When Recorded, Return To:
INDEPENDENT RESEARCH AGENCY FOR
LIFE INSURANCE, INC.
P. O. Box 2387
Fort Worth, Texas 76113
Attention: General Counsel
DEED OF TRUST, SECURITY AGREEMENT AND
ASSIGNMENT OF RENTS AND LEASES
STATE OF TEXAS Section
Section KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF TARRANT Section
THAT, FIRST COMMAND FINANCIAL CORPORATION ("GRANTOR", whether one or
more), whose address is 0000 Xxxxx Xxxxx, Xxxx Xxxxx, Xxxxx 00000, for and in
consideration of the sum of TEN DOLLARS ($10.00) to Grantor in hand paid by
Xxxxxx X. Xxxxxx, Trustee, of Tarrant County, Texas ("TRUSTEE"), in order to
secure the payment of the Indebtedness (as hereinafter defined) and the
performance of the obligations, covenants, agreements and undertakings of
Grantor hereinafter described, does hereby GRANT, BARGAIN, SELL, CONVEY,
TRANSFER, ASSIGN and SET OVER to Trustee all of Grantor's right, title and
interest in and to the real estate (the "LAND") situated in the County of
Tarrant and State of Texas described in EXHIBIT "A" attached hereto and made
a part hereof, TOGETHER WITH the following, whether now owned or hereafter
acquired by Grantor: (a) all buildings and other improvements now or
hereafter attached to or placed, erected, constructed or developed on the
Land (the "IMPROVEMENTS"); (b) all materials, equipment, fixtures,
furnishings, inventory and articles of personal property (the "PERSONAL
PROPERTY") whatsoever now or hereafter delivered to, attached to, installed
in, or used in or about the Improvements or which are necessary or useful for
the complete and comfortable use and occupancy of the Improvements for the
purposes for which they were or are to be attached, placed, erected,
constructed or developed, or which Personal Property is or may be used in the
development of the Improvements, and all renewals of or replacements or
substitutions for any of the foregoing whether or not the same shall be
attached to the Land or Improvements; (c) all building materials and
equipment now or hereafter delivered to and intended to be installed in or on
the Land or Improvements; (d) all security deposits and advance rentals under
any lease agreements now or at any time hereafter arising from or by virtue
of any transactions related to the Land, Improvements or the Personal
Property and held by or for the benefit of Grantor; (e) all monetary deposits
which Grantor has given to any public or private utility with respect to
utility services furnished to the Land or Improvements; (f) all rents,
issues, profits, revenues, royalties, bonuses or other benefits of the Land,
the Improvements or the Personal Property, including, without limitation,
cash or securities deposited pursuant to leases of all or any part of the
Land, Improvements or Personal
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Property; (g) all proceeds (including premium refunds) of each policy of
insurance relating to the Land, Improvements or Personal Property; (h) all
proceeds from the taking of the Land, Improvements, Personal Property or any
part thereof or any interest or right or estate appurtenant thereto by
eminent domain or by purchase in lieu thereof; (i) all Grantor's rights (but
not its obligations) under any contracts related to the Land or Improvements;
(j) all plans, specifications, maps, surveys, reports, architectural,
engineering and construction contracts, books of account, insurance policies
and other documents, of whatever kind or character, relating to the use,
construction upon, occupancy, leasing, sale or operation of the Land or
Improvements; (k) all easements and rights of way used in connection with the
Land or Improvements or as a means of ingress to or egress from said Land or
Improvements; (l) all right, title and interest of Grantor in and to all
streets, roads, ways, alleys, public places, easements and rights-of-way,
existing or proposed, public or private, adjacent to or used in connection
with, belonging or pertaining to the Land or any part thereof; and (m) all
rights, estates, powers, privileges and interests of whatever kind or
character appurtenant or incident to the foregoing. If the estate of Grantor
in any of the above-described property is a leasehold estate ("LEASEHOLD
ESTATE"), this conveyance shall include, and the lien and security interest
created hereby shall encumber, all additional title, estate, interest and
other rights that may hereafter be acquired by Grantor in the property
demised under the Leasehold Estate. The above-described property is
collectively herein referred to as the "MORTGAGED PROPERTY."
TO HAVE AND TO HOLD the Mortgaged Property, together with the rights,
privileges and appurtenances thereto belonging unto the Trustee and his
successors or substitutes, forever in this trust and to his or their
successors and assigns, IN TRUST, however, upon the terms, provisions and
conditions herein set forth.
ARTICLE I
SECURED INDEBTEDNESS
1.1 SECURED INDEBTEDNESS. This Deed of Trust, Security Agreement and
Assignment of Rents and Leases (the "MORTGAGE") is made to secure and enforce
the payment of the following promissory note, obligations, indebtedness and
liabilities: (a) one certain promissory note of even date herewith in the
original principal amount of EIGHT MILLION FIVE HUNDRED THOUSAND AND NO/100
DOLLARS ($8,500,000.00), made by Grantor and payable to the order of
INDEPENDENT RESEARCH AGENCY FOR LIFE INSURANCE, INC., whose address is P. O.
Box 2387, Fort Worth, Texas 76113, with interest at the rate or rates therein
provided, both principal and interest being payable as therein provided, and
containing a provision for the payment of a reasonable additional amount as
attorneys' fees (such promissory note and all modifications, increases,
renewals or extensions thereof, in whole or in part, and all other notes
given in substitution therefor or in modification, increase, renewal or
extension thereof, in whole or in part, are collectively referred to herein
as the "NOTE", and said payee and all subsequent holders of the Note or any
part thereof or any of the Indebtedness,
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as hereinafter defined, are collectively referred to herein as "NOTEHOLDER");
and (b) all future loans and advances made by Noteholder to Grantor and all
other indebtedness, obligations and liabilities of every kind and character
of Grantor now or hereafter existing in favor of Noteholder, including,
without limitation, all those incurred or arising pursuant to the provisions
of this Mortgage or any other instrument, document or agreement, whether such
debts, obligations or liabilities be direct or indirect, primary or
secondary, joint or several, fixed or contingent, and whether originally
payable to Noteholder or to a third party and subsequently acquired by
Noteholder and whether such debts, obligations and liabilities are evidenced
by note, open account, overdraft, endorsement, surety agreement, guaranty or
otherwise, it being contemplated that Grantor may hereafter become indebted
to Noteholder in further sum or sums. The indebtedness, obligations, and
liabilities referred to in this Paragraph are hereinafter collectively
referred to as the "INDEBTEDNESS." This Mortgage, the Note, the Loan
Agreement (as hereinafter defined) and any other instruments, documents and
agreements now or hereafter evidencing, securing, governing, guaranteeing
and/or pertaining to the Indebtedness or any part thereof are hereinafter
collectively referred to as the "LOAN DOCUMENTS."
ARTICLE II
REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS OF GRANTOR
2.1 REPRESENTATIONS AND WARRANTIES. Grantor does hereby represent and
warrant to Noteholder as follows:
(a) FINANCIAL MATTERS. Grantor is solvent, is not bankrupt and
has no outstanding liens, suits, garnishments, bankruptcies or court
actions which could render Grantor insolvent or bankrupt. There has not
been filed by or against Grantor a petition in bankruptcy or a petition
or answer seeking an assignment for the benefit of creditors, the
appointment of a receiver, trustee, custodian or liquidator with respect
to Grantor or any portion of Grantor's property, reorganization,
arrangement, rearrangement, composition, extension, liquidation or
dissolution or similar relief under the United States Bankruptcy Code or
any state law. All reports, statements and other data furnished by
Grantor to Noteholder in connection with the loan evidenced by the Note
are true and correct in all material respects and do not omit to state
any fact or circumstance necessary to make the statements contained
therein not misleading. No material adverse change has occurred since
the dates of such reports, statements and other data in the financial
condition of Grantor or of any tenant under leases described in such
reports, statements and other data.
(b) TITLE AND AUTHORITY. Grantor is the owner and holder of the
leasehold estate in and to the Land, and Grantor is the lawful owner of
good, indefeasible and marketable title to the Improvements and has good
right and authority to grant, bargain, sell,
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transfer, assign and mortgage Xxxxxxx's interest in the Land and the
Improvements and to grant a security interest in the Personal Property.
Grantor does not do business with respect to the Mortgaged Property
under any trade name.
(c) PERMITTED ENCUMBRANCES. The Mortgaged Property is free and
clear from all liens, security interests and encumbrances except the
lien and security interest evidenced hereby and any liens and/or
encumbrances affecting the Mortgaged Property appearing in the Real
Property Records of the county in which the Land is situated, but only
to the extent the same are valid and subsisting (hereinafter called the
"PERMITTED ENCUMBRANCES"). There are no mechanic's or materialmen's
liens, lienable bills or other claims constituting or that may
constitute a lien on the Mortgaged Property, or any part thereof.
(d) NO FINANCING STATEMENT. There is no financing statement
covering all or any part of the Mortgaged Property or its proceeds on
file in any public office which has not been terminated or assigned to
Noteholder.
(e) LOCATION OF PERSONAL PROPERTY. All tangible Personal Property
is located on the Land.
(f) NO HOMESTEAD. No portion of the Mortgaged Property is being
used as Grantor's business or residential homestead.
(g) NO DEFAULT OR VIOLATION. The execution, delivery and
performance of this Mortgage, the Note and all of the other Loan
Documents do not contravene, result in a breach of or constitute a
default under any mortgage, deed of trust, lease, promissory note, loan
agreement or other contract or agreement to which Grantor is a party or
by which Grantor or any of its properties may be bound or affected and
do not violate or contravene any law, order, decree, rule or regulation
to which Grantor is subject.
(h) COMPLIANCE WITH COVENANTS AND LAWS. The Mortgaged Property
and the intended use thereof by Grantor comply with all applicable
restrictive covenants, zoning ordinances and building codes, flood
disaster laws, applicable health and environmental laws and regulations
and all other applicable laws, statutes, ordinances, rules, regulations,
orders, determinations and court decisions, including, without
limitation, the Americans With Disabilities Act of 1990 and TEX. REV.
CIV. STAT. XXX. art. 9102, as amended (all of the foregoing hereinafter
sometimes collectively referred to as "APPLICABLE LAWS"), without
reliance upon grandfather provisions or adjacent or other properties.
Grantor has obtained all requisite zoning, utility, building, health and
operating permits from each governmental authority or municipality
having jurisdiction over the Mortgaged Property. All engineering
specifications with respect to the Mortgaged Property are within
applicable environmental standards.
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(i) ENVIRONMENTAL. Without limitation of any of the foregoing, to
the best of Grantor's knowledge no asbestos, material containing
asbestos which is or may become friable or material containing asbestos
deemed hazardous by Applicable Laws has been installed in the Mortgaged
Property and the Mortgaged Property and Grantor are not in violation of
or subject to any existing, pending or, to the best knowledge of
Grantor, threatened investigation or inquiry by any governmental
authority or to any remedial obligations under any Applicable Laws
pertaining to health or the environment (such Applicable Laws as they
now exist or are hereafter enacted and/or amended hereinafter sometimes
collectively referred to as "APPLICABLE ENVIRONMENTAL LAWS"), including
without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986 (collectively, together with
any subsequent amendments hereinafter referred to as "CERCLA"), the
Resource Conservation and Recovery Act of 1976, as amended by the Used
Oil Recycling Act of 1980, the Solid Waste Disposal Act Amendments of
1980, and the Hazardous and Solid Waste Amendments of 1984
(collectively, together with any subsequent amendments hereinafter
called "RCRA"), the Texas Water Code and the Texas Solid Waste Disposal
Act, and this representation 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 and Grantor. Grantor has not obtained and is not
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 by reason of any
Applicable Environmental Laws. Grantor undertook, at the time of
acquisition of the Mortgaged Property, all appropriate inquiry into the
previous ownership and uses of the Mortgaged Property consistent with
good commercial or customary practice to determine that the Mortgaged
Property and the uses therefor are in compliance with all Applicable
Environmental Laws. Grantor has taken all steps necessary to determine
and has determined that no hazardous substances or solid wastes have
been disposed of or otherwise released on or to the Mortgaged Property.
The use which Grantor makes and intends to make of the Mortgaged
Property will not result in the disposal or other release of any
hazardous substance or solid waste on or to the Mortgaged Property. The
terms "HAZARDOUS SUBSTANCE" and "RELEASE" as used in this Mortgage 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, then 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 the terms "HAZARDOUS SUBSTANCE," "RELEASE," "SOLID WASTE,"
or "DISPOSAL" (or "DISPOSED") which is broader than that specified in
either CERCLA or RCRA, such broader meaning shall apply.
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(j) NO SUITS. There are no judicial or administrative actions,
suits or proceedings pending or, to the best of Grantor's knowledge,
threatened against or affecting Grantor, any other person liable,
directly or indirectly, for the Indebtedness, or the Mortgaged Property
or involving the validity, enforceability or priority of any of the Loan
Documents.
(k) [Intentionally Omitted]
(l) ORGANIZATION. Grantor, if a corporation, is duly incorporated
and validly existing under the laws of the state of its incorporation
and is duly qualified to do business in the State of Texas. Grantor has
all requisite power and all governmental certificates of authority,
licenses, permits, qualifications and other documentation to own, lease
and operate its properties and to carry on its business as now conducted
and as contemplated to be conducted.
(m) ENFORCEABILITY. The Note, this Mortgage and all other Loan
Documents constitute the legal, valid and binding obligations of Grantor
enforceable in accordance with their respective terms. The execution
and delivery of, and performance under, the Note, this Mortgage and all
other Loan Documents are within Grantor's powers and have been duly
authorized by all requisite action and are not in contravention of the
powers of Grantor's charter, bylaws or other corporate papers.
(n) NOT A FOREIGN PERSON. Grantor is not a "FOREIGN PERSON"
within the meaning of the Internal Revenue Code of 1986, as amended
(hereinafter called the "CODE"), Sections 1445 and 7701 (i.e. Grantor is
not a non-resident alien, foreign corporation, foreign partnership,
foreign trust or foreign estate, as those terms are defined in the Code
and regulations promulgated thereunder).
2.2 COVENANTS AND AGREEMENTS. So long as the Indebtedness or any part
thereof remains unpaid, Grantor covenants and agrees with Noteholder as follows:
(a) PAYMENT AND PERFORMANCE. Grantor will make prompt payment, as
the same becomes due, of the Indebtedness and shall punctually and
properly perform all of Grantor's covenants, obligations and liabilities
under the Loan Documents.
(b) EXISTENCE. Grantor will continuously maintain its existence
and its right to do business in the State of Texas together with its
franchises and trade names.
(c) TAXES ON NOTE AND OTHER TAXES. Grantor will promptly pay all
income, franchise and other taxes owing by Grantor and any stamp taxes
which may be required to be paid with respect to the Note, this Mortgage
or any other Loan Documents.
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(d) OPERATION OF MORTGAGED PROPERTY. Grantor will operate the
Mortgaged Property in a good and workmanlike manner and in accordance
with all Applicable Laws and will pay all fees or charges of any kind in
connection therewith. Grantor will keep the Mortgaged Property occupied
so as not to impair the insurance carried thereon. Grantor will not use
or occupy, or allow the use or occupancy of, the Mortgaged Property in
any manner which violates any Applicable Law or which constitutes a
public or private nuisance or which makes void, voidable or cancelable,
or increases the premium of, any insurance then in force with respect
thereto. Grantor will not initiate or permit any zoning
reclassification of the Mortgaged Property or seek any variance under
existing zoning ordinances applicable to the Mortgaged Property or use
or permit the use of the Mortgaged Property in such a manner which would
result in such use becoming a nonconforming use under applicable zoning
ordinances or other Applicable Laws. Grantor will not impose any
restrictive covenants or encumbrances upon the Mortgaged Property,
execute or file any subdivision plat affecting the Mortgaged Property or
consent to the annexation of the Mortgaged Property to any municipality,
without the prior written consent of Noteholder. Grantor shall not
cause or permit any drilling or exploration for, or extraction, removal
or production of, minerals from the surface or subsurface of the
Mortgaged Property. Grantor will not do or suffer to be done any act
whereby the value of any part of the Mortgaged Property may be lessened.
Grantor will allow Noteholder or its authorized representative to enter
the Mortgaged Property at any reasonable time to inspect the Mortgaged
Property and Grantor's books and records pertaining thereto and Grantor
will assist Noteholder or said representative in whatever way necessary
to make such inspection. If Grantor receives a notice or claim from any
federal, state or other governmental entity pertaining to the Mortgaged
Property, including, without limitation, a notice that the Mortgaged
Property is not in compliance with any Applicable Law, Grantor will
promptly furnish a copy of such notice or claim to Noteholder.
(e) DEBTS FOR CONSTRUCTION. Grantor will cause all debts and
liabilities of any character, including without limitation, all debts
and liabilities for labor, material and equipment and all debts and
charges for utilities servicing the Mortgaged Property, incurred in the
construction, maintenance, operation and development of the Mortgaged
Property, to be promptly paid.
(f) AD VALOREM TAXES. Grantor will cause to be paid prior to
delinquency all taxes and assessments heretofore or hereafter levied or
assessed against the Mortgaged Property, or any part thereof, or against
Trustee or Noteholder for or on account of the Note or any other
Indebtedness or the interest created by this Mortgage and will furnish
Noteholder with receipts showing payment of such taxes and assessments
at least ten (10) days prior to the applicable default date therefor;
provided that Grantor may in good faith, by appropriate proceedings,
contest the validity, applicability, or amount of any asserted tax or
assessment, and pending such contest Grantor shall not be deemed in
Page 7
default hereunder if (i) Grantor shall diligently prosecute such contest
in a manner not prejudicial to the rights, liens and security interests
of Noteholder; (ii) prior to delinquency of the asserted tax or
assessment Grantor establishes with Noteholder an escrow acceptable to
Noteholder adequate to cover the payment of such tax or assessment with
interest, costs and penalties and a reasonable additional sum to cover
possible costs, interest and penalties (which escrow shall be returned
to Grantor upon payment of all such taxes, assessments, interest, costs
and penalties or disbursed in accordance with the resolution of the
contest to the claimant) or furnishes Noteholder with an indemnity bond
secured by a deposit in cash or other security acceptable to Noteholder,
or with a surety acceptable to Noteholder, in the amount of the tax or
assessment being contested by Grantor plus a reasonable additional sum
to pay all costs, interests and penalties which may be imposed or
incurred in connection therewith; (iii) Grantor pays to Noteholder
promptly after demand therefor all costs and expenses incurred by
Noteholder in connection with such contest; and (iv) Grantor promptly
causes to be paid any amount adjudged by a court of competent
jurisdiction to be due, with all costs, penalties and interest thereon,
promptly after such judgment becomes final and non-appealable; provided,
however, that in any event each such contest shall be concluded and the
tax, assessment, penalties, interest and costs shall be paid prior to
the date any writ or order is issued under which the Mortgaged Property
or any part thereof may be sold.
(g) REPAIR AND MAINTENANCE. Grantor will keep the Mortgaged
Property in first class order, repair, operating condition and
appearance, causing all necessary repairs, renewals, replacements,
additions and improvements to be promptly made, and will not allow any
of the Mortgaged Property to be misused, abused or wasted or to
deteriorate. Grantor will promptly replace all worn-out or obsolete
fixtures or personal property covered by this Mortgage with fixtures or
personal property comparable to the replaced fixtures or personal
property when new, and will repaint the Mortgaged Property when needed.
Grantor will make all renovations, modifications and alterations to the
Mortgaged Property in compliance with all Applicable Laws.
Notwithstanding any of the foregoing, Grantor will not, without the
prior written consent of Noteholder, (i) remove from the Mortgaged
Property any fixtures or personal property covered by this Mortgage
except those replaced by Grantor by an article of equal suitability and
value, owned by Grantor, free and clear of any lien or security interest
(except that created by this Mortgage); (ii) make any structural
alteration to the Mortgaged Property or any other alterations thereto
which impair the value thereof; or (iii) make any alteration to the
Mortgaged Property involving an estimated expenditure exceeding $10,000
except pursuant to plans and specifications approved in writing by
Noteholder.
(h) INSURANCE AND CASUALTY. Grantor will keep the Mortgaged
Property insured against loss or damage by fire, explosion, windstorm,
hail, flood (if the Mortgaged Property shall at any time be located in
an identified "FLOOD PRONE AREA" in which flood insurance has been made
available pursuant to the Flood Disaster Protection
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Act of 1973), tornado and such other hazards as may be required by
Noteholder by policies of fire, extended coverage and other insurance in
such company or companies, in such amounts, upon such terms and
provisions, and with such endorsements, all as may be acceptable to
Noteholder. Grantor will also provide such other insurance as
Noteholder may from time to time require, in such companies, upon such
terms and provisions, in such amounts, and with such endorsements, all
as are approved by Noteholder. Grantor further agrees that Grantor will
deliver to Noteholder the original policies evidencing such insurance
and any additional insurance which shall be taken out upon any part of
the Mortgaged Property and receipts evidencing the payment of all
premiums, and will deliver certificates evidencing renewals of all such
policies of insurance to Noteholder at least fifteen (15) days before
any such insurance shall expire. Without limiting the discretion of
Noteholder with respect to required endorsements to insurance policies,
Grantor further agrees that all such policies shall provide that
proceeds thereunder will be payable to Noteholder as its interest may
appear pursuant and subject to a mortgage clause (without contribution)
of standard form attached to or otherwise made a part of the applicable
policy. In the event of foreclosure of this Mortgage, or other transfer
of title to the Mortgaged Property in extinguishment in whole or in part
of the Indebtedness, all right, title and interest of Grantor in and to
such policies then in force concerning the Mortgaged Property and all
proceeds payable thereunder shall thereupon vest in the purchaser at
such foreclosure or Noteholder or other transferee in the event of such
other transfer of title. In the event any of the Mortgaged Property
covered by such insurance is destroyed or damaged by fire, explosion,
windstorm, hail or by any other casualty against which insurance shall
have been required hereunder, (i) Noteholder may, but shall not be
obligated to, make proof of loss if not made promptly by Grantor; (ii)
each insurance company concerned is hereby authorized and directed to
make payment for such loss directly to Noteholder instead of to Grantor;
and (iii) Noteholder shall have the right to apply the insurance
proceeds first, to reimburse Noteholder or Trustee for all costs and
expenses, including, without limitation, reasonable attorneys' fees,
incurred in connection with the collection of such proceeds and, second,
the remainder of said proceeds shall be applied, at the sole discretion
of Noteholder, in payment (without premium or penalty) of the
Indebtedness, either in whole or in part, in the order determined by
Noteholder in its sole discretion, or to the repair, restoration or
replacement, either partly or entirely, of the Mortgaged Property so
destroyed or damaged, provided that, any insurance proceeds held by
Noteholder to be applied to the repair, restoration or replacement of
the Mortgaged Property shall be so held without payment or allowance of
interest thereon and shall be paid out from time to time upon compliance
by Grantor with such terms, conditions and requirements as may be
imposed by Noteholder. In any event the unpaid portion of the
Indebtedness shall remain in full force and effect and Grantor shall not
be excused in the payment thereof. If any act or occurrence of any kind
or nature (including any casualty on which insurance was not obtained or
obtainable) shall result in damage to or loss or destruction of the
Mortgaged Property, Grantor shall give immediate written notice
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thereof to Noteholder and, unless otherwise so instructed by Noteholder,
shall promptly, at Grantor's sole cost and expense and regardless of
whether the insurance proceeds, if any, shall be sufficient for the
purpose, restore, repair, replace and rebuild the Mortgaged Property as
nearly as possible to its value, condition and character immediately
prior to such damage, loss or destruction in accordance with plans and
specifications submitted to and approved by Noteholder.
(i) CONDEMNATION. Immediately upon obtaining knowledge of the
institution of any proceedings for the condemnation of the Mortgaged
Property or any portion thereof, or any other proceedings arising out of
injury or damage to the Mortgaged Property, or any portion thereof,
Grantor will notify Noteholder of the pendency of such proceedings.
Noteholder may participate in any such proceedings, and Grantor shall
from time to time deliver to Noteholder all instruments requested by it
to permit such participation. Grantor shall, at its expense, diligently
prosecute any such proceedings, and shall consult with Noteholder, its
attorneys and experts, and cooperate with them in the carrying on or
defense of any such proceedings. All proceeds of condemnation awards or
proceeds of sale in lieu of condemnation with respect to the Mortgaged
Property and all judgments, decrees and awards for injury or damage to
the Mortgaged Property shall be paid to Noteholder and shall be applied,
first, to reimburse Noteholder or Trustee for all costs and expenses,
including, without limitation, reasonable attorneys' fees, incurred in
connection with collection of such proceeds and, second, the remainder
of said proceeds shall be applied, at the sole discretion of Noteholder,
to the payment of the Indebtedness (without premium or penalty) in the
order determined by Noteholder in its sole discretion or paid out to
repair or restore the Mortgaged Property so affected by such
condemnation, injury or damage in the same manner as provided in
Subparagraph (h) of this Paragraph 2.2. In any event the unpaid portion
of the Indebtedness shall remain in full force and effect and Grantor
shall not be excused in the payment thereof. In the event any of the
foregoing proceeds are applied to the repair, restoration or replacement
of the Mortgaged Property, Grantor shall promptly commence and complete
such repair, restoration or replacement of the Mortgaged Property as
nearly as possible to its value, condition and character immediately
prior to such damage or taking in accordance with plans and
specifications submitted to and approved by Noteholder. Grantor hereby
assigns and transfers all such proceeds, judgments, decrees and awards
to Noteholder and agrees to execute such further assignments of all such
proceeds, judgments, decrees and awards as Noteholder may request.
Noteholder is hereby authorized, in the name of Grantor, to execute and
deliver valid acquittances for, and to appeal from, any such judgment,
decree or award. Noteholder shall not be, in any event or
circumstances, liable or responsible for the failure to collect, or the
failure to exercise diligence in the collection of, any such proceeds,
judgments, decrees or awards.
(j) PROTECTION AND DEFENSE OF LIEN. If the validity or priority
of this Mortgage or of any rights, titles, liens or security interests
created or evidenced hereby
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with respect to the Mortgaged Property or any part thereof shall be
endangered or questioned or shall be attacked directly or indirectly or
if any legal proceedings are instituted against Grantor with respect
thereto, Grantor will give prompt written notice thereof to Noteholder
and at Grantor's own cost and expense will diligently endeavor to cure
any defect that may be developed or claimed, and will take all necessary
and proper steps for the defense of such legal proceedings, including,
without limitation, the employment of counsel, the prosecution or
defense of litigation and the release or discharge of all adverse
claims, and Trustee and Noteholder, or either of them (whether or not
named as parties to legal proceedings with respect thereto) are hereby
authorized and empowered to take such additional steps as in their
judgment and discretion may be necessary or proper for the defense of
any such legal proceedings or the protection of the validity or priority
of this Mortgage and the rights, titles, liens and security interests
created or evidenced hereby, including, without limitation, the
employment of counsel, the prosecution or defense of litigation, the
compromise or discharge of any adverse claims made with respect to the
Mortgaged Property, the purchase of any tax title and the removal of
prior liens or security interests (including, without limitation, the
payment of debts as they mature or the payment in full of matured or
unmatured debts, which are secured by these prior liens or security
interests), and all expenses so incurred of every kind and character
shall be subject to and covered by the provisions of Paragraph 2.3
hereof.
(k) NO OTHER LIENS. Grantor will not, without the prior written
consent of Noteholder, create, place or permit to be created or placed,
or through any act or failure to act, acquiesce in the placing of, or
allow to remain, any deed of trust, mortgage, voluntary or involuntary
lien, whether statutory, constitutional or contractual (except for the
lien for ad valorem taxes on the Mortgaged Property which are not
delinquent), security interest, encumbrance or charge, or conditional
sale or other title retention document, against or covering the
Mortgaged Property, or any part thereof, other than the Permitted
Encumbrances, regardless of whether the same are expressly or otherwise
subordinate to the lien or security interest created in this Mortgage,
and should any of the foregoing become attached hereafter in any manner
to any part of the Mortgaged Property without the prior written consent
of Noteholder, Grantor will cause the same to be promptly discharged and
released. Grantor will own all parts of the Mortgaged Property and will
not acquire any fixtures, equipment or other property forming a part of
the Mortgaged Property pursuant to a lease, license or similar
agreement, without the prior written consent of Noteholder.
(l) BOOKS AND RECORDS. Grantor will keep accurate books and
records in accordance with sound accounting principles in which full,
true and correct entries shall be promptly made as to all operations on
the Mortgaged Property, and will permit all such books and records
(including, without limitation, all contracts, statements, invoices,
bills and claims for labor, materials and services supplied for the
construction and
Page 11
operation of the improvements forming a part of the Mortgaged Property) to
be inspected and copied by Noteholder and its duly authorized
representatives at all times during reasonable business hours.
(m) FINANCIAL STATEMENTS AND REPORTS; RENT ROLL. Grantor will
deliver to Noteholder, within sixty (60) days after the close of each
fiscal year of Grantor, a statement of condition or balance sheet, a cash
flow statement and a statement of contingent liabilities of Grantor as of
the end of such fiscal year. Grantor will deliver to Noteholder, within
sixty (60) days after the close of the fiscal year of each guarantor of the
Indebtedness, a statement of condition or balance sheet of such guarantor
as at the end of such fiscal year. Grantor will deliver to Noteholder,
within forty-five (45) days after the close of each fiscal quarter of
Grantor, an operating statement showing in reasonable detail all income and
expenses of Grantor with respect to the Mortgaged Property during such
quarter and for the fiscal year through the end of such quarter. All such
statements of condition, balance sheets, cash flow statements and operating
statements shall be in form, scope and detail satisfactory to Noteholder
and shall be prepared and certified as to accuracy by an independent
certified public accountant or representative of Grantor acceptable to
Noteholder. Grantor will deliver to Noteholder, within sixty (60) days
after the close of each fiscal year of Grantor, a rent roll of the
Mortgaged Property containing the name and address of all tenants then
occupying portions of the Mortgaged Property under valid and subsisting
lease agreements and, with respect to each lease, the rentals payable,
square footage of the leased premises, amount of security deposit, lease
commencement date, lease expiration date, date through which rent is paid
and the nature and extent of any defaults by any tenant, all certified as
to accuracy by a representative of Grantor acceptable to Noteholder.
Grantor shall use its best efforts to obtain and examine financial and
credit information on all proposed lessees and provide copies of same to
Noteholder upon its request. If, and as often as, reasonably requested by
Noteholder, Grantor will make further reports of operations in such form as
Noteholder prescribes, setting out full data requested by Noteholder.
(n) ESCROW. If requested by Noteholder at any time during the term
the Indebtedness is outstanding in order to secure the performance and
discharge of Grantor's obligations under Subparagraphs (f) and (h) of this
Paragraph 2.2, but not in lieu of such obligations, Grantor will deposit
with Noteholder a sum equal to ad valorem taxes, assessments and charges
(which charges for the purpose of this Subparagraph shall include without
limitation ground rents and water and sewer rents and any other recurring
charge which could create or result in a lien against the Mortgaged
Property) against the Mortgaged Property for the current year and the
premiums for such policies of insurance for the current year, all as
estimated by Noteholder and prorated to the end of the calendar month
following the month during which this Mortgage is executed and delivered,
and thereafter will deposit with Noteholder, on each date when an
installment of principal and/or interest is due on the Note, sufficient
funds (as estimated from time
Page 12
to time by Noteholder) to permit Noteholder to pay, at least fifteen
(15) days prior to the due date thereof, the next maturing ad valorem
taxes, assessments and charges and premiums for such policies of
insurance. Noteholder shall have the right to rely upon tax information
furnished by applicable taxing authorities in the payment of such taxes
or assessments and shall have no obligation to make any protest of any
such taxes or assessments. Any excess over the amounts required for
such purposes shall be held by Noteholder for future use, applied to any
Indebtedness or refunded to Grantor, at Noteholder's option, and any
deficiency in such funds so deposited shall be made up by Grantor upon
demand of Noteholder. All such funds so deposited shall bear no
interest whatsoever, may be mingled with the general funds of Noteholder
and shall be applied by Noteholder toward the payment of such taxes,
assessments, charges and premiums when statements therefor are presented
to Noteholder by Grantor (such statements to be presented by Grantor to
Noteholder within a reasonable time before the applicable amount is
due); provided, however, that, if a Default (as hereinafter defined)
shall have occurred hereunder, such funds may at Noteholder's option be
applied to the payment of the Indebtedness in the order determined by
Noteholder in its sole discretion, and that Noteholder may at any time,
in its sole discretion, apply all or any part of such funds toward the
payment of any such taxes, assessments, charges or premiums which are
past due, together with any penalties or late charges with respect
thereto. The conveyance or transfer of Xxxxxxx's interest in the
Mortgaged Property for any reason (including, without limitation, the
foreclosure of a subordinate lien or security interest or a transfer by
operation of law) shall constitute an assignment or transfer of
Grantor's interest in and rights to such funds held by Noteholder under
this Subparagraph but subject to the rights of Noteholder hereunder.
(o) FURTHER ASSURANCES. Grantor will, on request of Noteholder,
promptly (i) correct any defect, error or omission which may be discovered
in the contents of this Mortgage or in any other instrument now or
hereafter executed in connection herewith or in the execution or
acknowledgment thereof; (ii) execute, acknowledge, deliver and record or
file such further instruments (including, without limitation, further deeds
of trust, security agreements, financing statements, continuation
statements and assignments of rents and leases) and do such further acts as
may be necessary, desirable or proper to carry out more effectively the
purposes of this Mortgage and such other instruments and to subject to the
liens and security interests hereof and thereof any property intended by
the terms hereof and thereof to be covered hereby and thereby including,
without limitation, any renewals, additions, substitutions, replacements or
appurtenances to the Mortgaged Property; (iii) execute, acknowledge,
deliver, procure and record or file any document or instrument (including,
without limitation, any financing statement) deemed advisable by Noteholder
to protect the lien or security interest hereunder against the rights or
interests of third persons; and (iv) provide such certificates, documents,
reports, information, affidavits and other instruments and do such further
acts as may be necessary, desirable or proper in the reasonable
determination of Noteholder to enable
Page 13
Noteholder to comply with the requirements or requests of any agency
having jurisdiction over Noteholder or any examiners of such agencies
with respect to the Indebtedness, Grantor or the Mortgaged Property and
Grantor will pay all costs connected with any of the foregoing.
(p) [Intentionally Omitted]
(q) FEES AND EXPENSES; INDEMNIFICATION. Grantor will pay all
appraisal fees, filing and recording fees, inspection fees, survey fees,
taxes, brokerage fees and commissions, abstract fees, title policy fees,
uniform commercial code search fees, escrow fees, attorneys' fees, and all
other costs and expenses of every character incurred by Grantor or
Noteholder in connection with the Indebtedness, either at the closing
thereof or at any time during the term thereof, or otherwise attributable
or chargeable to Grantor as owner of the Mortgaged Property, and will
reimburse Noteholder for all such costs and expenses incurred by
Noteholder. Grantor shall pay all expenses and reimburse Noteholder for
any expenditures, including, without limitation, reasonable attorneys' fees
and legal expenses, incurred or expended in connection with (i) the breach
by Grantor of any covenant herein or in any other Loan Document; (ii)
Noteholder's exercise of any of its rights and remedies hereunder or under
the Note or any other Loan Document or Noteholder's protection of the
Mortgaged Property and its lien and security interest therein; or (iii) any
amendments to this Mortgage, the Note or any other Loan Document or any
matter requested by Grantor or any approval required hereunder. Grantor
will indemnify and hold harmless Trustee and Noteholder (for purposes of
this Subparagraph, the terms "TRUSTEE" and "NOTEHOLDER" shall include the
directors, officers, partners, employees, representatives and agents of
Trustee and Noteholder, respectively, and any persons or entities owned or
controlled by, owning or controlling, or under common control or affiliated
with Trustee and Noteholder, respectively) from and against, and reimburse
them for, all claims, demands, liabilities, losses, damages, causes of
action, judgments, penalties, costs and expenses (including, without
limitation, reasonable attorneys' fees) which may be imposed upon, asserted
against or incurred or paid by them by reason of, on account of or in
connection with any bodily injury or death or property damage occurring in
or upon or in the vicinity of the Mortgaged Property through any cause
whatsoever or asserted against them on account of any act performed or
omitted to be performed hereunder or on account of any transaction arising
out of or in any way connected with the Mortgaged Property or with this
Mortgage, the Note or any other Loan Documents. WITHOUT LIMITATION OF THE
FOREGOING, IT IS THE INTENTION OF GRANTOR AND GRANTOR AGREES THAT THE
FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNIFIED PARTY WITH RESPECT TO
CLAIMS, DEMANDS, LIABILITIES, LOSSES, DAMAGES, CAUSES OF ACTION, JUDGMENTS,
PENALTIES, COSTS AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE
ATTORNEYS' FEES) WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF
THE
Page 14
NEGLIGENCE OF SUCH (AND/OR ANY OTHER) INDEMNIFIED PARTY. However, such
indemnities shall not apply to any indemnified party to the extent the
subject of the indemnification is caused by or arises out of the gross
negligence or willful misconduct of such indemnified party. The foregoing
indemnities shall not terminate upon release, foreclosure or other
termination of this Mortgage but will survive foreclosure of this Mortgage
or conveyance in lieu of foreclosure and the repayment of the Indebtedness
and the discharge and release of this Mortgage and the other Loan
Documents. Any amount to be paid hereunder by Grantor to Noteholder and/or
Trustee shall be subject to and governed by the provisions of Paragraph 2.3
hereof.
(r) LIABILITY INSURANCE. Grantor shall maintain Commercial General
Liability insurance against claims for bodily injury or death and property
damage occurring in or upon or resulting from the Mortgaged Property, in
standard form and with such insurance company or companies as may be
acceptable to Noteholder, such insurance to afford immediate protection, to
the limit of not less than $1,000,000 in respect of any one accident or
occurrence, and to the limit of not less than $100,000 for property damage,
with not more than $5,000 deductible. Such Commercial General Liability
insurance shall include Blanket Contractual Liability coverage which
insures contractual liability under the indemnification of Noteholder and
the Trustee by Grantor set forth in this Mortgage (but such coverage or the
amount thereof shall in no way limit such indemnification). Grantor shall
maintain with respect to each policy or agreement evidencing such
Commercial General Liability insurance such endorsements as may be required
by Noteholder and shall at all times deliver and maintain with Noteholder a
certificate with respect to such insurance in form satisfactory to
Noteholder. Not less than fifteen (15) days prior to the expiration date
of each policy of insurance required of Grantor pursuant to this
Subparagraph, Grantor shall deliver to Noteholder a renewal policy or
policies marked "PREMIUM PAID" or accompanied by other evidence of payment
satisfactory to Noteholder. In the event of a foreclosure of this
Mortgage, the purchaser of the Mortgaged Property shall succeed to all the
rights of Grantor, including, without limitation, any right to unearned
premiums, in and to all policies of insurance assigned pursuant to the
provisions of this Subparagraph, and Grantor hereby authorizes Noteholder
to notify any or all insurance carriers of this assignment.
(s) WARRANTY. Grantor will warrant and forever defend the title to
the Mortgaged Property against the claims of all persons making any claim
to the same or any part thereof, subject to the Permitted Encumbrances.
(t) TAX ON LIEN. In the event of the enactment after the date hereof
of any law of the State of Texas or of any other governmental entity
deducting from the value of property for the purpose of taxation any lien
or security interest thereon, or imposing upon Noteholder the payment of
the whole or any part of the taxes or assessments or charges or liens
herein required to be paid by Grantor, or changing in any way the laws
Page 15
relating to the taxation of deeds of trust or mortgages or security
agreements or debts secured by deeds of trust or mortgages or security
agreements or the interest of the mortgagee or secured party in the
property covered thereby, or the manner of collection of such taxes, so as
to affect this Mortgage or the Indebtedness or Noteholder, then, and in any
such event, Grantor upon demand by Noteholder, shall pay such taxes,
assessments, charges or liens, or reimburse Noteholder therefor; provided,
however, that if in the opinion of counsel for Noteholder (i) it might be
unlawful to require Grantor to make such payment; or (ii) the making of
such payment might result in the contracting for, charging or receiving of
interest beyond the maximum amount permitted by law, then and in such
event, Noteholder may elect, by notice in writing given to Grantor, to
declare all of the Indebtedness to be and become due and payable sixty (60)
days from the giving of such notice.
(u) CHANGE OF NAME, IDENTITY OR STRUCTURE. Grantor will not change
Grantor's name, identity (including its trade name or names) or Grantor's
corporate structure without notifying Noteholder of such change in writing
at least thirty (30) days prior to the effective date of such change.
Grantor will execute and deliver to Noteholder, prior to or
contemporaneously with the effective date of any such change, any financing
statement or financing statement change or other document required by
Noteholder to establish or maintain the validity, perfection and priority
of the lien and security interest granted herein. At the request of
Noteholder, Grantor shall execute a certificate in form satisfactory to
Noteholder listing the trade names under which Grantor intends to operate
the Mortgaged Property, and representing and warranting that Grantor does
business under no other trade name with respect to the Mortgaged Property.
(v) LOCATION AND USE OF PERSONAL PROPERTY. All tangible Personal
Property will be used in the business of Grantor and shall remain in
Grantor's possession or control at all times at Grantor's risk of loss and
shall be located on the Land.
(w) ESTOPPEL CERTIFICATE. Grantor shall at any time and from time to
time furnish promptly upon request by Noteholder a written statement in
such form as may be required by Noteholder stating that the Note, this
Mortgage and the other Loan Documents are valid and binding obligations of
Grantor, enforceable against Grantor in accordance with their terms; the
unpaid principal balance of the Note; the date to which interest on the
Note is paid; that the Note, this Mortgage and the other Loan Documents
have not been released, subordinated or modified; and that there are no
offsets or defenses against the enforcement of the Note, this Mortgage or
any other Loan Documents, or if any of the foregoing statements are untrue,
specifying the reasons therefor.
(x) PROCEEDS OF PERSONAL PROPERTY. Grantor shall account fully and
faithfully for and, if Noteholder so elects, shall promptly pay or turn
over to Noteholder all
Page 16
proceeds in whatever form received from any disposition of any of the
Personal Property, except as otherwise specifically authorized herein.
Grantor shall at all times keep the Personal Property and its proceeds
separate and distinct from other property of Grantor and shall keep
accurate and complete records of the Personal Property and its proceeds.
(y) LOAN AGREEMENT. Grantor will punctually perform and discharge
each and every obligation and undertaking of Grantor under the Line of
Credit Agreement, of even date herewith, as from time to time amended or
restated (the "LOAN AGREEMENT"), between Grantor and Noteholder and will
not permit a default to occur thereunder.
(z) PERMITTED ENCUMBRANCES. Grantor will comply with and will
perform all of the covenants, agreements and obligations imposed upon it or
the Mortgaged Property in the Permitted Encumbrances in accordance with
their respective terms and provisions. Grantor will not modify or permit
any modification of any Permitted Encumbrance without the prior written
consent of Noteholder.
(aa) ENVIRONMENTAL. Grantor will not cause or permit the Mortgaged
Property or Grantor to be in violation of, or do anything or permit
anything to be done which will subject the Mortgaged Property to any
remedial obligations under, any Applicable Environmental Laws, including,
without limitation, CERCLA, RCRA, the Texas Water Code and the Texas Solid
Waste Disposal Act, assuming disclosure to the applicable governmental
authorities of all relevant facts, conditions and circumstances, if any,
pertaining to Grantor and/or the Mortgaged Property, and Grantor will
promptly notify Noteholder in writing of any existing, pending or, to the
best knowledge of Grantor, threatened investigation or inquiry by any
governmental authority in connection with any Applicable Environmental
Laws. Grantor shall 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 by reason of any
Applicable Environmental Laws. Grantor shall take all steps necessary to
determine that no hazardous substances or solid waste are being disposed of
or otherwise released on or to the Mortgaged Property. Grantor will not
cause or permit the disposal or other release of any hazardous substance or
solid waste on or to the Mortgaged Property and covenants and agrees to
keep or cause the Mortgaged Property to be kept free of any hazardous
substance or solid waste and to remove the same (or if removal is
prohibited by law, to take whatever action is required by law) promptly
upon discovery at its sole expense. Upon Noteholder's reasonable request,
at any time and from time to time during the existence of this Mortgage,
Grantor will provide at Grantor's sole expense an inspection or audit of
the Mortgaged Property from an engineering or consulting firm approved by
Noteholder, indicating the presence or absence of hazardous substances and
solid wastes on the Mortgaged Property. If Grantor fails to provide same
after forty-five (45) days' notice, Noteholder may order same, and Grantor
grants to Noteholder and its agents, employees, contractors and consultants
access to the Mortgaged Property and a license
Page 17
(which is coupled with an interest and irrevocable while this Mortgage
is in effect) to perform inspections and tests. The cost of such
inspections and tests shall be a demand obligation owing by Grantor to
Noteholder pursuant to this Mortgage and shall be subject to and covered
by the provisions of Paragraph 2.3 hereof.
(bb) ASBESTOS. Grantor covenants and agrees that it will not install
in the Mortgaged Property, nor permit to be installed in the Mortgaged
Property, asbestos, material containing asbestos which is or may become
friable or material containing asbestos deemed hazardous by any Applicable
Environmental Law, and that if any such asbestos or material containing
asbestos exists in or on the Mortgaged Property, whether installed by
Grantor or others, Grantor will remove the same (or if removal is
prohibited by law, will take whatever action is required by law, including,
without limitation, implementing any required operation and maintenance
program) promptly upon discovery at its sole expense. Upon Noteholder's
reasonable request, at any time and from time to time during the existence
of this Mortgage, Grantor shall provide at Grantor's sole expense an
inspection or audit of the Mortgaged Property from an engineering or
consulting firm approved by Noteholder, indicating the presence or absence
of asbestos or material containing asbestos on the Mortgaged Property. If
Grantor fails to provide same after thirty (30) days' notice, Noteholder
may order same, and Grantor grants to Noteholder and its agents, employees,
contractors and consultants access to the Mortgaged Property and a license
(which is coupled with an interest and irrevocable while this Mortgage is
in effect) to perform inspections and tests. The cost of such inspections
and tests shall be subject to and covered by the provisions of Paragraph
2.3 hereof.
(cc) COMPLY WITH LEASE. Grantor will fully perform and comply with
all covenants, warranties, representations, and other obligations imposed
upon or assumed by it as lessee, sublessee or otherwise under any lease,
sublease or similar agreement pursuant to which it has a possessory
interest in the Land and, upon Grantor's failure or alleged failure
(notwithstanding that Xxxxxxx's failure or alleged failure may be contested
by Grantor) so to do, Noteholder will have the absolute and immediate right
to enter upon the Mortgaged Property and to take such other action, to such
extent and as often as Noteholder, in its opinion, deems necessary or
desirable, to prevent or to cure any such failures or alleged failures by
Grantor.
(dd) MATTERS PERTAINING TO LEASE. Grantor will not, without
Noteholder's prior written consent, (i) terminate or modify any lease,
sublease or similar agreement pursuant to which it has a possessory
interest in the Land in any respect or (ii) permit the fee title to the
Land demised by such lease, sublease or agreement and the leasehold estate
so created to merge, but rather such fee title and such leasehold estate
shall always be separate and distinct.
Page 18
2.3 RIGHT OF NOTEHOLDER TO PERFORM. Grantor agrees that if Grantor fails
to perform any act or to take any action which Grantor is required to perform or
take hereunder or under any of the other Loan Documents, or to pay any money
which Grantor is required to pay hereunder or under any of the other Loan
Documents, or takes any action prohibited hereby or thereby, Noteholder, in
Grantor's name or in its own name, may but shall not be obligated to perform or
cause to be performed such act or take such action, including, without
limitation, entering the Mortgaged Property for such purpose and to take all
such action thereon as it may deem necessary or appropriate, or pay such money
or remedy any action so taken, and any expenses so incurred by Noteholder, and
any money paid by Noteholder in connection therewith, shall be a demand
obligation owing by Grantor to Noteholder and Noteholder, upon making such
payment, shall be subrogated to all of the rights of the party receiving such
payment. Any amounts due and owing by Grantor to Noteholder pursuant to this
Mortgage shall bear interest from the date such amount becomes due until paid at
the rate of interest payable on matured but unpaid principal of or interest on
the Note and shall be a part of the Indebtedness and shall be secured by this
Mortgage and by all of the other Loan Documents.
2.4 INDEMNIFICATION REGARDING ENVIRONMENTAL MATTERS. Xxxxxxx agrees to
indemnify and hold Noteholder and Trustee (for purposes of this Paragraph, the
terms "NOTEHOLDER" and "TRUSTEE" shall include the directors, officers,
partners, employees, representatives and agents of Noteholder and Trustee,
respectively, and any persons or entities owned or controlled by, owning or
controlling, or under common control or otherwise affiliated with Noteholder and
Trustee, respectively) harmless from and against, and to reimburse Noteholder
and Trustee with respect to, any and all claims, demands, losses, damages
(including consequential damages), liabilities, causes of action, judgments,
penalties, costs and expenses (including attorneys' fees and court costs) of any
and every kind or character, known or unknown, fixed or contingent, imposed on,
asserted against or incurred by Noteholder and/or the Trustee at any time and
from time to time by reason of, in connection with or arising out of (a) the
breach of any representation or warranty of Grantor as set forth herein
regarding asbestos, material containing asbestos or Applicable Environmental
Laws, (b) the failure of Grantor to perform any obligation herein required to be
performed by Grantor regarding asbestos, material containing asbestos or
Applicable Environmental Laws, (c) any violation on or before the Release Date
(as hereinafter defined) of any Applicable Environmental Law in effect on or
before the Release Date, (d) the removal of hazardous substances or solid wastes
from the Mortgaged Property (or if removal is prohibited by law, the taking of
whatever action is required by law), (e) the removal of asbestos or material
containing asbestos from the Mortgaged Property (or if removal is prohibited by
Applicable Environmental Laws, the taking of whatever action is required by
Applicable Environmental Laws, including, without limitation, the implementation
of any required operation and maintenance program), (f) any act, omission, event
or circumstance existing or occurring on or prior to the Release Date
(including, without limitation, the presence on the Mortgaged Property or
release from the Mortgaged Property of any hazardous substance or solid waste
disposed of or otherwise released on or prior to the Release Date), resulting
from or in connection with the ownership, construction, occupancy,
Page 19
operation, use and/or maintenance of the Mortgaged Property, regardless of
whether the act, omission, event or circumstance constituted a violation of
any Applicable Environmental Law at the time of its existence or occurrence,
and (g) any and all claims or proceedings (whether brought by private party
or governmental agency) for bodily injury, property damage, abatement or
remediation, environmental damage or impairment or any other injury or damage
resulting from or relating to any hazardous substance or solid waste located
upon or migrating into, from or through the Mortgaged Property (whether or
not any or all of the foregoing was caused by Grantor or its tenant or
subtenant, or a prior owner of the Mortgaged Property or its tenant or
subtenant, or any third party and whether or not the alleged liability is
attributable to the handling, storage, generation, transportation or disposal
of such substance or waste or the mere presence of such substance or waste on
the Mortgaged Property). WITHOUT LIMITATION, THE FOREGOING INDEMNITIES SHALL
APPLY TO EACH INDEMNIFIED PARTY WITH RESPECT TO CLAIMS, DEMANDS, LOSSES,
DAMAGES (INCLUDING CONSEQUENTIAL DAMAGES), LIABILITIES, CAUSES OF ACTION,
JUDGMENTS, PENALTIES, COSTS AND EXPENSES (INCLUDING ATTORNEYS' FEES AND COURT
COSTS) WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE
OF SUCH (AND/OR ANY OTHER) INDEMNIFIED PARTY. However, such indemnities shall
not apply to any indemnified party to the extent the subject of the
indemnification is caused by or arises out of the gross negligence or willful
misconduct of such indemnified party. The term "RELEASE DATE" as used herein
shall mean the earlier of the following two dates: (i) the date on which the
Indebtedness has been paid and performed in full and this Mortgage has been
released, or (ii) the date on which the lien of this Mortgage is foreclosed
or a conveyance by deed in lieu of such foreclosure is fully effective;
provided, if such payment, performance, release, foreclosure or conveyance is
challenged, in bankruptcy proceedings or otherwise, the Release Date shall be
deemed not to have occurred until such challenge is rejected, dismissed or
withdrawn with prejudice. The foregoing indemnities shall not terminate upon
the Release Date or upon the release, foreclosure or other termination of
this Mortgage but will survive the Release Date, foreclosure of this Mortgage
or conveyance in lieu of foreclosure, and the repayment of the Indebtedness
and the discharge and release of this Mortgage and the other Loan Documents.
Any amount to be paid hereunder by Grantor to Noteholder and/or Trustee shall
be a demand obligation owing by Grantor to Noteholder and/or Trustee and
shall be subject to and covered by the provisions of Paragraph 2.3 hereof.
Nothing in this Paragraph, elsewhere in this Mortgage or in any other Loan
Document shall limit or impair any rights or remedies of Noteholder and/or
Trustee against Grantor or any third party under Applicable Environmental
Laws, including without limitation, any rights of contribution or
indemnification available hereunder or thereunder.
Page 20
ARTICLE III
ASSIGNMENT OF RENTS, LEASES, PROFITS, INCOME,
CONTRACTS AND BONDS
3.1 ASSIGNMENT OF RENTS. Grantor does hereby absolutely and
unconditionally assign, transfer and set over to Noteholder all rents, income,
receipts, revenues, issues, profits and proceeds to be derived from the
Mortgaged Property, including, without limitation, the immediate and continuing
right to collect and receive all of the rents, income, receipts, revenues,
issues, profits and other sums of money that may now or at any time hereafter
become due and payable to Grantor under the terms of any leases now or hereafter
covering the Mortgaged Property, or any part thereof, including, but not limited
to, minimum rents, additional rents, percentage rents, deficiency rents and
liquidated damages following default, all proceeds payable under any policy of
insurance covering the loss of rents resulting from untenantability caused by
destruction or damage to the Mortgaged Property, and all of Grantor's rights to
recover monetary amounts from any tenant in bankruptcy, including, without
limitation, rights of recovery for use and occupancy and damage claims arising
out of lease defaults, including rejections, under any Applicable Bankruptcy Law
(as hereinafter defined), together with any sums of money that may now or at any
time hereafter become due and payable to Grantor by virtue of any and all
royalties, overriding royalties, bonuses, delay rentals and any other amount of
any kind or character arising under any and all present and future oil, gas and
mining leases covering the Mortgaged Property or any part thereof (collectively,
the "RENTS"); and all proceeds and other amounts paid or owing to Grantor under
or pursuant to any and all contracts and bonds relating to the construction,
erection or renovation of the Mortgaged Property; subject however to a license
hereby granted by Noteholder to Grantor to collect and receive all of the
foregoing (such license evidenced by Noteholder's acceptance of the Mortgage),
subject to the terms and conditions hereof. Notwithstanding anything contained
herein or in any of the other Loan Documents to the contrary, the assignment in
this Paragraph is an absolute, unconditional and presently effective assignment
and not merely a security interest; provided, however, upon the occurrence of a
Default (as hereinafter defined) hereunder or upon the occurrence of any event
or circumstance which with the lapse of time or the giving of notice or both
would constitute a Default hereunder, such license shall automatically and
immediately terminate and Grantor shall hold all Rents paid to Grantor
thereafter in trust for the use and benefit of Noteholder and Noteholder shall
have the right, power and authority, whether or not it takes possession of the
Mortgaged Property, to seek enforcement of any such lease, contract or bond and
to demand, collect, receive, sue for and recover in its own name any and all of
the above described amounts assigned hereby and to apply the sum(s) collected,
first to the payment of expenses incident to the collection of the same, and the
balance to the payment of the Indebtedness; provided further, however, that
Noteholder shall not be deemed to have taken possession of the Mortgaged
Property except on the exercise of its option to do so, evidenced by its demand
and overt act for such purpose. It shall not be necessary for
Page 21
Noteholder to institute any type of legal proceedings or take any other
action whatsoever to enforce the assignment provisions in this Paragraph 3.1.
3.2 ASSIGNMENT OF LEASES. Grantor hereby assigns to Noteholder all
existing and future leases, including, without limitation, all subleases
thereof, and any and all extensions, renewals, modifications and replacements
thereof, upon any part of the Mortgaged Property (collectively, the "LEASES").
Grantor hereby further assigns to Noteholder all guaranties of tenants'
performance under the Leases. Prior to a Default, Grantor shall have the right,
without joinder of Noteholder, to enforce the Leases, unless Noteholder directs
otherwise.
3.3 WARRANTIES CONCERNING LEASES AND RENTS. Grantor represents and
warrants that:
(a) Grantor has good title to the Leases and Rents and authority to
assign them, and no other person or entity has any right, title
or interest therein;
(b) all existing Leases are valid, unmodified and in full force and
effect, except as indicated herein, and no default exists
thereunder;
(c) unless otherwise provided herein, no Rents have been or will be
assigned, mortgaged or pledged;
(d) no Rents have been or will be anticipated, waived, released,
discounted, set off or compromised; and
(e) except as indicated in the Leases, Grantor has not received any
funds or deposits from any tenant for which credit has not
already been made on account of accrued Rents.
3.4 GRANTOR'S COVENANTS OF PERFORMANCE. Grantor covenants to:
(a) perform all of its obligations under the Leases and give prompt
notice to Noteholder of any failure to do so;
(b) give immediate notice to Noteholder of any notice Grantor
receives from any tenant or subtenant under any Leases,
specifying any claimed default by any party under such Leases,
excluding, however, notices of default under residential leases;
(c) enforce the tenant's obligations under the Leases;
Page 22
(d) defend, at Xxxxxxx's expense, any proceeding pertaining to the
Leases, including, if Noteholder so requests, any such proceeding
to which Noteholder is a party; and
(e) neither create nor permit any encumbrance upon its interest as
lessor of the Leases, except this Mortgage and any other
encumbrances permitted by this Mortgage.
3.5 PRIOR APPROVAL FOR ACTIONS AFFECTING LEASES. Grantor shall not,
without the prior written consent of Noteholder:
(a) receive or collect Rents more than one month in advance;
(b) encumber or assign future Rents;
(c) waive or release any obligation of any tenant under the Leases;
(d) cancel, terminate or modify any of the Leases; cause or permit
any cancellation, termination or surrender of any of the Leases;
or commence any proceedings for dispossession of any tenant under
any of the Leases, except upon default by the tenant thereunder;
(e) renew or extend any of the Leases, except pursuant to terms in
existing Leases;
(f) permit any assignment of the Leases; or
(g) enter into any Leases after the date hereof.
3.6 SETTLEMENT FOR TERMINATION. Grantor agrees that no settlement for
damages for termination of any of the Leases under the Federal Bankruptcy Code,
or under any other federal, state or local statute, shall be made without the
prior written consent of Noteholder, and any check in payment of such damages
will be made payable to both Grantor and Noteholder. Grantor hereby assigns any
such payment to Noteholder to be applied to the Indebtedness as Noteholder may
elect and agrees to endorse any check for such payment to the order of
Noteholder.
3.7 NOTEHOLDER IN POSSESSION. Noteholder's acceptance of this assignment
shall not, prior to entry upon and taking possession of the Mortgaged Property
by Noteholder, be deemed to constitute Noteholder a "MORTGAGEE IN POSSESSION,"
nor obligate Noteholder to appear in or defend any proceedings relating to any
of the Leases or to the Mortgaged Property, take any action hereunder, expend
any money, incur any expenses, or perform any obligation or liability
Page 23
under the Leases, or assume any obligation for any deposits delivered to
Grantor by any tenant and not delivered to Noteholder. Noteholder shall not
be liable for any injury or damage to any person or property in or about the
Mortgaged Property.
3.8 APPOINTMENT OF ATTORNEY. Grantor hereby irrevocably appoints
Noteholder its attorney-in-fact, coupled with an interest, empowering Noteholder
to subordinate any Leases to this Mortgage.
3.9 INDEMNIFICATION. Grantor hereby indemnifies and holds Noteholder
(which shall include the directors, officers, partners, employees,
representatives and agents of Noteholder and any persons or entities owned or
controlled by, owning or controlling, or under common control or affiliated with
Noteholder) harmless from all liability, damage or expense imposed on or
incurred by Noteholder from any claims under the Leases, including, without
limitation, any claims by Grantor with respect to payments of Rents made
directly to Noteholder after Default and claims by any tenant for security
deposits or for rental payments more than one (1) month in advance and not
delivered to Noteholder. All amounts indemnified against hereunder, including,
without limitation, attorneys' fees, if paid by Noteholder shall bear interest
at the maximum lawful rate and shall be payable by Grantor in accordance with
Paragraph 2.3 hereof. The foregoing indemnities shall not terminate upon the
foreclosure, release or other termination of this Mortgage but will survive
foreclosure of this Mortgage or conveyance in lieu of foreclosure and the
repayment of the Indebtedness and the discharge and release of this Mortgage and
the other Loan Documents.
3.10 RECORDS. Upon request by Noteholder, Grantor shall deliver to
Noteholder executed originals of all Leases and copies of all records relating
thereto.
3.11 MERGER. There shall be no merger of the leasehold estates, created by
the Leases, with the fee estate of the Land without the prior written consent of
Noteholder.
3.12 RIGHT TO RELY. Grantor hereby irrevocably authorizes and directs the
tenants under the Leases to pay Rents to Noteholder upon written demand by
Noteholder without further consent of Grantor, and the tenants may rely upon any
written statement delivered by Noteholder to the tenants. Any such payment to
Noteholder shall constitute payment to Grantor under the Leases. The provisions
of this Paragraph are intended solely for the benefit of the tenants and shall
never inure to the benefit of Grantor or any person claiming through or under
Grantor, other than a tenant who has not received such notice. The assignment
of Rents set forth in Paragraph 3.1 is not contingent upon any notice or demand
by Noteholder to the tenants.
Page 24
ARTICLE IV
EVENTS OF DEFAULT
DEFAULTS. The term "DEFAULT" as used in this Mortgage shall mean the
occurrence of any of the following events:
4.1 FAILURE TO PAY INDEBTEDNESS. The failure, refusal or neglect of
Grantor to make due and punctual payment of principal or interest on the
Indebtedness, or any portion thereof, as the same shall become due and payable
which failure, refusal or neglect continues for more than ten (10) days after
Noteholder has given Grantor written notice thereof (except that Noteholder will
not be obligated to give more than three (3) such notices in any calendar year);
or
4.2 NON-PERFORMANCE OF COVENANTS. The failure of Grantor to timely and
properly observe, keep or perform any covenant, agreement, warranty or condition
(other than the covenant and agreement to pay the Indebtedness when due)
required herein or in any other Loan Document to be observed, kept or performed
which failure continues for more than thirty (30) days after Noteholder has
given Grantor written notice thereof; or
4.3 FALSE REPRESENTATION. Any representation contained herein or in any
other Loan Document or otherwise made by Grantor or any other person or entity
to Noteholder in connection with the Indebtedness is false or misleading in any
material respect; or
4.4 BANKRUPTCY OR INSOLVENCY. If the owner of the Mortgaged Property or
any person obligated to pay the Indebtedness: (a) becomes insolvent, or makes a
transfer in fraud of creditors, or makes an assignment for the benefit of
creditors, or admits in writing its inability to pay its debts as they become
due; (b) generally is not paying its debts as such debts become due; (c) has a
receiver, trustee or custodian appointed for, or take possession of, all or
substantially all of the assets of such party or any of the Mortgaged Property,
either in a proceeding brought by such party or in a proceeding brought against
such party and such appointment is not discharged or such possession is not
terminated within sixty (60) days after the effective date thereof or such party
consents to or acquiesces in such appointment or possession; (d) files a
petition for relief under the United States Bankruptcy Code or any other present
or future federal or state insolvency, bankruptcy or similar law (all of the
foregoing hereinafter collectively referred to as "APPLICABLE BANKRUPTCY LAW")
or an involuntary petition for relief is filed against such party under any
Applicable Bankruptcy Law and such involuntary petition is not dismissed within
sixty (60) days after the filing thereof, or an order for relief naming such
party is entered under any Applicable Bankruptcy Law, or any composition,
rearrangement, extension, reorganization or other relief of debtors now or
hereafter existing is requested or consented to by such party; (e) fails to have
discharged within a period of sixty (60)
Page 25
days any attachment, sequestration or similar writ levied upon any property
of such party; or (f) fails to pay within thirty (30) days any final money
judgment against such party; or
4.5 EXECUTION ON MORTGAGED PROPERTY. The Mortgaged Property or any part
thereof is taken on execution or other process of law in any action against
Grantor; or
4.6 ABANDONMENT. Grantor abandons all or a portion of the Mortgaged
Property; or
4.7 ACTION BY OTHER LIENHOLDER. The holder of any lien or security
interest on the Mortgaged Property (without hereby implying the consent of
Noteholder to the existence or creation of any such lien or security interest)
declares a default thereunder or institutes foreclosure or other proceedings for
the enforcement of its remedies thereunder; or
4.8 TRANSFER OF MORTGAGED PROPERTY. Without the prior written consent of
Noteholder, Grantor sells, leases, exchanges, assigns, transfers, conveys or
otherwise disposes of all or any part of the Mortgaged Property or any interest
therein (except for the disposition of worn-out or obsolete personal property or
fixtures under the circumstances described in Subparagraph 2.2(g) hereof), or
legal or equitable title to the Mortgaged Property, or any interest therein, is
vested in any other party, in any manner whatsoever, by operation of law or
otherwise, it being understood that the consent of Noteholder required hereunder
may be refused by Noteholder in its sole discretion or may be predicated upon
any terms, conditions and covenants deemed advisable or necessary in the sole
discretion of Noteholder, including, without limitation, the right to change the
interest rate, date of maturity or payments of principal and/or interest on the
Note, to require payment of any amount as additional consideration as a transfer
fee or otherwise and to require assumption of the Note and this Mortgage; or
4.9 OTHER LIENS. Without the prior written consent of Noteholder, Grantor
creates, places or permits to be created or placed, or through any act or
failure to act, acquiesces in the placing of, or allows to remain, any deed of
trust, mortgage, voluntary or involuntary lien, whether statutory,
constitutional or contractual (except for the lien for ad valorem taxes on the
Mortgaged Property which are not delinquent), security interest, encumbrance or
charge, or conditional sale or other title retention document, against or
covering the Mortgaged Property, or any part thereof, other than the Permitted
Encumbrances, regardless of whether the same are expressly or otherwise
subordinate to the lien or security interest created in this Mortgage, or
acquires any fixtures, equipment or other property forming a part of the
Mortgaged Property pursuant to a lease, license or similar agreement; or
4.10 DESTRUCTION OF MORTGAGED PROPERTY. The Mortgaged Property is so
demolished, destroyed or damaged that, in the judgment of Noteholder, it cannot
be restored or rebuilt with available funds to a profitable condition within a
reasonable period of time; or
Page 26
4.11 CONDEMNATION. So much of the Mortgaged Property is taken in
condemnation, or sold in lieu of condemnation, or the Mortgaged Property is so
diminished in value due to any injury or damage to the Mortgaged Property, that
the remainder thereof cannot, in the judgment of Noteholder, continue to be
operated profitably for the purpose for which it was being used immediately
prior to such taking, sale or diminution.
ARTICLE V
REMEDIES AND RELATED RIGHTS
If a Default shall occur, Noteholder may exercise any one or more of the
following remedies and shall, in addition to any other rights, have the
following related rights, without notice (unless notice is required by
Applicable Laws):
5.1 ACCELERATION. Upon the occurrence of a Default, Noteholder shall have
the option of declaring all Indebtedness in its entirety to be immediately due
and payable, and the liens and security interests evidenced hereby shall be
subject to foreclosure in any manner provided for herein or provided for by
applicable law as Noteholder may elect.
5.2 POSSESSION. Upon the occurrence of a Default, or any event or
circumstance which, with the lapse of time or the giving of notice, or both,
would constitute a Default hereunder, Noteholder is authorized prior or
subsequent to the institution of any foreclosure proceedings to enter upon the
Mortgaged Property, or any part thereof, and to take possession of the Mortgaged
Property and of all books, records and accounts relating thereto and to exercise
without interference from Grantor any and all rights which Grantor has with
respect to the management, possession, operation, protection or preservation of
the Mortgaged Property, including the right to rent the same for the account of
Grantor and to deduct from such rents all costs, expenses and liabilities of
every character incurred by Noteholder in collecting such rents and in managing,
operating, maintaining, protecting or preserving the Mortgaged Property and to
apply the remainder of such rents to the Indebtedness in such manner as
Noteholder may elect in its sole discretion. All such costs, expenses and
liabilities incurred by Noteholder in collecting such rents and in managing,
operating, maintaining or preserving the Mortgaged Property, if not paid out of
rents as hereinabove provided, shall constitute a demand obligation owing by
Grantor and shall be subject to and covered by Paragraph 2.3 hereof. If
necessary to obtain the possession provided for above, Noteholder may invoke any
and all legal remedies to dispossess Grantor, including, without limitation, one
or more actions for forcible entry and detainer, trespass to try title and
restitution. In connection with any action taken by Noteholder pursuant to this
Paragraph, Noteholder shall not be liable for any loss sustained by Grantor
resulting from any failure to rent the Mortgaged Property, or any part thereof,
or from any other act or omission of Noteholder in managing the Mortgaged
Property unless such loss is caused by the willful misconduct and bad faith of
Noteholder, nor shall Noteholder be obligated to perform or discharge any
obligation, duty or liability under any Lease covering the Mortgaged
Page 27
Property or any part thereof or under or by reason of this instrument or the
exercise of rights or remedies hereunder. Grantor shall and does hereby
agree to indemnify Noteholder for, and to hold Noteholder (which shall
include the directors, officers, partners, employees, representatives and
agents of Noteholder and any persons or entities owned or controlled by,
owning or controlling or under common control or affiliated with Noteholder)
harmless from, any and all liability, loss or damage which may or might be
incurred by Noteholder under any Lease or under or by reason of this Mortgage
or the exercise of rights or remedies hereunder and from any and all claims
and demands whatsoever which may be asserted against Noteholder by reason of
any alleged obligations or undertakings on its part to perform or discharge
any of the terms, covenants or agreements contained in any Lease. Should
Noteholder incur any such liability, the amount thereof, including costs,
expenses and reasonable attorneys' fees, shall be subject to and covered by
Paragraph 2.3 hereof. Nothing in this Paragraph shall impose any duty,
obligation or responsibility upon Noteholder for the control, care,
management or repair of the Mortgaged Property, nor for the carrying out of
any of the terms and conditions of any such Lease; nor shall it operate to
make Noteholder responsible or liable for any waste committed on the
Mortgaged Property by the tenants or by any other parties or for any
dangerous or defective condition of the Mortgaged Property, or for any
negligence in the management, upkeep, repair or control of the Mortgaged
Property resulting in loss or injury or death to any tenant, licensee,
employee or stranger. Grantor hereby assents to, ratifies and confirms any
and all actions of Noteholder with respect to the Mortgaged Property taken
under this Paragraph and agrees that the foregoing indemnity shall not
terminate upon release, foreclosure or other termination of this Mortgage.
5.3 FORECLOSURE. Upon the occurrence of a Default, Trustee, his successor
or substitute, is authorized and empowered and it shall be his special duty at
the request of Noteholder to sell the Mortgaged Property or any part thereof
situated in the State of Texas at the courthouse of any county in the State of
Texas in which any part of the Mortgaged Property is situated, at public vendue
to the highest bidder for cash. The sale shall take place at such area of the
courthouse as shall be properly designated from time to time by the
commissioners court (or, if not so designated by the commissioners court, at the
courthouse door) of the specified county, between the hours of 10 o'clock a.m.
and 4 o'clock p.m. (the commencement of such sale to occur within three hours
following the time designated in the hereinafter described notice of sale as the
earliest time at which such sale shall occur, if required by Applicable Laws) on
the first Tuesday in any month after having given notice of such sale at least
twenty-one (21) days before the day of sale of the time, place and terms of said
sale (including the earliest time at which such sale shall occur) in accordance
with the statutes of the State of Texas then in force governing sales of real
estate under powers conferred by deeds of trust. Notice of a sale of all or
part of the Mortgaged Property by Trustee shall be given by posting written
notice thereof at the courthouse door (or other area in the courthouse as may be
designated for such public notices) of the county in which the sale is to be
made, and by filing a copy of the notice in the office of the county clerk of
the county in which the sale is to be made at least twenty-one (21) days
preceding the date of the sale, and if the Mortgaged Property to be sold is in
more than one
Page 28
county, a notice shall be posted at the courthouse door and filed with the
county clerk of each county in which the Mortgaged Property is situated. In
addition, Noteholder shall, at least twenty-one (21) days preceding the date
of sale, serve written notice of the proposed sale by certified mail on
Grantor and each debtor obligated to pay the Indebtedness or any portion
thereof according to the records of Noteholder. Service of such notice shall
be completed upon deposit of the notice, enclosed in a postpaid certified
mail wrapper, properly addressed to Grantor and each such debtor at the most
recent address as shown by the records of Noteholder, in a post office or
official depository under the care and custody of the United States Postal
Service. The affidavit of any person having knowledge of the facts to the
effect that such service was completed shall be prima facie evidence of the
fact of service. Any sale made by Trustee hereunder may be as an entirety or
in such parcels as Noteholder may request, and any sale may be adjourned by
announcement at the time and place appointed for such sale without further
notice except as may be required by law. The sale 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 of less than the whole of the
Mortgaged Property shall be less than the aggregate of the Indebtedness and
the expense of executing this trust as provided herein, this Mortgage and the
lien hereof shall remain in full force and effect as to the unsold portion of
the Mortgaged Property just as though no sale had been made; provided,
however, that Grantor shall never have any right to require the sale of less
than the whole of the Mortgaged Property but Noteholder shall have the right,
at its sole election, to request Trustee to sell less than the whole of the
Mortgaged Property. After each sale, Trustee shall make to the purchaser or
purchasers at such sale good and sufficient conveyances in the name of
Grantor, conveying the property so sold to the purchaser or purchasers in fee
simple with general warranty of title, and shall receive the proceeds of said
sale or sales and apply the same as herein provided. Payment of the purchase
price to Trustee shall satisfy the obligation of purchaser at such sale
therefor, and such purchaser shall not be responsible for the application
thereof. The power of sale granted herein shall not be exhausted by any sale
held hereunder by Trustee or his substitute or successor, and such power of
sale may be exercised from time to time and as many times as Noteholder may
deem necessary until all of the Mortgaged Property has been duly sold and all
Indebtedness has been fully paid. In the event any sale hereunder is not
completed or is defective in the opinion of Noteholder, such sale shall not
exhaust the power of sale hereunder and Noteholder shall have the right to
cause a subsequent sale or sales to be made hereunder. Any and all
statements of fact or other recitals made in any deed or deeds given by
Trustee or any successor or substitute appointed hereunder as to nonpayment
of the Indebtedness, or as to the occurrence of any Default, or as to
Noteholder having declared all of such Indebtedness to be due and payable, or
as to the request to sell, or as to notice of time, place and terms of sale
and of the properties to be sold having been duly given, or as to the
refusal, failure or inability to act of Trustee or any substitute or
successor, or as to the appointment of any substitute or successor Trustee,
or as to any other act or thing having been duly done by Noteholder or by
Trustee or any substitute or successor, shall be taken as prima facie
evidence of the truth of the facts so stated and recited. Trustee, his
Page 29
successor or substitute, may appoint or delegate any one or more persons as
agent to perform any act or acts necessary or incident to any sale held by
Trustee, including, without limitation, the posting of notices and the
conducting of sales, but in the name and on behalf of Trustee, his successor
or substitute.
5.4 JUDICIAL FORECLOSURE. This Mortgage shall be effective as a mortgage
as well as a deed of trust and upon the occurrence of a Default may be
foreclosed as to any of the Mortgaged Property in any manner permitted by the
laws of the State of Texas or of any other state in which any part of the
Mortgaged Property is situated, and any foreclosure suit may be brought by
Trustee or by Noteholder. In the event a foreclosure hereunder shall be
commenced by Trustee, or his substitute or successor, Noteholder may at any time
before the sale of the Mortgaged Property direct Trustee to abandon the sale,
and may then institute suit for the collection of the Indebtedness, and/or for
the foreclosure of this Mortgage. It is agreed that if Noteholder should
institute a suit for the collection of the Indebtedness and/or for the
foreclosure of this Mortgage, Noteholder may at any time before the entry of a
final judgment in said suit dismiss the same, and require Trustee, his
substitute or successor to sell the Mortgaged Property in accordance with the
provisions of this Mortgage.
5.5 RECEIVER. In addition to all other remedies herein provided for,
Xxxxxxx agrees that upon the occurrence of a Default, or any event or
circumstance which, with the lapse of time or the giving of notice, or both,
would constitute a Default, Noteholder shall as a matter of right be entitled to
the appointment of a receiver or receivers for all or any part of the Mortgaged
Property, whether such receivership be incident to a proposed sale of the
Mortgaged Property or otherwise, and without regard to the value of the
Mortgaged Property or the solvency of any person or persons liable for the
payment of the Indebtedness, and Grantor does hereby consent to the appointment
of such receiver or receivers, waives any and all defenses to such appointment
and agrees not to oppose any application therefor by Noteholder, but nothing
herein is to be construed to deprive Noteholder of any other right, remedy or
privilege it may now have under the law to have a receiver appointed; provided,
however, that the appointment of such receiver or other appointee by virtue of
any court order, statute or regulation shall not impair or in any manner
prejudice the rights of Noteholder to receive payment of the Rents pursuant to
Paragraph 3.1 hereof. Any money advanced by Noteholder in connection with any
such receivership shall be subject to and covered by Paragraph 2.3 hereof.
5.6 PROCEEDS OF SALE. The proceeds of any sale held by Trustee or any
receiver or public officer in foreclosure of the liens evidenced hereby shall be
applied:
FIRST, to the payment of all necessary costs and expenses incident to
such foreclosure sale, including but not limited to, all court costs and
charges of every character in the event foreclosed by suit, attorneys' fees
and a reasonable fee to Trustee acting under the provisions of Paragraph
5.3 if foreclosed by power of sale as provided in said paragraph, not
exceeding five percent (5%) of the proceeds of such sale;
Page 30
SECOND, to the payment in full of the Indebtedness (including, without
limitation, the principal and interest due and unpaid on the Note,
attorneys' fees and any other amounts due and unpaid and owed to Noteholder
under this Mortgage) in such order as Noteholder may elect in its sole
direction; and
THIRD, the remainder, if any there shall be paid to Grantor or to such
other party or parties as may be entitled thereto by applicable law.
5.7 NOTEHOLDER AS PURCHASER. Noteholder shall have the right to become
the purchaser at any sale held by any Trustee or substitute or successor or by
any receiver or public officer, and any Noteholder purchasing at any such sale
shall have the right to credit upon the amount of the bid made therefor, to the
extent necessary to satisfy such bid, the Indebtedness owing to such Noteholder.
5.8 ADDITIONAL REMEDIES UNDER THE BUSINESS CODE. Upon the occurrence of a
Default, Noteholder may exercise its rights of enforcement with respect to the
Personal Property under the Texas Business and Commerce Code, as amended, (the
"BUSINESS CODE") and in conjunction with, in addition to or in substitution for
those rights and remedies:
(a) Noteholder may enter upon the Mortgaged Property to take
possession of, assemble and collect the Personal Property or to render it
unusable; and
(b) Noteholder may require Grantor to assemble the Personal Property
and make it available at a place Noteholder designates which is mutually
convenient to allow Noteholder to take possession or dispose of the
Personal Property; and
(c) written notice mailed to Grantor as provided herein five (5) days
prior to the date of public sale of the Personal Property or prior to the
date after which any private sale of the Personal Property will be made
shall constitute reasonable notice; and
(d) any sale made pursuant to the provisions of this Paragraph shall
be deemed to have been a public sale conducted in a commercially reasonable
manner if held contemporaneously with the sale of the Mortgaged Property
under power of sale as provided herein upon giving the same notice with
respect to the sale of the Personal Property hereunder as is required for
such sale of the Mortgaged Property under power of sale; and
(e) in the event of a foreclosure sale, whether made by Trustee under
the terms hereof, or under judgment of a court, the Personal Property and
the Mortgaged Property may, at the option of Noteholder, be sold as a
whole; and
Page 31
(f) it shall not be necessary that Noteholder take possession of the
Personal Property or any part thereof prior to the time that any sale
pursuant to the provisions of this Paragraph is conducted and it shall not
be necessary that the Personal Property or any part thereof be present at
the location of such sale; and
(g) prior to application of proceeds of disposition of the Personal
Property to the Indebtedness, such proceeds shall be applied to the
reasonable expenses of retaking, holding, preparing for sale or lease,
selling, leasing and the like and the reasonable attorneys' fees and legal
expenses incurred by Noteholder; and
(h) any and all statements of fact or other recitals made in any bill
of sale or assignment or other instrument evidencing any foreclosure sale
hereunder as to nonpayment of the Indebtedness or as to the occurrence of
any Default, or as to Noteholder having declared all of such Indebtedness
to be due and payable, or as to notice of time, place and terms of sale and
of the properties to be sold having been duly given, or as to any other act
or thing having been duly done by Noteholder, shall be taken as prima facie
evidence of the truth of the facts so stated and recited; and
(i) Noteholder may appoint or delegate any one or more persons as
agent to perform any act or acts necessary or incident to any sale held by
Noteholder, including the sending of notices and the conduct of the sale,
but in the name and on behalf of Noteholder.
5.9 PARTIAL FORECLOSURE. In the event of a Default in the payment of any
part of the Indebtedness, Noteholder shall have the right to proceed with
foreclosure of the liens and security interests evidenced hereby without
declaring the entire Indebtedness due, and in such event any such foreclosure
sale may be made subject to the unmatured part of the Indebtedness; and any such
sale shall not in any manner affect the unmatured part of the Indebtedness, but
as to such unmatured part this Mortgage shall remain in full force and effect
just as though no sale had been made. The proceeds of any such sale shall be
applied as provided in Paragraph 5.6 except that the amount paid under
subparagraph SECOND thereof shall be only the matured portion of the
Indebtedness and any proceeds of such sale in excess of those provided for in
subparagraphs FIRST and SECOND (modified as provided above) shall be applied to
installments of principal of and interest on the Note in the inverse order of
maturity. Several sales may be made hereunder without exhausting the right of
sale for any unmatured part of the Indebtedness.
5.10 REMEDIES CUMULATIVE. All remedies herein expressly provided for are
cumulative of any and all other remedies existing at law or in equity and are
cumulative of any and all other remedies provided for in any of the other Loan
Documents, or any part thereof, or otherwise benefiting Noteholder, and Trustee
and Noteholder shall, in addition to the remedies herein provided, be entitled
to avail themselves of all such other remedies as may now or hereafter
Page 32
exist at law or in equity for the collection of the Indebtedness and the
enforcement of the covenants herein and the foreclosure of the liens and
security interests evidenced hereby, and resort to any remedy provided for
hereunder or under any such Loan Documents or provided for by law shall not
prevent the concurrent or subsequent employment of any other appropriate
remedy or remedies.
5.11 RESORT TO ANY SECURITY. Noteholder may resort to any security given
by this Mortgage or to any other security now existing or hereafter given to
secure the payment of the Indebtedness, in whole or in part, and in such
portions and in such order as may seem best to Noteholder in its sole and
absolute discretion, and any such action shall not in any way be considered as a
waiver of any of the rights, benefits, liens or security interests evidenced by
this Mortgage.
5.12 WAIVER. To the full extent Grantor may do so, Xxxxxxx agrees that
Grantor will not at any time insist upon, plead, claim or take the benefit or
advantage of any law now or hereafter in force pertaining to the rights and
remedies of sureties or providing for any appraisement, valuation, stay,
extension or redemption, and Grantor, for Grantor and Xxxxxxx's heirs, devisees,
representatives, successors and assigns, and for any and all persons ever
claiming any interest in the Mortgaged Property, to the extent permitted by law,
hereby waives and releases all rights of redemption, valuation, appraisement,
stay of execution, notice of intention to mature or declare due the whole of the
Indebtedness, notice of election to mature or declare due the whole of the
Indebtedness and all rights to a marshaling of the assets of Grantor, including,
without limitation, the Mortgaged Property, or to a sale in inverse order of
alienation in the event of foreclosure of the liens and security interests
hereby created. Grantor shall not have or assert any right under any statute or
rule of law pertaining to the marshaling of assets, sale in inverse order of
alienation, the exemption of homestead, the administration of estates of
decedents or other matters whatever to defeat, reduce or affect the right of
Noteholder under the terms of this Mortgage to a sale of the Mortgaged Property
for the collection of the Indebtedness without any prior or different resort of
collection, or the right of Noteholder under the terms of this Mortgage to the
payment of such Indebtedness out of the proceeds of sale of the Mortgaged
Property in preference to every other claimant whatever. If any law referred to
in this Paragraph and now in force, of which Grantor or Grantor's heirs,
devisees, representatives, successors and assigns and such other persons
claiming any interest in the Mortgaged Property might take advantage despite
this Paragraph, shall hereafter be repealed or cease to be enforced, such law
shall not thereafter be deemed to preclude the application of this Paragraph.
5.13 DELIVERY OF POSSESSION AFTER FORECLOSURE. In the event there is a
foreclosure sale hereunder and at the time of such sale Grantor or Grantor's
heirs, devisees, representatives, successors or assigns or any other persons
claiming any interest in the Mortgaged Property by, through or under Grantor are
occupying or using the Mortgaged Property, or any part thereof, each and all
shall immediately become the tenant of the purchaser at such sale, which tenancy
Page 33
shall be a tenancy from day-to-day, terminable at the will of either landlord or
tenant, at a reasonable rental per day based upon the value of the property
occupied, such rental to be due daily to the purchaser. In the event the tenant
fails to surrender possession of said property upon demand, the purchaser shall
be entitled to institute and maintain an action for forcible entry and detainer
of said property in the appropriate court having jurisdiction.
5.14 TENDER AFTER ACCELERATION. If, following the occurrence of a Default
and the acceleration of the Indebtedness but prior to the foreclosure of this
Mortgage, Grantor shall tender to Noteholder payment of an amount sufficient to
pay the entire Indebtedness, such tender shall be deemed to be a voluntary
prepayment under the Note and, consequently, Grantor shall also pay to
Noteholder any charge or premium required under the Note or any other Loan
Documents to be paid in order to prepay principal and, if such principal payment
is made during any period when prepayment is prohibited by this Mortgage, the
Note or any of the other Loan Documents the applicable charge or premium shall
be the maximum prepayment penalty provided for in the Note; provided, however,
that in the event any amount payable under this Paragraph is deemed interest, in
no event shall such amount when added to the interest otherwise payable on the
Note and the other Indebtedness exceed the maximum interest permitted under
applicable law.
ARTICLE VI
MISCELLANEOUS
6.1 DEFEASANCE. If all of the Indebtedness is paid as the same becomes
due and payable and if all of the covenants, warranties, undertakings and
agreements made in this Mortgage are kept and performed, then and in that event
only, all rights under this Mortgage shall terminate and the Mortgaged Property
shall become wholly clear of the liens, security interests, conveyances and
assignments evidenced hereby, which shall be released by Noteholder in due form
at Grantor's cost.
6.2 SUCCESSOR TRUSTEE. Trustee may resign by an instrument in writing
addressed to Noteholder, or Trustee may be removed at any time with or without
cause by an instrument in writing executed by Noteholder. In case of the death,
resignation, removal or disqualification of Trustee or if for any reason
Noteholder shall deem it desirable to appoint a substitute or successor Trustee
to act instead of the herein named Trustee or any substitute or successor
Trustee, then Noteholder shall have the right and is hereby authorized and
empowered to appoint a successor Trustee, or a substitute Trustee, without
formality other than appointment and designation in writing executed by
Noteholder and the authority hereby conferred shall extend to the appointment of
other successor and substitute Trustees successively until the Indebtedness has
been paid in full or until the Mortgaged Property is sold hereunder. In the
event the Indebtedness is owned by more than one person or entity, the holders
of not less than a majority in the amount of such Indebtedness shall have the
right and authority to make the appointment
Page 34
of a successor or substitute Trustee provided for in the preceding sentence.
Such appointment and designation by Noteholder or by the holder or holders of
not less than a majority of the Indebtedness shall be full evidence of the
right and authority to make the same and of all facts therein recited. If
Noteholder is a national banking association or corporation and such
appointment is executed in its behalf by an officer of such national banking
association or corporation, such appointment shall be conclusively presumed
to be executed with authority and shall be valid and sufficient without proof
of any action by the board of directors or any superior officer of the
association or corporation. Upon the making of any such appointment and
designation, all of the estate and title of Trustee in the Mortgaged Property
shall vest in the named successor or substitute Trustee and he shall
thereupon succeed to and shall hold, possess and execute all the rights,
powers, privileges, immunities and duties herein conferred upon Trustee; but
nevertheless, upon the written request of Noteholder or of the successor or
substitute Trustee, Trustee ceasing to act shall execute and deliver an
instrument transferring to such successor or substitute Trustee all of the
estate and title in the Mortgaged Property of Trustee so ceasing to act,
together with all the rights, powers, privileges, immunities and duties
herein conferred upon Trustee, and shall duly assign, transfer and deliver
any of the properties and moneys held by said Xxxxxxx xxxxxxxxx to said
successor or substitute Trustee. All references herein to Trustee shall be
deemed to refer to Trustee (including any successor or substitute appointed
and designated as herein provided) from time to time acting hereunder.
Grantor hereby ratifies and confirms any and all acts which the herein named
Trustee or his successor or successors, substitute or substitutes, in this
trust, shall do lawfully by virtue hereof.
6.3 LIABILITY AND INDEMNIFICATION OF TRUSTEE. Trustee shall not be liable
for any error of judgment or act done by Trustee in good faith, or be otherwise
responsible or accountable under any circumstances whatsoever (including,
without limitation, Trustee's negligence), except for Trustee's gross negligence
or willful misconduct. Trustee shall have the right to rely on any instrument,
document or signature authorizing or supporting any action taken or proposed to
be taken by him hereunder, believed by him in good faith to be genuine. All
moneys received by Trustee shall, until used or applied as herein provided, be
held in trust for the purposes for which they were received, but need not be
segregated in any manner from any other moneys (except to the extent required by
law), and Trustee shall be under no liability for interest on any moneys
received by him hereunder. Grantor will reimburse Trustee for, and indemnify
and save him harmless against, any and all liability and expenses (including,
without limitation, reasonable attorneys' fees) which may be incurred by him in
the performance of his duties hereunder (Trustee shall include the directors,
officers, partners, employees, representatives and agents of Trustee and any
persons or entities owned or controlled by, owning or controlling or under
common control or affiliated with Trustee). The foregoing indemnity shall not
terminate upon release, foreclosure or other termination of this Mortgage.
6.4 WAIVER BY NOTEHOLDER. Noteholder may at any time and from time to
time in writing (a) waive compliance by Grantor with any covenant herein made by
Grantor to the extent and in the manner specified in such writing; (b) consent
to Grantor doing any act which
Page 35
hereunder Grantor is prohibited from doing, or consent to Grantor failing to
do any act which hereunder Grantor is required to do, to the extent and in
the manner specified in such writing; (c) release any part of the Mortgaged
Property, or any interest therein, from the lien and security interest of
this Mortgage without the joinder of Trustee; or (d) release any party
liable, either directly or indirectly, for the Indebtedness or for any
covenant herein or in any of the other Loan Documents now or hereafter
securing the payment of the Indebtedness, without impairing or releasing the
liability of any other party. No such act shall in any way impair the rights
of Noteholder hereunder except to the extent specifically agreed to by
Noteholder in such writing.
6.5 ACTIONS BY NOTEHOLDER. The lien, security interest and other security
rights of Noteholder hereunder shall not be impaired by any indulgence,
moratorium or release granted by Noteholder, including but not limited to (a)
any renewal, extension, increase or modification which Noteholder may grant with
respect to any of the Indebtedness; (b) any surrender, compromise, release,
renewal, extension, exchange or substitution which Noteholder may grant in
respect of the Mortgaged Property, or any part thereof or any interest therein;
or (c) any release or indulgence granted to any endorser, guarantor or surety of
any of the Indebtedness. The taking of additional security by Noteholder shall
not release or impair the lien, security interest or other security rights of
Noteholder hereunder or affect the liability of Grantor or of any endorser or
guarantor or other surety or improve the rights of any permitted junior
lienholder in the Mortgaged Property.
6.6 RIGHTS OF NOTEHOLDER. Noteholder may waive any Default without
waiving any other prior or subsequent Default. Noteholder may remedy any
default without waiving the Default remedied. Neither the failure by Noteholder
to exercise, nor the delay by Noteholder in exercising, any right, power or
remedy upon any Default shall be construed as a waiver of such Default or as a
waiver of the right to exercise any such right, power or remedy at a later date.
No single or partial exercise by Noteholder of any right, power or remedy
hereunder shall exhaust the same or shall preclude any other or further exercise
thereof, and every such right, power or remedy hereunder may be exercised at any
time and from time to time. No modification or waiver of any provision hereof
nor consent to any departure by Grantor therefrom shall in any event be
effective unless the same shall be in writing and signed by Noteholder and then
such waiver or consent shall be effective only in the specific instances, for
the purpose for which given and to the extent therein specified. No notice to
nor demand on Grantor in any case shall of itself entitle Grantor to any other
or further notice or demand in similar or other circumstances. Acceptance by
Noteholder of any payment in an amount less than the amount then due on any of
the Indebtedness shall be deemed an acceptance on account only and shall not in
any way affect the existence of a Default hereunder.
6.7 NOTIFICATION OF ACCOUNT DEBTORS. Noteholder may at any time after
Default by Grantor notify the account debtors or obligors of any accounts,
chattel paper, negotiable
Page 36
instruments or other evidences of indebtedness included in the Personal
Property to pay Noteholder directly.
6.8 REPRODUCTION AS FINANCING STATEMENT. A carbon, photographic or other
reproduction of this Mortgage or of any financing statement relating to this
Mortgage shall be sufficient as a financing statement.
6.9 FIXTURE FILING. This Mortgage shall be effective as a financing
statement filed as a fixture filing with respect to all fixtures included within
the Mortgaged Property and is to be filed for record in the real property
records in the Office of the County Clerk for the county or counties where the
Mortgaged Property (including said fixtures) is situated. This Mortgage shall
also be effective as a financing statement covering minerals or the like
(including oil and gas) and accounts subject to Subsection 9.103(e) of the
Uniform Commercial Code as in effect from time to time in the State of Texas
(the "CODE") and is to be filed for record in the real property records of the
county where the Mortgaged Property is situated. The mailing address of Grantor
is set forth on the first page of this Mortgage and the address of Noteholder
from which information concerning the security interest may be obtained is the
address of Noteholder set forth in Paragraph 1.1 of this Mortgage.
6.10 FILING AND RECORDATION. Grantor will cause this Mortgage and all
amendments and supplements thereto and substitutions therefor and all financing
statements and continuation statements relating hereto to be recorded, filed,
re-recorded and refiled in such manner and in such places as Trustee or
Noteholder shall reasonably request, and will pay all such recording, filing,
re-recording and refiling taxes, fees and other charges.
6.11 DEALING WITH SUCCESSOR. In the event the ownership of the Mortgaged
Property or any part thereof becomes vested in a person other than Grantor,
Noteholder may, without notice to Grantor, deal with such successor or
successors in interest with reference to this Mortgage and to the Indebtedness
in the same manner as with Grantor, without in any way vitiating or discharging
Grantor's liability hereunder or for the payment of the Indebtedness; provided,
however, nothing in this Paragraph shall be construed as permitting any transfer
of the Mortgaged Property which would constitute a Default under this Mortgage.
No sale of the Mortgaged Property, no forbearance on the part of Noteholder and
no extension of the time for the payment of the Indebtedness given by Noteholder
shall operate to release, discharge, modify, change or affect, in whole or in
part, the liability of Grantor hereunder or for the payment of the Indebtedness
or the liability of any other person hereunder or for the payment of the
Indebtedness, except as agreed to in writing by Noteholder.
6.12 PLACE OF PAYMENT. The Indebtedness shall be payable at the place
designated in the Note, or if no such designation is made, at the office of
Noteholder at the address indicated in this Mortgage, or at such other place as
Noteholder may designate in writing.
Page 37
6.13 SUBROGATION. To the extent that proceeds of the Note are used to pay
indebtedness secured by any outstanding lien, security interest, charge or prior
encumbrance against the Mortgaged Property, such proceeds have been advanced by
Noteholder at Grantor's request and Noteholder shall be subrogated to any and
all rights, security interests and liens owned or held by any owner or holder
of such outstanding liens, security interests, charges or encumbrances,
irrespective of whether said liens, security interests, charges or encumbrances
are released; provided, however, that the terms and provisions of this Mortgage
shall govern the rights and remedies of Noteholder and shall supersede the
terms, provisions, rights and remedies under and pursuant to the instruments
creating the liens, security interests, charges or encumbrances to which
Noteholder is subrogated hereunder.
6.14 APPLICATION OF INDEBTEDNESS. If any part of the Indebtedness cannot
be lawfully secured by this Mortgage or if any part of the Mortgaged Property
cannot be lawfully subject to the lien and security interest hereof to the full
extent of the Indebtedness, then all payments made shall be applied on said
Indebtedness first in discharge of that portion thereof which is unsecured by
this Mortgage.
6.15 USURY. This Mortgage has been executed under, and shall be construed
and enforced in accordance with, the laws of the State of Texas, except as such
laws are preempted by federal law. This Mortgage and all of the other Loan
Documents are intended to be performed in accordance with, and only to the
extent permitted by, all applicable usury laws. If any provision hereof or of
any of the other Loan Documents or the application thereof to any person or
circumstance shall, for any reason and to any extent, be invalid or
unenforceable, neither the application of such provision to any other person or
circumstance nor the remainder of the instrument in which such provision is
contained shall be affected thereby and shall be enforced to the greatest extent
permitted by Applicable Laws. It is expressly stipulated and agreed to be the
intent of Grantor and Noteholder to at all times comply with the usury and other
applicable laws now or hereafter governing the interest payable on the
Indebtedness. If the applicable law is ever revised, repealed or judicially
interpreted so as to render usurious any amount called for under the Note or
under any of the other Loan Documents, or contracted for, charged, taken,
reserved or received with respect to the Indebtedness, or if Noteholder's
exercise of the option to accelerate the maturity of the Indebtedness, or if any
prepayment of the Indebtedness results in the payment of any interest in excess
of that permitted by law, then it is the express intent of Grantor and
Noteholder that all excess amounts theretofore collected by Noteholder be
credited on the principal balance of the Note (or, if the Note and all of such
other Indebtedness have been paid in full, refunded), and the provisions of the
Note and the other Loan Documents immediately be deemed reformed and the amounts
thereafter collectable hereunder and thereunder reduced, without the necessity
of the execution of any new document, so as to comply with the then Applicable
Laws, but so as to permit the recovery of the fullest amount otherwise called
for hereunder or thereunder. All sums paid, or agreed to be paid, for the use,
forbearance, detention, taking, charging, receiving or reserving on the
Indebtedness shall, to the extent permitted by Applicable Laws, be amortized,
prorated, allocated and spread
Page 38
throughout the full term of such Indebtedness until payment in full so that
the rate or amount of interest on account of such Indebtedness does not
exceed the usury ceiling from time to time in effect and applicable thereto
for so long as debt is outstanding under the Indebtedness. To the extent that
Noteholder is relying on Chapter 303 of the Texas Finance Code, as amended,
to determine the maximum rate ("MAXIMUM RATE") payable on the Indebtedness,
Noteholder will utilize the weekly ceiling from time to time in effect as
provided in such Chapter 303. To the extent federal law permits Noteholder
to contract for, charge or receive a greater amount of interest, Noteholder
will rely on federal law instead of such article, as amended, for the purpose
of determining the Maximum Rate. Additionally, to the extent permitted by
applicable law now in effect, Noteholder may, at its option and from time to
time, implement any other method of computing the Maximum Rate under such
article, as amended, or under other applicable law by giving notice, if
required, to Grantor as provided by applicable law now or hereafter in
effect. In no event shall the provisions of Chapter 346 of the Texas Finance
Code (which regulates certain revolving credit loan accounts and revolving
triparty accounts) apply to the Indebtedness. Notwithstanding anything to
the contrary contained herein or in any of the other Loan Documents, it is
not the intention of Noteholder to accelerate the maturity of any interest
that has not accrued at the time of such acceleration or to collect unearned
interest at the time of such acceleration.
6.16 NOTICE. Any notice, request, demand or other communication required
or permitted hereunder, or under the Note, or under any of the other Loan
Documents (unless otherwise expressly provided therein) shall be given in
writing by (a) personal delivery, (b) expedited delivery service with proof of
delivery, or (c) United States mail, postage prepaid, registered or certified
mail, return receipt requested, sent to the intended addressee at the address
shown in this Mortgage, or to such different address as the addressee shall have
designated by written notice sent in accordance herewith, and shall be deemed to
have been given and received either at the time of personal delivery or, in the
case of delivery service, as of the date of first attempted delivery at the
address and in the manner provided herein, or in the case of mail, upon deposit
in a receptacle of United States mail; provided that, service of a notice
required by Texas Property Code Section 51.002 shall be considered complete when
the requirements of that statute are met.
6.17 SUCCESSORS AND ASSIGNS. The terms, provisions, covenants and
conditions hereof shall be binding upon Grantor, and the successors and assigns
of Grantor including all successors in interest of Grantor in and to all or any
part of the Mortgaged Property, and shall inure to the benefit of Trustee and
Noteholder and their respective heirs, successors, substitutes and assigns and
shall constitute covenants running with the Land. All references in this
Mortgage to Grantor, Trustee or Noteholder shall be deemed to include all such
heirs, devisees, representatives, successors, substitutes and assigns.
6.18 SEVERABILITY. A determination that any provision of this Mortgage is
unenforceable or invalid shall not affect the enforceability or validity of any
other provision and any
Page 39
determination that the application of any provision of this Mortgage to any
person or circumstance is illegal or unenforceable shall not affect the
enforceability or validity of such provision as it may apply to any other
persons or circumstances.
6.19 GENDER AND NUMBER. Within this Mortgage, words of any gender shall
be held and construed to include any other gender, and words in the singular
number shall be held and construed to include the plural and words in the plural
number shall be held and construed to include the singular, unless in each
instance the context otherwise requires.
6.20 COUNTERPARTS. This Mortgage may be executed in any number of
counterparts with the same effect as if all parties hereto had signed the same
document. All such counterparts shall be construed together and shall
constitute one instrument, but in making proof hereof it shall only be necessary
to produce one such counterpart.
6.21 JOINT AND SEVERAL. Where two or more persons or entities have
executed this Mortgage, unless the context clearly indicates otherwise, the term
"GRANTOR" as used in this Mortgage means the grantors hereunder or either or any
of them and the obligations of Grantor hereunder shall be joint and several.
6.22 REPORTING REQUIREMENTS. Grantor agrees to comply with any and all
reporting requirements applicable to the transaction evidenced by the Note and
secured by this Mortgage which are set forth in any law, statute, ordinance,
rule, regulation, order or determination of any governmental authority
(including, but not limited to, The International Investment Survey Act of 1976,
The Agricultural Foreign Investment Disclosure Act of 1978, The Foreign
Investment in Real Property Tax Act of 1980 and the Tax Reform Act of 1984) and
further agrees upon request of Noteholder to furnish Noteholder with evidence of
such compliance.
6.23 HEADINGS. The Paragraph headings contained in this Mortgage are for
convenience only and shall in no way enlarge or limit the scope or meaning of
the various and several Paragraphs hereof.
6.24 CONSENT OF NOTEHOLDER. Except where otherwise provided herein, in
any instance hereunder where the approval, consent or the exercise of judgment
of Noteholder is required, the granting or denial of such approval or consent
and the exercise of such judgment shall be within the sole discretion of
Noteholder, and Noteholder shall not, for any reason or to any extent, be
required to grant such approval or consent or exercise such judgment in any
particular manner, regardless of the reasonableness of either the request or
Noteholder's judgment.
6.25 MODIFICATION OR TERMINATION. The Loan Documents may only be modified
or terminated by a written instrument or instruments executed by the party
against which enforcement of the modification or termination is asserted. Any
alleged modification or termination which is not so documented shall not be
effective as to any party. Xxxxxxx agrees
Page 40
that it shall be bound by any modification of this Mortgage or any of the
other Loan Documents made by Noteholder and any subsequent owner of the
Mortgaged Property, with or without notice to or consent of Grantor, and no
such modification shall impair the obligations of Grantor under this Mortgage
or under any other Loan Document.
6.26 NEGATION OF PARTNERSHIP. Nothing contained in the Loan Documents is
intended to create any partnership, joint venture or association between Grantor
and Noteholder, or in any way make Noteholder a co-principal with Grantor with
reference to the Mortgaged Property, and any inferences to the contrary are
hereby expressly negated.
6.27 ENTIRE AGREEMENT. The Loan Documents constitute the entire
understanding and agreement between Grantor and Noteholder with respect to the
transactions arising in connection with the Indebtedness and supersede all prior
written or oral understandings and agreements between Grantor and Noteholder
with respect thereto. Grantor hereby acknowledges that, except as incorporated
in writing in the Loan Documents, there are not, and were not, and no persons
are or were authorized by Noteholder to make, any representations,
understandings, stipulations, agreements or promises, oral or written, with
respect to the transaction which is the subject of the Loan Documents.
EXECUTED as of June 1, 1998.
FIRST COMMAND FINANCIAL CORPORATION
By: /s/ Xxxxx X Xxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxx
-----------------------------------
Title: Chief Executive Officer
Page 41
STATE OF TEXAS Section
Section
COUNTY OF TARRANT Section
This instrument was acknowledged before me on June 11, 1998, by
Xxxxx X. Xxxxx, as ___________________________________ of First Command
Financial Corporation, a Texas corporation, on behalf of said corporation.
[S E A L]
/s/ Xxxxxx X. Xxxxx
-----------------------------------
Notary Public, State of Texas
My Commission Expires:
3-26-01 XXXXXX X. XXXXX
------------ -----------------------------------
Printed Name of Notary
Page 42
EXHIBIT A
BEING a 43750 sqaure foot tract of land situated in the B.B.B. & C.R.R.
Survey, Abstract Number 217, and the X. Xxxxxx Survey, Abstract Number 693,
City of Fort Worth, Tarrant County, Texas, being part of Lot 2-R, Block C of
OVERTON WEST ADDITION described by xxxx recorded in Volume 388-173, Page 10,
Plat Records of Tarrant County, Texas (PRTCT), and being part of a called
17.000 acre tract of land described by deed as "TRACT FOUR" to Cassco Land
Co., Inc., recorded in Volume 6494, Page 389, Deed Records of Tarrant County,
Texas (DRTCT), said 43750 square foot tract of land being more particularly
described by metes and bounds as follows:
Commencing at a 1/2-inch iron rod found at the intersection of the north
right-of-way line of Xxxxxxx Plaza (an 80-foot right-of-way) and the west
right-of-way line of South Xxxxx Street (a 120-foot right-of-way);
THENCE along said west right-of-way line the following:
North 00DEG.09'00" East, a distance of 281.00 feet to a 1/2-inch iron
rod found for the beginning of a curve to the left having a central
angle of 09DEG.31'21" and a radius of 1287.60 feet;
Along said curve to the left an arc distance of 214.00 feet and a chord
bearing and distance of North 04DEG.36'41" West 213.75 feet to a
1/2-inch iron rod found for the southeast corner of Lot 1, Block C of
OVERTON WEST ADDITION described by xxxx recorded in Volume 388-74, Page
2, PRTCT;
THENCE South 84DEG.46'00" West, a distance of 327.42 feet along the south
line of said Lot 1 to a point;
THENCE South 05DEG.14'00" East, a distance of 59.71 feet to a point for
corner, said point being the POINT OF BEGINNING;
THENCE South 04DEG.23'44" East, a distance of 125.00 feet to a point for
corner;
THENCE South 85DEG.36'16" West, a distance of 350.00 feet to a point for
corner;
THENCE North 04DEG.23'44" West, a distance of 125.00 feet to a point for
corner;
THENCE North 85DEG.36'16" East, a distance of 350.00 feet to the POINT OF
BEGINNING.
CONTAINING a computed area of 43750 square foot feet of land.
