Exhibit 10.4(b)
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
Redwood Mortgage
000 Xx Xxxxxx Xxxx, Xxxxx X
Xxxxxxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxxx Xxxxxxx
LOAN NO.:
DEED OF TRUST, ASSIGNMENT
OF LEASES AND RENTS, SECURITY
AGREEMENT AND FIXTURE FILING
THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND
FIXTURE FILING (this "Deed of Trust") is made as of _______, 19___, by
______________________________ __________________, the owner of the property
described hereinbelow, whose address is
_____________________________________________________________ (herein
"Trustor"), to GYMNO CORPORATION, a California corporation, whose address is 000
Xx Xxxxxx Xxxx, Xxxxx X Xxxxxxx Xxxx, Xxxxxxxxxx 00000-0000, (herein "Trustee"),
in favor of ___________________________________________________________________
whose address is 000 Xx Xxxxxx Xxxx, Xxxxx X, Xxxxxxx Xxxx, Xxxxxxxxxx
00000-0000 (herein "Beneficiary").
Trustor, in consideration of the loan described below, irrevocably grants,
conveys, transfers and assigns to Trustee, its successors and assigns, in trust,
with power of sale and right of entry and possession, all of Trustor's estate,
right, title and interest in and to that certain real property located in the
City of ________________, County of _______________, State of California, more
particularly described in Exhibit A attached hereto and incorporated herein by
this reference;
TOGETHER WITH all structures and improvements now existing or hereafter
erected on the aforesaid real property, all easements, rights and appurtenances
thereto or used in connection therewith, all rents, royalties, issues, profits,
revenues, income and other benefits thereof or arising from the use or enjoyment
of all or any portion thereof (subject to the rights given below to Trustor to
collect and apply such rents, royalties, issues, profits, revenues, income and
other benefits), all interests in and rights, royalties and profits in
connection with all minerals, oil and gas and other hydrocarbon substances
thereon or therein, development rights or credits, air rights, water, water
rights (whether riparian, appropriative or otherwise, and whether or not
appurtenant) and water stock, all intangible property and rights relating to the
aforesaid real property or the operation thereof, or used in connection
therewith, including, without limitation, tradenames and trademarks, all
fixtures, machinery, equipment, building materials, appliances and goods of
every nature whatsoever (herein collectively called "equipment" and other
"personal property") now or hereafter located in, or on, attached or affixed to,
or used or intended to be used in connection with, the aforesaid real property,
including, but without limitation, all heating, lighting, laundry, incinerating,
gas, electric and power equipment, engines, pipes, pumps, tanks, motors,
conduits, switchboards, plumbing, lifting, cleaning, fire prevention, fire
extinguishing, refrigerating, ventilating and communications apparatus, air
cooling and air conditioning apparatus, elevators and escalators and related
machinery and equipment, pool and pool operation and maintenance equipment and
apparatus, shades, awnings, blinds, curtains, drapes, attached floor coverings,
including rugs and carpeting, television, radio and music cable antennae and
systems, screens, storm doors and windows, stoves, refrigerators, dishwashers
and other installed appliances, attached cabinets, partitions, ducts and
compressors, and trees, plants and other items of landscaping (except that the
foregoing equipment and other personal property covered hereby shall not include
machinery, apparatus, equipment, fittings and articles of personal property used
in the business of Trustor (commonly referred to as "trade fixtures") whether
the same are annexed to said real property or not, unless the same are also used
in the operation of any building or other improvement located thereon or unless
the same cannot be removed without materially damaging said real property or any
such building or other improvement, all of which, including replacements and
additions thereto, shall, to the fullest extent permitted by law and for the
purposes of this Deed of Trust, be deemed to be part and parcel of, and
appropriated to the use of, said real property and, whether affixed or annexed
thereto or not, be deemed conclusively to be real property and conveyed by this
Deed of Trust, and all proceeds and products of any and all thereof, and Trustor
agrees to execute and deliver, from time to time, such further instruments and
documents as may be required by Beneficiary to confirm the lien of this Deed of
Trust on any of the foregoing; all of the foregoing property referred to in this
section, together with said described real property, are herein referred to as
the "Mortgaged Property";
FOR THE PURPOSE OF SECURING, in such order of priority as Beneficiary may
elect:
(a) The repayment of the indebtedness evidenced by Trustor's promissory
note of even date herewith payable to the order of Beneficiary in the original
principal sum of ____________________ ($_____________), with interest thereon,
as provided therein, and all prepayment charges, late charges and loan fees
required thereunder, and all extensions, renewals, modifications, amendments and
replacements thereof (herein "Note");
(b) The payment of all other sums which may be advanced by or otherwise be
due to Trustee or Beneficiary under any provision of this Deed of Trust or under
any other instrument or document referred to in subsection (c) below, with
interest thereon at the rate provided herein or therein;
(c) The performance of each and every of the covenants and agreements of
Trustor contained (1) herein, in the Note, and in any note evidencing a Future
Advance (as hereinafter defined), (2) in the Environmental Agreement and
Indemnity executed by Trustor concurrently herewith, and in any and all pledge
agreements, supplemental agreements, assignments and all instruments of
indebtedness or security now or hereafter executed by Trustor in connection with
any indebtedness referred to in subsection (a) above or subsection (d) below or
for the purpose of supplementing or amending this Deed of Trust or any
instrument secured hereby (all of the foregoing in this Clause (2), as the same
may be amended, modified or supplemented from time to time, being referred to
hereinafter as "Related Agreements"); and
(d) The repayment of any other loans or advances, with interest thereon,
hereafter made to Trustor (or any successor in interest to Trustor as the owner
of the Mortgaged Property or any part thereof) by Beneficiary when the
promissory note evidencing the loan or advance specifically states that said
note is secured by this Deed of Trust, together with all extensions, renewals,
modifications, amendments and replacements thereof (herein "Future Advance").
ARTICLE I
COVENANTS OF TRUSTOR
To protect the security of this Deed of Trust, Trustor covenants and agrees
as follows:
1.01 Performance of Obligations Secured.
Trustor shall promptly pay when due the principal of and interest on the
indebtedness evidenced by the Note, the principal of and interest on any Future
Advances, and any prepayment, late charges and loan fees provided for in the
Note or in any note evidencing a Future Advance or provided for herein, and
shall further perform fully and in a timely manner all other obligations of
Trustor contained herein or in the Note or in any note evidencing a Future
Advance or in any of the Related Agreements. All sums payable by Trustor
hereunder shall be paid without demand, counterclaim, offset, deduction or
defense and Trustor waives all rights now or hereinafter conferred by statute or
otherwise to any such demand, counterclaim, offset, deduction or defense.
1.02 Insurance.
Trustor shall keep the Mortgaged Property insured with an all-risk policy
insuring against loss or damage by fire with extended coverage and against any
other risks or hazards which, in the opinion of Beneficiary, should be insured
against, in an amount not less than 100% of the full insurable value thereof on
a replacement cost basis, with an inflation guard endorsement, with a company or
companies and in such form and with such endorsements as may be approved or
required by Beneficiary, including, if applicable, boiler explosion coverage and
sprinkler leakage coverage. All losses under said insurance and any other
insurance obtained by Trustor with respect to the Property whether or not
required by Beneficiary shall be payable to Beneficiary and shall be applied in
the manner provided in Section 1.03 hereof. Trustor shall also carry
comprehensive general public liability insurance and twelve (12) months' rent
loss insurance in such form and amounts and with such companies as are
satisfactory to Beneficiary. Trustor shall also carry insurance against flood if
required by the Federal Flood Disaster Protection Act of 1973 and regulations
issued thereunder. All hazard, flood and rent loss insurance policies shall be
endorsed with a standard noncontributory mortgagee clause in favor of and in
form acceptable to Beneficiary, and may be canceled or modified only upon not
less than ten (10) days' prior written notice to Beneficiary. All of the
above-mentioned insurance policies or certificates of such insurance
satisfactory to Beneficiary, together with receipts for the payment of premiums
thereon, shall be delivered to and held by Beneficiary, which delivery shall
constitute assignment to Beneficiary of all return premiums to be held as
additional security hereunder. All renewal and replacement policies shall be
delivered to Beneficiary at least thirty (30) days before the expiration of the
expiring policies. Beneficiary shall not by the fact of approving, disapproving,
accepting, preventing, obtaining or failing to obtain any insurance, incur any
liability for or with respect to the amount of insurance carried, the form or
legal sufficiency of insurance contracts, solvency of insurance companies, or
payment or defense of lawsuits, and Trustor hereby expressly assumes full
responsibility therefor and all liability, if any, with respect thereto.
1.03 Condemnation and Insurance Proceeds.
(a) The proceeds of any award or claim for damages, direct or
consequential, in connection with any condemnation or other taking of or damage
or injury to the Mortgaged Property, or any part thereof, or for conveyance in
lieu of condemnation, are hereby assigned to and shall be paid to Beneficiary.
In addition, all causes of action, whether accrued before or after the date of
this Deed of Trust, of all types for damages or injury to the Mortgaged Property
or any part thereof, or in connection with any transaction financed by funds
loaned to Trustor by Beneficiary and secured hereby, or in connection with or
affecting the Mortgaged Property or any part thereof, including, without
limitation, causes of action arising in tort or contract and causes of action
for fraud or concealment of a material fact, are hereby assigned to Beneficiary
as additional security, and the proceeds thereof shall be paid to Beneficiary.
Beneficiary may at its option appear in and prosecute in its own name any action
or proceeding to enforce any such cause of action and may make any compromise or
settlement thereof. Trustor, immediately upon obtaining knowledge of any
casualty damage to the Mortgaged Property or damage in any other manner in
excess of $25,000.00 or knowledge of the institution of any proceedings relating
to condemnation or other taking of or damage or injury to the Mortgaged Property
or any portion thereof, will immediately notify Beneficiary in writing.
Beneficiary, in its sole discretion, may participate in any such proceedings and
may join Trustor in adjusting any loss covered by insurance.
(b) All compensation, awards, proceeds, damages, claims, insurance
recoveries, rights of action and payments which Trustor may receive or to which
Trustor may become entitled with respect to the Mortgaged Property in the event
of any damage or injury to or a partial condemnation or other partial taking of
the Mortgaged Property shall be paid over to Beneficiary and shall be applied
first toward reimbursement of all costs and expenses of Beneficiary in
connection with recovery of the same, and then shall be applied, as follows:
(1) Beneficiary shall consent to the application of such payments to the
restoration of the Mortgaged Property so damaged if and only if Trustor fulfills
all of the following conditions (a breach of any one of which shall constitute
an Event of Default under this Deed of Trust and shall entitle Beneficiary to
exercise all rights and remedies Beneficiary may have in such event): (a) that
no default or Event of Default is then outstanding under this Deed of Trust, the
Note, or any Related Agreement; (b) that Trustor is not in default under any of
the terms, covenants and conditions of any of the Leases (hereinafter defined);
(c) that the Leases shall continue in full force and effect; (d) that Trustor
has in force rental continuation and business interruption insurance covering
the Mortgaged Property for the longer of twelve (12) months or the time
Beneficiary reasonably estimates will be necessary to complete such restoration
and rebuilding; (e) Beneficiary is satisfied that during the period from the
time of damage or taking until restoration and rebuilding of the Mortgaged
Property is completed (the "Gap Period") Trustor's net income from (1) all
leases, subleases, licenses and other occupancy agreements affecting the
Mortgaged Property (the "Leases") which may continue without abatement of rent
during such Gap Period, plus (2) all leases, subleases, licenses and other
occupancy agreements in effect during the Gap Period without abatement of rent
which Trustor may obtain in substitution for any of the same which did not
continue during such Gap Period, plus (3) the proceeds of rental continuation
and business interruption insurance, is sufficient to satisfy Trustor's
obligations under this Deed of Trust as they come due; (f) Beneficiary is
satisfied that the insurance or award proceeds shall be sufficient to fully
restore and rebuild the Mortgaged Property free and clear of all liens except
the lien of this Deed of Trust, or, in the event that such proceeds are in
Beneficiary's sole judgment insufficient to restore and rebuild the Mortgaged
Property, then Trustor shall deposit promptly with Beneficiary funds which,
together with the insurance or award proceeds, shall be sufficient in
Beneficiary's sole judgment to restore and rebuild the Mortgaged Property; (g)
construction and completion of restoration and rebuilding of the Mortgaged
Property shall be completed in accordance with plans and specifications and
drawings submitted to and approved by Beneficiary, which plans, specifications
and drawings shall not be substantially modified, changed or revised without the
Beneficiary's prior written consent; (h) Beneficiary shall also have approved
all prime and subcontractors, and the general contract or contracts the Trustor
proposes to enter into with respect to the restoration and rebuilding; and (i)
any and all monies which are made available for restoration and rebuilding
hereunder shall be disbursed through Beneficiary, the Trustee or a title
insurance and trust company satisfactory to Beneficiary, in accord with standard
construction lending practice, including, if requested by Beneficiary, monthly
lien waivers and title insurance datedowns, and the provision of payment and
performance bonds by Trustor, or in any other manner approved by Beneficiary in
Beneficiary's sole discretion; or
(2) If less than all of conditions (a) through (i) in subsection (1) above
are satisfied, then such payments shall be applied in the sole and absolute
discretion of Beneficiary (a) to the payment or prepayment with any applicable
prepayment premium of any indebtedness secured hereby in such order as
Beneficiary may determine, or (b) to the reimbursement of Trustor's expenses
incurred in the rebuilding and restoration of the Mortgaged Property. In the
event Beneficiary elects under this subsection (2) to make any monies available
to restore the Mortgaged Property, then all of conditions (a) through (i) in
subsection (1) above shall apply, except such conditions which Beneficiary, in
its sole discretion, may waive.
(c) If any material part of the Mortgaged Property is damaged or destroyed
and the loss is not adequately covered by insurance proceeds collected or in the
process of collection, Trustor shall deposit, within ten (10) days of the
Beneficiary's request therefor, the amount of the loss not so covered.
(d) All compensation, awards, proceeds, damages, claims, insurance
recoveries, rights of action and payments which Trustor may receive or to which
Trustor may become entitled with respect to the Mortgaged Property in the event
of a total condemnation or other total taking of the Mortgaged Property shall be
paid over to Beneficiary and shall be applied first toward reimbursement of all
costs and expenses of Beneficiary in connection with recovery of the same, and
then shall be applied to the payment or prepayment with any applicable
prepayment premium of any indebtedness secured hereby in such order as
Beneficiary may determine, until the indebtedness secured hereby has been paid
and satisfied in full. Any surplus remaining after payment and satisfaction of
the indebtedness secured hereby shall be paid to Trustor as its interest may
then appear.
(e) Any application of such amounts or any portion thereof to any
indebtedness secured hereby shall not be construed to cure or waive any default
or notice of default hereunder or invalidate any act done pursuant to any such
default or notice.
(f) If any part of any automobile parking areas included within the
Mortgaged Property is taken by condemnation or before such areas are otherwise
reduced, Trustor shall provide parking facilities in kind, size and location to
comply with all leases, and before making any contract for such substitute
parking facilities, Trustor shall furnish to Beneficiary satisfactory assurance
of completion thereof, free of liens and in conformity with all governmental
zoning, land use and environmental regulations.
1.04 Taxes, Liens and Other Items.
Trustor shall pay at least ten days before delinquency, all taxes, bonds,
assessments, special assessments, common area charges, fees, liens, charges,
fines, penalties, impositions and any and all other items which are attributable
to or affect the Mortgaged Property and which may attain a priority over this
Deed of Trust by making payment prior to delinquency directly to the payee
thereof, unless Trustor shall be required to make payment to Beneficiary on
account of such items pursuant to Section 1.05 hereof. Prior to the delinquency
of any such taxes or other items, Trustor shall furnish Beneficiary with
receipts indicating such taxes and other items have been paid. Trustor shall
promptly discharge any lien which has attained or may attain priority over this
Deed of Trust. In the event of the passage after the date of this Deed of Trust
of any law deducting from the value of real property for the purposes of
taxation any lien thereon, or changing in any way the laws for the taxation of
deeds of trust or debts secured by deeds of trust for state, federal or any
other purposes, or the manner of the collection of any such taxes, so as to
affect this Deed of Trust, the Beneficiary and holder of the debt which it
secures shall have the right to declare the principal sum and the interest due
on a date to be specified by not less than thirty (30) days written notice to be
given to Trustor by Beneficiary; provided, however, that such election shall be
ineffective if Trustor is permitted by law to pay the whole of such tax in
addition to all other payments required hereunder and if, prior to such
specified date, does pay such taxes and agrees to pay any such tax when
hereafter levied or assessed against the Mortgaged Property, and such agreement
shall constitute a modification of this Deed of Trust.
1.05 Funds for Taxes and Insurance.
If an Event of Default has occurred under this Deed of Trust or under any
of the Related Agreements, regardless of whether the same has been cured, then
thereafter at any time Beneficiary may, at its option to be exercised upon
thirty (30) days' written notice to Trustor, require the deposit with
Beneficiary or its designee by Trustor, at the time of each payment of an
installment of interest or principal under the Note, of an additional amount
sufficient to discharge the obligations of Trustor under Sections 1.02 and 1.04
hereof as and when they become due. The determination of the amount payable and
of the fractional part thereof to be deposited with Beneficiary shall be made by
Beneficiary in its sole discretion. These amounts shall be held by Beneficiary
or its designee not in trust and not as agent of Trustor and shall not bear
interest, and shall be applied to the payment of the obligations in such order
or priority as Beneficiary shall determine. If at any time within thirty (30)
days prior to the due date of any of the aforementioned obligations the amounts
then on deposit therefor shall be insufficient for the payment of such
obligation in full, Trustor shall within ten (10) days after demand deposit the
amount of the deficiency with Beneficiary. If the amounts deposited are in
excess of the actual obligations for which they were deposited, Beneficiary may
refund any such excess, or, at its option, may hold the same in a reserve
account, not in trust and not bearing interest, and reduce proportionately the
required monthly deposits for the ensuing year. Nothing herein contained shall
be deemed to affect any right or remedy of Beneficiary under any other provision
of this Deed of Trust or under any statute or rule of law to pay any such amount
and to add the amount so paid to the indebtedness hereby secured.
All amounts so deposited shall be held by Beneficiary or its designee as
additional security for the sums secured by this Deed of Trust and upon the
occurrence of an Event of Default hereunder Beneficiary may, in its sole and
absolute discretion and without regard to the adequacy of its security
hereunder, apply such amounts or any portion thereof to any part of the
indebtedness secured hereby. Any such application of said amounts or any portion
thereof to any indebtedness secured hereby shall not be construed to cure or
waive any default or notice of default hereunder.
If Beneficiary requires deposits to be made pursuant to this Section 1.05,
Trustor shall deliver to Beneficiary all tax bills, bond and assessment
statements, statements of insurance premiums, and statements for any other
obligations referred to above as soon as such documents are received by Trustor.
If Beneficiary sells or assigns this Deed of Trust, Beneficiary shall have
the right to transfer all amounts deposited under this Section 1.05 to the
purchaser or assignee, and Beneficiary shall thereupon be released and have no
further liability hereunder for the application of such deposits, and Trustor
shall look solely to such purchaser or assignee for such application and for all
responsibility relating to such deposits.
1.06 Assignment of Rents and Profits.
(a) All of Trustor's interest in any leases or other occupancy agreements
pertaining to the Mortgaged Property now existing or hereafter entered into, and
all of the rents, royalties, issues, profits, revenue, income and other benefits
of the Mortgaged Property arising from the use or enjoyment of all or any
portion thereof or from any lease or agreement pertaining to occupancy of any
portion of the Mortgaged Property now existing or hereafter entered into whether
now due, past due, or to become due, and including all prepaid rents and
security deposits (the "Rents and Profits"), are hereby absolutely, presently
and unconditionally assigned, transferred and conveyed to Beneficiary to be
applied by Beneficiary in payment of the principal and interest and all other
sums payable on the Note, and of all other sums payable under this Deed of Trust
subject to the rights of residential tenants under California Civil Code Section
1950.5(d). Prior to the occurrence of any Event of Default (hereinafter
defined), Trustor shall have a license to collect and receive all Rents and
Profits, which license shall be terminable at the sole option of Beneficiary,
without regard to the adequacy of its security hereunder and without notice to
or demand upon Trustor, upon the occurrence of any Event of Default. It is
understood and agreed that neither the foregoing assignment of Rents and Profits
to Beneficiary nor the exercise by Beneficiary of any of its rights or remedies
under Article IV hereof shall be deemed to make Beneficiary a
"mortgagee-in-possession" or otherwise responsible or liable in any manner with
respect to the Mortgaged Property or the use, occupancy, enjoyment or operation
of all or any portion thereof, unless and until Beneficiary, in person or by
agent, assumes actual possession thereof. Nor shall appointment of a receiver
for the Mortgaged Property by any court at the request of Beneficiary or by
agreement with Trustor, or the entering into possession of the Mortgaged
Property or any part thereof by such receiver, be deemed to make Beneficiary a
mortgagee-in-possession or otherwise responsible or liable in any manner with
respect to the Mortgaged Property or the use, occupancy, enjoyment or operation
of all or any portion thereof. Upon the occurrence of any Event of Default, this
shall constitute a direction to and full authority to each lessee under any
lease and each guarantor of any lease to pay all Rents and Profits to
Beneficiary without proof of the default relied upon. Trustor hereby irrevocably
authorizes each lessee and guarantor to rely upon and comply with any notice or
demand by Beneficiary for the payment to Beneficiary of any Rents and Profits
due or to become due.
(b) Trustor shall apply the Rents and Profits to the payment of all
necessary and reasonable operating costs and expenses of the Mortgaged Property,
debt service on the indebtedness secured hereby, and a reasonable reserve for
future expenses, repairs and replacements for the Mortgaged Property, before
using the Rents and Profits for Trustor's personal use or any other purpose not
for the direct benefit of the Mortgaged Property.
(c) Trustor warrants as to each lease now covering all or any part of the
Mortgaged Property: (1) that each lease is in full force and effect; (2) that no
default exists on the part of the lessees or Trustor under leases constituting
more than 5%, in the aggregate, of all units in the Mortgaged Property; (3) that
no rent has been collected more than one month in advance; (4) that no lease or
any interest therein has been previously assigned or pledged; (5) that no lessee
under any lease has any defense, setoff or counterclaim against Trustor; (6)
that all rent due to date under each lease has been collected and no concession
has been granted to any lessee in the form of a waiver, release, reduction,
discount or other alteration of rent due or to become due; and (7) that the
interest of the lessee under each lease is as lessee only, with no options to
purchase or rights of first refusal. All the foregoing warranties shall be
deemed to be reaffirmed and to continue until performance in full of the
obligations under this Deed of Trust.
(d) Trustor shall at all times perform the obligations of lessor under all
such leases. Trustor shall not execute any further assignment of any of the
Rents and Profits or any interest therein or suffer or permit any such
assignment to occur by operation of law. Trustor shall at any time or from time
to time, upon request of Beneficiary, transfer and assign to Beneficiary in such
form as may be satisfactory to Beneficiary, Trustor's interest in any lease,
subject to and upon the condition, however, that prior to the occurrence of any
Event of Default hereunder Trustor shall have a license to collect and receive
all Rents and Profits under such lease upon accrual, but not prior thereto, as
set forth in subsection (a) above. Whenever requested by Beneficiary, Trustor
shall furnish to Beneficiary a certificate of Trustor setting forth the names of
all lessees under any leases, the terms of their respective leases, the space
occupied, the rents payable thereunder, and the dates through which any and all
rents have been paid.
(e) Without the prior written consent of Beneficiary, Trustor shall not (1)
accept prepayments of rent exceeding one month under any leases of any part of
the Mortgaged Property; (2) take any action under or with respect to any such
leases which would decrease the monetary obligations of the lessee thereunder or
otherwise materially decrease the obligations of the lessee or the rights or
remedies of the lessor, including, without limitation, any reduction in rent or
granting of an option to renew for a term greater than one year; (3) modify or
amend any such leases or, except where the lessee is in default, cancel or
terminate the same or accept a surrender of the leased premises, provided,
however, that Trustor may renew, modify or amend leases in the ordinary course
of business so long as such actions do not decrease the monetary obligations of
the lessee thereunder, or otherwise decrease the obligations of the lessee or
the rights and remedies of the lessor; (4) consent to the assignment or
subletting of the whole or any portion of the lessee's interest under any lease
which has a term of more than five years; (5) create or permit any lien or
encumbrance which, upon foreclosure, would be superior to any such leases; or
(6) in any other manner impair Beneficiary's rights and interest with respect to
the Rents and Profits.
(f) Each lease of the Mortgaged Property, or any part thereof, shall make
provision for the attornment of the lessee thereunder to any person succeeding
to the interest of Trustor as the result of any foreclosure or transfer in lieu
of foreclosure hereunder, said provision to be in form and substance approved by
Beneficiary. If any lease provides for the abatement of rent during repair of
the demised premises by reason of fire or other casualty, Trustor shall furnish
rental insurance to Beneficiary, the policies to be in amount and form and
written by such companies as shall be satisfactory to Beneficiary. Each lease
shall remain in full force and effect despite any merger of the interest of
Trustor and any lessee thereunder.
(g) Beneficiary shall be deemed to be the creditor of each lessee in
respect of any assignments for the benefit of creditors and any bankruptcy,
arrangement, reorganization, insolvency, dissolution, receivership or other
debtor-relief proceedings affecting such lessee (without obligation on the part
of Beneficiary, however, to file timely claims in such proceedings or otherwise
pursue creditor's rights therein). Beneficiary shall have the right to assign
Trustor's right, title and interest in any leases to any subsequent holder of
this Deed of Trust or any participating interest therein or to any person
acquiring title to all or any part of the Mortgaged Property through foreclosure
or otherwise. Any subsequent assignee shall have all the rights and powers
herein provided to Beneficiary. Beneficiary shall have the authority, as
Trustor's attorney-in-fact, such authority being coupled with an interest and
irrevocable, to sign the name of Trustor and to bind Trustor on all papers and
documents relating to the operation, leasing and maintenance of the Mortgaged
Property.
1.07 Security Agreement.
This Deed of Trust is intended to be a security agreement pursuant to the
California Uniform Commercial Code for (a) any and all items of personal
property specified above as part of the Mortgaged Property which, under
applicable law, may be subject to a security interest pursuant to the California
Uniform Commercial Code and which are not herein effectively made part of the
real property, and (b) any and all items of property specified above as part of
the Mortgaged Property which, under applicable law, constitute fixtures and may
be subject to a security interest under Section 9-313 of the California Uniform
Commercial Code; and Trustor hereby grants Beneficiary a security interest in
said property, all of which is referred to herein as "Personal Property," and in
all additions thereto, substitutions therefor and proceeds thereof, for the
purpose of securing all indebtedness and other obligations of Trustor now or
hereafter secured by this Deed of Trust, which shall be a paramount and superior
lien on all such Personal Property at all times. Trustor agrees to execute and
deliver financing and continuation statements covering the Personal Property
from time to time and in such form as Beneficiary may require to perfect and
continue the perfection of Beneficiary's lien or security interest with respect
to said property. Trustor shall pay all costs of filing such statements and
renewals and releases thereof and shall pay all reasonable costs and expenses of
any record searches for financing statements Beneficiary may reasonably require.
Upon the occurrence of any default of Trustor hereunder, Beneficiary shall have
the rights and remedies of a secured party under California Uniform Commercial
Code, including, Section 9501(4) thereof, as well as all other rights and
remedies available at law or in equity, and, at Beneficiary's option,
Beneficiary may also invoke the remedies provided in Article IV of this Deed of
Trust as to such property.
1.08 Acceleration.
(a) Trustor acknowledges that in making the loan evidenced by the Note and
this Deed of Trust (the "Loan"), Beneficiary has relied upon: (1) Trustor's
credit rating; (2) Trustor's financial stability; and (3) Trustor's experience
in owning and operating real property comparable to the Mortgaged Property.
Without limiting the obligations of Trustor or the rights and remedies of
Beneficiary, Beneficiary shall have the right, at its option, to declare any
indebtedness and obligations under the Note and this Deed of Trust, irrespective
of the maturity date specified therein, due and payable in full if: (1) Trustor
enters into a contract of sale, conveys, alienates or encumbers the Mortgaged
Property or any portion thereof or any fractional undivided interest therein, or
suffers Trustor's title or any interest therein to be divested or encumbered,
whether voluntarily or involuntarily, or leases with an option to sell, or
changes or permits to be changed the character or use of the Mortgaged Property,
or drills or extracts or enters into a lease for the drilling for or extracting
of oil, gas or other hydrocarbon substances or any mineral of any kind or
character on such property; (2) Trustor or any one or more of the persons
comprising Trustor is a partnership and the interest of any general partner (or
the interest of any general partner in a partnership that is a partner) is
assigned or transferred, except for an assignment or transfer resulting from the
death or physical or mental incapacity of a general partner; (3) Trustor or any
one or more of the persons comprising Trustor is a partnership and more than
twenty-five percent (25%) of the corporate stock of any corporation that is a
general partner of such partnership is sold, transferred or assigned; (4)
Trustor is a corporation and more than twenty-five percent (25%) of the
corporate stock is sold, transferred or assigned; (5) Trustor is a trust and
there is a change in beneficial ownership with respect to more than twenty-five
percent (25%) of the trust; (6) Trustor consists of several persons or entities
holding fractional undivided interest in the Mortgaged Property and there is a
cumulative change in ownership with respect to more than a twenty-five percent
(25%) fractional undivided interest in the Mortgaged Property; (7) Trustor
breaches or fails to comply with any of the covenants and agreements contained
in this Deed of Trust; or (8) Trustor is a limited liability company and the
membership or economic interest of any member is assigned or transferred, except
for an assignment or transfer resulting from the death or physical or mental
incapacity of a member. In such case, Beneficiary or other holder of this Note
may exercise any and all of the rights and remedies and recourses set forth in
Article IV herein, and as granted by law.
(b) In order to allow Beneficiary to determine whether enforcement of the
foregoing provisions is desirable, Trustor agrees to notify Beneficiary promptly
in writing of any transaction or event described in Clauses 1.08(a)(1) through
(8) above. In addition to other damages and costs resulting from the breach by
Trustor of its obligations under this subsection (b), Trustor acknowledges that
failure to give such notice may damage Beneficiary in an amount equal to not
less than the difference between the interest payable on the indebtedness
specified herein, and the interest and loan fees which Beneficiary could obtain
on said sum on the date that the event of acceleration occurred and was
enforceable by Beneficiary under applicable law. Trustor shall pay to
Beneficiary all damages Beneficiary sustains by reason of the breach of the
covenant of notice set forth in this subsection (b) and the amount thereof shall
be added to the principal of the Note and shall bear interest and shall be
secured by this Deed of Trust.
(c) Notwithstanding subsection 1.08(a) above, Trustor may from time to time
replace items of personal property and fixtures constituting a part of the
Mortgaged Property, provided that: (1) the replacements for such items of
personal property or fixtures are of equivalent value and quality; and (2)
Trustor has good and clear title to such replacement property free and clear of
any and all liens, encumbrances, security interests, ownership interests, claims
of title (contingent or otherwise), or charges of any kind, or the rights of any
conditional sellers, vendors or any other third parties in or to such
replacement property have been expressly subordinated at no cost to Beneficiary
to the lien of the Deed of Trust in a manner satisfactory to Beneficiary; and
(3) at the option of Beneficiary, Trustor provides at no cost to Beneficiary a
satisfactory opinion of counsel to the effect that the Deed of Trust constitutes
a valid and subsisting first lien on and security interest in such replacement
property and is not subject to being subordinated or the priority thereof
affected under any applicable law, including, but not limited, to the provisions
of Section 9-313 of the California Uniform Commercial Code.
1.09 Preservation and Maintenance of Mortgaged Property.
Trustor shall keep the Mortgaged Property and every part thereof in good
condition and repair, and shall not permit or commit any waste, impairment, or
deterioration of the Mortgaged Property, or commit, suffer or permit any act
upon or use of the Mortgaged Property in violation of law or applicable order of
any governmental authority, whether now existing or hereafter enacted and
whether foreseen or unforeseen, or in violation of any covenants, conditions or
restrictions affecting the Mortgaged Property, or bring or keep any article upon
any of the Mortgaged Property or cause or permit any condition to exist thereon
which would be prohibited by or could invalidate any insurance coverage
maintained, or required hereunder to be maintained, by Trustor on or with
respect to any part of the Mortgaged Property, and Trustor further shall do all
other acts which from the character or use of the Mortgaged Property may be
reasonably necessary to protect the Mortgaged Property. Trustor shall underpin
and support, when necessary, any building, structure or other improvement
situated on the Mortgaged Property and shall not remove or demolish any building
on the Mortgaged Property. Trustor shall complete or restore and repair promptly
and in a good workmanlike manner any building, structure or improvement which
may be constructed, damaged or destroyed thereon and pay when due all claims for
labor performed and materials furnished therefor, whether or not insurance or
other proceeds are available to cover in whole or in part the costs of any such
completion, restoration or repair; provided, however, that Trustor shall not
demolish, remove, expand or extend any building, structure or improvement on the
Mortgaged Property, nor construct, restore, add to or alter any such building,
structure or improvement, nor consent to or permit any of the foregoing to be
done, without in each case obtaining the prior written consent of Beneficiary
thereto.
If this Deed of Trust is on a condominium or a cooperative apartment or
planned development project, Trustor shall perform all of Trustor's obligations
under any applicable declaration of condominium or master deed, or any
declaration of covenants, conditions and restrictions pertaining to any such
project, or any by-laws or regulations of the project or owners' association or
constituent documents.
Trustor shall not drill or extract or enter into any lease for the drilling
for or extraction of oil, gas or other hydrocarbon substances or any mineral of
any kind or character on or from the Mortgaged Property or any part thereof
without first obtaining Beneficiary's written consent.
Unless required by applicable law or unless Beneficiary has otherwise first
agreed in writing, Trustor shall not make or allow to be made any changes in the
nature of the occupancy or use of the Mortgaged Property or any part thereof for
which the Mortgaged Property or such part was intended at the time this Deed of
Trust was delivered.
1.10 Financial Statements; Offset Certificates.
(a) Trustor, without expense to Beneficiary, shall, upon receipt of written
request from Beneficiary, furnish to Beneficiary (1) an annual statement of the
operation of the Mortgaged Property prepared and certified by Trustor, showing
in reasonable detail satisfactory to Beneficiary total rents received and total
expenses together with an annual balance sheet and profits and loss statement,
within one hundred twenty (120) days after the close of each fiscal year of
Trustor, beginning with the fiscal year first ending after the date of delivery
of this Deed of Trust, (2) within 30 days after the end of each calendar quarter
(March 31, June 30, September 30, December 31) interim statements of the
operation of the Mortgaged Property showing in reasonable detail satisfactory to
Beneficiary total rents received and total expenses, for the previous quarter,
certified by Trustor, and (3) copies of Trustor's annual state and federal
income tax filing within thirty (30) days of filing. Trustor shall keep accurate
books and records, and allow Beneficiary, its representatives and agents, upon
demand, at any time during normal business hours, access to such books and
records, including any supporting or related vouchers or papers, shall allow
Beneficiary to make extracts or copies of any thereof, and shall furnish to
Beneficiary and its agents convenient facilities for the audit of any such
statements, books and records.
(b) Trustor, within three (3) days upon request in person or within five
(5) days upon request by mail, shall furnish a written statement duly
acknowledged of all amounts due on any indebtedness secured hereby, whether for
principal or interest on the Note or otherwise, and stating whether any offsets
or defenses exist against the indebtedness secured by this Deed of Trust and
covering such other matters with respect to any such indebtedness as Beneficiary
may reasonably require.
1.11 Trustee's Costs and Expenses; Governmental Charges.
Trustor shall pay all costs, fees and expenses of Trustee, its agents and
counsel in connection with the performance of its duties under this Deed of
Trust, including, without limitation, the cost of any trustee's sale guaranty or
other title insurance coverage ordered in connection with any sale or
foreclosure proceedings hereunder, and shall pay all taxes (except federal and
state income taxes) or other governmental charges or impositions imposed by any
governmental authority on Trustee or Beneficiary by reason of its interest in
the Note, or any note evidencing a Future Advance, or this Deed of Trust.
1.12 Protection of Security; Costs and Expenses.
Trustor agrees that, at any time and from time to time, it will execute and
deliver all such further documents and do all such other acts and things as
Beneficiary may reasonably request in writing in order to protect the security
and priority of the lien created hereby. Trustor shall appear in and defend any
action or proceeding purporting to affect the security hereof or the rights or
powers of the Beneficiary or Trustee, and shall pay all costs and expenses,
including, without limitation, cost of evidence of title and reasonable
attorneys' fees, in any such action or proceeding in which Beneficiary or
Trustee may appear, and in any suit brought by Beneficiary to foreclose this
Deed of Trust or to enforce or establish any other rights or remedies of
Beneficiary hereunder. If Trustor fails to perform any of the covenants or
agreements contained in this Deed of Trust, or if any action or proceeding is
commenced which affects Beneficiary's interest in the Mortgaged Property or any
part thereof, including, but not limited to, eminent domain, code enforcement,
or proceedings of any nature whatsoever under any federal or state law, whether
now existing or hereafter enacted or amended, relating to bankruptcy,
insolvency, arrangement, reorganization or other form of debtor relief, or to a
decedent, then Beneficiary or Trustee may, but without obligation to do so and
without notice to or demand upon Trustor and without releasing Trustor from any
obligation hereunder, make such appearances, commence, defend or appear in any
such action or proceeding affecting the Mortgaged Property, pay, contest or
compromise any encumbrance, charge or lien which affects the Mortgaged Property,
disburse such sums and take such action as Beneficiary or Trustee deems
necessary or appropriate to protect Beneficiary's interest, including, but not
limited to, disbursement of reasonable attorneys' fees, entry upon the Mortgaged
Property to make repairs or take other action to protect the security hereof,
and payment, purchase, contest or compromise of any encumbrance, charge or lien
which in the judgment of either Beneficiary or Trustee appears to be prior or
superior hereto. Trustor further agrees to pay all reasonable expenses of
Beneficiary (including fees and disbursements of counsel) incident to the
protection of the rights of Beneficiary hereunder, or to enforcement or
collection of payment of the Note or any Future Advances, whether by judicial or
nonjudicial proceedings, or in connection with any bankruptcy, insolvency,
arrangement, reorganization or other debtor relief proceeding of Trustor, or
otherwise. Any amounts disbursed by Beneficiary or Trustee pursuant to this
Section 1.12 shall be additional indebtedness of Trustor secured by this Deed of
Trust and each of the Related Agreements as of the date of disbursement and
shall bear interest at the rate set forth in the Note. All such amounts shall be
payable by Trustor immediately without demand. Nothing contained in this Section
1.12 shall be construed to require Beneficiary or Trustee to incur any expense,
make any appearance, or take any other action.
1.13 Fixture Filing.
This Deed of Trust constitutes a financing statement filed as a fixture
filing in the Official Records of the County Recorder of the county in which the
Mortgaged Property is located with respect to any and all fixtures included
within the term "Mortgaged Property" as used herein and with respect to any
goods or other personal property that may now be or hereafter become such
fixtures.
1.14 Notify Lender of Default.
Trustor shall notify Beneficiary in writing within five (5) days of the
occurrence of any Event of Default or other event which, upon the giving of
notice or the passage of time or both, would constitute an Event of Default.
1.15 Management of Mortgaged Property.
Trustor shall manage the Mortgaged Property through its own personnel or a
third party manager approved by Beneficiary, and shall not hire, retain or
contract with any other third party for property management services without the
prior written approval by Beneficiary of such party and the terms of its
contract for management services; provided, however, Beneficiary shall not
withhold approval of a new manager if the new manager has a reputation and
experience in managing properties similar to the Mortgaged Property which are
greater than or equal to the present experience and reputation of the current
manager.
1.16 Miscellaneous.
Trustor shall: (a) make or permit no termination or material amendment of
any agreement between Trustor and a third party relating to the Mortgaged
Property or the loan secured hereby (including, without limitation, the leases)
(the "Third Party Agreements") without the prior written approval of
Beneficiary, except amendments to leases permitted by Section 1.06 hereof, (b)
perform Trustor's obligations under each Third Party Agreement, and (c) comply
promptly with all governmental requirements relating to Trustor, the loan
secured hereby and the Mortgaged Property.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
To induce the Beneficiary to make the loan secured hereby, Trustor
represents and warrants to Beneficiary, in addition to any representations and
warranties in the Note or any Related Agreements, that as of the date hereof and
throughout the term of the loan secured hereby until the Note is paid in full
and all obligations under this Deed of Trust are performed:
2.01 Power and Authority.
Trustor is duly organized and validly existing, qualified to do business
and in good standing in the State of California and has full power and due
authority to execute, deliver and perform this Deed of Trust, the Note, and any
Related Agreements in accordance with their terms. Such execution, delivery and
performance has been duly authorized by all necessary trust action and approved
by each required governmental authority or other party.
2.02 No Default or Violations.
No Event of Default (as defined hereafter) or event which, with notice or
passage of time or both, would constitute an Event of Default ("Unmatured Event
of Default") has occurred and is continuing under this Deed of Trust, the Note,
or any of the Related Agreements. Trustor is not in violation of any
governmental requirement (including, without limitation, any applicable
securities law) or in default under any agreement to which it is bound, or which
affects it or any of its property, and the execution, delivery and performance
of this Deed of Trust, the Note, or any of the Related Agreements in accordance
with their terms and the use and occupancy of the Mortgaged Property will not
violate any governmental requirement (including, without limitation, any
applicable usury law), or conflict with, be inconsistent with or result in any
default under, any of the provisions of any deed of trust, easement, restriction
of record, contract, document, agreement or instrument of any kind to which any
of the foregoing is bound or which affects it or any of its property, except as
identified in writing and approved by Beneficiary.
2.03 No Limitation or Governmental Controls.
There are no proceedings of any kind pending, or, to the knowledge of
Trustor, threatened against or affecting Trustor, the Mortgaged Property
(including any attempt or threat by any governmental authority to condemn or
rezone all or any portion of the Mortgaged Property), any party constituting
Trustor or any general partner in any such party, or involving the validity,
enforceability or priority of this Deed of Trust, the Note or any of the Related
Agreements or enjoining or preventing or threatening to enjoin or prevent the
use and occupancy of the Mortgaged Property or the performance by Beneficiary of
its obligations hereunder, and there are no rent controls, governmental
moratoria or environment controls presently in existence, or, to the knowledge
of Trustor, threatened or affecting the Mortgaged Property, except as identified
in writing to, and approved by, Beneficiary.
2.04 Liens.
Title to the Mortgaged Property, or any part thereof, is not subject to any
liens, encumbrances or defects of any nature whatsoever, whether or not of
record, and whether or not customarily shown on title insurance policies, except
as identified in writing and approved by Beneficiary.
2.05 Financial and Operating Statements.
All financial and operating statements submitted to Beneficiary in
connection with this loan secured hereby are true and correct in all respects,
have been prepared in accordance with generally accepted accounting principles
(applied, in the case of any unaudited statement, on a basis consistent with
that of the preceding fiscal year) and fairly present the respective financial
conditions of the subjects thereof and the results of their operations as of the
respective dates shown thereon. No materially adverse changes have occurred in
the financial conditions and operations reflected therein since their respective
dates, and no additional borrowings have been made since the date thereof other
than the borrowing made under this Deed of Trust and any other borrowing
approved in writing by Beneficiary.
2.06 Other Statements to Beneficiary.
Neither this Deed of Trust, the Note, any Related Agreement, nor any
document, agreement, report, schedule, notice or other writing furnished to the
Beneficiary by or on behalf of any party constituting Trustor, or any general
partner of any such party, contains any omission or misleading or untrue
statement of any fact material to any of the foregoing.
2.07 Third Party Agreements.
Each Third Party Agreement is unmodified and in full force and effect and
free from default on the part of each party thereto, and all conditions required
to be (or which by their nature can be) satisfied by any party to date have been
satisfied. Trustor has not done or said or omitted to do or say anything which
would give to any obligor on any Third Party Agreement any basis for any claims
against Beneficiary or any counterclaim to any claim which might be made by
Beneficiary against such obligor on the basis of any Third Party Agreement.
ARTICLE III
EVENTS OF DEFAULT
Each of the following shall constitute an event of default ("Event of
Default") hereunder:
3.01 Failure to make any payment of principal or interest on the Note or
any Future Advance, when and as the same shall become due and payable, whether
at maturity or by acceleration or as part of any prepayment or otherwise, or
default in the performance of any of the covenants or agreements of Trustor
contained herein, or default in the performance of any of the covenants or
agreements of Trustor contained in the Note, or in any note evidencing a Future
Advance, or in any of the Related Agreements, after the expiration of the period
of time, if any, permitted for cure of such default thereunder.
3.02 The appointment, pursuant to an order of a court of competent
jurisdiction, of a trustee, receiver or liquidator of the Mortgaged Property or
any part thereof, or of Trustor, or any termination or voluntary suspension of
the transaction of business of Trustor, or any attachment, execution or other
judicial seizure of all or any substantial portion of Trustor's assets which
attachment, execution or seizure is not discharged within thirty (30) days.
3.03 Trustor, any trustee of Trustor, any general partner of Trustor, or
any trustee of a general partner of Trustor (each of which shall constitute
"Trustor" for purposes of this Section 3.03 and Sections 3.04 and 3.05 below)
shall file a voluntary case under any applicable bankruptcy, insolvency, debtor
relief, or other similar law now or hereafter in effect, or shall consent to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or similar official) of the Trustor or for any
part of the Mortgaged Property or any substantial part of Trustor's property, or
shall make any general assignment for the benefit of Trustor's creditors, or
shall fail generally to pay Trustor's debts as they become due or shall take any
action in furtherance of any of the foregoing.
3.04 A court having jurisdiction shall enter a decree or order for relief
in respect of the Trustor, in any involuntary case brought under any bankruptcy,
insolvency, debtor relief, or similar law now or hereafter in effect, or Trustor
shall consent to or shall fail to oppose any such proceeding, or any such court
shall enter a decree or order appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of the Trustor or for any
part of the Mortgaged Property or any substantial part of the Trustor's
property, or ordering the winding up or liquidation of the affairs of the
Trustor, and such decree or order shall not be dismissed within sixty (60) days
after the entry thereof.
3.05 Default under the terms of any agreement of guaranty relating to the
indebtedness evidenced by the Note or relating to any Future Advance, or the
occurrence of any of the events enumerated in Sections 3.02, 3.03 or 3.04 with
regard to any guarantor of the Note or any Future Advance, or the revocation,
limitation or termination of the obligations of any guarantor of the Note or any
Future Advance, except in accordance with the express written terms of the
instrument of guaranty.
3.06 The occurrence of any event or transaction described in subsection
1.08(a) above without the prior written consent of Beneficiary.
3.07 Without the prior written consent of Beneficiary in each case, (a) the
dissolution or termination of existence of Trustor, voluntarily or
involuntarily; (b) the amendment or modification in any respect of Trustor's
agreement of partnership or its partnership resolutions relating to this
transaction; or (c) the distribution of any of the Trustor's capital, except for
distribution of the proceeds of the loan secured hereby and cash from
operations; as used herein, cash from operations shall mean any cash of the
Trustor earned from operation of the Mortgaged Property, but not from a sale or
refinancing of the Mortgaged Property or from borrowing, available after paying
all ordinary and necessary current expenses of the Trustor, including expenses
incurred in the maintenance of the Mortgaged Property, and after establishing
reserves to meet current or reasonably expected obligations of the Trustor.
3.08 The imposition of a tax, other than a state or federal income tax, on
or payable by Trustee or Beneficiary by reason of its ownership of the Note, or
its ownership of any note evidencing a Future Advance, or this Deed of Trust,
and Trustor not promptly paying said tax, or it being illegal for Trustor to pay
said tax.
3.09 Any representation, warranty, or disclosure made to Beneficiary by
Trustor or any guarantor of any indebtedness secured hereby in connection with
or as an inducement to the making of the loan evidenced by the Note or in
connection with or as an inducement to the making of any Future Advance, or this
Deed of Trust (including, without limitation, the representations and warranties
contained in Article II of this Deed of Trust), or any of the Related
Agreements, proving to be false or misleading in any material respect as of the
time the same was made, whether or not any such representation or disclosure
appears as part of this Deed of Trust.
3.10 Any other event occurring which, under this Deed of Trust, or under
the Note or any note evidencing a Future Advance, or under any of the Related
Agreements constitutes a default by Trustor hereunder or thereunder or gives
Beneficiary the right to accelerate the maturity of the indebtedness, or any
part thereof, secured hereby.
ARTICLE IV
REMEDIES
Upon the occurrence of any Event of Default, Trustee and Beneficiary shall
have the following rights and remedies:
4.01 Acceleration.
Beneficiary may declare the entire principal amount of the Note and/or any
Future Advances then outstanding (if not then due and payable), and accrued and
unpaid interest thereon, and all other sums or payments required thereunder, to
be due and payable immediately, and notwithstanding the stated maturity in the
Note, or any note evidencing any Future Advance, the principal amount of the
Note and/or any Future Advance and the accrued and unpaid interest thereon and
all other sums or payments required thereunder shall thereupon become and be
immediately due and payable.
4.02 Entry.
Irrespective of whether Beneficiary exercises the option provided in
Section 4.01 above, Beneficiary in person or by agent or by court-appointed
receiver may enter upon, take possession of, manage and operate the Mortgaged
Property or any part thereof and do all things necessary or appropriate in
Beneficiary's sole discretion in connection therewith, including, without
limitation, making and enforcing, and if the same be subject to modification or
cancellation, modifying or canceling leases upon such terms or conditions as
Beneficiary deems proper, obtaining and evicting tenants, and fixing or
modifying rents, contracting for and making repairs and alterations, and doing
any and all other acts which Beneficiary deems proper to protect the security
hereof; and either with or without so taking possession, in its own name or in
the name of Trustor, xxx for or otherwise collect and receive the Rents and
Profits, including those past due and unpaid, and apply the same less costs and
expenses of operation and collection, including reasonable attorneys' fees, upon
any indebtedness secured hereby, and in such order as Beneficiary may determine.
Upon request of Beneficiary, Trustor shall assemble and make available to
Beneficiary at the site of the real property covered hereby any of the Mortgaged
Property which has been removed therefrom. The entering upon and taking
possession of the Mortgaged Property, or any part thereof, and the collection of
any Rents and Profits and the application thereof as aforesaid shall not cure or
waive any default theretofore or thereafter occurring or affect any notice or
default hereunder or invalidate any act done pursuant to any such default or
notice, and, notwithstanding continuance in possession of the Mortgaged Property
or any part thereof by Beneficiary, Trustor or a receiver, and the collection,
receipt and application of the Rents and Profits, Beneficiary shall be entitled
to exercise every right provided for in this Deed of Trust or by law or in
equity upon or after the occurrence of a default, including, without limitation,
the right to exercise the power of sale. Any of the actions referred to in this
Section 4.02 may be taken by Beneficiary irrespective of whether any notice of
default or election to sell has been given hereunder and without regard to the
adequacy of the security for the indebtedness hereby secured.
4.03 Judicial Action.
Beneficiary may bring an action in any court of competent jurisdiction to
foreclose this instrument or to enforce any of the covenants and agreements
hereof.
4.04 Power of Sale.
Beneficiary may elect to cause the Mortgaged Property or any part thereof
to be sold under the power of sale herein granted in any manner permitted by
applicable law. In connection with any sale or sales hereunder, Beneficiary may
elect to treat any of the Mortgaged Property which consists of a right in action
or which is property that can be severed from the real property covered hereby
or any improvements thereon without causing structural damage thereto as if the
same were personal property, and dispose of the same in accordance with
applicable law, separate and apart from the sale of real property. Sales
hereunder of any personal property only shall be conducted in any manner
permitted by the California Uniform Commercial Code. Where the Mortgaged
Property consists of real property and personal property located on or within
the real property, Beneficiary may elect in its discretion to dispose of both
the real and personal property together in one sale pursuant to real property
law as permitted by Section 9-501(4) of the California Uniform Commercial Code.
Should Beneficiary elect to sell the Mortgaged Property, or any part thereof,
which is real property or which Beneficiary has elected to treat as real
property as provided above, Beneficiary or Trustee shall give such notice of
default and election to sell as may then be required by law. Thereafter, upon
the expiration of such time and the giving of such notice of sale as may then be
required by law, and without the necessity of any demand on Trustor, Trustee, at
the time and place specified in the notice of sale, shall sell said real
property or part thereof at public auction to the highest bidder for cash in
lawful money of the United States. Trustee may, and upon request of Beneficiary
shall, from time to time, postpone any sale hereunder by public announcement
thereof at the time and place noticed therefor. If the Mortgaged Property
consists of several lots, parcels or items of property, Beneficiary may: (a)
designate the order in which such lots, parcels or items shall be offered for
sale or sold, or (b) elect to sell such lots, parcels or items through a single
sale, or through two or more successive sales, or in any other manner
Beneficiary deems in its best interest. Any person, including Trustor, Trustee
or Beneficiary, may purchase at any sale hereunder, and Beneficiary shall have
the right to purchase at any sale hereunder by crediting upon the bid price the
amount of all or any part of the indebtedness hereby secured. Should Beneficiary
desire that more than one sale or other disposition of the Mortgaged Property be
conducted, Beneficiary may, at its option, cause the same to be conducted
simultaneously, or successively, on the same day, or at such different days or
times and in such order as Beneficiary may deem to be in its best interests, and
no such sale shall terminate or otherwise affect the lien of this Deed of Trust
on any part of the Mortgaged Property not sold until all indebtedness secured
hereby has been fully paid. In the event Beneficiary elects to dispose of the
Mortgaged Property through more than one sale, Trustor agrees to pay the costs
and expenses of each such sale and of any judicial proceedings wherein the same
may be made, including reasonable compensation to Trustee and Beneficiary, their
agents and counsel, and to pay all expenses, liabilities and advances made or
incurred by Trustee in connection with such sale or sales, together with
interest on all such advances made by Trustee at the lower of the rate set forth
in the Note, or the maximum rate permitted by law to be charged by Trustee. Upon
any sale hereunder, Trustee shall execute and deliver to the purchaser or
purchasers a deed or deeds conveying the property so sold, but without any
covenant or warranty whatsoever, express or implied, whereupon such purchaser or
purchasers shall be let into immediate possession; and the recitals in any such
deed or deeds of facts, such as default, the giving of notice of default and
notice of sale, and other facts affecting the regularity or validity of such
sale or disposition, shall be conclusive proof of the truth of such facts and
any such deed or deeds shall be conclusive against all persons as to such facts
recited therein.
4.05 Environmental Default and Remedies.
In the event that any portion of the Mortgaged Property is determined to be
"environmentally impaired" (as "environmentally impaired" is defined in
California Code of Civil Procedure Section 726.5(e)(3)) or to be an "affected
parcel" (as "affected parcel" is defined in California Code of Civil Procedure
Section 726.5(e)(1)), then, without otherwise limiting or in any way affecting
Beneficiary's or Trustee's rights and remedies under this Deed of Trust,
Beneficiary may elect to exercise its right under California Code of Civil
Procedure Section 726.5(a) to (1) waive its lien on such environmentally
impaired or affected portion of the Mortgaged Property and (2) exercise (i) the
rights and remedies of an unsecured creditor, including reduction of its claim
against Trustor to judgment, and (ii) any other rights and remedies permitted by
law. For purposes of determining Beneficiary's right to proceed as an unsecured
creditor under California Code of Civil Procedure Section 726.5(a), Trustor
shall be deemed to have willfully permitted or acquiesced in a release or
threatened release of hazardous materials, within the meaning of California Code
of Civil Procedure Section 726.5(d)(1), if the release or threatened release of
hazardous materials was knowingly or negligently caused or contributed to by any
lessee, occupant or user of any portion of the Mortgaged Property and Trustor
knew or should have known of the activity by such lessee, occupant or user which
caused or contributed to the release or threatened release. All costs and
expenses, including, but not limited to, attorneys' fees, incurred by
Beneficiary in connection with any action commenced under this Section 4.05,
including any action required by California Code of Civil Procedure Section
726.5(b) to determine the degree to which the Mortgaged Property is
environmentally impaired, plus interest thereon at the rate specified in
Paragraph 2(b) of the Note, shall be added to the indebtedness secured by this
Deed of Trust and shall be due and payable to Beneficiary upon its demand made
at any time following the conclusion of such action.
4.06 Proceeds of Sale.
The proceeds of any sale made under or by virtue of this Article IV,
together with all other sums which then may be held by Trustee or Beneficiary
under this Deed of Trust, whether under the provisions of this Article IV or
otherwise, shall be applied as follows:
FIRST: To the payment of costs and expenses of sale and of any judicial
proceedings wherein the same may be made, including reasonable compensation to
Trustee and Beneficiary, their agents and counsel, and to the payment of all
expenses, liabilities and advances made or incurred by Trustee under this Deed
of Trust, together with interest on all advances made by Trustee at the lower of
the interest rate set forth in the Note or the maximum rate permitted by law to
be charged by Trustee.
SECOND: To the payment of any and all sums expended by Beneficiary under
the terms of this Deed of Trust, not then repaid, with accrued interest at the
rate set forth in the Note, and all other sums (except advances of principal and
interest thereon) required to be paid by Trustor pursuant to any provisions of
this Deed of Trust, or the Note, or any note evidencing any Future Advance, or
any of the Related Agreements, including but not limited to all expenses,
liabilities and advances made or incurred by Beneficiary under this Deed of
Trust or in connection with the enforcement thereof, together with interest
thereon as herein provided except for any amounts incurred under or as a result
of the Environmental Agreement.
THIRD: To the payment of the entire amount then due, owing or unpaid for
principal and interest upon the Note and any notes evidencing any Future
Advances, with interest on the unpaid principal at the rate set forth therein
from the date of advancement thereof until the same is paid in full.
FOURTH: To the payment of any and all expenses, liabilities and advances
made or incurred by Beneficiary under this Deed of Trust or otherwise in
connection with the Environmental Agreement or in connection with the
enforcement thereof, together with interest thereon as herein provided.
FIFTH: The remainder, if any, to the person or persons legally entitled
thereto.
4.07 Waiver of Marshalling.
Trustor, for itself and for all persons hereafter claiming through or under
it or who may at any time hereafter become holders of liens junior to the lien
of this Deed of Trust, hereby expressly waives and releases all rights to direct
the order in which any of the Mortgaged Property shall be sold in the event of
any sale or sales pursuant hereto and to have any of the Mortgaged Property
and/or any other property now or hereafter constituting security for any of the
indebtedness secured by this Deed of Trust marshalled upon any foreclosure of
this Deed of Trust or of any other security for any of said indebtedness.
4.08 Remedies Cumulative.
No remedy herein conferred upon or reserved to Trustee or Beneficiary is
intended to be exclusive of any other remedy herein or by law provided, but each
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute. No
delay or omission of Trustee or Beneficiary to exercise any right or power
accruing upon any Event of Default shall impair any right or power or shall be
construed to be a waiver of any Event of Default or any acquiescence therein;
and every power and remedy given by this Deed of Trust to Trustee or Beneficiary
may be exercised from time to time as often as may be deemed expedient by
Trustee or Beneficiary. If there exists additional security for the performance
of the obligations secured hereby, the holder of the Note, at its sole option,
and without limiting or affecting any of its rights or remedies hereunder, may
exercise any of the rights and remedies to which it may be entitled hereunder
either concurrently with whatever rights and remedies it may have in connection
with such other security or in such order as it may determine. Any application
of any amounts or any portion thereof held by Beneficiary at any time as
additional security hereunder, whether pursuant to Section 1.03 or Section 1.05
hereof or otherwise, to any indebtedness secured hereby shall not extend or
postpone the due dates of any payments due from Trustor to Beneficiary hereunder
or under the Note, any Future Advances or any of the Related Agreements, or
change the amounts of any such payments or otherwise be construed to cure or
waive any default or notice of default hereunder or invalidate any act done
pursuant to any such default or notice.
ARTICLE V
MISCELLANEOUS
5.01 Severability.
In the event any one or more of the provisions contained in this Deed of
Trust shall for any reason be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Deed of Trust, but this Deed of Trust shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein.
5.02 Certain Charges.
Trustor agrees to pay Beneficiary for each statement of Beneficiary as to
the obligations secured hereby, furnished at Trustor's request, the maximum fee
allowed by law, or if there be no maximum fee, then such reasonable fee as is
charged by Beneficiary as of the time said statement is furnished. Trustor
further agrees to pay the charges of Beneficiary for any other service rendered
Trustor, or on its behalf, connected with this Deed of Trust or the indebtedness
secured hereby, including, without limitation, the delivery to an escrow holder
of a request for full or partial reconveyance of this Deed of Trust,
transmitting to an escrow holder moneys secured hereby, changing its records
pertaining to this Deed of Trust and indebtedness secured hereby to show a new
owner of the Mortgaged Property, and replacing an existing policy of insurance
held hereunder with another such policy.
5.03 Notices.
All notices expressly provided hereunder to be given by Beneficiary to
Trustor and all notices and demands of any kind or nature whatsoever which
Trustor may be required or may desire to give to or serve on Beneficiary shall
be in writing and shall be served in person or by first class or certified mail.
Any such notice or demand so served by first class or certified mail shall be
deposited in the United States mail, with postage thereon fully prepaid and
addressed to the party so to be served at its address above stated or at such
other address of which said party shall have theretofore notified in writing, as
provided above, the party giving such notice. Service of any such notice or
demand so made shall be deemed effective on the day of actual delivery as shown
by the addressee's return receipt or the expiration of three business days after
the date of mailing, whichever is the earlier in time, except that service of
any notice of default or notice of sale provided or required by law shall, if
mailed, be deemed effective on the date of mailing.
5.04 Trustor Not Released.
Extension of the time for payment or modification of the terms of payment
of any sums secured by this Deed of Trust granted by Beneficiary to any
successor in interest of Trustor shall not operate to release, in any manner,
the liability of the original Trustor. Beneficiary shall not be required to
commence proceedings against such successor or refuse to extend time for payment
or otherwise modify the terms of payment of the sums secured by the Deed of
Trust by reason of any demand made by the original Trustor. Without affecting
the liability of any person, including Trustor, for the payment of any
indebtedness secured hereby, or the lien of this Deed of Trust on the remainder
of the Mortgaged Property for the full amount of any such indebtedness and
liability unpaid, Beneficiary and Trustee are respectively empowered as follows:
Beneficiary may from time to time and without notice (a) release any person
liable for the payment of any of the indebtedness, (b) extend the time or
otherwise alter the terms of payment of any of the indebtedness, (c) accept
additional real or personal property of any kind as security therefor, whether
evidenced by deeds of trust, mortgages, security agreement or any other
instruments of security, or (d) alter, substitute or release any property
securing the indebtedness; Trustee may, at any time, and from time to time, upon
the written request of Beneficiary, which Beneficiary may withhold in its sole
discretion (1) consent to the making of any map or plat of the Mortgaged
Property or any part thereof, (2) join in granting any easement or creating any
restriction thereon, (3) join in any subordination or other agreement affecting
this Deed of Trust or the lien or charge hereof, or (4) reconvey, without any
warranty, all or part of the Mortgaged Property.
5.05 Inspection.
Beneficiary may at any reasonable time or times make or cause to be made
entry upon and inspection of the Mortgaged Property or any part thereof in
person or by agent.
5.06 Reconveyance.
Upon the payment in full of all sums secured by this Deed of Trust,
Beneficiary shall request Trustee to reconvey the Mortgaged Property and shall
surrender this Deed of Trust and all notes evidencing indebtedness secured by
this Deed of Trust to Trustee. Upon payment of its fees and any other sums owing
to it under this Deed of Trust, Trustee shall reconvey the Mortgaged Property
without warranty to the person or persons legally entitled thereto. Trustor
shall pay all costs of recordation, if any. The recitals in such conveyance of
any matters of facts shall be conclusive proof of the truthfulness thereof. The
grantee in such reconveyance may be described as "the person or persons legally
entitled thereto." Five years after issuance of such full reconveyance, Trustee
may destroy said notes and this Deed of Trust unless otherwise directed by
Beneficiary.
5.07 Statute of Limitations.
The pleading of any statute of limitations as a defense to any and all
obligations secured by this Deed of Trust is hereby waived to the fullest extent
permitted by law.
5.08 Interpretation.
Wherever used in this Deed of Trust, unless the context otherwise indicates
a contrary intent, or unless otherwise specifically provided herein, the word
"Trustor" shall mean and include both Trustor and any subsequent owner or owners
of the Mortgaged Property, and the word "Beneficiary" shall mean and include not
only the original Beneficiary hereunder but also any future owner and holder,
including pledgees, of the Note secured hereby. In this Deed of Trust whenever
the context so requires, the masculine gender includes the feminine and/or
neuter, and the neuter includes the feminine and/or masculine, and the singular
number includes the plural and conversely. In this Deed of Trust, the use of the
word "including" shall not be deemed to limit the generality of the term or
clause to which it has reference, whether or not nonlimiting language (such as
"without limitation," or "but not limited to," or words of similar import) is
used with reference thereto, but rather shall be deemed to include any word
which could reasonably fall within the broadest possible scope of such general
statement, term or matter. The captions and headings of the Articles and
Sections of this Deed of Trust are for convenience only and are not to be used
to interpret, define or limit the provisions of this Deed of Trust.
5.09 Consent; Delegation to Sub-Agents.
The granting or withholding of consent by Beneficiary to any transaction as
required by the terms hereof shall not be deemed a waiver of the right to
require consent to future or successive transactions. Wherever a power of
attorney is conferred upon Beneficiary hereunder, it is understood and agreed
that such power is conferred with full power of substitution, and Beneficiary
may elect in its sole discretion to exercise such power itself or to delegate
such power, or any part thereof, to one or more sub-agents.
5.10 Successors and Assigns.
All of the grants, obligations, covenants, agreements, terms, provisions
and conditions herein shall run with the land and shall apply to, bind and inure
to the benefit of, the heirs, administrators, executors, legal representatives,
successors and assigns of Trustor and the successors in trust of Trustee and the
endorsees, transferees, successors and assigns of Beneficiary. In the event
Trustor is composed of more than one party, the obligations, covenants,
agreements, and warranties contained herein as well as the obligations arising
therefrom are and shall be joint and several as to each such party.
5.11 Governing Law.
The loan secured by this Deed of Trust is made pursuant to, and shall be
construed and governed by, the laws of the United States of America and the
rules and regulations promulgated thereunder, including the federal laws, rules
and regulations for federal savings and loan associations.
5.12 Substitution of Trustee.
Beneficiary may remove Trustee at any time or from time to time and appoint
a successor trustee, and upon such appointment, all powers, rights, duties and
authority of Trustee, as aforesaid, shall thereupon become vested in such
successor. Such substitute trustee shall be appointed by written instrument duly
recorded in the county or counties where the real property covered hereby is
located, which appointment may be executed by any authorized agent of
Beneficiary or in any other manner permitted by applicable law.
5.13 No Waiver.
No failure or delay by Beneficiary in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. No waiver, consent or approval of any kind by Beneficiary shall be
effective unless contained in writing signed and delivered by Beneficiary. No
notice to or demand on Trustor in any case shall entitle Trustor to any other
notice or demand in similar or other circumstances, nor shall such notice or
demand constitute a waiver of the rights of Beneficiary to any other or further
actions.
5.14 Beneficiary Not Partner of Trustor; Trustor to Indemnify Beneficiary.
The exercise by Beneficiary of any of its rights, privileges or remedies
conferred hereunder or under the Note or any other Related Agreements or under
applicable law, shall not be deemed to render Beneficiary a partner or a
coventurer with the Trustor or with any other person. Any and all of such
actions will be exercised by Beneficiary solely in furtherance of its role as a
secured lender advancing funds for use by the Trustor as provided in this Deed
of Trust. Trustor shall indemnify Beneficiary against any claim by any third
party for any injury, damage or liability of any kind arising out of any failure
of Trustor to perform its obligations in this transaction, shall notify
Beneficiary of any lawsuit based on such claim, and at Beneficiary's election,
shall defend Beneficiary therein at Trustor's own expense by counsel
satisfactory to Beneficiary or shall pay the Beneficiary's cost and attorneys'
fees if Beneficiary chooses to defend itself on any such claim.
5.15 Time of Essence.
Time is declared to be of the essence in this Deed of Trust, the Note and
any Related Agreements and of every part hereof and thereof.
5.16 Entire Agreement.
Once the Note, this Deed of Trust, and all of the other Related Agreements,
if any, have been executed, all of the foregoing constitutes the entire
agreement between the parties hereto and none of the foregoing may be modified
or amended in any manner other than by supplemental written agreement executed
by the parties hereto; provided, however, that all written and oral
representations of Trustor, and of any partner, principal or agent of Trustor,
previously made to Beneficiary shall be deemed to have been made to induce
Beneficiary to make the loan secured hereby and to enter into the transaction
evidenced hereby and by the Note and the Related Agreements, and shall survive
the execution hereof and the closing pursuant hereto. This Deed of Trust cannot
be changed or modified except by written agreement signed by both Trustor and
Beneficiary.
5.17 No Third Party Benefits.
This Deed of Trust, the Note and the other Related Agreements, if any, are
made for the sole benefit of Trustor and Beneficiary and their successors and
assigns, and convey no other legal interest to any party under or by reason of
any of the foregoing. Whether or not Beneficiary elects to employ any or all of
the rights, powers or remedies available to it under any of the foregoing,
Beneficiary shall have no obligation or liability of any kind to any third party
by reason of any of the foregoing or any of Beneficiary's actions or omissions
pursuant thereto or otherwise in connection with this transaction.
REQUEST FOR NOTICES
Trustor hereby requests that a copy of any Notice of Default and Notice of
Sale as may be required by law be mailed to Trustor at its address above stated.
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day
and year first hereinabove written.
TRUSTOR: _________________________________
_________________________________
EXHIBIT A
DESCRIPTION OF THE PROPERTY
STATE OF CALIFORNIA )
)
COUNTY OF ______________________)
On __________________, 19___ before me, ___________________________, a
Notary Public in and for said State, personally appeared______________________
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
___________________________________
(Signature)
(SEAL)
STATE OF CALIFORNIA )
)
COUNTY OF ___________________________)
On __________________, 19___ before me, ___________________________, a
Notary Public in and for said State, personally appeared __________
_______________________________________________personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
___________________________________
(Signature)
(SEAL)~
