEING OUT OF A
CERTAIN 82.10 ACRE TRACT OF LAND DEED OF WHICH IS RECORDED IN
VOLUME 524, PAGE 263, XXXXXXXXXX COUNTY DEED RECORDS, SAID
9.000 ACRES BEING DESCRIBED MORE PARITCULARY AS FOLLOWS:
BEGINNING at a 1" galvanized iron pipe found for the Southwest corner
of the said 82.10 acre tract, the Northwest corner of the First Christian Church
5.7225 acre tract of land deed of which is recorded under County Clerk's File
Number 8421004, Xxxxxxxxxx County Real Property Records, same being the
Southwest corner of the herein described tract, and being 0.60 feet East of the
East line of XxXxxx Estates, Section 1, a Subdivision, map of which is recorded
in Cabinet A, Sheet 12, Xxxxxxxxxx County Map Records;
THENCE N. 16(degree) 06' 00" W., along the West line of the said 82.10
acre tract, generally 0.60 feet East of the East line of said XxXxxx Estates for
a distance of 803.59 feet to a 1/2" iron rod set for the Northwest corner
of the herein described tract;
THENCE S. 74(degree) 20' 15E E., leaving the West line of the 82.10
acre tract, across the 82.10 acre tract for a distance of 851.68 feet to a 1/2"
iron rod set for the Northeast corner of the herein described tract, in the West
line of State Highway Loop 336, (varying width right of way Vol. 1045, Xx. 000,
X.X.X.X.);
THENCE S. 08(degree) 57' 38" W., along the West line of said Loop 336
for a distance of 400.00 feet to a 4" x 4" TXDOT concrete monument found for the
Southeast corner of the herein described tract, in the South line of the 82.10
acre tract, the North line of the said Church tract, from whence a 5/8" iron rod
found inside a 1" iron pipe for the Southeast corner of the 82.10 acre tract
bears N. 74(degree) 37' 54" E., 735.81 feet, a 4" x 4" TXDOT concrete monument
found for the Northeast corner of the Church tract bears N. 74(degree) 37' 54"
E., 5.55 feet;
THENCE S. 74(degree) 37' 54" W., leaving the West line of Loop 336,
along the South line of the 82.10 acre tract, the North line of the Church tract
for a distance of 554.75 feet to the POINT OF BEGINNING and containing in all
9.000 acres of land.
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