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EXHIBIT 10.1(c)
DEED OF TRUST, SECURITY AGREEMENT,
FINANCING STATEMENT, AND ASSIGNMENT OF RENTAL
THE STATE OF TEXAS )
) KNOW ALL PERSONS BY THESE PRESENTS:
COUNTY OF DALLAS )
THIS DEED OF TRUST, SECURITY AGREEMENT, FINANCING STATEMENT, AND
ASSIGNMENT OF RENTAL is executed as of the date last shown below, by PACIFIC
UNITED, L. P., a Texas limited partnership ("Grantor"), to XXXXX X. XXXXX whose
address is 0000 X. Xxxx Xxxxxxxxx Xxxxxxx, Xxxxxx, Xxxxxx Xxxxxx, Xxxxx, as
Trustee ("Trustee") for the benefit of BANK OF AMERICA TEXAS, N.A. whose
address is 0000 X. Xxxx Xxxxxxxxx Xxxxxxx, Xxxxxx, Xxxxx 00000 (such party,
together with any holder or holders of all or any part of the "Secured
Indebtedness" (as hereinafter defined) shall be referred to herein as
"Beneficiary").
ARTICLE I
DEFINITIONS
Section 1.1. As used herein, the following terms shall have the definitions
assigned to them as follows:
"Beneficiary" has the meaning assigned to it in the preamble hereof.
"Code" means the Uniform Commercial Code as adopted in the State of
Texas.
"Collateral" means all of Grantor's right, title, and interest, to the
extent assignable or transferable, now owned or hereafter acquired, in and to
the following described properties and interests and all replacements or
substitutes therefor and all products and proceeds thereof, and accessions
thereto:
(1) All portions of the Personal Property which are
either fixtures or personal property, tangible or intangible; and
(2) All accounts, inventory, instruments, chattel paper,
documents, consumer goods, insurance proceeds, leases, contract
rights, and general intangibles now, or hereafter related to, any of
the Real Estate, including, without limitation, the following:
(A) All contracts now or hereafter entered into
by and between Grantor, as owner, and any "Original
Contractor" (as such term is defined in Section 53.001(7) of
the Texas Property Code), or any party, as well as all right,
title, and interest of Grantor in, to, and under any
subcontracts, providing for the construction (original,
restorative or otherwise) of any of the Improvements, and of
any other buildings, structures or improvements to, or on, the
Real Estate (or any part thereof), or the furnishing of any
materials, supplies, equipment, or labor in connection with
any such construction;
(B) All of the plans, specifications, and
drawings (including, without limitation, plot plans,
foundation plans, utility facilities plans, floor plans,
elevations plans, framing plans, cross-sections of walls
plans, mechanical plans, electrical plans, architectural and
engineering plans and specifications, and architectural and
engineering studies and analyses) heretofore or hereafter
prepared by any architect or engineer with respect to any of
the Real Estate;
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(C) All agreements now or hereafter entered into
with any party with respect to architectural, engineering,
management, brokerage, promotional, marketing, or consulting
services rendered or to be rendered, with respect to the
planning, design, inspection, or supervision of the
construction, development, management, marketing, promotion,
leasing, operation, or sale of any of the Real Estate;
(D) All commitments (and the proceeds therefrom)
issued by any lenders to finance any of the Mortgaged
Property;
(E) Any completion bonds, performance bonds,
labor and material payment bonds, and any other bonds (and the
proceeds therefrom) relating to any of the Real Estate or to
any contract providing for construction of any of the
Improvements or any other buildings, structures, or
improvements to, or on, any of the Real Estate;
(F) All rights or awards due to Grantor arising
out of any eminent domain proceedings for the taking or for
loss of value of any of the Real Estate;
(G) All rents, issues, profits, and deposits due
to Grantor, as lessor, under any lease covering any of the
Real Estate;
(H) All trademarks, trade names, or symbols under
which any of the Real Estate is operated or the business of
Grantor at the Real Estate is conducted;
(I) All accounts receivable arising out of the
leasing and operation of, or the business conducted at or in
relation to, any of the Real Estate;
(J) All monetary deposits which Grantor has been,
or may be, required to give to any public or private utility
with respect to utility services furnished, or to be
furnished, to the Real Estate;
(K) All contracts of sale and options relating to
the disposition of any of the Real Estate;
(L) All products and proceeds arising by virtue
of any transaction related to the disposition of any of the
Mortgaged Property;
(M) All deposits of cash, securities, or other
property which may be held at any time, and from time to time,
by Grantor to secure the performance by each "Lessee" (as
hereinafter defined) of such Lessee's covenants, agreements,
and obligations under any "Lease" (as hereinafter defined);
(N) All permits, licenses, franchises,
certificates, and other rights and privileges obtained by
Grantor in connection with the Mortgaged Property;
(0) The balance of every deposit account (now or
hereafter existing) of Grantor with Beneficiary (or any agent,
affiliate, or subsidiary of Beneficiary) and any other claim
of Grantor against Beneficiary (now or hereafter existing) and
all money, instruments, securities, documents, chattel paper,
credits, demands, and any other property, rights, or interests
of Grantor which at any time shall come into the possession,
custody, or control of Beneficiary (or any agent, affiliate,
or subsidiary of Beneficiary);
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(P) All proceeds payable or to be payable under
each policy of insurance relating to the Real Estate and/or
the Personal Property; and
(Q) All books, records and computer software
concerning the Real Estate, the Personal Property, and the
property described in clauses (A) through (P) above.
"Deed of Trust" means this Deed of Trust, Security Agreement,
Financing Statement and Assignment of Rental, including all exhibits attached
hereto, as the same may, at any time and from time to time, be renewed,
extended, modified and/or increased.
"Event of Default" has the meaning set forth in Section 4.1 hereof.
"Grantor" has the meaning assigned to it in the preamble hereof.
"Grantor's Successors" means each and all of the heirs, executors,
administrators, legal representatives, successors, and assigns of Grantor, both
immediate and remote.
"Improvements" means all buildings and improvements now or hereafter
situated upon the Land.
"Land" means all of that certain tract of real property located in
Dallas County, Texas, more particularly described upon Exhibit A attached
hereto, together with all strips or gores appurtenant to such property,
underlying roadways or public rights-of-way or otherwise, in which Grantor now
or hereafter possesses an interest.
"Loan" means the indebtedness and obligations of Grantor evidenced by
the Security Instruments.
"Loan Agreement" means that certain Construction Loan Agreement dated
of even date herewith between Grantor and Beneficiary.
"Lots" means the 87 single-family residential lots situated or to be
situated within the Land.
"Mortgaged Property" means the Real Estate and the Collateral,
collectively.
"Note" means that certain promissory note dated August 6, 1997,
executed by Grantor payable to the order of Beneficiary, in the original
principal amount of Three Million Six Hundred Seventy-Five Thousand and No/100
Dollars ($3,675,000.00), bearing interest as therein specified, containing a
clause requiring the payment of attorneys' fees, and providing that the
principal balance of such Note shall be due and payable on August 6, 1999,
unless extended to August 6, 2001, in accordance with the provisions of the
Note, and all loans, principal, interest, fees, expenses, obligations and
liabilities of Grantor to Beneficiary arising pursuant to or represented by
such note, as it may, at any time and from time to time, be renewed, extended,
modified and/or increased.
"Permitted Exceptions" means those items shown as exceptions in the
mortgagee policy of title insurance issued by Chicago Title Insurance Company
in connection with this Deed of Trust.
"Personal Property" means all fixtures, building materials, machinery,
equipment, furniture, furnishings, and personal property in which Grantor now
has, or at any time hereafter acquires, an interest, and which now, or at any
time hereafter, are situated in, on or about the Land.
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"Real Estate" means the Land, the Improvements, the Personal Property
and all other estates, easements, licenses, interests, rights, titles, powers
and privileges of every kind and character which Grantor now has or at any time
hereafter acquires, in and to the Land, the Improvements, the Personal
Property, and all property owned by Grantor which is used or useful in
connection with the Land, the Improvements, and the Personal Property, and the
proceeds of any and all insurance covering the Land, the Improvements, and the
Personal Property.
"Secured Indebtedness" means
(a) All indebtedness, liabilities and obligations arising under
the Note or this Deed of Trust or the other Security Instruments;
(b) All loans and advances which Beneficiary may hereafter make to
Grantor in connection with the Loan or the Mortgaged Property;
(c) All other and additional indebtedness, liabilities and
obligations of every kind and character, of Grantor now or hereafter existing
in favor of Beneficiary in connection with the Loan or the Mortgaged Property,
regardless of whether they are direct, indirect, primary, secondary, joint,
several, joint and several, liquidated, unliquidated, fixed or contingent, and
regardless of whether the same may, prior to their acquisition by Beneficiary,
be or have been payable to some other person or entity, it being the intention
and contemplation of Grantor and Beneficiary that future advances may be made
to Grantor for a variety of purposes, that Grantor may guarantee (or otherwise
become directly or contingently obligated with respect to), the obligations of
others to Beneficiary in connection with the Loan or the Mortgaged Property,
and that Beneficiary may, from time to time, acquire from others obligations of
Grantor to such others, or that Grantor may otherwise hereafter be or become
further indebted to Beneficiary in connection with the Loan or the Mortgaged
Property, and that payment and repayment of all of the foregoing are intended
to and shall be part of the Secured Indebtedness secured hereby;
(d) The payment and performance by Grantor of all of its
obligations under (i) any loan agreement now or hereafter executed by and
between Grantor and Beneficiary in connection with the Loan or the Mortgaged
Property, together with all amendments, modifications, renewals, restatements,
rearrangements, or extensions thereof, and (ii) any and all other security
agreements, mortgages, deeds of trust, collateral pledge agreements, assignments
or contracts of any kind now or hereafter existing as evidence of, security for,
or otherwise executed in connection with any indebtedness, obligation or
liability of Grantor to Beneficiary in connection with the Loan or the Mortgaged
Property; and
(e) Any and all renewals, increases, extensions, modifications,
rearrangements, or restatements of and supplements to all or any part of the
loans, advances, indebtedness, liabilities, and obligations described or
referred to in subparagraphs, (a) through (d) above, together with all costs,
expenses and attorneys' fees incurred in connection with the enforcement or
collection thereof.
"Security Instruments" means the Note, this Deed of Trust and the Loan
Agreement, together with all loan agreements, security agreements, deeds of
trust, collateral pledge agreements, assignments, guaranties or contracts
evidencing, referring to or securing the Secured Indebtedness, as they may, at
any time and from time to time, be amended, renewed, extended, increased,
supplemented and/or restated.
"Trustee" has the meaning assigned to it in the preamble and shall
include all substitute trustees appointed in conformity with Section 4.2(g).
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Section 1.2. All capitalized terms not otherwise defined herein shall have
the meaning assigned to them in the Note.
ARTICLE II
GRANT
Section 2.1.
(a) For good and valuable consideration, including the
indebtedness evidenced by the Note, the Secured Indebtedness and the trust
herein after described, the receipt and legal sufficiency of which are hereby
expressly acknowledged by all parties, Grantor does hereby GRANT, BARGAIN,
SELL, TRANSFER, ASSIGN, AND CONVEY unto Trustee the Mortgaged property, subject
only to the Permitted Exceptions.
TO HAVE AND TO HOLD the Mortgaged Property, together with all and singular the
rights, hereditaments, and appurtenances in anywise appertaining or belonging
thereto, unto Trustee and Trustee's successors or substitutes in this trust,
and Trustee's and its or his successors and assigns, in trust and for the uses
and purposes hereinafter set forth, forever.
(b) This Deed of Trust shall also constitute a security agreement
with respect to, and Grantor hereby grants to Beneficiary a security interest
in, the Collateral. This Deed of Trust shall constitute a "fixture filing" for
purposes of Chapter 9 of the Code. Portions of the Collateral are or may become
fixtures. Information concerning the security interests herein granted may be
obtained at the addresses stated in Section 7.20 hereof.
(c) To the extent that any of the Collateral is not subject to the
Uniform Commercial Code of the state of states where it is situated, Grantor
hereby assigns to Beneficiary all of Grantor's right, title, and interest in
and to the Collateral to secure the Secured Indebtedness, together with the
right of set-off with regard to such Collateral (or any part hereof)
exercisable after the occurrence of an Even of Default. Release of the lien of
this Deed of Trust shall automatically terminate this assignment.
Section 2.2. Grantor, for Grantor and Grantor's Successors, hereby agrees
to warrant and forever defend, all and singular, title to the Mortgaged
Property unto Trustee, and Trustee's successors or substitutes in this trust,
forever, against every person whomsoever lawfully claiming, or to claim, the
same or any part thereof, subject, however, to the Permitted Exceptions.
Section 2.3. This Deed of Trust, and all rights, remedies, powers,
privileges, and benefits, and all titles, interests, liens, and security
interests created hereby, or arising by virtue hereof, are given to secure
payment and performance of the Secured Indebtedness.
Section 2.4. A carbon, photographic, or other reproduction of this Deed of
Trust, or any financing statement relating to this Deed of Trust, shall be
sufficient as a financing statement.
ARTICLE III
CERTAIN REPRESENTATIONS,
WARRANTIES AND COVENANTS OF GRANTOR
Section 3.1. Representations and Warranties. Grantor expressly represents
and warrants to Beneficiary and Trustee as follows:
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(a) Grantor is duly organized and validly existing under
applicable state laws;
(b) Grantor has full and lawful authority and power to execute,
acknowledge, deliver, and perform this Deed of Trust, the Note, and the other
Security Instruments and the same constitute the legal, valid, and binding
obligations of Grantor and any other party thereto, enforceable against Grantor
and such other parties in accordance with their respective terms;
(c) The Personal Property is, and will be, used as equipment in
Grantor's business and not as inventory, or as goods leased or held for lease
by Grantor but not held for sale;
(d) Grantor's principal office and mailing address is set forth in
Section 7.20 hereof;
(e) Grantor is the lawful owner of good and indefeasible title to
the Mortgaged Property, subject only to the Permitted Exceptions;
(f) To the best of Grantor's knowledge, all of the representations
and warranties contained in this Deed of Trust, the Note, and the other
Security Instruments are in all material respects true and correct. Neither the
execution and delivery of the Note, this Deed of Trust or the other Security
Instruments, nor consummation of any of the transactions herein or therein
contemplated, nor compliance with the terms and provisions hereof or with the
terms and provisions thereof, will contravene or conflict with any provision of
law, statute or regulation to which Grantor is subject or any judgment,
license, order or permit applicable to Grantor or any indenture, mortgage, deed
of trust, agreement or other instrument to which Grantor is a party or by which
Grantor may be bound, or to which Grantor may be subject, or violate or
contravene any provision of the Articles of Incorporation forming Grantor;
(g) No event has occurred and is continuing which constitutes an
"Event of Default" (hereinafter defined);
(h) All taxes, assessments and other charges levied against the
Mortgaged Property have been paid in full to the extent due and payable;
(i) Except as disclosed to Beneficiary, neither the Land nor any
portion thereof is located within an area that has been designated or
identified as an area having special flood hazards by the Secretary of Housing
and Urban Development or by such other official as shall from time to time be
authorized by federal or state law to make such designation pursuant to the
National Flood Insurance Act of 1968, as such act may from time to time be
amended, or pursuant to any other national, state, county or city program of
flood control;
(j) Upon the occurrence of an Event of Default, Beneficiary shall
quietly enjoy and possess the Mortgaged Property;
(k) No part of the Mortgaged Property constitutes a part of a
business or residential homestead;
(l) The Secured Indebtedness constitutes a "contract under which
credit is extended for business, commercial, investment, or other similar
purpose," and is not for "personal, family, household, or agricultural use,"
within the meaning of TEX. REV. CIV. STAT. XXX. art. 5069-1.04(b)(2);
(m) The representations and warranties of Grantor shall at all
times be construed to be for the benefit of the Beneficiary, and they shall
remain in full force and effect, notwithstanding the assignment hereof, or the
partial release of the lien hereof, or any foreclosure thereof; and
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(n) There is no financing statement or other document creating or
evidencing a lien now on file in any public office covering any of the
Collateral or the Real Estate, or any lien or encumbrance on any of the
Collateral or the Real Estate, whether such Collateral and the Real Estate
shall be real or personal, tangible or intangible, or whether Grantor is named
or signed as Grantor, and until the termination of this Deed of Trust, Grantor
will not execute and there will not be on file in any public office any such
financing statement or statements, except as may have been or may hereafter be
granted to Beneficiary, and Grantor further agrees that it will not permit or
suffer any security interest, lien, or encumbrance upon any of the Collateral
or the Real Estate, except as may be granted to Beneficiary, and except liens,
claims, or encumbrances contested under Section 3.2(a) during the pendency of
such contest.
Section 3.2. Covenants. Grantor, for Grantor and Grantor's Successors,
covenants and agrees as follows:
(a) To pay, or cause to be paid, before delinquent, all lawful
taxes and assessments of every character in respect of any of the Mortgaged
Property, and from time to time, upon request of Beneficiary, to furnish to
Beneficiary evidence satisfactory to Beneficiary of the timely payment of such
taxes and assessments and to promptly pay all bills for labor and materials
incurred in connection with the Mortgaged Property and never to permit to be
fixed against the Mortgaged Property, or any party thereof, any lien or
security interest, even through inferior to the liens and security interests
hereof, for any such xxxx which may be legally due and payable. Notwithstanding
anything to the contrary contained in this Deed of Trust, Grantor (i) may
contest the validity or amount of any claim of any contractor, consultant,
architect, or other person providing labor, materials, or services with respect
to the Mortgaged Property, in the amount of such claim, (ii) may contest any
tax or special assessments levied by any governmental authority, and (iii) may
contest the enforcement of or compliance with any governmental requirements,
and such contest on the part of Grantor shall not constitute an Event of
Default if, during the pendency of any such contest, Grantor shall furnish to
Beneficiary a Bond Indemnifying Against Liens (pursuant to Tex. Property Code
Xxx. Section 53.171) with corporate surety reasonably satisfactory to
Beneficiary or other security acceptable to Beneficiary in an amount equal to
the amount being contested plus a reasonable additional sum to cover possible
costs, interest, and penalties, and provided that Grantor shall pay any amount
adjudged by a court of competent jurisdiction to be due, with all costs,
interest, and penalties thereon, before such judgment becomes a lien on the
Mortgaged Property;
(b) To carry insurance with respect to the Mortgaged Property with
such insurers, in such amounts and covering such risks as is required under
Section 2.10 of the Loan Agreement;
(c) [Intentionally Deleted];
(d) [Intentionally Deleted];
(e) To comply with all valid governmental laws, ordinances, rules,
and regulations applicable to the Mortgaged Property and its ownership, use,
and operation, and to comply with all, and not violate any, easements,
restrictions, agreements, covenants, and conditions with respect to or
affecting the Mortgaged Property, or any part thereof;
(f) At all times to maintain, preserve, and keep the Mortgaged
property in good repair and condition, and from time to time, to make all
necessary and proper repairs, replacements, and renewals, and not to commit or
permit any waste on or of the Mortgaged Property;
(g) Without the prior written consent of Beneficiary, not to
permit to be created or exist in respect of the Mortgaged Property, or any part
thereof, any other or additional lien or security interest on a parity with or
superior or inferior to the liens and security interests hereof; provided,
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however, if Beneficiary so consents to the creation of any such lien or security
interest, Grantor covenants to timely perform all covenants, agreements and
obligations required to be performed under or pursuant to the terms of any
instrument or agreement creating or giving rise to such lien or security
interest;
(h) At any time, and from time to time, upon request by
Beneficiary, forthwith to execute and deliver to Beneficiary any and all
additional instruments and further assurances, and do all other acts and
things, as may be necessary or proper, in Beneficiary's reasonable opinion, to
effect the intent of these presents, more fully evidence and to perfect, the
rights, titles, liens, and security interests herein created or intended to be
created and protect the rights, remedies, powers, and privileges of Beneficiary
hereunder;
(i) From time to time, upon request of Beneficiary, promptly to
furnish to Beneficiary such financial statements and reports relating to
Grantor and Grantor's business affairs, as Beneficiary may reasonably request;
(j) Continuously to maintain Grantor's existence and Grantor's
right to do business in Texas under all applicable laws;
(k) Except as expressly permitted by Section 7.23. not, without
the prior written consent of Beneficiary (which consent may be withheld with or
without cause), to W sell, trade, transfer, assign, exchange, or otherwise
dispose of the Collateral, or any part thereof or any interest therein (whether
legal or equitable in nature), except items of Personal Property which have
become obsolete or worn beyond practical use and which have been replaced by
adequate substitutes having a value equal to or greater than the replaced items
when new, or (ii) permit the sale, transfer, assignment, exchange or other
disposition more than forty nine percent (49.0%) of the partnership interests
of Borrower in the aggregate at any time or from time to time after the date of
this Deed of Trust, except to general partner or to Guarantor;
(1) To pay and perform all of the Secured Indebtedness in
accordance with the terms thereof or hereof, or when the maturity thereof may
be accelerated in accordance with the terms thereof or hereof;
(m) Promptly to deliver to Beneficiary the terms of any sale of
the Mortgaged Property, or any part thereof; provided, however, that neither
this Subsection 3.2(m) nor any other provision herein shall be construed to
impliedly or expressly authorize any action by Grantor contrary to Subsection
3.2(k) preceding or Subsection 4.1(d);
(n) To deliver to Beneficiary financial information as required
under Section 2.16 of the Loan Agreement;
(o) [Intentionally Delete];
(p) At any time any law shall be enacted imposing or authorizing
the imposition of any tax upon this Deed of Trust, or upon any rights, titles,
liens, or security interests created hereby, or upon the Secured Indebtedness,
or any part thereof, immediately to pay all such taxes to the extent permitted
by law; provided that, if it is unlawful for Grantor to pay such taxes, then
Grantor shall, if Beneficiary so requires, prepay the Secured Indebtedness in
full within sixty (60) days after demand therefor by Beneficiary;
(q) At any time and from time to time, to furnish promptly upon
request, a written statement or affidavit, in such form as shall be reasonably
satisfactory to Beneficiary, stating the unpaid balance of the Secured
Indebtedness and that there are no offsets or defenses against full
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payment of the Secured Indebtedness and the terms hereof, or, if there are any
such offsets and defenses, specifically describing such offsets to the
satisfaction of Beneficiary;
(r) Punctually and properly to perform all of Grantor's covenants,
duties, and liabilities under this Deed of Trust, the Note, and all of the
other Security Instruments within the time period specified therein or within
any applicable cure period specified therein;
(s) To allow Beneficiary and its agents, representatives and
employees to inspect the Mortgaged Property and all records relating thereto
after prior notice to Borrower during business hours or to the Secured
Indebtedness, and to make and take away copies of such records;
(t) Not to cause or permit any of the Personal Property to be
removed from the county and state where the Land is located, except items of
Personal Property which have become obsolete or worn beyond practical use and
which have been replaced by adequate substitutes having a value equal to, or
greater than, the replaced items when new;
(u) That by agreement with the maker or makers of any instrument
evidencing any indebtedness at any time secured hereby, Beneficiary, without
notice to or consent of any other party to this Deed of Trust, may from time to
time extend the time of payment of the whole or any part of such indebtedness,
or may accept from said maker or makers one or more new instruments in the same
or different form, in renewal of or by way of substitution for any instrument
of indebtedness without in any manner impairing or affecting the lien of this
Deed of Trust or any of Beneficiary's rights hereunder;
(v) To do all things necessary or proper to defend title to the
Mortgaged Property, but Beneficiary shall have the right, at any time, to
intervene in any suit affecting such title and to employ independent counsel in
connection with any such suit to which it may be a party by intervention or
otherwise; and upon demand Grantor agrees to pay Beneficiary all reasonable
expenses paid or incurred by Beneficiary in respect of any such suit affecting
title to any such property or affecting Beneficiary's lien or rights hereunder,
including reasonable fees to Beneficiary's attorneys, and Grantor will
indemnify and hold harmless Beneficiary from and against any and all costs and
expenses, including, but not limited to, any and all cost, loss, damage or
liability which Beneficiary may suffer or incur by reason of the failure of the
title to all or any part of the property hereby mortgaged or assigned or by
reason of the failure or inability of Grantor, for any reason, to convey the
rights, titles and interests which this Deed of Trust purports to mortgage or
assign, and all amounts at any time so payable by Grantor hereunder shall be
secured by the lien hereof and by the said assignment;
(w) To protect, warrant and forever defend title to the Mortgaged
Property unto Beneficiary, its successors and assigns, at Grantor's expense,
against all persons whomsoever lawfully having or claiming an interest therein
or lien thereon;
(x) Promptly to deliver to Beneficiary a copy of any notice or
other instrument received by Grantor which might materially adversely affect
the Mortgaged Property or the liens or security interests securing the Secured
Indebtedness, including, without limitation, any notice from a public authority
concerning any tax or special assessment, or any notice of any alleged
violation of any zoning ordinance, fire ordinance, material building code
provision, or other law or regulation affecting the Mortgaged Property;
(y) Upon the request of Beneficiary after the occurrence of an
Event of Default, Grantor shall promptly, at its expense:
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(i) deliver to Beneficiary with appropriate endorsement
or assignment, all instruments, chattel paper, monies, checks, notes,
drafts and other evidence of indebtedness, or other property in the
nature of items of payment representing proceeds of any of the
Collateral, or arising from an account, which are then in, or may
thereafter come into, Grantor's possession; and
(ii) direct all parties obligated on any of the Collateral
to make all payments due or to become due thereon directly to
Beneficiary or to such other person or officer as may be specified by
Beneficiary; and
(z) Grantor will not at any time insist upon, or plead, or in any
manner whatever claim or take any benefit or advantage of any stay or extension
or moratorium law, any exemption from execution or sale of the Mortgaged
Property, or any part thereof, whenever enacted, now or at any time hereafter
enforced, which may affect the covenants and terms of performance of this Deed
of Trust, nor claim, take or insist upon any benefit or advantage of any law
now or hereafter enforced providing for the valuation or appraisal of the
Mortgaged Property, or any part thereof, prior to any sale or sales thereof
which may be made pursuant to any provision herein, or pursuant to the decree,
judgment or order of any court of competent jurisdiction; nor, after such sale
or sales, claim or exercise any right under any statute heretofore or hereafter
enacted to redeem the property so sold or any part thereof and the Grantor
hereby expressly waives all benefit or advantage of any such law or laws and
covenants not to hinder, delay or impede the execution of any power herein
granted or delegated to Trustee or Beneficiary, but to suffer and permit the
execution of every power as though no such law or laws had been made or
enacted.
ARTICLE IV
RESPECTING DEFAULTS AND REMEDIES OF BENEFICIARY
Section 4.1. The term "Event of Default" shall mean the occurrence of any one
or more of the following events:
(a) The failure of Grantor to pay the Secured Indebtedness or any
part thereof, as it becomes due in accordance with the terms of the Note or any
other Security Instruments and the continuance thereof for a period of at least
three (3) days after notice of such failure from Beneficiary or when
accelerated pursuant to any power to accelerate contained in this Deed of
Trust, the Note, or any of the other Security Instruments; or
(b) Grantor fails to punctually and properly to perform any other
covenant, agreement, obligation, or condition contained herein, or in the Note,
the Security Instruments, or any other instrument securing or evidencing the
Secured Indebtedness, or any part thereof, or executed in connection therewith
and does not cure such failure within twenty (20) days after notice of such
failure from Beneficiary (the "Initial Cure Period") or (ii) within sixty (60)
days after notice of such failure from Beneficiary so long as Grantor attempts
to cure such failure within the Initial Cure Period and diligently continues to
attempt to cure such failure;
(c) The discovery by Beneficiary that any statement,
representation, or warranty in the Note, this Deed of Trust, the Security
Instruments or in any writing ever delivered to Beneficiary pursuant to the
provisions hereof or thereof, is false, misleading, or erroneous in any
material respect; or
(d) Except as permitted by Section 7.23, the ownership of the
Mortgaged Property, or any part thereof, or any legal or equitable interest
therein, becomes vested in a person or entity other than Grantor; or
Deed of Trust/Pacific United, L.P. Page 10
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(e) Any change in the ownership of more than forty-nine percent
(49%) of the partnership interests of Grantor in the aggregate at any time or
from time to time after the date of this Deed Of Trust, except to general
partner or to Guarantor; or
(f) Grantor shall (i) execute a general assignment for the benefit
of Grantor's creditors, or (ii) become the subject, voluntarily or
involuntarily, of any bankruptcy, insolvency or reorganization proceeding, or
(iii) admit in writing Grantor's inability to pay Grantor's debts generally as
they become due, or (iv) apply for or consent to the appointment of a
custodian, receiver, trustee, or liquidator of Grantor or of all or a
substantial part of Grantor's assets, or (v) file a voluntary petition seeking
protection under any debtor's relief, or other insolvency law now or hereafter
existing, or (vi) file an answer admitting the material allegations of, or
consenting to, or default in filing an answer to, a petition filed against
Grantor in any bankruptcy, reorganization, or other insolvency proceedings, or
(vii) institute or voluntarily be or become a party to any other judicial
proceedings intended to effect a discharge of the debts of Grantor, in whole or
in part, or a postponement of the maturity or the collection thereof, or a
suspension of any of the rights or powers of Beneficiary granted in the
Security Instruments and such proceeding is not dismissed within sixty (60)
days of the filing thereof; or
(g) An order, judgment, or decree shall be entered by any court of
competent jurisdiction appointing a custodian, receiver, trustee, or liquidator
of Grantor or of all or any substantial part of Grantor's assets; or
(h) The failure of Grantor to pay any material money judgment
against it at least ten (10) days prior to the date on which the assets of
Grantor may be sold to satisfy such judgment; or
(i) The failure to have discharged within a period of thirty (30)
days after the commencement thereof any attachment, sequestration, or similar
proceedings against any of Grantor's assets; or
(j) The liens, mortgages or security interests created (or
purported to be created) by this Deed of Trustor by the other Security
Instruments should become unenforceable, or cease to be first priority liens,
mortgages or security interests and such unenforceability or priority is not
remedied to the satisfaction of Beneficiary within twenty (20) days after
notification thereof to Beneficiary; or
(k) The liquidation, dissolution or termination of Grantor; or
(1) Any sale, trade, transfer, assignment, exchange or other
disposition of the Mortgaged Property, except to Beneficiary, or except as
otherwise expressly permitted by Section 7.23.
Section 4.2. Upon the occurrence of an Event of Default, Beneficiary may, at
Beneficiary's option, do any one or more of the following:
(a) If Grantor has failed to keep or perform any covenant
whatsoever contained in this Deed of Trust or other security instruments,
Beneficiary may, but shall not be obligated to any person to, perform or
attempt to perform said covenant, and any payment made or expense incurred in
the performance or attempted performance of any such covenant shall be a part
of the Secured Indebtedness, and Grantor promises, upon demand, to pay to
Beneficiary, at the place where the Note is payable, or at such other place as
Beneficiary may direct by written notice, all sums so advanced or paid by
Beneficiary, with interest at the highest lawful rate from the date when paid
or incurred by Beneficiary. No such payment by Beneficiary shall constitute a
waiver of any Event of Default. In addition to the liens and security interests
hereof, Beneficiary shall be subrogated to all rights, titles, liens, and
security interests securing the payment of any debt, claim, tax, or assessment
for the payment of which Beneficiary may make an advance, or which Beneficiary
may pay.
Deed of Trust/Pacific United, L.P. Page 11
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(b) Beneficiary may, at its option, declare the Note and all or
any other portion of the remaining Secured Indebtedness to be immediately due
and payable without presentment, demand, protest, notice of protest, notice of
acceleration and intention to accelerate or other notice of any kind, all of
which are expressly waived by Grantor; provided, however, that if any Event of
Default specified in Section 4.1(f) hereof shall occur, the Note and the
remaining Secured Indebtedness shall thereupon become due and payable
concurrently therewith, without any further action by Beneficiary and without
presentment, demand, protest, notice of protest and non-payment, or other
notice of default, notice of acceleration and intention to accelerate or other
notice of any kind, all of which are expressly waived by Grantor.
(c) Beneficiary may request Trustee to proceed with foreclosure,
and in such event Trustee is hereby authorized and empowered, and it shall be
Trustee's special duty, upon such request of Beneficiary, to sell the Mortgaged
Property, or any part thereof, to the highest bidder or bidders for cash or
credit, as directed by Beneficiary, at the location at the county courthouse
specified by the commissioner's court of the county in the State of Texas
wherein the Land then subject to the lien hereof is situated or, if no such
location is specified by the commissioner's court, then at the location
specified in Beneficiary's notice of such sale to Grantor; provided, that if
the Land is situated in more than one county, then such sale of the Mortgaged
Property, or part thereof, may be made in any county in the State of Texas
wherein any part of the Land then subject to the lien hereof is situated. Any
such sale shall be made at public outcry, between the hours of ten o'clock
(10:00) A.M. and four o'clock (4:00) P.M. on the first (1st) Tuesday in any
month. Written or printed notice of such sale shall be posted at the courthouse
door in the county, or if more than one, then in each of the counties, wherein
the Land then subject to the lien hereof is situated. Such notice shall
designate the county where the Mortgaged Property, or part thereof, will be
sold and the earliest time at which the sale will occur, and such notice shall
be posted at least twenty-one (21) days prior to the date of sale. Such notice
shall also be filed with the county clerk in the county, or if more than one,
then in each of the counties wherein the Land is located. Beneficiary shall, at
least twenty-one (21) days preceding the date of sale, serve written notice of
the proposed sale by certified mail on each debtor obligated to pay the Secured
Indebtedness according to the records of Beneficiary. After such sale, Trustee
shall make to the purchaser or purchasers thereunder good and sufficient
assignments, deeds, bills of sale, and other instruments, in the name of
Grantor, conveying the Mortgaged Property, or part thereof, so sold to the
purchaser or purchasers with general warranty of title by Grantor. The sale of
a part of the Mortgaged Property shall not exhaust the power of sale, but sales
may be made from time to time until the Secured Indebtedness is paid and
performed in full. It shall not be necessary to have present or to exhibit at
any such sale any of the Personal Property.
(d) In addition to the rights and powers of sale granted under the
preceding Subsection 4.2(c), if any Event of Default occurs concerning the
payment of any installment of the Secured Indebtedness, Beneficiary, at its
option, at once or at any time thereafter while any matured installment remains
unpaid, without declaring the entire Secured Indebtedness to be due and
payable, may orally or in writing direct the Trustee to enforce this trust and
to sell the Mortgaged Property subject to such unmatured indebtedness and the
assignments, liens, and security interests securing its payment, in the same
manner, on the same terms, at the same place and time and after having given
notice in the same manner, all as provided in the preceding provisions of
Subsection 4.2(c). After such sale, the Trustee shall make due conveyance to
the purchaser or purchasers. Sales made without maturing the Secured
Indebtedness may be made hereunder whenever there occurs an Event of Default in
the payment of any installment of the Secured Indebtedness without exhausting
the power of sale granted hereby, and without affecting in any way the power of
sale granted under this Subsection 4.2(d), the unmatured balance of the Secured
Indebtedness (except as to any proceeds of any sale which Beneficiary may apply
as a prepayment of the Secured Indebtedness) or the assignments, liens and
security interests securing payment of the Secured Indebtedness.
Deed of Trust/Pacific United, L.P. Page 12
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(e) It is intended by each of the foregoing provisions of Subsection
4.2(c) and Subsection 4.2(d) that Trustee may, after any request or direction
by Beneficiary, sell not only the Real Estate but also the Collateral and other
interests constituting a party of the Mortgaged Property, or any part thereof,
along with the Real Estate, or any party thereof, all as a unit and as a part
of a single sale, or may sell any party of the Mortgaged Property separately
from the remainder of the Mortgaged Property. The sale or sales by Trustee of
less than the whole of the Mortgaged Property shall not exhaust the power of
sale herein granted, and Trustee is specifically empowered to make successive
sale or sales under such power until the whole of the Mortgaged Property shall
be sold; and if the proceeds of such sale or sales of less than the whole of
such Mortgaged property shall be less than the aggregate of the Secured
Indebtedness and the expense of executing this trust, this Deed of Trust and
the assignments, liens, and security interests hereof shall remain in full
force and effect as to the unsold portion of the Mortgaged Property just as
though no sale or sales of less than the whole of the Mortgaged Property had
occurred, but Beneficiary shall have the right, at its sole election, to
request Trustee to sell less than the whole of the Mortgaged Property.
(f) Grantor and Beneficiary agree that, in any assignments, deeds,
bills of sale, no of sale, or postings, given by Trustee or Beneficiary, any
and all statements of fact or other recitals therein made as to the identity of
Beneficiary, or as to the occurrence or existence of any Event of Default, or
as to the acceleration of the maturity of the Secured Indebtedness, or as to
the request to sell, posting of notice of sale, notice of sale, time, place,
terms and manner of sale and receipt, distribution and application of the money
realized therefrom, or as to the due and proper appointment of a substitute
trustee and without being limited by the foregoing, as to any other act or
thing having been duly done by Beneficiary or by Trustee, shall be taken by all
courts of law and equity as prima facie evidence that the said statements or
recitals state facts and are without further question to be so accepted, and
Grantor does hereby ratify and confirm any and all acts that Trustee may
lawfully do in the premises by virtue hereof.
(g) In the event of the resignation or death of Trustee, or
Trustee's removal from Trustee's county of residence stated on the first page
hereof, or Trustee's failure, refusal or inability, for any reason, to make any
such sale or to perform any of the trusts herein declared, or, at the option of
Beneficiary, without cause, Beneficiary may appoint, orally or in writing, a
substitute trustee, who shall thereupon succeed to all the estates, titles,
rights, powers, and trusts herein granted to and vested in Trustee. If
Beneficiary is a corporation, such appointment may be made on behalf of such
Beneficiary by any person who is then the president, or a vice-president,
assistant vice-president, treasurer, cashier, secretary, or any other authorized
officer or agent of Beneficiary. In the event of the resignation or death of
any substitute trustee, or such substitute trustee's failure, refusal or
inability to make any such sale or perform such trusts, or, at the option of
Beneficiary, without cause, successive substitute trustees may thereafter, from
time to time, be appointed in the same manner. Wherever herein the word
"Trustee" is used, the same shall mean the person who is the duly appointed
trustee in the first paragraph of this Deed of Trust or substitute trustee
hereunder at the time in question.
(h) Beneficiary may, or Trustee may upon written request of
Beneficiary, proceed by suit or suits, at law or in equity, to enforce the
payment and performance of the Secured Indebtedness in accordance with the
terms hereof or of the Note or the other Security Instruments, to foreclose or
otherwise enforce the assignments, liens, and security interests created or
evidenced by the other Security Instruments, or this Deed of Trust as against
all, or any part of, the Mortgaged Property, and to have all or any part of the
Mortgaged Property sold under the judgment or decree of a court of competent
jurisdiction.
(i) To the extent permitted by law, Beneficiary, as a matter of
right without notice to Grantor and without regard to the sufficiency of the
security, and without any showing of insolvency, fraud, or mismanagement on the
part of Grantor, and without the necessity of filing any judicial or
Deed of Trust/Pacific United, L.P. Page 13
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other proceeding other than the proceeding for appointment of a receiver, shall
be entitled to the appointment of a receiver or receivers of the Mortgaged
Property, or any part thereof, and of the income, rents, issues, and profits
thereof.
(j) To the extent permitted by law, Beneficiary may enter upon the
Land, take possession of the Mortgaged Property and remove the Collateral or
any part thereof, with or without judicial process, and, in connection
therewith, without any responsibility or liability on the part of Beneficiary,
take possession of any property located on or in the Real Estate which is not a
part of the Mortgaged Property and hold or store such property at Grantor's
expense.
(k) Beneficiary may require Grantor to assemble the Collateral, or
any part thereof, and make it available to Beneficiary at a place to be
designated by Beneficiary which is reasonably convenient to Grantor and
Beneficiary.
(l) After notification, if any, hereafter provided in this
Subsection, Beneficiary may, or the Trustee may, upon request of Beneficiary,
sell, lease, or otherwise dispose of, at the office of Beneficiary, or on the
Land, or elsewhere as chosen by Beneficiary, all or any part of the Collateral,
in its then condition, or following any commercially reasonable preparation or
processing, and each "Sale" (as used herein, the term "Sale" means any such
sale, lease, or other disposition made pursuant to this Subsection 4.2 (l) may
be as a unit or in parcels, by public or private proceedings, and by way of one
or more contracts, and, at any Sale, it shall not be necessary to exhibit the
Collateral, or part thereof, being sold. The Sale of any part of the Collateral
shall not exhaust Beneficiary's power of Sale, but Sales may be made, from time
to time, until the Secured Indebtedness is paid and performed in full.
Reasonable notification of the time and place of any public Sale pursuant to
this Subsection, or reasonable notification of the time after which any private
Sale is to be made pursuant to this Subsection, shall be sent to Grantor and to
any other person entitled to notice under Chapter 9 of the Code; provided, that
if the Collateral being sold, or any part thereof, is perishable, or threatens
to decline speedily in value, or is of a type customarily sold on a recognized
market, Beneficiary may sell, lease, or otherwise dispose of such Collateral
without notification, advertisement or other notice of any kind. It is agreed
that notice sent or given not less than ten (10) calendar days prior to the
taking of the action to which the notice relates, is reasonable notification
and notice for the purposes of this Subsection.
(m) Beneficiary may retain the Collateral in satisfaction of the
Secured Indebtedness whenever the circumstances are such that Beneficiary is
entitled to do so under the Code.
(n) Beneficiary may buy the Mortgaged Property, or any part
thereof, at any public Sale or judicial Sale (including any Sale of the
Collateral as contemplated in Subsection 4.2(l) hereof).
(o) Beneficiary may buy the Collateral, or any part thereof, at
any private Sale if the Collateral, or part thereof, being sold is a type
customarily sold in a recognized market or a type which is the subject of
widely distributed standard price quotations.
(p) Beneficiary shall have and may exercise any and all other
rights and remedies which Beneficiary may have at law or in equity, or by
virtue of any other security instrument, or under the Code, or otherwise.
(q) Notwithstanding anything contained herein to the contrary,
pursuant to TEX. BUS. & COM. CODE XXX. Section 9.501(d) (TEX. UCC) (Xxxxxx
Supp. 1982), Beneficiary may proceed under Chapter 9 of the Code as to all
personal property covered hereby or, at Beneficiary's election, Beneficiary may
proceed as to both the real and personal property covered hereby in accordance
with Beneficiary's rights and remedies in respect of real property, in which
case the provisions of Chapter 9 of the Code (and Subsection 4.2 (l) hereof)
shall not apply.
Deed of Trust/Pacific United, L.P. Page 14
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Section 4.3. If Beneficiary is the purchaser of the Mortgaged Property, or
any part thereof, at any sale thereof (including any Sale of the Collateral as
contemplated in Subsection 4.2(l) hereof), whether such sale be under the power
of sale hereinabove vested in Trustee, or upon any other foreclosure or
enforcement of the assignments, liens, and security interests hereof, or
otherwise, Beneficiary shall, upon any such purchase, acquire good title to the
Mortgaged Property so purchased, free of the assignments, liens, and security
interests of these presents.
Section 4.4. Should any part of the Mortgaged Property come into the possession
of Beneficiary, whether before or after the occurrence of an Event of Default,
Beneficiary may use or operate the Mortgaged Property for the purpose of
preserving it or its value, pursuant to the order of a court of appropriate
jurisdiction, or in accordance with any other rights held by Beneficiary with
respect to the Mortgaged Property. Grantor covenants to promptly reimburse and
pay to Beneficiary, at the place where the Note is payable, or at such other
place as may be designated by Beneficiary in writing, the amount of all
reasonable expenses (including the cost of any insurance, taxes, or other
charges) incurred by Beneficiary in connection with its custody, preservation,
use or operation of the Mortgaged Property, together with interest thereon from
the date incurred by Beneficiary at the highest lawful rate, and all such
expenses, cost, taxes, interest, and other charges shall be a part of the
Secured Indebtedness. It is agreed, however, that the risk of accidental loss
or damage to the Mortgaged Property is undertaken by Grantor, and Beneficiary
shall have no liability whatever for decline in value of the Mortgaged
Property, nor for failure to obtain or maintain insurance, nor for failure to
determine whether any insurance ever in force is adequate as to amount or as to
the risks insured.
Section 4.5. If the assignments, liens, or security interests hereof shall be
foreclosed or otherwise enforced by a Trustee's sale, or by any other judicial
or non-judicial action, then the purchaser at any such sale shall receive, as
an incident to his ownership, immediate possession of that portion of the
Mortgaged Property purchased, and if Grantor or Grantor's Successors shall hold
possession of any of said portion of the Mortgaged Property subsequent to such
foreclosure, Grantor and Grantor's Successors shall be considered as tenants at
sufferance of the purchaser at such foreclosure sale, and anyone occupying the
Mortgaged Property (or any part thereof) after demand made for possession
thereof shall be guilty of forcible detainer and shall be subject to eviction
and removal, forcible or otherwise, with or without process of law, and all
damages by reason thereof are hereby expressly waived.
Section 4.6. The proceeds from any sale, lease or other disposition made
pursuant to this Article IV, or the proceeds from surrendering any insurance
policies pursuant to Subsection 4.2(m) hereof, or any Rental (as hereafter
defined) collected by Beneficiary pursuant to Article V hereof, or sums
received pursuant to Section 7.7 hereof, or proceeds from insurance which
Beneficiary elects to apply to the Secured Indebtedness pursuant to Section 7.8
hereof, shall be applied by Trustee, or by Beneficiary, as the case may be, as
follows: FIRST, to the payment of all reasonable expenses of collection or of
advertising, selling, and conveying the Mortgaged Property, or any part
thereof, and reasonable attorneys' fees; SECOND, to interest on the matured
portion of the Secured Indebtedness; THIRD, to principal on the matured portion
of the Secured Indebtedness; FOURTH, to prepayment of the unmatured portion, if
any, of the Secured Indebtedness applied to installments of principal in
inverse order of maturity; and FIFTH, the balance, if any, remaining after the
full and final payment and performance of the Secured Indebtedness, to Grantor,
or as otherwise required by applicable law.
Section 4.7. This instrument shall be effective as a mortgage as well as a deed
of trust, and upon the occurrence of an Event of Default may be foreclosed as
to the Mortgaged Property in any manner permitted by the laws of Texas and any
other state in which any part of the Mortgaged Property is situated. Any
foreclosure suit may be brought by Trustee or any Beneficiary. If a foreclosure
hereunder is commenced by Trustee, Beneficiary may, at any time before the
sale, direct the Trustee to abandon the sale, and may then institute suit for
the collection of the Note, and for the foreclosure or enforcement of the
assignments, liens, and security interests hereof. If Beneficiary should
institute
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a suit for the collection of the Note, and for a foreclosure or enforcement of
the assignments, liens, and security interests hereof, it may, at any time
before the entry of a final judgment in said suit, dismiss the same, and
require Trustee to sell the Mortgaged Property, or any part thereof, in
accordance with the provisions of this Deed of Trust.
ARTICLE V
LEASES AND ASSIGNMENT OF RENTAL
Section 5.1. As used in this Deed of Trust: (i) "Lease" means any ground lease,
space lease, sublease or other agreement (oral or written) under the terms of
which any person other than Grantor has or acquires any right to occupy, use,
or manage the Mortgaged Property, or any part thereof, or interest therein;
(ii) "Lessee" means the lessee, sublessee, tenant or other person having the
right to occupy, use, or manage the Mortgaged Property, or any part thereof,
under a Lease; and (iii) "Rental" means the rents, issues, profits, royalties,
bonuses, revenue, income and other benefits derived from the Mortgaged Property
or arising from the use or enjoyment of any portion thereof or from any Lease
and liquidated damages following defaults under any Lease, and all proceeds
payable under any policy of insurance covering loss of rents, together with any
and all rights which Grantor may have against any tenant under any Lease.
Section 5.2. Grantor hereby assigns to Beneficiary all Rental payable under
each Lease now or at any time hereafter existing, such assignment being upon
the following terms:
(a) until Beneficiary notifies Grantor of the occurrence of an
Event of Default, Grantor shall collect Rental directly from each Lessee, and
each Lessee may pay Rental directly to Grantor, but Grantor covenants to hold
the Rentals in trust, to be applied, and Grantor covenants to apply the
Rentals, to the payment of (i) the Note and the remaining Secured Indebtedness,
and (ii) reasonable and necessary expenses and charges with respect to the
ownership, maintenance and operation of the Mortgaged Property, all before the
Rentals are applied by Grantor for any other purpose;
(b) upon receipt by Grantor from Beneficiary of notice of the
occurrence of an Event of Default and that Rental shall be paid directly to
Beneficiary, Grantor is hereby directed to pay directly to Beneficiary all
Rental thereafter accruing;
(c) upon receipt by Grantor, the manager of the Mortgaged Property
and/or any Lessee from Beneficiary of notice of the occurrence of an Event of
Default and that Rental shall be paid directly to Beneficiary, Grantor, such
manager and each Lessee that receives notice of the occurrence of an Event of
Default are hereby authorized and directed to pay directly to Beneficiary all
Rental thereafter accruing, and the receipt of Rental by Beneficiary shall be a
release of each such Lessee to the extent of all amounts so paid to
Beneficiary;
(d) Rental so received by Beneficiary shall be applied by
Beneficiary, at its option, in any order determined by Beneficiary in its
reasonable discretion, notwithstanding any instructions, directions or requests
from Grantor or any Lessee to the contrary, to (i) the payment and performance
of the Secured Indebtedness and/or (ii) expenses of and charges with respect to
the ownership, maintenance and operation of the Mortgaged Property (and
including, at Beneficiary's option, the maintenance, without interest thereon,
of a reserve for replacement), all before the Rentals are applied for any other
purpose not inconsistent with the Security Instruments; and
(e) Beneficiary shall not be liable for Beneficiary's 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.
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This assignment is in addition and in supplement to, and Beneficiary's
rights and remedies under this Article V are cumulative of, Beneficiary's
rights and remedies under any other document or assignment concerning or
applicable to each Lease now or at any time hereafter existing or Rentals
thereunder, or any part thereof.
As between Beneficiary and Grantor, and any person claiming through or
under Grantor, the assignment contained in this Section 5.2 is intended to be
absolute, unconditional and presently effective, and the provisions of
Subsections 5.2(a) and (b) are intended solely for the benefit of the manager
of the Mortgaged Property and each Lessee and shall never inure to the benefit
of Grantor or any person claiming through or under Grantor, other than a
manager or a Lessee who has not received such notice. It shall never be
necessary for Beneficiary to institute legal proceedings of any kind whatsoever
to enforce the provisions of this Section 5.2.
Section 5.3. Nothing in this Article V shall ever be construed as
subordinating this Deed of Trust to any Lease; provided, however, that any
proceedings by Beneficiary to foreclose this Deed of Trust, or any action by
way of its entry into possession after an Event of Default, shall not operate
to terminate any Lease which has been approved in writing by Beneficiary to the
Lessee thereunder, and Beneficiary will not cause any Lessee under any such
approved Lease to be disturbed in his possession and enjoyment of the leased
premises so long as such Lessee shall continue to fully and promptly pay the
Rental and perform all of the terms, covenants and provisions of such Lessee's
Lease.
Section 5.4. Grantor covenants: (i) upon demand by Beneficiary, to assign
to Beneficiary, by separate instrument in form and substance satisfactory to
Beneficiary, any or all Leases, or the Rental payable thereunder, including but
not limited to, any Lease which is now in existence or which may be executed
after the date hereof; (ii) not to accept from any Lessee, nor permit any
Lessee to pay, Rental for more than one month in advance; (iii) to comply with
the terms and provisions of each Lease; (iv) except to Beneficiary, not to
assign, transfer or mortgage any Lease; and (v) except to Beneficiary, not to
assign, transfer, pledge or mortgage any Rental.
Section 5.5. In the event that Beneficiary ever collects Rental,
Beneficiary shall be entitled to pay its agent as compensation for collecting
such Rental, from sums so collected, a reasonable fee.
Section 5.6. [Intentionally Omitted]
Section 5.7. In addition to the foregoing, Grantor covenants and agrees
that (unless otherwise consented to by Beneficiary in writing):
(a) Grantor shall not enter into any agreement with any person or
entity for the payment of leasing commissions with regard to any Lease which
agreement is not expressly made subordinate and inferior to the assignments,
liens, and security interests created by this Deed of Trust; and
(b) Grantor shall not challenge or interfere with Beneficiary's
application of Rentals as provided in Subsection 5.2.(d).
Section 5.8.
(a) notwithstanding any provision in this Deed of Trust to the
contrary, upon full payment and satisfaction of the Secured Indebtedness, this
assignment of Rental shall terminate, but the affidavit, certificate, letter or
statement of any officer or agent of Beneficiary stating that any part of the
Secured Indebtedness remains unpaid or undischarged shall constitute conclusive
evidence of the validity, effectiveness or continuing force of this assignment,
and any person, firm or corporation may, and is hereby authorized to, rely
thereon. Written demand made by Beneficiary delivered to any Lessee for payment
of Rentals by reason of the occurrence of any Event of Default claimed by
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Beneficiary shall be sufficient evidence of each such Lessee's obligation and
authority to make all future payments of Rentals to Beneficiary without the
necessity for further consent by the Grantor. Grantor hereby indemnifies and
agrees to hold each Lessee free and harmless from and against all liability,
loss, cost, damage or expense suffered or incurred by such Lessee by reason of
its compliance with any demand for payment of Rentals made by the Beneficiary
contemplated by the preceding sentence.
(b) If Beneficiary receives any Rentals as provided in this
Article V, then provisions of Section 7.22 shall apply to the Rentals received
by Beneficiary.
ARTICLE VI
ENVIRONMENTAL PROVISIONS
Section 6. 1. Grantor warrants and represents to Beneficiary that to
Grantor's knowledge (except as disclosed in the Phase I Environmental Site
Assessment delivered to Beneficiary by Grantor) (a) the location, construction,
occupancy, operation, and use of the Mortgaged Property do not violate any
applicable law, statute, ordinance, rule, regulation, order, or determination
of any governmental authority or any board of fire underwriters (or other body
exercising similar functions), or any restrictive covenant or deed restriction
(of record or otherwise) affecting the Mortgaged Property, including, without
limitation, all applicable zoning ordinances and building codes, flood disaster
laws and health and environmental laws and regulations (hereinafter sometimes
collectively called the "Applicable Regulations"); (b) without limitation of
(a) above, the Mortgaged Property is not in violation of or subject to any
existing, pending, or, to Grantor's knowledge, threatened investigation or
inquiry by any governmental authority and are not subject to any remedial
obligations under any Applicable Regulations pertaining to health or the
environment (hereinafter sometimes collectively called "Applicable
Environmental Laws"), including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended
("CERCLA"), and the Resource Conservation and Recovery Act of 1976, as amended
("RCRA"), and this representation and warranty would continue to be true and
correct following disclosure to the applicable governmental authorities of all
relevant facts, conditions, and circumstances, if any, pertaining to the
Mortgaged Property; (c) neither Grantor nor any Lessee has obtained or is
required to obtain any permits, licenses, or similar authorizations to
construct, occupy, operate, or use any buildings, improvements, fixtures, and
equipment forming a part of the Mortgaged Property as presently used and
operated by reason of any Applicable Environmental Laws; (d) Grantor has taken
all steps necessary to determine, and has determined, that no Reportable
Quantity of any hazardous substances or solid wastes has been disposed of or
otherwise released on or to the Mortgaged Property; (e) the use which Grantor
makes, intends to make, or intends to allow, of the Mortgaged Property will not
result in the disposal of or release of a Reportable Quantity of any hazardous
substance or solid waste onto the Mortgaged Property and (f) no underground
storage tanks, whether or not containing any substance, are located on or under
the Land. The terms (as used in this Article VI) "hazardous substance" and
"release" shall have the meanings specified in CERCLA, and the terms "solid
waste" and "disposal" (or "disposed") shall have the meanings specified in
RCRA, provided, in the event either CERCLA or RCRA is amended so as to broaden
the meaning of any term defined thereby, such broader meaning shall apply
subsequent to the effective date of such amendment, and provided further, to
the extent that the laws of the State of Texas establish a meaning for
"hazardous substance," "release," "solid waste," or "disposal" which is broader
than that specified in either CERCLA or RCRA, such broader meaning shall apply.
For purposes of this Deed of Trust, the term "Reportable Quantity" shall have
the same meaning specified in the regulations promulgated under CERCLA.
Section 6.2. Grantor covenants and agrees that (a) Grantor shall not
construct or install, or permit to be constructed or installed, on or under the
Land, any underground storage tank, without the prior written consent of
Beneficiary, (b) Grantor shall give notice to Beneficiary immediately upon
Grantor's
Deed of Trust/Pacific United, L.P. Page 18
19
acquiring knowledge of the presence or release of a Reportable Quantity of any
hazardous substance on, to or from the Mortgaged Property, with a full
description thereof, (c) Grantor shall promptly comply with any requirement or
order of any governmental authority requiring the removal, treatment, or
disposal of any hazardous substance and provide Beneficiary with satisfactory
evidence of such compliance, and (d) Grantor shall provide Beneficiary, within
thirty (30) days after demand by Beneficiary, with a bond, letter of credit, or
similar financial assurance evidencing to Beneficiary's satisfaction that the
necessary funds are available to pay the costs and expenses of removing,
treating and disposing of any hazardous substances located on the Mortgaged
Property in accordance with Applicable Environmental Laws and of discharging
any assessments or liens which may be established against the Mortgaged Property
as a result thereof.
Section 6.3. At any time and from time to time, that Beneficiary shall
reasonably believe that any hazardous substance shall have been disposed of on
or released to the Mortgaged Property, Grantor agrees to deliver to
Beneficiary, within thirty (30) days of a written request by Beneficiary made
not more than once during each twelve (12) month period commencing on the date
hereof, an environmental audit prepared by an environmental consulting firm
acceptable to Beneficiary in Beneficiary's reasonable judgment, at Grantor's
cost and expense, detailing the results of an environmental investigation of
the Mortgaged Property prepared in accordance with prudent engineering
standards, including, without limitation, the interpretation of and results of
a chemical analysis of soil and ground water samples. Grantor covenants and
agrees to take such action as is recommended by the environmental audit in
connection with any Reportable Quantity of any hazardous substances which may
be located on the Mortgaged Property, including, without limitation, asbestos.
Section 6.4. Grantor agrees to indemnify and to hold Beneficiary harmless
from and against, and to reimburse Beneficiary with respect to, any and all
claims, demands, causes of action, loss, damage, liabilities, costs, and
expenses (including attorneys' fees and court costs) of any and every kind or
character, known or unknown, fixed or contingent, asserted against or incurred
by Beneficiary at any time and from time to time by reason of or arising out of
any violation of any Applicable Environmental Law and any and all matters
arising out of any acts, omission, event, or circumstance (including, without
limitation, the presence on the Mortgaged Property or release from or to the
Mortgaged Property of hazardous substances or solid waste disposed of or
otherwise released), regardless of whether the act, omission, event, or
circumstance constituted a violation of any Applicable Environmental Law at the
time of the existence or occurrence.
Section 6.5. Notwithstanding anything set forth in this Deed of Trust or
any of the other Security Instruments to the contrary, the representations,
warranties, covenants and agreements contained in this Article VI shall survive
the satisfaction of the Secured Indebtedness and the foreclosure, release
and/or extinguishment of this Deed of Trust.
ARTICLE VII
MISCELLANEOUS
Section 7.1. If the Secured Indebtedness is paid and performed in full in
accordance with the terms of this Deed of Trust and the Note and other
instruments evidencing the Secured Indebtedness, and if Grantor shall well and
truly perform all of Grantor's covenants contained herein, then this conveyance
shall become null and void and be released at Grantor's request and expense;
otherwise, it shall remain in full force and effect, provided that no release
hereof shall impair Grantor's warranties and indemnities contained herein.
Section 7.2. As used in this Article VII, "Rights" means rights, remedies,
powers and privileges, and "Liens" means all assignments, titles, interests,
liens, security interests, and other encumbrances.
Deed of Trust/Pacific United, L.P. Page 19
20
All Rights and Liens herein expressly conferred are cumulative of all other
Rights and Liens herein or by law or in equity provided, or provided in any
other security instrument, and shall not be deemed to deprive Beneficiary or
Trustee of any such other legal or equitable Rights and Liens by judicial
proceedings, or otherwise, appropriate to enforce the conditions, covenants and
terms of this Deed of Trust, the Note and the other Security Instruments, and
the employment of any Rights hereunder, or otherwise, shall not prevent the
concurrent or subsequent employment of any other appropriate Rights.
Section 7.3. Any and all covenants in this Deed of Trust may from time to
time, by instrument in writing signed by Beneficiary and delivered to Grantor,
be waived to such extent and in such manner as Beneficiary may desire, but no
such waiver shall ever affect or impair Beneficiary's Rights or Liens
hereunder, except to the extent so specifically stated in such written
instrument. Impossibility shall not excuse the performance of any covenant or
condition in this Deed of Trust.
Section 7.4. If Grantor, or any of Grantor's Successors, conveys its
interest in any of the Mortgaged Property to any other party, then Beneficiary
may, without notice to Grantor, or its successors and assigns, deal with any
owner of any part of the Mortgaged Property with reference to this Deed of
Trust and the Secured Indebtedness, either by way of forbearance on the part of
Beneficiary, or extension of time of payment of the Secured Indebtedness, or
release of all or any part of the Mortgaged Property, or any other property
securing payment of the Secured Indebtedness, without in any way modifying or
affecting Beneficiary's Rights and Liens hereunder or the liability of Grantor,
or any other party liable for payment of the Secured Indebtedness, in whole or
in part.
Section 7.5. Grantor hereby waives all Rights of marshaling in the event of
any foreclosure of the Liens hereby created.
Section 7.6. At the request of Beneficiary after the occurrence of an Event
of Default, Grantor shall create a fund or reserve for the payment of all
insurance premiums, taxes, and assessments against the Mortgaged Property by
paying to Beneficiary, contemporaneously with each installment of principal and
interest on the Note, a sum equal to the premiums that will next become due and
payable on the hazard insurance policies covering the Mortgaged Property, or
any part thereof, plus taxes and assessments next due on the Mortgaged
Property, or any part thereof, as estimated by Beneficiary, less all sums paid
previously to Beneficiary therefor, divided by the number of installments of
principal and/or interest to elapse before one month prior to the date when
such ground rentals, premiums, taxes, and assessments will become delinquent,
such sums to be held by Beneficiary, with interest, for the benefit of Grantor
for the purposes of paying such ground rentals, premiums, taxes, and
assessments. Any excess reserve shall, at the discretion of Beneficiary, be
credited by Beneficiary on subsequent payments to be made on the Secured
Indebtedness by Grantor, and any deficiency shall be paid by Grantor to
Beneficiary on or before the date when such ground rentals, premiums, taxes,
and assessments, shall have become delinquent. Transfer of legal title to the
Mortgaged Property shall automatically transfer title in all sums deposited
under the provisions of this Section 7.6.
Section 7.7. Beneficiary shall be entitled to receive any and all sums
which may be awarded or become payable to Grantor for the condemnation of any
of the Mortgaged Property for public or quasi-public use, or by virtue of
private sale in lieu thereof, and any sums which may be awarded or become
payable to Grantor for damages caused by public works or construction on or
near the Mortgaged Property. All such sums are hereby assigned to Beneficiary,
and Grantor shall, upon request of Beneficiary, make, execute, acknowledge, and
deliver any and all additional assignments and documents as may be necessary
from time to time to enable Beneficiary to collect and receipt for any such
sums. Beneficiary shall not be, under any circumstances, liable or responsible
for failure to collect, or exercise diligence in the collection of, any of such
sums. After the occurrence of an Event of Default, any sums so collected shall
be applied by Beneficiary, first, to the expenses, if any, of collection, and
then in accordance with Section 4.6 hereof. Subject to the provisions of
Section 7.8(d), Grantor may use any sums so collected to rebuild or restore the
Mortgaged Property.
Deed of Trust/Pacific United, L.P. Page 20
21
Section 7.8. Damages and Insurance Proceeds
(a) Grantor hereby absolutely and irrevocably assigns to
Beneficiary, and authorizes the payor to pay to Beneficiary, the following
claims, causes of action, awards, payments and rights to payment:
(i) All awards, claims and causes of action,
arising out of any warranty affecting all or any part of the Property,
or for damage or injury to or decrease in value of all or part of the
Property or any interest in it; and
(ii) All proceeds of any insurance policies
payable because of loss sustained to all or part of the Property; and
(iii) All interest which may accrue on any of the
foregoing.
(b) Grantor shall immediately notify Beneficiary in
writing if:
(i) Any damage occurs or any injury or loss is
sustained in the amount of $25,000.00 or more to all or part of the
Property, or any action or proceeding relating to any such damage,
injury or loss is commenced; or
(ii) Any offer is made, or any action or
proceeding is commenced, which relates to any actual or proposed
condemnation or taking of all or part of the Property.
(c) If Beneficiary chooses to do so, Beneficiary may in
its own name appear in or prosecute any action or proceeding to enforce any
cause of action based on warranty, or for damage, injury or loss to all or part
of the Property, and Beneficiary may make any compromise or settlement of the
action or proceeding. Beneficiary, if it so chooses, may participate in any
action or proceeding relating to condemnation or taking of all or part of the
Property, and may join Grantor in adjusting any loss covered by insurance.
(d) All proceeds of these assigned claims, all
condemnation proceeds and all other property and rights which Grantor may
receive or be entitled to shall be paid to Beneficiary. In each instance,
Beneficiary shall apply such proceeds first toward reimbursement of all of
Beneficiary's costs and expenses of recovering the proceeds, including
attorneys' fees. If, in any instance, each and all of the following conditions
are satisfied in Beneficiary's reasonable judgment, Beneficiary shall permit
Grantor to use the balance of such proceeds ("Net Claims Proceeds") to pay
costs of repairing or reconstructing the Property in the manner described
below:
(i) The plans and specifications, cost breakdown,
construction contract, construction schedule, contractor and payment
and performance bond (bonds not to be required for losses less than
$100,000.00) for the work of repair or reconstruction must all be
acceptable to Beneficiary.
(ii) Beneficiary must receive evidence
satisfactory to it that after repair or reconstruction, the Property
would be at least as valuable as it was immediately before the damage
or condemnation occurred.
(iii) The Net Claims Proceeds must be sufficient in
Beneficiary's determination to pay for the total cost of repair or
reconstruction, including all associated
Deed of Trust/Pacific United, L.P. Page 21
22
development costs and interest projected to be payable on the Secured
Obligations until the repair or reconstruction is complete; or Grantor
must provide its own funds in an amount equal to the difference
between the Net Claims Proceeds and a reasonable estimate, made by
Grantor and found acceptable by Beneficiary, of the total cost of
repair or reconstruction.
(iv) Beneficiary must receive evidence
satisfactory to it that all leases which Beneficiary may find
acceptable will continue after the repair or reconstruction is
complete.
(v) No Event of Default shall have occurred and
be continuing.
If Beneficiary finds that such conditions have been met, Beneficiary shall hold
the Net Claims Proceeds and any funds which Grantor is required to provide in a
noninterest-bearing account and shall disburse them to Grantor to pay costs of
repair or reconstruction upon presentation of evidence reasonably satisfactory
to Beneficiary that repair or reconstruction has been completed satisfactorily
and lien-free. However, if Beneficiary finds that one or more of such
conditions have not been satisfied, Beneficiary may apply the Net Claims
Proceeds to pay or prepay some or all of the Secured Obligations in such order
and proportions as Beneficiary in its sole discretion may choose. Any Net
Claims Proceeds remaining after completion of repair or reconstruction shall be
applied against the unpaid balance of the Note as a partial or total
prepayment, subject to the terms and conditions of the Note with respect to
prepayments.
Section 7.9. It is understood and agreed that the proceeds of the Note, to
the extent that the same are utilized to pay or renew or extend any
indebtedness of Grantor, or any other indebtedness, or take up or release any
outstanding Liens against the Mortgaged Property, or any portion thereof, have
been advanced by Beneficiary at Grantor's request and at the request of the
obligors thereof and upon the representation that such amounts are due and
payable. Beneficiary shall be subrogated to any and all Rights and Liens owned
or claimed by any owner or Beneficiary of said outstanding Rights and Liens,
however remote, regardless of whether said Rights and Liens are acquired by
assignment or are released by the Beneficiary thereof upon payment.
Section 7.10. Each and every party who signs this Deed of Trust, and each
and every subsequent owner of any of the Mortgaged Property, covenants and
agrees that such party will perform or cause to be performed, each and every
condition, term, provision, and covenant of this Deed of Trust, except that
such party shall have no duty to pay the indebtedness evidenced by the Note
except in accordance with the terms of the Note, and all renewals, extensions,
modifications and increases thereof, and the terms of this Deed of Trust or in
accordance with the terms of the transfer to him.
Section 7.11. If any provision of this Deed of Trust is held to be illegal,
invalid, or unenforceable under present or future laws effective during the
term of this Deed of Trust, the legality, validity, and enforceability of the
remaining provisions of this Deed of Trust shall not be affected thereby, and
in lieu of each such illegal, invalid or unenforceable provision there shall be
added automatically as a part of this Deed of Trust a provision as similar in
terms to such illegal, invalid, or unenforceable provision as may be possible
and be legal, valid, and enforceable. If the Rights and Liens created by this
Deed of Trust shall be invalid or unenforceable as to any part of the Secured
Indebtedness, then the unsecured portion of the Secured Indebtedness shall be
completely paid prior to the payment of the remaining and secured portion of
the Secured Indebtedness, and all payments made on the Secured Indebtedness
shall be considered to have been paid on and applied first to the complete
payment of the unsecured portion of the Secured Indebtedness.
Section 7.12. This Deed of Trust is binding upon Grantor and Grantor's
Successors, and shall inure to the benefit of Beneficiary, and its successors
and assigns, and the provisions hereof shall likewise be covenants running with
the land. The duties, covenants, conditions, obligations, and warranties of
Grantor in this Deed of Trust shall be joint and several obligations of Grantor
and Grantor's
Deed of Trust/Pacific United, L.P. Page 22
23
Successors. Beneficiary may at any time and from time to time assign or sell to
other lenders all or a portion of the indebtedness secured hereby, or sell
participations therein, and may, in contemplation of such sale or assignment
divulge, and deliver copies of, information (financial or otherwise) concerning
Grantor and any Guarantor to such prospective lenders.
Section 7.13. This Deed of Trust has been simultaneously executed in a
number of identical counterparts, each of which, for all purposes, shall be
deemed an original.
Section 7.14. Beneficiary shall have the right at any time to file this Deed
of Trust as a financing statement, but the failure to do so shall not impair
the validity and enforceability of this Deed of Trust in any respect
whatsoever.
Section 7.15. Grantor hereby assumes all liability for the Mortgaged
Property, for the Liens created therein by this Deed of Trust, and for any
development, use, possession, maintenance, and management of, and construction
upon, the Mortgaged Property, or any part thereof, and agrees to assume
liability for, and to indemnify and hold Beneficiary harmless from and against,
any and all claims, causes of action, or liabilities, for injuries to or deaths
of persons and damage to property, howsoever arising, from or incident to such
development, use, possession, maintenance, management, and construction,
whether such persons be agents or employees of Grantor or of third parties, or
such damage be to property of Grantor or of others. Grantor agrees to
indemnify, save and hold harmless Beneficiary from and against, and covenants
to defend Beneficiary against, any and all losses, damages, claims, costs,
penalties, liabilities, and expenses, including, but not limited to, court
costs and reasonable attorneys' fees, howsoever arising or incurred because of,
incident to, or with respect to the Mortgaged Property or any development, use,
possession, maintenance, or management thereof or construction thereon.
Section 7.16. If all or any portion of the proceeds of the loan evidenced by
the Note has been advanced for the purpose of paying the purchase price for all
or a part of the Mortgaged Property, then: (a) Beneficiary shall have, and is
hereby granted, a vendor's lien on the Mortgaged Property to further secure the
Secured Indebtedness; and (b) Beneficiary shall be subrogated to all rights,
titles, interests, liens, and security interests owned or claimed by the holder
of any indebtedness which has been directly or indirectly discharged or paid
from the proceeds of the loan evidenced by the Note.
Section 7.17. All references to "Article," "Articles," "Section," "Sections,"
"Subsection," or "Subsections" contained herein are, unless specifically
indicated otherwise, references to articles, sections, and subsections of this
Deed of Trust.
Section 7.18. Whenever herein the singular number is used, the same shall
include the plural where appropriate, and words of any gender shall include
each other gender where appropriate.
Section 7.19. The captions, headings, and arrangements used in this Deed of
Trust are for convenience only and do not in any way affect, limit, amplify, or
modify the terms and provisions hereof.
Section 7.20. Whenever this Deed of Trust requires or permits any consent,
approval, notice, request, or demand from one party to another, the consent,
approval, notice, request, or demand must be in writing to be effective and
shall be deemed to have been given when (a) if by hand delivery, telecopy or
other facsimile transmission, on the day and at the time on which delivered to
such party at the address or telecopier numbers specified below; (b) if by
mail, on the day two (2) days following the date upon which it is deposited,
postage prepaid, in the United States, registered or certified mail, return
receipt requested, addressed to such party at the address specified below
(except that any notice of a nonjudicial foreclosure shall be effective upon
the date so deposited in the U. S. mail); or
Deed of Trust/Pacific United, L.P. Page 23
24
(c) if by Federal Express or other reputable express mail service, on the
next Business Day following the delivery to such express mail service,
addressed to such party at the address set forth below:
If to Beneficiary: Bank of America Texas, N.A.
0000 X. Xxxx Xxxxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
If to Grantor: Pacific United, L.P.
0000 Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx
Failure to deliver copies of notices to parties other than Grantor and
Beneficiary shall not affect the effectiveness or validity of notices otherwise
properly given. Any party may change its address for purposes hereof by giving
ten (10) days written notice of such change to the other parties pursuant to
this Section 7.20.
Notwithstanding any provision contained herein or in any of the other
Security Instruments to the contrary, in the event that Beneficiary shall fail
to give any notice to Grantor required hereunder or thereunder, the sole and
exclusive remedy for such failure shall be to seek appropriate equitable relief
to enforce the Security Instruments to give such notice and to have any action
of Beneficiary postponed or revoked and any proceedings in connection therewith
delayed or terminated pending the giving of such notice by Beneficiary, and no
Person shall have any right to damages (whether actual or consequential) or any
other type of relief not herein specifically set out against Beneficiary, all
of which damages or other relief are expressly waived by Grantor. The foregoing
is not intended and shall not be deemed under any circumstances to require
Beneficiary to give notice of any type or nature to any Person except as
expressly set forth herein or as may be otherwise expressly required by
applicable law regarding statutory notice of non-judicial foreclosure sales of
certain collateral.
Section 7.21. This Deed of Trust is being executed and delivered, and is
intended to be performed, in the State of Texas, and the substantive laws of
such State shall govern the validity, construction, enforcement, and
interpretation of this Deed of Trust, the Note, and the other Security
Instruments, unless otherwise specified herein or therein or unless federal law
or the laws of another state require the application of such laws.
Section 7.22. Regardless of any provisions contained in this Deed of Trust,
the Note or any of the other Security Instruments, Beneficiary shall never be
entitled to receive, collect or apply, as interest on the Secured Indebtedness,
any amount in excess of the highest lawful rate and, in the event that
Beneficiary ever receives, collects or applies, as interest, any such excess,
such amount which would be excessive interest shall be applied to the reduction
of the unpaid principal balance of the Secured Indebtedness, and if the
principal balance of the Secured Indebtedness is paid in full, any remaining
excess shall be forthwith paid to Grantor. In determining whether or not the
interest paid or payable, under any specific contingency, exceeds the highest
lawful rate, Grantor and Beneficiary shall, to the maximum extent permitted
under applicable law, (a) characterize any nonprincipal payment as an expense,
fee, or premium rather than as interest, (b) exclude voluntary prepayments and
the effects thereof, and (c) "spread" the total amount of interest throughout
the entire term of the Note so that the interest rate does not exceed the
highest lawful rate of interest.
Deed of Trust/Pacific United, L.P. Page 24
25
Section 7.23. Subject to the requirements of Section 3.2(c) of the Loan
Agreement, after completion of the Improvements, Grantor shall be entitled to
obtain, from time to time, the release of one or more of the Lots from the Lien
of this Deed of Trust in connection with the all-cash sale of one or more of
such Lots to third parties for purposes of constructing single-family homes
thereon, provided the following conditions have been satisfied: (i) at least
fifteen (15) days before the closing of the intended sale, Borrower shall have
given Beneficiary written notice of the intended sale accompanied by (a) a
survey plat containing the legal description of the Lots proposed to be
released from the lien of this Deed of Trust (the "Release Lots") and depicting
the location of the Release Lots within the Property in relation to the Lots
remaining subject to the lien of this Deed of Trust (the "Remaining Lots"); (b)
a copy of the contract of sale (which is subject to Beneficiary's prior
approval pursuant to Section 3.2 of the Loan Agreement) and all other documents
proposed to be executed in connection with the sale; (c) a certification by the
Grantor that Grantor and all other parties liable in connection with the Loan
are in compliance with all material provisions of the Loan Documents; (d)
Grantor's computation of the net sales proceeds that will result from the sale
(which proceeds must be at least equal to the minimum proceeds required by
Section 3.2(c) of the Loan Agreement); (e) such evidence as Beneficiary may
reasonably require that following the release, the Remaining Lots will continue
to be in compliance with all applicable zoning, platting and land use laws and
restrictions and (ii) Bank reasonably determines that following the requested
release, the ratio of the unpaid balance of the Note to the value of the
Remaining Lots will not exceed the Maximum Loan to Value Ratio set forth in the
Loan Agreement. If the foregoing information is satisfactory to Beneficiary and
the requirements of Section 3.2(c) of the Loan Agreement are met, then Grantor
shall be entitled to a release of the Release Lots from the lien of this Deed of
Trust at the closing of the sale of the Release Lots, conditioned upon delivery
to Beneficiary of (i) an acceptable form of modification endorsement to the
mortgagee title policy insuring the lien of this deed of trust and (ii) payment
to Beneficiary of the greater of (i) one hundred percent (100%) of the net sales
proceeds from the sale, or (ii) the Minimum Net Proceeds (as such term is
defined in the Loan Agreement). Regardless of whether or not the proposed
partial release is approved, Grantor shall pay Beneficiary's reasonable costs,
including legal fees, incurred in connection with any requested release of Lots
from the lien of this Deed of Trust. Within five (5) days after the closing of
a sale of a portion of the Land for which a Partial Release is given, Grantor
shall provide Beneficiary with a signed copy of the closing statement for such
sale.
Section 7.24. THIS WRITTEN LOAN AGREEMENT 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.
As used herein, the term "Loan Agreement" means one or more promises,
promissory notes, agreements, undertakings, security agreements, deeds of trust
or other documents, or commitments, or any combination of those actions or
documents relating to the Loan. This Notice is given with respect to the Loan,
pursuant to Section 26.02 of the Texas Business and Commerce Code.
Section 7.25. Time is of the essence of this Deed of Trust and the other
Security Instruments.
Section 7.26. Nothing contained in this Deed of Trust, the Note, the
Security Instruments, or any of the other security instruments nor the acts of
the parties hereto shall be construed to create a relationship of principal and
agent, partnership, or joint venture between Grantor and Beneficiary.
Deed of Trust/Pacific United, L.P. Page 25
26
EXECUTED effective as of August 6, 1997.
GRANTOR:
PACIFIC UNITED, L.P.,
a Texas limited partnership
By: Pacific United Development Corp.,
a Nevada corporation,
its sole general partner
By: /s/ XXXXXXX XXXXXXX
--------------------------------
Xxxxxxx Xxxxxxx,
President
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
This instrument was acknowledged before me on August 6, 1997, by
Xxxxxxx Xxxxxxx, President of PACIFIC UNITED DEVELOPMENT CORP., a Nevada
corporation, on behalf of said corporation as general partner on behalf of
PACIFIC UNITED, L.P., a Texas limited partnership.
/s/ XXXXXXXX XXX
---------------------------------
Notary Public Signature
(PERSONALIZED SEAL)
[NOTARY PUBLIC SEAL]
Deed of Trust/Pacific United, L.P. Page 26
