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EXHIBIT 10.2
ALLSTATE LIFE INSURANCE COMPANY
LOAN NO. 121977
DEED OF TRUST, ASSIGNMENT OF LEASES,
RENTS AND CONTRACTS, SECURITY AGREEMENT
AND
FIXTURE FILING
BETWEEN
ROYAL BODYCARE, INC., A NEVADA CORPORATION, AS TRUSTOR,
▇▇▇▇▇ ▇. ▇▇▇▇▇, AS TRUSTEE
AND
ALLSTATE LIFE INSURANCE COMPANY, AS BENEFICIARY
DATED: March 16, 2001
LOAN AMOUNT: $3,000,000.00
PROPERTY ADDRESS:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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TABLE OF CONTENTS
Page
ARTICLE 1 - COVENANTS OF TRUSTOR ................................................................... 5
Section 1.1 - Performance of Obligations Secured ............................................... 5
Section 1.2 - Insurance ........................................................................ 5
Section 1.3 - Condemnation ..................................................................... 6
Section 1.4 - Damage to Property ............................................................... 7
Section 1.5 - Escrow Fund for Condemnation and Insurance Proceeds .............................. 9
Section 1.6 - Taxes, Liens and other Items ..................................................... 10
Section 1.7 - Assignment of Leases, Contracts, Rents and Profits ............................... 11
Section 1.8 - Acceleration Upon Sale or Encumbrance ............................................ 15
Section 1.9 - Preservation and Maintenance of Property ......................................... 15
Section 1.10 - Offset Certificates ............................................................. 16
Section 1.11 - Trustee's Costs and Expenses .................................................... 16
Section 1.12 - Protection of Security; Costs and Expenses ...................................... 16
Section 1.13 - Trustor's Covenants Respecting Collateral ....................................... 17
Section 1.14 - Covenants Regarding Financial Statements ........................................ 19
Section 1.15 - Environmental Covenants ......................................................... 20
ARTICLE 2 - EVENTS OF DEFAULT ...................................................................... 21
Section 2.1 - Monetary and Performance Defaults ................................................ 21
Section 2.2 - Bankruptcy, Insolvency, Dissolution .............................................. 22
Section 2.3 - Misrepresentation ................................................................ 22
Section 2.4 - Default under Subordinate Loans .................................................. 22
ARTICLE 3 - REMEDIES ............................................................................... 22
Section 3.1 - Acceleration ..................................................................... 22
Section 3.2 - Entry ............................................................................ 23
Section 3.3 - Judicial Action .................................................................. 24
Section 3.4 - Non-Judicial ..................................................................... 24
Section 3.5 - Posting .......................................................................... 24
Section 3.6 - Statutes ......................................................................... 25
Section 3.7 - Installment Sale ................................................................. 26
Section 3.8 - Rescission of Notice of Default .................................................. 26
Section 3.9 - Beneficiary's Remedies Respecting Collateral ..................................... 26
Section 3.10 - Proceeds of Sales ............................................................... 27
Section 3.11 - Condemnation and Insurance Proceeds ............................................. 27
Section 3.12 - Waiver of Marshalling, Rights of Redemption, Homestead, Valuation and Notice .... 27
Section 3.13 - Remedies Cumulative ............................................................. 28
Section 3.14 - Recourse ........................................................................ 28
ARTICLE 4 - MISCELLANEOUS .......................................................................... 29
Section 4.1 - Severability ..................................................................... 29
Section 4.2 - Certain Charges and Brokerage Fees ............................................... 29
Section 4.3 - Notices .......................................................................... 29
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Section 4.4 - Trustor Not Released; Certain Trustee Acts ....................................... 31
Section 4.5 - Inspection ....................................................................... 31
Section 4.6 - Release or Cancellation .......................................................... 31
Section 4.7 - Statute of Limitations ........................................................... 32
Section 4.8 - Interpretation ................................................................... 32
Section 4.9 - Captions ......................................................................... 32
Section 4.10 - Consent ......................................................................... 32
Section 4.11 - Delegation to Subagents ......................................................... 32
Section 4.12 - Successors and Assigns .......................................................... 32
Section 4.13 - Governing Law ................................................................... 33
Section 4.14 - Substitution of Trustee ......................................................... 33
Section 4.15 - Changes in Taxation ............................................................. 34
Section 4.16 - Maximum Interest Rate ........................................................... 34
Section 4.17 - Time of Essence ................................................................. 34
Section 4.18 - Reproduction of Documents ....................................................... 34
Section 4.19 - No Oral Modifications ........................................................... 35
Section 4.20 - Trustee Provisions .............................................................. 35
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DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND CONTRACTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND CONTRACTS,
SECURITY AGREEMENT AND FIXTURE FILING is made as of March 16, 2001, from ROYAL
BODYCARE, INC., a Nevada corporation, whose mailing address is ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (herein "Trustor") to ▇▇▇▇▇ ▇. ▇▇▇▇▇, a Texas resident,
whose mailing address is c/o Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P., ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (herein "Trustee"), in
favor of ALLSTATE LIFE INSURANCE COMPANY, an Illinois insurance corporation,
whose mailing address is Allstate Plaza South, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ (herein "Beneficiary").
TRUSTOR, in consideration of the indebtedness herein recited and the
trust herein created, hereby 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,
to and under that certain real property located in Dallas County, Texas, more
particularly described on Exhibit A attached hereto and incorporated herein by
this reference (the "Land");
TOGETHER with all of Trustor's now or hereafter acquired estate,
right, title and interest in, to and under all buildings, structures,
improvements and fixtures now existing or hereafter erected on the Land and all
right, title and interest, if any, of Trustor in and to: the streets and roads,
opened or proposed, abutting the Land to the center lines thereof, and strips
within or adjoining the Land, the air space and right to use said air space
above the Land, all rights of ingress and egress on or within the Land, all
easements, rights and appurtenances thereto or used in connection with the Land,
including, without limitation, all lateral support, alley and drainage rights,
all revenues, income, rents, cash or security deposits, advance rental deposits,
and other benefits thereof or arising from the use or enjoyment of all or any
portion thereof (subject however to the rights and authorities given herein to
Trustor to collect and apply such revenues, 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, and water stock, all
options to purchase or lease, all development or other rights relating to the
Land or the operation thereof, or used in connection therewith, including all
Trustor's right, title and interest in all fixtures, attachments, partitions,
machinery, equipment, building materials, appliances and goods of every nature
whatever now or hereafter located on, or attached to, the Land, 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
real property and, whether affixed or annexed thereto or not, be deemed
conclusively to be real property; 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 legal operation and effect of this Deed of Trust on
any of the foregoing. All of the foregoing property described in this section
(the "Improvements") together with the Land, shall be hereinafter referred to as
the "Property").
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TOGETHER with all of Trustor's now existing or hereafter acquired
right, title and interest in the following:
A. All equipment, fixtures, inventory, goods, instruments,
appliances, furnishings, machinery, tools, raw materials, component parts, work
in progress and materials, and all other tangible personal property of
whatsoever kind, used or consumed in the improvement, use or enjoyment of the
Property now or any time hereafter owned or acquired by Trustor, wherever
located and all products thereof whether in possession of Trustor or whether
located on the Property or elsewhere;
B. To the extent such general intangibles are assignable, all
general intangibles relating to design, development, operation, management and
use of the Property, including, but not limited to, (1) all names under which or
by which the Property may at any time be owned and operated or any variant
thereof, and all goodwill in any way relating to the Property and all service
marks and logotypes used in connection therewith, (2) all permits, licenses,
authorizations, variances, land use entitlements, approvals, consents,
clearances, and rights obtained from governmental agencies issued or obtained in
connection with the Property, (3) all permits, licenses, approvals, consents,
authorizations, franchises and agreements issued or obtained in connection with
the construction, use, occupation or operation of the Property, (4) all
materials prepared for filing or filed with any governmental agency, and (5) the
books and records of Trustor relating to construction or operation of the
Property;
C. All shares of stock or partnership interest or other
evidence of ownership of any part of the Property that is owned by Trustor in
common with others, including all water stock relating to the Property, if any,
and all documents or rights of membership in any owners' or members' association
or similar group having responsibility for managing or operating any part of the
Property provided, however, that the foregoing shall not include any ownership
interests in the Trustor;
D. All accounts, deposit accounts, tax and insurance escrows
held pursuant to this Deed of Trust, accounts receivable, instruments,
documents, documents of title, general intangibles, rights to payment of every
kind, all of Trustor's rights, direct or indirect, under or pursuant to any and
all construction, development, financing, guaranty, indemnity, maintenance,
management, service, supply and warranty agreements, commitments, contracts,
subcontracts, insurance policies, licenses and bonds now or anytime hereafter
arising from construction on the Land or the use or enjoyment of the Property to
the extent such are assignable; and
E. All condemnation proceeds and insurance proceeds related to
the Property.
TOGETHER with all additions to, substitutions for and the products of
all of the above, and all proceeds therefrom, whether cash proceeds or noncash
proceeds, received when any such property (or the proceeds thereof) is sold,
exchanged, leased, licensed, or otherwise disposed of, whether voluntarily or
involuntarily. Such proceeds shall include any of the foregoing specifically
described property of Trustor acquired with cash proceeds. Together with, and
without limiting
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the above items, all Goods, Accounts, Documents, Instruments, Money, Chattel
Paper and General Intangibles arising from or used in connection with the
Property, as those terms are defined in the Uniform Commercial Code from time to
time in effect in the State of Texas. (All of the foregoing including such
products and proceeds thereof, are collectively referred to as "Collateral".)
Notwithstanding anything to the contrary set forth herein, it is
agreed that the Property and Collateral described in and encumbered by this
instrument specifically does not include, and the Beneficiary/Secured Party is
neither granted nor shall it possess or claim, any interest in and to any of the
following properties and/or assets of Trustor/Debtor (provided, however, that
Trustor/Debtor hereby covenants and agrees that no pledges or security interests
in respect to the following-described items shall be granted or encumber the
following-described items other than purchase money security interests, vendor's
liens and/or first lien financing with respect to such items):
(a) Any and all furniture, trade fixtures, equipment, records,
intangible property rights and other personal property of Trustor/Debtor which
is not affixed to the Land or the Improvements (including, without limitation,
the various items listed on Schedule 1 attached hereto and made a part hereof
for all purposes);
(b) Any and all revenues and income earned, received and/or realized by
Trustor/Debtor in the ordinary course of its business (as distinguished from any
revenues or income received from the lease, sale or other transfer or conveyance
of the Land or Improvements or either of same);
(c) All accounts and contract rights of Trustor/Debtor arising in the
ordinary course of its business;
(d) All general intangibles of the Trustor/Debtor;
(e) All inventory of the Trustor/Debtor; and
(f) All leased furniture, trade fixtures, equipment and other leased
personal property of Trustor/Debtor.
The personal property in which Beneficiary has a security interest
includes goods which are or shall become fixtures on the Property. This Deed of
Trust is intended to serve as a fixture filing pursuant to the terms of the
applicable provisions of the Uniform Commercial Code of the State of Texas and
Exhibit B attached hereto and made a part hereof. This filing is to be recorded
in the real estate records of the appropriate city, town or county in which the
Property is located. In that regard, the following information is provided:
Names of Debtor: ROYAL BODYCARE, INC.
a Nevada corporation
Address of Debtor: See Section 4.3 hereof
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Name of Secured Party: ALLSTATE LIFE INSURANCE COMPANY,
an Illinois insurance corporation
Address of Secured Party: See Section 4.3 hereof.
Trustor warrants and agrees that there is no financing statement
covering the foregoing Collateral, the Property, or any part thereof, on file in
any public office.
TO HAVE AND TO HOLD the Property and Collateral hereby conveyed or
mentioned and intended so to be, unto Trustee and to his substitutes or
successors forever, and Trustor does hereby bind itself, its successors and
assigns to warrant and forever defend, all and singular, the Property unto the
Trustee, his successors and assigns against every person whomsoever lawfully
claiming or to claim the same, or any part thereof, by, through or under
Trustor, but not otherwise, subject only to the specific matters, if any, set
forth on Exhibit C attached hereto.
HOWEVER, THIS IS A DEED OF TRUST, AND THIS CONVEYANCE IS MADE IN
TRUST FOR THE FOLLOWING USES AND TRUST, AND FOR NO OTHER PURPOSES, AND FOR THE
PURPOSE OF SECURING, IN SUCH ORDER OF PRIORITY AS BENEFICIARY MAY ELECT:
A. The repayment of the indebtedness evidenced by that certain
Mortgage Note ("Note") of even date herewith with a maturity date of April 1,
2019 executed by Trustor and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and payable to the order of
Beneficiary, in the principal sum of THREE MILLION AND NO/100 DOLLARS
($3,000,000.00) with interest thereon, as provided therein and all late charges,
loan fees, commitment fees, Prepayment Premiums (as described in the Note), and
all extensions, renewals, modifications, amendments and replacements thereof;
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 clause C. below,
with interest thereon at the rate provided herein or therein;
C. The performance of each and every covenant and agreement of
Trustor contained (1) herein, in the Note, or in any note evidencing a Future
Advance (as hereinafter defined), and (2) in the obligations of Trustor upon any
and all pledge or other security agreements, loan agreements, disbursement
agreements, supplemental agreements (the foregoing shall not include the
Commitment Letter between Trustor and Beneficiary), assignments (both present
and collateral) and all instruments of indebtedness or security now or hereafter
executed by Trustor in connection with any indebtedness referred to in clauses
A., B., or D. of this section or for the purpose of supplementing or amending
this Deed of Trust or any instrument secured hereby (all of the foregoing in
this clause C., as the same may be amended, modified or supplemented from time
to time, being referred to hereinafter as "Related Agreements") and all costs
and expenses, including reasonable attorneys' fees actually incurred by
Beneficiary with
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respect to all such documents, including, without limitation, the negotiation
and drafting of any loan settlement or workout agreement; 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 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 and in the Related
Agreements "Future Advance").
ARTICLE 1
COVENANTS OF TRUSTOR
To protect the security of this Deed of Trust, Trustor covenants and
agrees as follows:
Section 1.1__________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 Advance, any
Prepayment Premium and late charges provided for in the Note or in any note
evidencing a Future Advance, 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.
Section 1.2 Insurance. For all times during the period there remains
any indebtedness under the Note, or any and all other indebtedness (including
without limitation Future Advances) secured by this Deed of Trust, Trustor shall
keep the Property insured against all risks or hazards as Beneficiary may
require. Such insurance shall be in policy form, amount and coverage
satisfactory to Beneficiary, including, but not limited to:
A. Fire and extended coverage property damage insurance,
including, but not limited to all risk insurance, in an amount equal to the full
replacement value of the Improvements, without coinsurance or deducting for
depreciation, containing a waiver of subrogation clause and a deductible amount
acceptable to Beneficiary;
B. Public liability insurance, in such form, amount and
deductible satisfactory to Beneficiary, and naming Beneficiary c/o Beneficiary's
servicing agent, if any, as additional insured covering Beneficiary's interest
in the Property;
C. Business interruption or rent loss insurance endorsement in
an amount at least equal to 100% of the sum of: annual debt service on the Note,
the annual debt service on any other financing permitted by Beneficiary, ground
rents, if any, and operating expenses, including, without limitation, real
estate taxes and assessments and insurance, for the Property;
▇. ▇▇▇▇▇ insurance required by and obtainable through the
National Flood Insurance Program sufficient to cover any damage which may be
anticipated in the event of flood
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unless Trustor has provided Beneficiary evidence satisfactory to Beneficiary
that no portion of the Property is located within the boundaries of the 100 year
flood plain;
E. "Dram shop" insurance if alcoholic beverages are sold on
the Property;
F. Boiler and machinery insurance when risks covered thereby
are present and Beneficiary requires such insurance; and
G. Earthquake insurance if Beneficiary requires such
insurance.
The insurance coverages described in subsections A., C., D., F., and G. above
shall name Beneficiary c/o Beneficiary's servicing agent, if any, under a
standard noncontributory mortgagee clause or otherwise directly insure
Beneficiary's interest in the Property. All losses under said insurance shall be
payable to Beneficiary in the manner provided in Sections 1.4 and 1.5 hereof.
All policies of insurance required under this Section 1.2 shall be with a
company or companies with a policy rating of A and financial rating of at least
Class X in the most current edition of Best's Insurance Reports and authorized
to do business in the state in which the Property is located. All policies of
insurance shall provide that they will not be canceled or modified without
thirty (30) days' prior written notice to Beneficiary. True copies of the above
mentioned insurance policies or evidence of such insurance (in the form of
Accord Form 27) satisfactory to Beneficiary shall be delivered to and held by
Beneficiary. True copies of all renewal and replacement policies or evidences of
such insurance forms (Accord Form 27) thereof shall be delivered to Beneficiary
at least fifteen (15) days before the expiration of the expiring policies. If
any renewal or replacement policy is not obtained as required herein,
Beneficiary is authorized to obtain the same in Trustor's name and at Trustor's
expense. Beneficiary shall not by the fact of 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.
Section 1.3 Condemnation.
A. Immediately upon obtaining knowledge of the commencement or
threat of any action in connection with (1) any condemnation, (2) any other
taking of the Property or any part thereof by any public authority or private
entity having the power of eminent domain, or (3) any conveyance in lieu of such
condemnation or taking of the Property or any part thereof ("Condemnation"),
Trustor shall notify Beneficiary in writing but in no event later than ten (10)
days after Trustor obtains knowledge of the commencement of or threat of a
Condemnation. Beneficiary shall have the right, but not the obligation, to
participate in any proceedings relating to any Condemnation and may, in its
reasonable discretion, consent or withhold its consent to any settlement,
adjustment, or compromise of any claims arising from the Condemnation and no
such settlement, adjustment or compromise shall be final or binding upon
Beneficiary without Beneficiary's prior consent which consent shall not be
unreasonably withheld, conditioned or delayed.
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B. If all or part of the Property is taken by Condemnation and
Beneficiary in its reasonable judgment determines that the remainder of the
Property, if any, cannot be operated as an economically viable entity at
substantially the same level of operations as immediately prior to such
Condemnation, then all proceeds of the Condemnation ("Condemnation Proceeds")
shall be paid over to Beneficiary and shall be applied first toward
reimbursement of the actual costs and expenses (including reasonable attorneys'
fees) of Beneficiary, if any, in connection with the recovery of such
Condemnation Proceeds, and then, in the sole and absolute discretion of
Beneficiary and without regard to the adequacy of its security under this Deed
of Trust, shall be applied against all amounts due herein under the Note and any
remaining Condemnation Proceeds shall be released to the Trustor. Any prepayment
of the Note under this Section 1.3(B) shall not be subject to the Prepayment
Premium or the No-Prepayment Period; however, any partial prepayment shall not
entitle Trustor to prepay the portion of the Note remaining unpaid after
application of the Condemnation Proceeds. Prepayment of the balance shall
continue to be subject to the terms and conditions of the Note, including the
No-Prepayment Period and the Prepayment Premium described therein.
C. If less than all of the Property is taken by Condemnation
and Beneficiary in its reasonable judgment determines that the remainder of the
Property can be operated as an economically viable entity at substantially the
same level of operations as immediately prior to such Condemnation, then Trustor
shall diligently restore the Property to a condition and use as close as
possible to its condition immediately prior to the Condemnation and all
Condemnation Proceeds shall be made available to Trustor for such restoration.
If the estimated cost of restoration, as reasonably determined by Beneficiary,
is equal to or less than $50,000, all Condemnation Proceeds shall be released
directly to Trustor for restoration of the Property. If the estimated cost of
restoration exceeds $50,000, all Condemnation Proceeds shall be deposited into
an escrow fund in accordance with Section 1.5 below. Beneficiary shall have the
right to obtain an opinion of an independent contractor or engineer reasonably
satisfactory to Beneficiary, at Trustor's expense, to estimate the cost to
restore the remaining portion of the Property. If the amount of the Condemnation
Proceeds is not sufficient to restore the Property based on the opinion of an
independent contractor or engineer, subject to revision as restorations are
made, Trustor shall be obligated to pay the difference toward the restoration of
the Property.
D. If an Event of Default exists at any time from the time of
a Condemnation through the completion of restoration and payment of any
Condemnation Proceeds, the use of the Condemnation Proceeds shall be governed by
the remedies set forth in Article III below. If an event has occurred which with
notice, the passage of time, or both, could become an Event of Default, then,
the Condemnation Proceeds shall be held by Beneficiary or in the Escrow Fund (as
defined below), as applicable, pending cure of such event.
Section 1.4 Damage to Property.
A. Promptly upon obtaining knowledge of any damage to the
Property or any part thereof with an estimated cost of restoration in excess of
$5,000, but in no event later than five (5) days after Trustor obtains such
knowledge, Trustor shall notify Beneficiary of such damage in writing. Trustor
shall diligently restore the Property to the same condition that existed
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immediately prior to the damage whether or not insurance proceeds are sufficient
for such restoration. All proceeds of any insurance on the Property ("Insurance
Proceeds") received by Trustor shall be applied to such restoration. Beneficiary
shall have the right to obtain an opinion of an independent contractor or
engineer reasonably satisfactory to Beneficiary, at Trustor's expense, to
estimate the cost to restore the Property to its original condition, which
opinion may be revised as restorations are made. If the amount of the insurance
proceeds is not sufficient to restore the Property based on an independent
contractor's or engineer's opinion, subject to revision as restorations are
made, Trustor shall be obligated to pay the difference toward the restoration of
the Property.
B. If the estimated cost of restoration is equal to or less
than $50,000, Trustor shall promptly settle and adjust any claims under the
insurance policies which insure against such risks and, upon receipt of the
Insurance Proceeds, Trustee and Beneficiary shall deliver such to Trustor for
use in restoration of the Property.
C. If the estimated cost of restoration is greater than
$50,000, Beneficiary shall have the right, but not the obligation, to
participate in the settlement of the insurance claims and may, in its reasonable
discretion, consent or withhold its consent to any settlement, adjustment, or
compromise of such insurance claims and no such settlement, adjustment, or
compromise shall be final or binding upon Beneficiary without its prior consent
(which consent shall not be unreasonably withheld, delayed or conditioned). Upon
settlement of insurance claims in excess of $50,000 and if Trustor can
demonstrate to the reasonable satisfaction of Beneficiary that the projected
ratio of Net Operating Income, as defined below, to annual debt service due
under the Note and any other notes secured by the Property ("Debt Coverage
Ratio") will be at least 105% for the twelve months immediately following
reconstruction of the Property, the insurance proceeds shall be deposited into
an escrow fund in accordance with Section 1.5 below.
As used in this Deed of Trust, "Net Operating Income" shall mean:
(i) all gross receipts received or anticipated (as
may be applicable) from tenants in the Property and paying rent under leases in
effect during the applicable twelve month period, calculated on a cash basis
which reflects only the income actually received during the previous
twelve-month period as of the date of such calculation, and any income
anticipated to be received during the following twelve-month period based on
leases in effect as of the date of calculation, for such time as those leases
are contracted to remain in effect without expiration by their terms or optional
termination by the tenant (unless the tenant has waived its termination rights
in writing or the term of the lease has been extended in writing), including
without limitation all amounts to be received from tenants as payment of
operating expenses but not including refundable deposits, lease termination
payments, excess tenant improvement and leasing commission payments included as
additional rent, principal or interest payments received by Trustor on loans to
tenants and fees and reimbursements for work performed for tenants by Trustor,
less:
(ii) all amounts, calculated on a cash basis, for the
operation or maintenance of the Property for the applicable twelve-month period,
including ground rents, the
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cost of property management (which shall be no less than 3% of gross
collections), maintenance, cleaning, security, landscaping, parking maintenance
and utilities, and other costs and expenses approved in writing by Beneficiary
and amounts reasonably estimated by Beneficiary for the payment of real estate
taxes and assessments and other taxes related to the operation of the Property,
insurance premiums, necessary repairs and future replacements of equipment;
payments under the Note shall not be included in Net Operating Income.
D. If in the reasonable judgment of Beneficiary the conditions
of Section 1.4(C) cannot be satisfied, then at any time from and after the
occurrence of the damage, upon written notice to Trustor, Beneficiary may
declare the entire balance of the Note and/or any Future Advances then
outstanding and accrued and unpaid interest thereon, and all other sums or
payments required thereunder or under this Deed of Trust, without any Prepayment
Premium, to be immediately due and payable, and all insurance proceeds shall be
applied by Beneficiary first to the reimbursement of any costs or expenses
incurred by Beneficiary in connection with the damage or the determination to be
made hereunder, and then to the payment of the indebtedness secured by this Deed
of Trust in such order as Beneficiary may determine in its sole discretion.
E. If an Event of Default exists at any time from the time of
damage through the completion of restoration and the final release of any
Insurance Proceeds to Trustor, the use of the Insurance Proceeds shall be
governed by the remedies set forth in Article III below. If an event has
occurred which with notice, the passage of time, or both, could become an Event
of Default, then the Insurance Proceeds shall be held by Beneficiary or in the
Escrow Fund, as applicable, pending cure of such event prior to the expiration
of any applicable cure or grace period.
Section 1.5 Escrow Fund for Condemnation and Insurance Proceeds.
A. In the circumstances indicated above in subsections 1.3(C)
and 1.4(C), all Condemnation Proceeds and Insurance Proceeds shall be deposited
in an interest bearing escrow fund ("Escrow Fund"). The escrow agent and the
form of the escrow agreement shall be reasonably satisfactory to Beneficiary and
Trustor. The costs and fees of such escrow agent shall be paid by Trustor. If
the amount of the Proceeds is not sufficient to restore the Property based on an
independent contractor's or engineer's opinion obtained by Beneficiary at
Trustor's expense, subject to revision as restorations are made, Trustor shall
be obligated to deposit in the Escrow Fund the difference between the
contractor's or engineer's estimate and the amount of the Proceeds or deliver to
the escrow agent an irrevocable, unconditional letter of credit issued in the
amount of such difference in a form and by a financial institution reasonably
acceptable to Beneficiary or other cash equivalent acceptable to Beneficiary.
The Trustor's funds, if necessary, and the Proceeds shall be deposited into the
Escrow Fund and shall not be released by the escrow agent unless used to restore
the Property to its condition immediately prior to the occurrence of such
condemnation or damage and unless a disbursement agent satisfactory to
Beneficiary and Trustor approves such disbursements from time to time. The
escrow agreement shall provide that the escrow agent shall only disburse funds
to Trustor so long as the restoration work is being diligently performed by
Trustor and only after (1) Beneficiary has approved the plans and specifications
for the restoration of the Property (which approval shall not be unreasonably
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withheld, conditioned or delayed); (2) Trustor has executed a contract
acceptable to Beneficiary with a general contractor reasonably acceptable to
Beneficiary for the restoration of the Property; (3) the general contractor has
submitted lien waivers and/or releases, executed by the general contractor and
all subcontractors which may be partial to the extent of partial payments and
which, in the case of releases, may be contingent upon payment if the escrow
agent makes payment directly to such contractor or subcontractor; (4) Trustor
has furnished Beneficiary with an endorsement to its title policy showing no
additional exceptions (other than those approved by Beneficiary) or if such
endorsement is not available, a new mortgagee policy of title insurance showing
no additional exceptions (other than those approved by Beneficiary); and (5)
Trustor has submitted such other documents and information as may be requested
by Beneficiary to determine that the work to be paid for has been performed in
accordance with the plans and specifications approved by Beneficiary. If any
requisition for payment of work performed is for an amount which would result in
the remaining balance of the Escrow Fund to be insufficient to complete the
remainder of the restoration, Trustor shall advance the requisite amount in cash
to the Escrow Fund immediately upon written request from the disbursement agent
or Beneficiary.
B. Any Condemnation Proceeds and any interest thereon
remaining in the Escrow Fund after payment of the costs to complete the
restoration of the Property pursuant to the approved plans and specifications
and the costs of the escrow agent shall be paid first, to Trustor to the extent
of any funds of Trustor's contributed to the restoration pursuant to Section
1.5, provided there is no Event of Default or an event which with notice, the
passage of time, or both, could become an Event of Default, and thereafter at
Beneficiary's option, any remaining Condemnation Proceeds may be applied to the
partial payment or prepayment of the Note (without payment of any Prepayment
Premium and notwithstanding any No-Prepayment Period) or may be returned to the
Trustor. If an Event of Default exists, the use of the Condemnation Proceeds
shall be governed by Article III below. If, however, an event exists which with
notice, the passage of time, or both, could become an Event of Default, the
remaining balance in the Escrow Fund shall be held by the escrow agent pending
cure of the event prior to the expiration of any applicable cure or grace
period.
C. Any Insurance Proceeds and any interest thereon remaining
in the Escrow Fund after payment of the costs to complete the restoration of the
Property pursuant to the approved plans and specifications and the costs of the
escrow agent, provided there is no Event of Default or an event which with
notice, the passage of time, or both, could become an Event of Default, shall be
paid first, to Trustor to the extent of any funds of Trustor's contributed to
the restoration pursuant to Section 1.5, and thereafter, any remaining Insurance
Proceeds shall be held in the escrow as additional collateral security for the
Note, provided there is no Event of Default or an event which with notice, the
passage of time, or both, could become an Event of Default. The entire amount
remaining in such escrow shall be paid to Beneficiary upon maturity of the Note
for application to the indebtedness secured by this Deed of Trust and the
balance, if any, shall be paid to Trustor. If an Event of Default exists at any
time from the time of completion of restoration and the final application of any
Insurance Proceeds, the use of the Insurance Proceeds shall be governed by
Article III below.
Section 1.6 Taxes, Liens and other Items.
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A. Trustor shall pay any and all taxes, bonds, assessments,
fees, liens, charges, fines, impositions and any accrued interest or penalty
thereon, and any and all other items which are attributable to or affect the
Property by making payment prior to delinquency directly to the payee thereof
and promptly furnish copies of paid receipts for these to Beneficiary. Trustor
shall promptly discharge or bond around any lien or encumbrance on the Property
whether said lien or encumbrance has or may attain priority over this Deed of
Trust or not. This Deed of Trust shall be the sole encumbrance on the Property
and, if with the consent of Beneficiary it is not the sole encumbrance, then it
shall be prior to any and all other liens or encumbrances on the Property.
Provided that the priority of this Deed of Trust is not in any way affected,
Trustor may in good faith protest the payment of any tax or lien which it
believes is unwarranted or excessive and may defer payment of such tax pending
conclusion of such contest if legally permitted to do so and provided
Beneficiary's security is not jeopardized in Beneficiary's sole opinion.
B. As further security for the payment of the Note and the
payment of real estate taxes, regular or special assessments and insurance
premiums, Trustor shall be required to deposit 1/12 of the annual amounts of
such items as estimated by Beneficiary, with each monthly payment on the Note,
so that Beneficiary will hold a sufficient amount to pay all such charges not
less than thirty (30) days prior to the date on which such items become due and
payable. Beneficiary shall be furnished evidence to allow it to estimate such
amounts, including paid receipts or annual insurance premium statements,
assessment notices and tax receipts. All funds so deposited shall, until applied
to the payment of the aforesaid items, as hereinafter provided, be held by
Beneficiary without interest (except to the extent required under applicable
law) and may be commingled with other funds of Beneficiary. All funds so
deposited shall be applied to the payment of the aforesaid items only upon the
satisfaction of the following conditions: (1) no Event of Default or event,
which with notice or the passage of time or both could become an Event of
Default, shall have occurred; (2) Beneficiary shall have sufficient funds to pay
the full amounts of such items (which funds may include amounts paid solely for
such purpose by Trustor in addition to the escrowed funds); and (3) Trustor
shall have furnished Beneficiary with prior written notification that such items
are due and with the bills and invoices therefor in sufficient time to pay the
same before any penalty or interest attaches and before policies of insurance
lapse, as the case may be, and shall have deposited any additional funds as
Beneficiary may determine as necessary to pay such items.
C. Beneficiary expressly disclaims any obligation to pay the
aforesaid items unless and until Trustor complies with all of the provisions set
forth in subsections 1.6(A) and (B). Trustor hereby pledges any and all monies
now or hereafter deposited pursuant to subsection 1.6(B) as additional security
for the Note and Related Agreements. If any Event of Default shall have
occurred, or if the Note shall be accelerated as herein provided, all funds so
deposited may, at Beneficiary's option, be applied as determined solely by
Beneficiary or to cure said Event of Default or as provided in this Section 1.6.
In no event shall Trustor claim any credit against the principal and interest
due hereunder for any payment or deposit for any of the aforesaid items.
Section 1.7 Assignment of Leases, Contracts, Rents and Profits.
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A. Trustor hereby absolutely, presently and unconditionally
grants, assigns, transfers, conveys and sets over to Beneficiary all of
Trustor's right, title and interest in and to the following whether arising
under the Leases, by statute, at law, in equity, or in any other way:
1. All of the leases of the Property which are in
effect on the date hereof, if any, and entered into or in effect from time to
time after the date hereof, including, without limitation, all amendments,
extensions, replacements, modifications and renewals thereof and all subleases,
concession agreements, any ground leases or ground subleases and all other
agreements affecting the same (the "Leases") and all guaranties thereunder;
2. All of the rents, income, profits, revenue,
judgments, condemnation awards, Insurance Proceeds, unearned insurance premiums
and any other fees or sums payable to Trustor or any other person as landlord
and other benefits and rights of the Property arising from the use, occupancy,
operation or management of all or any portion thereof or from all the Leases,
and any proceeds, deposits or security deposits relating thereto, including,
without limitation, any award to Trustor made hereafter in any court involving
any of the tenants under the Leases in any bankruptcy, insolvency, or
reorganization proceeding in any state or federal court, and Trustor's right to
appear in any action and/or to collect any such award or payment, and all
payments by any tenant in lieu of rent (collectively, "Rents and Profits")
subject to the exclusions set forth in the description of the Collateral and
Property hereinabove; and
3. All contracts, agreements, management, operating
and maintenance agreements, warranties, licenses, permits, guaranties and sales
contracts relating to the Property and the Collateral entered into by, or
inuring to the benefit of, Trustor (the "Contracts").
B. Notwithstanding the provisions of subsection 1.7(A), prior
to the occurrence of any Event of Default hereunder, Beneficiary shall not
exercise any of the rights or powers conferred upon Beneficiary by this Section
1.7, and, subject to subsection 1.7(F), Trustor shall have a license: to manage
the Property; to collect, receive and use all Rents and Profits in accordance
with the terms of the Leases; to let the Property and to take all actions which
a reasonable and prudent landlord would take in enforcing the provisions of the
Leases and Contracts; provided, however, that all amounts so collected shall be
applied toward operating expenses, real estate taxes and insurance relating to
the Property, capital repair items necessary to the operation of the Property,
and the payment of sums due and owing under the Note, and this Deed of Trust
prior to any other expenditure or distribution by Trustor and thereafter, so
long as no Event of Default has occurred and is continuing, as Trustor elects.
From and after the occurrence of an Event of Default (whether or not Beneficiary
shall have exercised Beneficiary's option to declare the Note immediately due
and payable), such license shall be automatically revoked without any action
required by Beneficiary. Any amounts received by Trustor or its agents in the
performance of any acts prohibited by the terms of this Deed of Trust, including
but not limited to any amounts received in connection with any cancellation,
modification or amendment of any of the Leases prohibited by the terms of this
Deed of Trust and any amounts received by Trustor as rents, income, issues or
profits from the Property from and after an Event of Default under this Deed of
Trust, the Note, or any of the other Related Agreements, shall be held by
Trustor as trustee for Beneficiary and all such amounts shall be accounted for
to
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Beneficiary and shall not be commingled with other funds of the Trustor. Any
person acquiring or receiving all or any portion of such trust funds shall
acquire or receive the same in trust for Beneficiary as if such person had
actual or constructive notice that such funds were impressed with a trust in
accordance herewith.
C. Upon the occurrence of an Event of Default, the Beneficiary
shall have the right but not the obligation to perform as landlord under the
Leases and as a party under the Contracts. The assignment of Rents and Profits
set forth herein constitutes an irrevocable direction and authorization of all
tenants under the Leases to pay all Rents and Profits to Beneficiary upon demand
and without further consent or other action by Trustor. Trustor irrevocably
appoints Beneficiary its true and lawful attorney, at the option of Beneficiary
at any time following the occurrence of an Event of Default, to demand, receive
and enforce payment, to give receipts, releases and satisfactions, and to ▇▇▇,
either in the name of Trustor or in the name of Beneficiary, for all such Rents
and Profits and apply the same to the indebtedness secured by this Deed of
Trust.
D. Neither the foregoing assignment of Rents and Profits,
Leases and Contracts to Beneficiary nor the exercise by Beneficiary of any of
its rights or remedies under Article III shall be deemed to make Beneficiary a
"mortgagee-in-possession" or otherwise liable in any manner with respect to the
Property, unless Beneficiary, in person or by agent, assumes actual possession
thereof. Nor shall appointment of a receiver for the Property by any court at
the request of Beneficiary or by agreement with Trustor, or the entering into
possession of the Property by such receiver, be deemed to make Beneficiary a
"mortgagee-in-possession" or otherwise liable in any manner with respect to the
Property.
E. In the event Beneficiary collects and receives any Rents
and Profits under this Section 1.7 pursuant to any Monetary or Performance
Default as defined in Section 2.1 hereof, such collection or receipt shall in no
way constitute a curing of the Monetary or Performance Default.
F. Trustor shall not, without the prior written consent of
Beneficiary which consent shall not be unreasonably withheld or delayed, enter
into, or consent to or permit the assignment or subletting of, any leases.
G. Trustor shall promptly give notice to Beneficiary of any
default under any of the Leases meeting the criteria of a lease for which
Beneficiary's consent would have been required pursuant to Section 1.7(F)
regardless of whether such leases were executed before or after the date of this
Deed of Trust, together with a complete copy of any notices delivered to or by
the tenant as a result of such default. Beneficiary shall have the right, but
not the obligation, to cure any default of Trustor under any of the Leases and
all amounts actually disbursed in connection with said cure shall be deemed to
be indebtedness secured hereby.
H. Beneficiary shall have the right to approve any lease forms
used by Trustor for lease of space in the Property.
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I. Trustor hereby represents, warrants and agrees that:
1. Trustor has the right, power and capacity to make
this assignment and that no person, firm or corporation or other entity other
than Trustor has or will have any right, title or interest in or to the Leases
or the Rents and Profits.
2. Trustor shall, at its sole cost and expense,
perform and discharge all of the obligations and undertakings of the landlord
under the Leases. Trustor shall enforce the performance of each material
obligation of the tenants under the Leases and will appear in and prosecute or
defend any action connected with the Leases or the obligations of the tenants
thereunder.
J. BENEFICIARY SHALL NOT BE OBLIGATED TO PERFORM OR DISCHARGE,
NOR DOES IT HEREBY UNDERTAKE TO PERFORM OR DISCHARGE, ANY OBLIGATION, DUTY OR
LIABILITY UNDER THE LEASES OR UNDER OR BY REASON OF THIS ASSIGNMENT. TRUSTOR
SHALL AND DOES HEREBY AGREE TO INDEMNIFY BENEFICIARY FOR AND TO DEFEND AND HOLD
BENEFICIARY HARMLESS FROM ANY AND ALL LIABILITY, LOSS OR DAMAGE WHICH
BENEFICIARY MAY OR MIGHT INCUR UNDER THE LEASES OR UNDER OR BY REASON OF THIS
ASSIGNMENT, AND FROM ANY AND ALL CLAIMS (INCLUDING, BUT NOT LIMITED TO, ANY AND
ALL CLAIMS OR CAUSES OF ACTION ARISING OUT OF OR BASED IN WHOLE OR IN PART ON
THE NEGLIGENCE OR STRICT LIABILITY OF BENEFICIARY BUT EXCLUDING ANY SUCH CLAIMS
OR CAUSES OF ACTION ARISING OUT OF OR BASED IN WHOLE OR IN PART ON THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF BENEFICIARY) WHATSOEVER WHICH MAY BE
ASSERTED AGAINST BENEFICIARY BY REASON OF ANY ALLEGED OBLIGATIONS OR
UNDERTAKINGS ON BENEFICIARY'S PART TO PERFORM OR DISCHARGE ANY OF THE TERMS,
COVENANTS OR AGREEMENTS CONTAINED IN THE LEASES. SHOULD BENEFICIARY INCUR ANY
LIABILITY, LOSS OR DAMAGE UNDER THE LEASES OR UNDER OR BY REASON OF THIS
ASSIGNMENT, OR IN THE DEFENSE OF ANY OF SUCH CLAIMS OR DEMANDS (BUT EXCLUDING
ANY SUCH LIABILITY, LOSS OR DAMAGE ARISING OUT OF OR BASED ON THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF BENEFICIARY), THE AMOUNT THEREOF, INCLUDING
COSTS, EXPENSES AND ATTORNEYS' FEES, SHALL BE SECURED BY THIS DEED OF TRUST; AND
TRUSTOR SHALL REIMBURSE BENEFICIARY THEREFOR IMMEDIATELY UPON DEMAND, AND UPON
FAILURE OF TRUSTOR TO DO SO, BENEFICIARY MAY DECLARE ALL SUMS SO SECURED TO BE
IMMEDIATELY DUE AND PAYABLE.
K. Beneficiary may take or release other security, may release
any party primarily or secondarily liable for any indebtedness secured hereby,
may grant extensions, renewals or indulgences with respect to such indebtedness,
and may apply any other security therefor held by it to the satisfaction of such
indebtedness, without prejudice to any of its rights hereunder.
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L. Nothing herein contained and no act done or omitted by
Beneficiary pursuant to the powers and rights granted it herein shall be deemed
to be a waiver by Beneficiary of its other rights and remedies under the Note
and this Deed of Trust, and this assignment is made and accepted without
prejudice to any of the other rights and remedies possessed by Beneficiary under
the terms thereof. The right of Beneficiary to collect said indebtedness and to
enforce any other security therefor held by it may be exercised by Beneficiary
either prior to, simultaneously with, or subsequent to any action taken by it
hereunder. It is the intent of both Trustor and Beneficiary that this assignment
be supplementary to, and not in substitution or derogation of, any other
provision contained in this Deed of Trust giving Beneficiary any interest in or
rights with respect to the Leases or Rents and Profits.
M. Neither this assignment nor pursuit of any remedy hereunder
by Beneficiary shall cause or constitute a merger of the interests of the tenant
and the Trustor under any of the Leases such that any of the Leases hereby
assigned are no longer valid and binding legal obligations of the parties
executing the same.
N. Trustor agrees, from time to time, to execute and deliver,
upon demand, all assignments and any and all other writings as Beneficiary may
reasonably deem necessary or desirable to carry out the purpose and intent
hereof, or to enable Beneficiary to enforce any right or rights hereunder.
Section 1.8 Acceleration Upon Sale or Encumbrance. If, without the
prior written consent of Beneficiary, Trustor or any general partner, member or
shareholder of Trustor or any general partner of such general partner shall (A)
sell or convey the Property or any part thereof, or any interest in the Property
or in Trustor or in any general partner of Trustor; (B) be divested of its title
to the Property or any interest therein; (C) further encumber the Property or
the ownership interests in the Trustor; (D) enter into any lease giving the
tenant any option to purchase the Property or any part thereof; or (E) encumber,
grant a security interest in, transfer, permit the transfer of, or change or
permit the change in: (1) the ownership of interests in the Trustor or any
general partner in Trustor or any general partner of such general partner, or
(2) the amount of the general partnership or membership interests in Trustor or
the general partner of the Trustor or any general partner of such general
partner or the beneficiary thereof, without the prior written consent of
Beneficiary, then Beneficiary shall have the right, at its option, to declare
the indebtedness secured by this Deed of Trust, irrespective of the maturity
date specified in the Note, immediately due and payable. Except as expressly
consented to in writing by Beneficiary, Trustor shall not permit any additional
encumbrances on the Property.
Section 1.9 Preservation and Maintenance of Property. Trustor shall
hire competent and responsive property managers who shall be reasonably
acceptable to Beneficiary. Trustor or its property manager, if applicable shall
keep the Property and every part thereof in good condition and repair, in
accordance with sound property management practices and shall promptly and
faithfully comply with and obey all laws, ordinances, rules, regulations,
requirements and orders of every duly constituted governmental authority or
agent having jurisdiction with respect to the Property. Trustor shall not permit
or commit any waste, impairment, or deterioration of the Property, nor commit,
suffer or permit any act upon or use of the Property in violation of law
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or applicable order of any governmental authority, whether now existing or
hereafter enacted, or in violation of any covenants, conditions or restrictions
affecting the Property or bring or keep any article in the Property or cause or
permit any condition to exist thereon which would be prohibited by or invalidate
the insurance coverage required to be maintained hereunder. Trustor shall not
make any material structural changes or alterations to the Property nor remove
or demolish the Improvements or any portion thereof without the prior written
consent of Beneficiary. Trustor shall promptly restore any portion of the
Property which may be damaged or destroyed. Trustor shall promptly bond or
discharge any mechanics' liens against the Property.
Unless required by applicable law or unless Beneficiary has
otherwise first agreed in writing, Trustor shall not make or allow any changes
which will adversely affect the value of the Property to be made in the nature
of the occupancy or use of the Property or any part thereof for which the
Property or such part was intended at the time this Deed of Trust was delivered.
Trustor shall not initiate or acquiesce in any change which will adversely
affect the value of the Property in any zoning or other land use classification
now or hereafter in effect and affecting the Property or any part thereof
without in each case obtaining Beneficiary's prior written consent thereto.
Section 1.10 Offset Certificates. Trustor, within five (5) days upon
request in person or within ten (10) days upon request by mail, shall furnish a
written statement duly acknowledged and notarized, of all amounts due on any
indebtedness secured hereby or secured by any of the Related Agreements, whether
for principal or interest on the Note or otherwise, and stating whether any
offsets or defenses exist against the indebtedness secured hereby and covering
such other matters with respect to any such indebtedness as Beneficiary may
reasonably require.
Section 1.11 Trustee's Costs and Expenses. Trustor shall pay all actual
costs, fees and expenses of Trustee, its agents and counsel, in connection with
the performance of its duties hereunder.
Section 1.12 Protection of Security; Costs and Expenses. Trustor and
its property manager, if applicable, shall appear in and defend any action or
proceeding purporting to affect the security of this Deed of Trust or any
additional or other security for the obligations secured hereby, or the rights
or powers of the Beneficiary or Trustee, and shall pay all costs and expenses
actually incurred, including, without limitation, cost of evidence of title and
actual 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 or under any other security for the obligations secured
hereby. 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 Property or any part thereof, including, 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 may, but without obligation to
do so and without notice to or demand upon Trustor, perform such covenant or
agreement and compromise any encumbrance, charge or lien which in the judgment
of Beneficiary appears to be prior or superior
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hereto. Trustor shall further pay all expenses of Beneficiary actually incurred
(including reasonable and actual fees and disbursements of counsel) incident to
the protection or enforcement of the rights of Beneficiary hereunder, and
enforcement or collection of payment of the Note or any Future Advance 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 pursuant to this
section or Section 1.11 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 Default Rate set forth in the Note,
from demand until paid. All such amounts shall be payable by Trustor immediately
upon demand. Nothing contained in this section shall be construed to require
Beneficiary to incur any expense, make any appearance, or take any other action.
Section 1.13 Trustor's Covenants Respecting Collateral.
A. Trustor shall execute and deliver financing and
continuation statements covering the Collateral from time to time and in such
form as Beneficiary may reasonably require to perfect and continue the
perfection of Beneficiary's security interest with respect to such property, and
Trustor shall pay all reasonable costs and expenses of any record searches for
financing statements Beneficiary may require.
B. Without the prior written consent of Beneficiary, Trustor
shall not create or suffer to be created any other security interest in the
Collateral, including replacements and additions thereto.
C. Without the prior written consent of Beneficiary or except
in the ordinary course of business, Trustor shall not sell, transfer or encumber
any of the Collateral, or remove any of the Collateral from the Property unless
Trustor shall promptly substitute and replace the property removed with similar
property of at least equivalent value on which Beneficiary shall have a
continuing security interest ranking at least equal in priority to Beneficiary's
security interest in the property removed.
D. Trustor shall (1) at any reasonable time and upon
reasonable notice (unless an emergency or Event of Default exists) permit
Beneficiary and its representatives to enter upon the Property to inspect the
Collateral and Trustor's books and records relating to the Collateral and make
extracts therefrom and to arrange for verification of the amount of Collateral,
under procedures reasonably acceptable to Beneficiary, directly with Trustor's
debtors or otherwise at Trustor's expense; (2) promptly notify Beneficiary of
any attachment or other legal process levied against any of the Collateral and
any information received by Trustor relative to the Collateral, Trustor's
debtors or other persons obligated in connection therewith, which may in any way
affect the value of the Collateral or the rights and remedies of Beneficiary in
respect thereto; (3) reimburse Beneficiary upon demand for any and all costs
actually incurred, including, without limitation, reasonable and actual
attorneys' and accountants' fees, and other expenses incurred in collecting any
sums payable by Trustor under any obligation secured hereby, or in the checking,
handling and collection of the Collateral and the preparation and enforcement of
any agreement relating thereto; (4) notify Beneficiary of each location at which
the Collateral is or will be kept,
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other than for temporary processing, storage or similar purposes, and of any
removal thereof to a new location, including, without limitation, each office of
Trustor at which records relating to the Collateral are kept; (5) provide,
maintain and deliver to Beneficiary originals or certified copies of the
policies of insurance and certificates of insurance insuring the Collateral
against loss or damage by such risks and in such amounts, form and by such
companies as Beneficiary may require and with loss payable to Beneficiary, and
in the event Beneficiary takes possession of the Collateral, the insurance
policy or policies and any unearned or returned premium thereon shall at the
option of Beneficiary become the sole property of Beneficiary; and (6) do all
acts reasonably necessary to maintain, preserve and protect all Collateral, keep
all Collateral in good condition and repair and prevent any waste or unusual or
unreasonable depreciation thereof.
E. Until Beneficiary exercises its right to collect proceeds
of the Collateral pursuant hereto, Trustor will collect with diligence any and
all proceeds of the Collateral. If an Event of Default exists, any proceeds
received by Trustor shall be held in trust for Beneficiary, and Trustor shall
keep all such collections separate and apart from all other funds and property
so as to be capable of identification as the property of Beneficiary and shall
deliver to Beneficiary such collections at such time as Beneficiary may request
in the identical form received, properly endorsed or assigned when required to
enable Beneficiary to complete collection thereof.
F. Beneficiary shall have all of the rights and remedies
granted to a secured party under the Uniform Commercial Code of the state in
which the Collateral is located, as well as all other rights and remedies
available at law or in equity. During the continuance of any Event of Default
hereunder or under the Note, Beneficiary shall have the right to take possession
of all or any part of the Collateral, to receive directly or through its
agent(s) collections of proceeds of the Collateral (including notification of
the persons obligated to make payments to Trustor in respect of the Collateral),
to release persons liable on the Collateral and compromise disputes in
connection therewith, to exercise all rights, powers and remedies which Trustor
would have, but for the security agreement contained herein, to all of the
Collateral and proceeds thereof, and to do all other acts and things and execute
all documents in the name of Trustor or otherwise, deemed by Beneficiary as
necessary, proper and convenient in connection with the preservation, perfection
or enforcement of its rights hereunder; and
G. After any Event of Default hereunder or under the Note,
Trustor shall, at the request of Beneficiary, assemble and deliver the
Collateral and books and records pertaining to the Property at a place
designated by Beneficiary, and Beneficiary may, at reasonable times and with
reasonable notice to Trustor (unless an emergency or Event of Default exists),
enter onto the Property and take possession of the Collateral. It is agreed that
public or private sales, for cash or on credit to a wholesaler or retailer or
investor, or user of collateral of the types subject to the security agreement,
or public auction, are all commercially reasonable since differences in the
sales prices generally realized in the different kinds of sales are ordinarily
offset by the differences in the costs and credit risks of such sales. The
proceeds of any sale of the Collateral shall be applied first to the expenses of
Beneficiary actually incurred in retaking, holding, preparing for sale, or
selling the Collateral or similar matters, including reasonable and actual
attorneys' fees, and then, as Beneficiary shall solely determine.
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Section 1.14 Covenants Regarding Financial Statements.
A. Trustor shall keep true books of record and account in
which full, true and correct entries in accordance with sound accounting
practice and principles applied on a consistent basis from year to year shall be
made of all dealings or transactions with respect to the Property.
B. 1. Trustor shall deliver to Beneficiary:
(a) Within ninety (90) days after the last day
of each fiscal year of the Trustor during
the term of the Note, unaudited annual
financial reports prepared on a cash basis,
including balance sheets, income statements
and cash flow statements covering the
operation of the Property, the financial
condition of Trustor, Trustor's general
partners(s), shareholder(s), member(s) and
such principals of the Trustor as
Beneficiary may from time to time designate,
for the previous fiscal year, all certified
to Beneficiary to be complete, correct and
accurate by the individual, managing general
partner, manager or chief financial officer
of the party whom the report concerns; and
(b) If available, within thirty (30) days after
receipt by Trustor, original annual audit
reports of an independent certified public
accountant prepared in accordance with
generally accepted accounting principals
containing an unqualified opinion, including
balance sheets, income statements and cash
flow statements covering the operation of
the Property and the financial condition of
the Trustor, Trustor's general partner(s),
shareholder(s), member(s) and such
principals of the Trustor as Beneficiary may
from time to time designate, for the
previous fiscal year;
2. At the request of Beneficiary from time to time
(but no more often than once in each fiscal quarter of the Trustor during the
term of the Note), Trustor shall also deliver to Beneficiary Trustor's Form 10Q
and 10K, unaudited financial reports prepared on a cash basis, including balance
sheets, income statements and cash flow statements covering the operation of the
Property and the financial condition of the Trustor, Trustor's general
partner(s), shareholder(s), member(s) and such principals of the Trustor as
Beneficiary may from time to time request, for the previous fiscal quarter, a
portfolio analysis report covering the operation of all properties of which
Trustor or any of Trustor's general partner(s), shareholder(s), member(s) or
principals designated by Beneficiary is the owner or a general partner of the
owner, setting out a cash flow statement (including debt service payments) for
each such property, and a current rent roll of the Property, all certified to
Beneficiary to be complete, correct and accurate by the individual, managing
general partner or chief financial officer of the party whom the report
concerns.
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3. All reports shall include, without limitation,
balance sheets and statements of income and of partner's equity, if applicable,
setting forth in each case in comparative form the figures for the previous
fiscal quarter or year, as the case may be. The interim quarterly reports shall
also include a breakdown of all categories of revenues and expenses, and any
supporting schedules and data requested by Beneficiary. Each set of annual or
quarterly financial reports or quarterly rent rolls delivered to Beneficiary
pursuant to this Section 1.14 shall also be accompanied by a certificate of the
chief financial officer or the managing general partner of Trustor, stating
whether any condition or event exists or has existed during the period covered
by the annual or quarterly reports which then constituted or now constitutes an
Event of Default under the Note or this Deed of Trust, and if any such condition
or event then existed or now exists, specifying its nature and period of
existence and what Trustor did or proposes to do with respect to such condition
or event.
C. In the event such statements are not in a form reasonably
acceptable to Beneficiary or Trustor fails to furnish such statements and
reports, then Beneficiary shall have the immediate and absolute right to audit
the respective books and records of the Property and Trustor at the expense of
Trustor.
Section 1.15 Environmental Covenants. Trustor covenants: (A) that no
Hazardous Materials (as defined below) shall be installed, used, generated,
manufactured, treated, handled, refined, produced, processed, stored or disposed
of, in, on or under the Property; (B) that no activity shall be undertaken on
the Property which would cause (1) the Property to become a hazardous waste
treatment, storage or disposal facility under any Hazardous Material Law (as
defined below), (2) a release or threatened release of Hazardous Material from
the Property in violation of any Hazardous Material Law, or (3) the discharge of
Hazardous Material into any watercourse, body of surface or subsurface water or
wetland, or the discharge into the atmosphere of any Hazardous Material which
would require a permit under any Hazardous Material Law and for which no such
permit has been issued; (C) that no activity shall be undertaken or permitted to
be undertaken, by the Trustor on the Property which would result in a violation
under any Hazardous Material Law, (D) to obtain and deliver to Beneficiary,
within a reasonable time following completion of actions required by an
appropriate governmental agency, certifications of engineers or other
professionals reasonably acceptable to Beneficiary, in form and substance
satisfactory to Beneficiary, certifying that all necessary and required actions
to clean up, remove, contain, prevent and eliminate all releases or threats of
release of Hazardous Materials on or about the Property to the levels required
by the appropriate governmental agencies have been taken and, to the current,
actual knowledge of such professional, the Property is then in compliance with
applicable Hazardous Material Laws as then in effect and applicable to such
actions. For purposes of this Deed of Trust, "Hazardous Materials" means and
includes asbestos or any substance containing asbestos, polychlorinated
biphenyls, any explosives, radioactive materials, chemicals known or suspected
to cause cancer or reproductive toxicity, pollutants, effluents, contaminants,
emissions, infectious wastes, any petroleum or petroleum-derived waste or
product or related materials and any items defined as hazardous, special or
toxic materials, substances or waste under any Hazardous Material Law, or any
material which shall be removed from the Property pursuant to any administrative
order or enforcement proceeding or in order to place the Property in a condition
that is suitable for ordinary use. "Hazardous Material ▇▇▇▇"
▇▇
▇▇
collectively means and includes any present and future local, state, federal or
international law or treaty relating to public health, safety or the environment
including without limitation, the Resource Conservation and Recovery Act, as
amended ("RCRA"), 42 U.S.C. Section 6901 et seq., the Comprehensive
Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C.
Section 9601 et seq., as amended by the Superfund Amendments and Reauthorization
Act of 1986 ("▇▇▇▇"), the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801 et seq., the Clean Water Act, 33 U.S.C. Section 1251 et seq., the
Clean Air Act, as amended 42 U.S.C. Section 7401 et seq., the Toxic Substances
Control Act, 15 U.S.C. Section 2601 et seq., the Safe Drinking Water Act, 42
U.S.C. Section 300f et seq., the Uranium Mill Tailings Radiation Control Act, 42
U.S.C. Section 7901 et seq., the Occupational Safety and Health Act, 29 U.S.C.
Section 655 et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7
U.S.C. Section 136 et seq., the National Environmental Policy Act, 42 U.S.C.
Section 4321 et seq., the Noise Control Act, 42 U.S.C. Section 4901 et seq., and
the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. Section 11001
et seq., and the amendments, regulations, orders, decrees, permits, licenses or
deed restrictions now or hereafter promulgated thereunder.
ARTICLE 2
EVENTS OF DEFAULT
Each of the following shall constitute an event of default ("Event of
Default") hereunder:
Section 2.1 Monetary and Performance Defaults.
A. Failure to make any payment due under the Note or any note
evidencing a Future Advance, other than the final payment and Prepayment
Premium, or to make any payment due under this Deed of Trust to Beneficiary or
any other party, including without limitation, payment of escrow deposits, real
estate taxes, insurance premiums and ground rents, if any, on or before the
fifth day of the month in which such payment is due; or
B. Failure to make the final payment or the Prepayment Premium
due under the Note or any note evidencing a Future Advance when such payment is
due whether at maturity, by reason of acceleration, as part of a prepayment or
otherwise (the defaults in A. and B. hereinafter "Monetary Default"); or
C. Breach or default in the performance of any of the
covenants or agreements of Trustor contained herein or in any Related Agreement
("Performance Default"), if such Performance Default shall continue for fifteen
(15) days or more after written notice to Trustor from Beneficiary specifying
the nature of the Performance Default; provided, however, that if such
Performance Default is of a nature that it cannot be cured within the 15 day
period, then Trustor shall not be in default if it commences good faith efforts
to cure the Performance Default within the 15 day period, demonstrates
continuous diligent efforts to cure the Performance Default in a manner
satisfactory to Beneficiary and, within a reasonable period, not to exceed 180
days after the date of the original written notice of the Performance Default,
completes the cure of such Performance Default.
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Section 2.2 Bankruptcy, Insolvency, Dissolution.
A. Any court of competent jurisdiction shall sign an order (1)
adjudicating Trustor, or any person, partnership or corporation holding an
ownership interest in Trustor or in any partnership comprising Trustor, or any
guarantor (which term when used in this Deed of Trust shall mean guarantor of
payment of the indebtedness) bankrupt or insolvent, (2) appointing a receiver,
trustee or liquidator of the Property or of a substantial part of the property
of Trustor, or any person, partnership or corporation holding an ownership
interest in Trustor, or in any partnership comprising Trustor, or any guarantor,
or (3) approving a petition for, or effecting an arrangement in bankruptcy, or
any other judicial modification or alteration of the rights of Beneficiary or of
other creditors of Trustor, or any person, partnership or corporation holding an
ownership interest in Trustor, or in any partnership comprising Trustor or any
guarantor; or
B. Trustor, any partnership or corporation holding an
ownership interest in Trustor or in any partnership comprising Trustor, shall
(1) apply for or consent to the appointment of a receiver, trustee or liquidator
for it or for any of its property, (2) as debtor, file a voluntary petition in
bankruptcy, or petition or answer seeking reorganization or an arrangement with
creditors or to take advantage of any bankruptcy, reorganization, insolvency,
readjustment of debt, dissolution or liquidation law or statute, or an answer
admitting the material allegations of a petition filed against it and any
proceeding under such law, (3) admit in writing an inability to pay its debts as
they mature, or (4) make a general assignment for the benefit of creditors; or
C. An involuntary petition in bankruptcy is filed against
Trustor, or any person, partnership or corporation holding an ownership interest
in Trustor or in any partnership comprising Trustor and the same is not vacated
or stayed within 30 days of the filing date.
Section 2.3 Misrepresentation. Trustor makes or furnishes a
representation, warranty, statement, certificate, schedule and/or report to
Beneficiary in or pursuant to this Deed of Trust or any of the Related
Agreements which is false or misleading in any material respect as of the date
made or furnished.
Section 2.4 Default under Subordinate Loans. An occurrence of a default
under any loan subordinate to this Deed of Trust which is not an independent
default under this Deed of Trust which results in the commencement of
foreclosure proceedings or the taking of any other remedial action under such
subordinate loan.
ARTICLE 3
REMEDIES
Upon the occurrence of any Event of Default, Trustee and Beneficiary
shall have the following rights and remedies set forth in Sections 3.1 through
3.14:
Section 3.1 Acceleration. Notwithstanding the stated maturity date in
the Note, or any note evidencing any Future Advance, Beneficiary may without
notice or demand, declare the
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entire principal amount of the Note and/or any Future Advances then outstanding
and accrued and unpaid interest thereon, and all other sums or payments required
thereunder including, but not limited to the Prepayment Premium described in the
Note, to be due and payable immediately.
Section 3.2 Entry. Irrespective of whether Beneficiary exercises the
option provided in Section 3.1 above, Beneficiary in person or by agent or by
court-appointed receiver (and Beneficiary shall have the right to the immediate
appointment of such a receiver without regard to the adequacy of the security
and Trustor hereby irrevocably consents to such appointment and waives notice of
any application therefor) may, at its option, without any action on its part
being required, without in any way waiving such Event of Default, with or
without the appointment of a receiver, or an application therefor:
A. take possession of the Property and conduct tests of,
manage or hire a manager to manage, lease and operate the Property or any part
thereof, on such terms and for such period of time as Beneficiary may deem
proper, with full power to make, from time to time, all alterations,
renovations, repairs or replacements thereto as may seem proper to Beneficiary;
B. with or without taking possession of the Property, collect
and receive all Rents and Profits, notify tenants under the Leases or any other
parties in possession of the Property to pay Rents and Profits directly to
Beneficiary, its agent or a court-appointed receiver and apply such Rents and
Profits to the payment of:
1. all costs and expenses incident to taking and
retaining possession of the Property, management and operation of the Property,
keeping the Property properly insured and all alterations, renovations, repairs
and replacements to the Property;
2. all taxes, charges, claims, assessments, and any
other liens which may be prior in lien or payment to this Deed of Trust or the
Note, and premiums for insurance, with interest on all such items; and
3. the indebtedness secured hereby together with all
costs and attorney's fees, in such order or priority as to any of such items as
Beneficiary in its sole discretion may determine, any statute, law, custom or
use to the contrary notwithstanding;
C. exclude Trustor, its agents and servants, wholly from the
Property;
D. have joint access with Trustor to the books, papers and
accounts of Trustor relating to the Property, at the expense of Trustor;
E. commence, appear in and/or defend any action or proceedings
purporting to affect the interests, rights, powers and/or duties of Beneficiary
hereunder, whether brought by or against Trustor or Beneficiary; and
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F. pay, purchase, contest or compromise any claim, debt, lien,
charge or encumbrance which in the judgment of Beneficiary may affect or appear
to affect the interest of Beneficiary or the rights, powers and/or duties of
Beneficiary hereunder.
The receipt by Beneficiary of any Rents and Profits pursuant to this Deed of
Trust after the institution of foreclosure or other proceedings under the Deed
of Trust shall not cure any such Event of Default or affect such proceedings or
any sale pursuant thereto. After deducting the expenses and amounts set forth
above in this Section 3.2, as well as just and reasonable compensation for all
Beneficiary's employees and other agents (including, without limitation,
reasonable and actual attorneys' fees and management and rental commissions)
engaged and employed, the moneys remaining, at the option of Beneficiary, may be
applied to the indebtedness secured hereby. Whenever all amounts due on the Note
and under this Deed of Trust shall have been paid and all Events of Default have
been cured and any such cure has been accepted by Beneficiary, Beneficiary shall
surrender possession to Trustor. The same right of entry, however, shall exist
if any subsequent Event of Default shall occur; provided, however, neither
Trustee nor Beneficiary shall be under any obligation to make any of the
payments or do any of the acts referred to in this Section 3.2.
Section 3.3 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. The Property may be foreclosed in parts
or as an entirety.
Section 3.4 Non-Judicial. Upon failure to perform or to pay the amounts
secured hereby, or any part thereof, when the same shall become due (after the
expiration of any applicable cure or grace period), in whatever way the maturity
thereof may be brought about, it shall thereupon, or at any time thereafter
while any part of the amounts secured hereby remains undischarged, be the duty
of the Trustee, or his successors, as hereinafter provided, at the request of
Beneficiary (which request shall be presumed), to enforce this trust and to sell
the Property, as an entirety or in parcels, by one sale or by several sales,
held at one time or at different times, all as the Trustee acting may elect,
each sale to be held at the door of the county courthouse in any county in which
a part of the real property to be sold is situated and to be made on the first
Tuesday of some month between the hours of 10 o'clock a.m. and 4 o'clock p.m. to
the highest bidder for cash at public vendue, after the Trustee (or a person or
persons selected by the Trustee) and Beneficiary shall have given notices of the
proposed sale in the manner hereinafter set forth, and to make due conveyance to
the purchaser or purchasers, with special warranty of title to such purchaser or
purchasers binding upon Trustor and its successors. Trustor, for itself, its
successors and assigns, hereby expressly and specifically waive all rights to a
marshaling of the assets of Trustor, including the Property, or to a sale in
inverse order of alienation.
Section 3.5 Posting. The Trustee (or a person or persons selected by
the Trustee) shall give notice of each such proposed sale by posting written
notice of the time, place, and terms of sale at the courthouse door, and by
filing a copy of such written notice in the office of the county clerk, of the
county in which the sale is to be made for at least twenty-one (21) consecutive
days preceding the date of the sale. Where properties to be sold are situated in
more than one county, one notice shall be posted at the courthouse door, and a
copy of such notice shall be filed with the
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county clerk, of each county in which a part of the real properties to be sold
is situated, and such notices shall designate the county where such real
properties will be sold, which may be any county in which a part of said real
properties is situated. In addition to the foregoing notice or notices to be
posted and filed by the Trustee (or a person or persons selected by the
Trustee), Beneficiary shall, at least twenty-one (21) days preceding the date of
sale, serve or cause to be served written notice of the proposed sale by
certified mail on each debtor obligated to pay such indebtedness according to
the records of Beneficiary. The service of such notice shall be completed upon
deposit of the notice, enclosed in a postpaid wrapper, properly addressed to
each such debtor at the most recent address (which shall be within the United
States of America) as shown by the records of Beneficiary, 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. In this respect and to the full extent they may legally do so, Trustor
also expressly covenants, stipulates, and agrees that: (i) the address of
Trustor set out in Section 4.3 hereof shall be deemed and considered
conclusively to be and remain at all times the most recent address of all
debtors obligated to pay such indebtedness as shown by the records of
Beneficiary, provided such address may be changed to some other address within
the United States of America from time to time only by express written notice of
change thereof signed by all debtors obligated to pay such indebtedness and
actually delivered to and received by Beneficiary and setting forth a new
address which shall be within the United States of America and which shall be
deemed and considered conclusively to be and remain at all times thereafter the
most recent address of all debtors obligated to pay such indebtedness as shown
by the records of Beneficiary until changed in the manner herein provided, (ii)
the records of Beneficiary shall not be deemed to reflect any change in the name
or identity of the debtors obligated to pay the indebtedness (to whom notice of
a proposed sale shall be required to be mailed as provided for above) unless and
until express written notice of such changed signed by all debtors obligated to
pay such indebtedness shall have been actually delivered to and received by
Beneficiary, and (iii) no notice of such sale or sales other than the notices
hereinabove provided shall be required to be given to Trustor or any other
persons and any other notice is expressly waived.
Section 3.6 Statutes. The provisions of Section 3.5 with respect to
posting, serving, filing, and giving notices of sale are intended to comply with
the provisions of Section 51.002 of the Property Code of the State of Texas (in
this Section 3.6 such Section 51.002 being called the "Subject Statutes"). In
the event the requirement for any notice, or the posting, serving, filing, or
giving thereof, under the Subject Statutes shall be eliminated or the prescribed
manner of posting, serving, filing, or giving same is modified by future
amendment to the Subject Statutes, the requirement for such particular notice
shall be stricken from, or the manner of posting, serving, filing, or giving any
notice hereunder modified in, this Deed of Trust in conformity with such
amendment. The manner herein prescribed for posting, serving, filing, or giving
any notice, other than that to be posted and filed or caused to be posted and
filed by the Trustee, shall not be deemed exclusive but such notice or notices
may be posted, served, filed, or given in any other manner which may be
permitted by applicable law. Further, in relation to this Deed of Trust and the
exercise of any power of sale by the Trustee hereunder, if either the Subject
Statutes shall be amended or modified to require any other notice or the
posting, filing, serving, or giving thereof or any statute hereafter enacted
shall require any other notice or the posting, filing, serving, or
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giving thereof, the Trustee or the person selected by him is hereby authorized
and empowered by Trustor to give such notice or make such posting, filing,
serving, or giving thereof; provided, however, Trustor waive such other notice
or the posting, filing, serving, or giving thereof to the full extent Trustor
may lawfully so do.
Section 3.7 Installment Sale. Without limiting any of the powers or
remedies provided elsewhere, Trustor agrees that, in the event the amounts
secured hereby are payable in installments or include, at any time, items of
matured as well as unmatured indebtedness, as the case may be, Beneficiary shall
have the right to have the Property sold, subject to the part of the Note which
is unmatured at the time the Trustee is requested to make such sale, at
Trustee's sale to satisfy the lien and security interest hereof securing the
then matured portion of said indebtedness and the Trustee is expressly
authorized and empowered to conduct such sale which is called in this Section
3.7 "Installment Foreclosure." Any Installment Foreclosure made under this
Section 3.7 shall not affect the liens, assignments, and security interest of
this Deed of Trust existing to secure that portion of the obligations secured
hereby to which the sale is to be made subject. No Installment Foreclosure shall
exhaust the power of the Trustee to conduct future Installment Foreclosures nor
in anywise limit the powers of sale provided elsewhere in this Deed of Trust.
The provisions elsewhere in this Deed of Trust relating to manner of conducting
Trustee's sales, including the posting, filing, and giving of notices thereof,
shall also apply to any Installment Foreclosure and the same presumptions shall
be applicable to any Trustee's deed or recital therein contained in connection
with an Installment Foreclosure and to any other affidavit as hereinabove
provided.
Section 3.8 Rescission of Notice of Default. Beneficiary, from time to
time before Trustee's sale, public sale or deed in lieu of foreclosure, may
rescind any such notice of breach or default and of election to cause the
Property to be sold by executing and delivering to Trustee a written notice of
such rescission, which notice, when recorded, shall also constitute a
cancellation of any prior declaration of default and demand for sale or such
documents as may be required by the laws of the state in which the Property is
located to effect such rescission. The exercise by Beneficiary of such right of
rescission shall not constitute a waiver of any breach or Event of Default then
existing or subsequently occurring, or impair the right of Beneficiary to
execute and deliver to Trustee, as above provided, other declarations of default
and demand for sale, and notices of breach or default, and of election to cause
the Property to be sold to satisfy the obligations hereof, nor otherwise affect
any provision, agreement, covenant or condition of the Note and/or of this Deed
of Trust or any of the rights, obligations or remedies of the parties hereunder.
Section 3.9 Beneficiary's Remedies Respecting Collateral. Beneficiary
may realize upon the Collateral, enforce and exercise all of the Trustor's
rights, powers, privileges and remedies in respect of the Collateral, dispose of
or otherwise deal with the Collateral in such order as Beneficiary may in its
discretion determine, and exercise any and all other rights, powers, privileges
and remedies afforded to a secured party under the laws of the state in which
the Property is located as well as all other rights and remedies available at
law or in equity.
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Section 3.10 Proceeds of Sales. The proceeds of any sale made under or
by virtue of this Article III, 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 III or otherwise, shall be applied as follows:
A. To the payment of the costs, fees and expenses of sale and
of any judicial proceedings wherein the same may be made, including the cost of
evidence of title in connection with the sale, compensation to Trustee and
Beneficiary, 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 interest rate applicable under the Note, but
limited to any maximum rate permitted by law to be charged by Trustee;
B. To the payment of any and all sums expended by Beneficiary
under the terms hereof, not then repaid, with accrued interest at the Default
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, without limitation, 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; and
C. To the payment of the entire amount then due, owing or
unpaid for principal and interest upon the Note, any notes evidencing any Future
Advance, and any other obligation secured hereby, 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; and then
D. The remainder, if any, to the person or persons, including
the Trustor, legally entitled thereto.
Section 3.11 Condemnation and Insurance Proceeds. All Condemnation
Proceeds, Insurance Proceeds and any interest earned thereon shall be paid over
either by the condemning authority, insurance company or escrow agent to
Beneficiary and shall be applied first toward reimbursement of the costs and
expenses of Beneficiary (including reasonable attorneys' fees), if any, in
connection with the recovery of such Proceeds, and then shall be applied in the
sole and absolute discretion of Beneficiary and without regard to the adequacy
of its security under this Deed of Trust (A) to the payment or prepayment of all
or any portion of the Note including the Prepayment Premium described in the
Note; (B) to the reimbursement of expenses incurred by Beneficiary in connection
with the restoration of the Property; or (C) to the performance of any of the
covenants contained in this Deed of Trust as Beneficiary may determine. Any
prepayment of the Note or portion thereof pursuant to Beneficiary's election
under this section shall be subject to the Prepayment Premium described in the
Note.
Section 3.12 Waiver of Marshalling, Rights of Redemption, Homestead,
Valuation and Notice.
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A. 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 Property shall be sold in the
event of any sale or sales pursuant hereto and to have any of the Property
and/or any other property now or hereafter constituting security for any of the
indebtedness secured hereby marshalled upon any foreclosure of this Deed of
Trust or of any other security for any of said indebtedness.
B. To the fullest extent permitted by law, Trustor, for itself
and all who may at any time claim through or under it, hereby expressly waives,
releases and renounces all rights of redemption from any foreclosure sale, all
rights of homestead, exception, monitoring reinstatements, forbearance,
appraisement, valuation, stay and all rights under any other laws which may be
enacted extending the time for or otherwise affecting enforcement or collection
of the Note, the debt evidenced thereby, or this Deed of Trust.
C. Trustor, for itself and for all persons hereafter claiming
through or under it, hereby expressly waives, any notice of default, except as
specifically provided for herein, notice of intent to accelerate, notice of
acceleration and all other notices now or hereafter required by law.
Section 3.13 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. Every power and remedy given by this Deed of Trust
to Trustee or Beneficiary may be exercised separately, successively or
concurrently 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, Beneficiary, 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 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 Advance, or under 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.
Section 3.14 Recourse. Trustor shall be fully liable under this Deed of
Trust. However, except as otherwise set forth in this section, the liability of
the general partners or shareholder of Trustor, if any, under the Note, this
Deed of Trust and the Related Agreements shall be limited to and satisfied from
the Property and the proceeds thereof, the Rents and Profits and all other
income arising therefrom, the other assets of Trustor arising out of the
Property which are given
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as collateral for the Note, and any other collateral given in writing to
Beneficiary as security for repayment of the Note (all of the foregoing
collectively referred to as the "Loan Collateral"); provided, however, that
nothing contained in this section shall (A) preclude Beneficiary from
foreclosing the lien of this Deed of Trust or from enforcing any of its rights
or remedies in law or in equity against Trustor, (B) constitute a waiver of any
obligation evidenced by the Note or secured by this Deed of Trust or any Related
Agreements, (C) limit the right of Beneficiary or Trustee to name Trustor as a
party defendant in any action brought under this Deed of Trust, the Note or any
Related Agreements, (D) prohibit Beneficiary or Trustee from pursuing all of its
rights and remedies against Trustor, any guarantor or surety, whether or not
such guarantor or surety is a partner of Trustor or a Maker under the Note, (E)
limit the personal liability of Trustor or any shareholder of Trustor, or any
general partner of Trustor, to Beneficiary or Trustee, for misappropriation or
misapplication of funds, fraud, waste, willful misrepresentation or willful
damage to the Property, or (F) preclude Beneficiary from recovering from Trustor
and the Indemnitors under that certain Environmental Indemnity Agreement of even
date herewith.
ARTICLE 4
MISCELLANEOUS
Section 4.1 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, but only to the extent
that it is invalid, illegal or unenforceable.
Section 4.2 Certain Charges and Brokerage Fees.
A. Trustor agrees to pay Beneficiary for each written
statement requested of Beneficiary as to the obligations secured hereby,
furnished at Trustor's request. 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
release or reconveyance of this Deed of Trust, transmittal to an escrow holder
of moneys secured hereby, changing its records pertaining to this Deed of Trust
and indebtedness secured hereby to show a new owner of the Property, and
replacing an existing policy of insurance held hereunder with another such
policy.
B. Trustor agrees to indemnify and hold Beneficiary harmless
from any responsibility and/or liability for the payment of any commission
charge or brokerage fees to anyone which may be payable in connection with the
funding of the loan evidenced by the Note and this Deed of Trust or refinancing
of any prior indebtedness, if applicable, based upon any action taken by
Trustor. It is understood that any such commission charge or brokerage fees
shall be paid directly by Trustor to the entitled parties.
Section 4.3 Notices.
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A. All notices expressly provided hereunder to be given by
Beneficiary to Trustor and all notices, demands and other communications of any
kind or nature whatever which Trustor may be required or may desire to give to
or serve on Beneficiary shall be in writing and shall be (1) hand-delivered by a
third-party courier service, effective upon receipt, (2) sent by United States
Express Mail or by private third-party overnight courier, effective upon
receipt, or (3) served by certified mail, to the appropriate address set forth
below, or at such other place as the Trustor, Beneficiary or Trustee, as the
case may be, may from time to time designate in writing by ten (10) days prior
written notice thereof. Any such notice or demand served by certified mail,
return receipt requested, 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 (3) business days after the date of mailing, whichever is
the earlier in time. Any notice required to be given by Beneficiary shall be
equally effective if given by Beneficiary's agent, if any.
B. Trustor hereby requests that any notice, demand, request or
other communication (including any notice of an Event of Default and notice of
sale as may be required by law) desired to be given or required pursuant to the
terms hereof be addressed to Trustor as follows:
Royal BodyCare, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C.
5400 Renaissance Tower
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇, Esq.
All notices and other communications to Beneficiary shall be
addressed as follows:
Allstate Life Insurance Company
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Commercial Mortgage Loan Servicing Division
With a copy to:
Allstate Insurance Company
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▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Investment Law Division
All notices to Trustee shall be addressed as follows:
▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
c/o Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Section 4.4 Trustor Not Released; Certain Trustee Acts.
A. 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 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
this Deed of Trust, by reason of any demand made by Trustor. Without affecting
the liability of any person, including Trustor, for the payment of any
indebtedness secured hereby, or the legal operation and effect of this Deed of
Trust on the remainder of the 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 (1)
release any person liable for the payment of any of the indebtedness; (2) extend
the time or otherwise alter the terms of payment of any of the indebtedness; (3)
accept additional real or personal property of any kind as security therefor,
whether evidenced by deeds of trust, mortgages, security agreements or any other
instruments of security; or (4) alter, substitute or release any property
securing the indebtedness.
B. Beneficiary may, at any time, and from time to time, (1)
consent to the making of any map or plan of the 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
legal operation and effect or charge hereof; or (4) release or reconvey, without
any warranty, all or part of the Property from the lien of this Deed of Trust.
Section 4.5 Inspection. Upon reasonable prior notice and subject to the
inspection rights of tenants under the Leases, Beneficiary may at any reasonable
time make or cause to be made entry upon and make inspections, reappraisals,
surveys, construction and environmental testing of the Property or any part
thereof in person or by agent, all at Beneficiary's sole cost and expense.
Section 4.6 Release or Cancellation. Upon the payment in full of all
sums secured by this Deed of Trust, this Deed of Trust shall become null and
void. Upon payment of its fees and any other sums owing to it under this Deed of
Trust, Beneficiary shall release this Deed of Trust. The duly recorded release
of the Property shall constitute a reassignment of the Leases by the Beneficiary
to the Trustor. Trustor shall pay all reasonable fees of Beneficiary and costs
of
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recordation, if any, in connection with such release or cancellation. The
recitals in such release of any matters or facts shall be conclusive proof of
the truthfulness thereof.
Section 4.7 Statute of Limitations. Trustor hereby expressly waives and
releases to the fullest extent permitted by law, the pleading of any statute of
limitations as a defense to any and all obligations secured by this Deed of
Trust.
Section 4.8 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 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 or other
obligations 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. 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 non-limiting language (such as "without limitation," or "but not
limited to," or words of similar import) is used with reference thereto.
Section 4.9 Captions. 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 hereof.
Section 4.10 Consent. 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. Trustor covenants and agrees to reimburse Beneficiary promptly on
demand for all legal and other expenses incurred by Beneficiary or its servicing
agent in connection with all requests by Trustor for consent or approval under
this Deed of Trust.
Section 4.11 Delegation to Subagents. 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 subagents.
Section 4.12 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 (but this shall not permit any assignment prohibited hereby) 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.
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SECTION 4.13 GOVERNING LAW. THIS DEED OF TRUST IS INTENDED TO BE
GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE IN WHICH THE PROPERTY IS
LOCATED. TO THE EXTENT PERMITTED BY LAW, TRUSTOR HEREBY WAIVES ITS RIGHT TO A
TRIAL BY JURY.
Section 4.14 Substitution of Trustee. Trustee may resign by an
instrument in writing addressed to Beneficiary, or Trustee may be removed at any
time with or without cause by an instrument in writing executed by Beneficiary.
In case of the death, resignation, removal or disqualification of Trustee or if
for any reason Beneficiary 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 Beneficiary shall have the right and is hereby
authorized and empowered to appoint a successor trustee, or a substitute
trustee, without other formality than appointment and designation in writing
executed by Beneficiary, and the authority hereby conferred shall extend to the
appointment of other successor and substitute trustees successively until the
indebtedness hereby secured has been paid in full or until the Property is sold
hereunder. In the event the indebtedness hereby secured is owned by more than
one person or entity, the holder or holders of not less than a majority in the
amount of such indebtedness shall have the right and authority to make the
appointment of a successor or substitute trustee provided for in the preceding
sentence. Such appointment and designation by Beneficiary or by the holder or
holders of not less than a majority of the indebtedness hereby secured shall be
full evidence of the right and authority to make the same and of all facts
therein recited, as to such appointment. If Beneficiary is a corporation and
such appointment is executed in its behalf by an officer of such 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 corporation. Upon the making of any
such appointment and designation, all of the estate and title of Trustee in the
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 the Trustee; but
nevertheless, upon the written request of Beneficiary 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 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 Trustee hereunder 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. Trustor 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. Trustee shall
not be liable for any error of judgment or act done by Trustee, or be otherwise
responsible or accountable under any circumstances whatsoever, except for
Trustee's 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
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him hereunder. TRUSTOR WILL REIMBURSE TRUSTEE FOR, AND INDEMNIFY AND SAVE HIM
HARMLESS AGAINST, ANY AND ALL LIABILITY AND EXPENSES WHICH MAY BE INCURRED BY
HIM IN THE PERFORMANCE OF HIS DUTIES HEREUNDER, INCLUDING, BUT NOT LIMITED TO,
ANY LIABILITY AND EXPENSES BASED UPON OR ARISING OUT OF THE NEGLIGENCE OR STRICT
LIABILITY OF TRUSTEE BUT EXCLUDING ANY LIABILITY BASED UPON OR ARISING OUT OF
THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF TRUSTEE.
Section 4.15 Changes in Taxation. If, after the date of this Deed of
Trust, any law is passed by the state in which the Property is located or by any
other governing entity, imposing upon Beneficiary any tax against the Property,
or changing in any way the laws for the taxation of mortgages or deeds of trust
or debts secured by mortgages or deeds of trust so that an additional or
substitute tax is imposed on Beneficiary or the holder of the Note, Trustor
shall reimburse Beneficiary for the amount of such taxes immediately upon
receipt of written notice from Beneficiary. Provided, however, that such
requirement of payment shall be ineffective if Trustor is permitted by law to
pay the whole of such tax in addition to all other payments required hereunder,
without any penalty or charge thereby accruing to Beneficiary and if Trustor in
fact pays such tax prior to the date upon which payment is required by such
notice.
Section 4.16 Maximum Interest Rate. No provision of this Deed of Trust
or of the Note or of any note evidencing a Future Advance shall require the
payment or permit the collection of interest in excess of the maximum
non-usurious rate permitted by applicable law. In the event such interest does
exceed the maximum legal rate, it shall be canceled automatically to the extent
that such interest exceeds the maximum legal rate and if theretofore paid,
credited on the principal amount of the Note or, if the Note has been prepaid,
then such excess shall be rebated to Trustor. All amounts paid or agreed to be
paid which would under applicable law be deemed "interest" shall, to the extent
permitted by such applicable law, be amortized, prorated, allocated and spread
throughout the stated term of the Note. The term "applicable law" as used in
this paragraph shall mean the law in effect from time to time which lawfully
permits the charging and collection of the highest permissible, lawful,
nonusurious rate of interest on the transactions herein contemplated, including
laws of the State of Texas and the United States of America; and the term
"maximum legal rate" as used in this paragraph shall mean, with respect to each
portion of the indebtedness secured hereby, the maximum, lawful, nonusurious
rate of interest (if any) which under applicable law Beneficiary is permitted to
charge from time to time with respect to such portion of the indebtedness
secured.
Section 4.17 Time of Essence. Time is of the essence of the obligations
of Trustor in this Deed of Trust and each and every term, covenant and condition
made herein by or applicable to Trustor.
Section 4.18 Reproduction of Documents. This Deed of Trust and all
documents relating thereto, specifically excluding the Note but including,
without limitation, consents, waivers and modifications which may hereafter be
executed, financial and operating statements, certificates and other information
previously or hereafter furnished to Beneficiary, may be reproduced by
Beneficiary by any photographic, photostatic, microfilm, micro-card, miniature
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photographic or other similar process. Trustor agrees and stipulates that any
such reproduction is an original and shall be admissible in evidence as the
Master in any judicial or administrative proceeding (whether or not the Master
is in existence and whether or not such reproduction was made or preserved by
Beneficiary in the regular course of business) and any enlargement, facsimile or
further reproduction of such a reproduction shall be no less admissible.
Section 4.19 No Oral Modifications. This Deed of Trust may not be
amended or modified orally, but only by an agreement in writing signed by the
party against whom enforcement of any amendment or modification is sought.
Section 4.20 Trustee Provisions. Trustee accepts this Trust when this
Deed of Trust, duly executed and acknowledged is made a public record as
provided by law. The Trust created hereby is irrevocable by Trustor. Trustee,
upon presentation to it of an affidavit signed by or on behalf of Beneficiary,
setting forth any facts showing a default by Trustor under any of the terms or
conditions of this Deed of Trust, is authorized to accept as true and conclusive
all facts and statements in such affidavit and to act hereunder in complete
reliance thereon. Trustee shall be under no obligation to notify any party
hereof of any action or proceeding of any kind in which Trustor, Beneficiary
and/or Trustee shall be a party, unless brought by Trustee, or of any pending
sale under any other deed of trust. The necessity of Trustee's making oath,
filing inventory or giving bond as security for the execution of this Deed of
Trust, as may now be or hereafter required by the laws of the state in which the
Property is located, is hereby expressly waived.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned has executed this Deed of Trust as
of the day and year first hereinabove written.
TRUSTOR:
ROYAL BODYCARE, INC.,
a Nevada corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President, CEO
THE STATE OF TEXAS >
>
COUNTY OF _______________ >
Before me the undersigned, a Notary Public in and for said County in
said State, personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President and CEO of Royal
Bodycare, Inc., a Nevada corporation, known to me (or proved to me on the basis
of satisfactory evidence) to be the person whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
authorized capacity, as the act and deed of said corporation.
Given under my hand and official notarial seal this the ______ day of
March, 2001.
--------------------------------------------
Notary Public
(AFFIX NOTARIAL SEAL) My Commission Expires:
----------------------
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EXHIBIT A
(Property Description)
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EXHIBIT B
(Fixture Filing)
Pursuant to the security agreement contained in this Deed of Trust
("Security Agreement") and the appropriate Uniform Commercial Code ("UCC")
sections in the State in which the Fixtures are located, as amended and
recodified from time to time, this Deed of Trust shall constitute a Fixture
Filing.
1. Description of Fixtures. "Fixtures" shall include all articles of
personal property now or hereafter attached to, placed upon for an indefinite
term or used in connection with said real property, appurtenances and
improvements together with all goods and other property which are or at any time
become so related to the Property that an interest in them arises under real
estate law.
2. Description of Collateral. The Collateral, as defined in the
Security Agreement, includes, without limitation, the following items and types
of Collateral as well as certain other items and types of Collateral:
Subject to the exclusion set forth in the description of the Collateral
and Property set forth hereinabove. All equipment, fixtures, goods, inventory
and all present and future accessions and products thereof and thereto as
defined in the UCC, now or at any time acquired, used, or to be used for or in
connection with the construction, use or enjoyment of the Property by Trustor,
whether in the possession of Trustor, warehousemen, bailees or any other person
and whether located at the Property or elsewhere, including without limitation:
A. all building, maintenance or service equipment; building,
maintenance or raw materials or supplies; component parts or
work in process; appliances; furnishings; machinery; and
tools; and
B. all goods and property covered by any warehouse receipts,
bills of lading and other documents evidencing any goods or
other tangible personal property of any kind (including any
Collateral) in which Trustor now or at any time hereafter has
any interest in connection with any or all of the Property or
Collateral; and
C. any and all products of any accessions to any such Collateral
which may exist at any time.
Part of the above described goods are or are to become Fixtures on the Property.
As used in this Exhibit to qualify the scope of Beneficiary's security interest
in any of the Collateral, the phrase "in connection with any or all of the
Property or Collateral" shall be used in its broadest and most comprehensive
sense and shall include without limitation property used or acquired (or to be
used or acquired) in connection with the improvement, development, construction,
repair or remodeling of any or all of the Property, property arising from or in
connection with the
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operation, use, maintenance, occupancy, sale, lease or disposition of any or all
of the Property or Collateral, property used or acquired (or to be used or
acquired) in connection with Trustor's performance of any of its obligations to
Beneficiary, and property acquired with any loan proceeds. If any property is
used (or to be used) for multiple or different purposes, and one such purpose
relates to any aspect of the Property or collateral, such property shall
constitute Collateral hereunder, unless Beneficiary shall release such property
from this Fixture Filing and Beneficiary's security interest in a duly executed
written instrument.
3. Relation of Fixture filing to Deed of Trust. Some or all of the
Collateral described in Section 2 above may be or become Fixtures in which
Beneficiary has a security interest under the Security Agreement. However,
nothing herein shall be deemed to create any lien or interest in favor of the
Trustee under this Deed of Trust in any such Collateral which is not a fixture,
and the purpose of this Exhibit B is to create a fixture filing under the
appropriate Uniform Commercial Code sections in the State in which the Fixtures
are located, as amended or recodified from time to time. The rights, remedies
and interests of Beneficiary under this Deed of Trust are independent and
cumulative, and there shall be no merger of any lien hereunder with any security
interest created by the Security Agreement. Beneficiary may elect to exercise or
enforce any of its rights, remedies, or interests under this Deed of Trust as
Beneficiary may from time to time deem appropriate.
4. Name and Address of Beneficiary:
Allstate Life Insurance Company
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Commercial Mortgage Loan Servicing Division
5. Other Fixture Financing and Removal of Fixtures. (A) Beneficiary has
not consented to any other security interest of any other person in any Fixtures
and has not disclaimed any interest in any Fixtures; and (B) Beneficiary has not
agreed or consented to the removal of any Fixtures from the Property, and any
such consent by Trustor shall not be binding on Beneficiary. Beneficiary
reserves the right to prohibit the removal of any Fixtures by any person with
the legal right to remove any Fixtures from the Property unless and until such
person makes arrangements with (and satisfactory to) Beneficiary for the payment
to Beneficiary of all costs of repairing any physical injury to the Property
which may be caused by the removal of such Fixtures. Any such payment shall be
made directly to Beneficiary at its request, and Beneficiary may hold such
payment as additional collateral under this Deed of Trust. Failure by Trustor to
cause the delivery to Beneficiary of any such payment shall constitute both: (1)
waste under (and breach of) this Deed of Trust; and (2) conversion of Collateral
under (and a breach of) the Security Agreement.
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EXHIBIT C
1. The following restrictive covenants of record itemized below:
Recorded in Volume 73166, Page 1001, Volume 77154, Page 1096, Volume
79122, Page 749, Volume 82071, Page 3244, Volume 84213, Page 2741, and
Volume 75073, Page 494, refiled in Volume 75105, Page 856, all of which
are filed of record in the Real Property Records, Dallas County, Texas.
2. Any shortages in area.
3. The following matters and terms of the documents creating or offering
evidence of the matters:
(a) A utility easement, 15 feet in width, located along the
south, east and west property line, as reflected by the plat
recorded in Volume 77097, Page 406, Map Records, Dallas
County, Texas, as shown on survey dated 2/7/2001, by ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, RPLS #1674, of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Job/Project
▇▇-▇▇-▇▇▇▇▇.
(b) Subject to the Order Adopting Airport Zoning Regulations of
the Dallas-Fort Worth Regional Airport, Ordinance No. 71-100,
imposed by the Joint Airport Zoning Board of the Dallas-Fort
Worth Regional Airport, filed September 2, 1982, recorded in
Volume 82173, Page 0178, Real Property Records, Dallas County,
Texas.
(c) Terms and conditions of Avigation Release, as reflected by
the plat recorded in Volume 77097, Page 406, Map Records,
Dallas County, Texas.
(d) Building set back line, 30 feet from the east property line
and a portion of the south property line, as shown by plat
recorded in Volume 77097, Page 406, Map Records of Dallas
County, Texas, as shown on survey dated 2/7/2001, by ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, RPLS #1674, of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Job/Project
▇▇-▇▇-▇▇▇▇▇.
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SCHEDULE 1
1. Machinery:
(a) KMC SPFS ▇▇▇▇▇▇ ▇▇▇▇▇▇
(b) Kinex SWTE-16 Cap Tightener
(c) Autolabe 620 Labeler
(d) Charlotte ND-7 Colloid Mill
(e) Permason Jovc 475 Gal Jacketed Tank
(f) 550 Gal Tank w/Agitator
(g) ▇▇▇ 30 Gal Kettle
(h) Drum Cradle
(i) Drum Truck
(j) Pressure Washer 2000 PSI
(k) Bench Scale D-5
(l) Platform Scale E854F-50P
(m) Electroflo PS34 Filling Machine
(n) Pump Centrifugal
(o) Bottle Indexer
(p) Conveyors 2 ea
(q) Variable Speed Drives 2 ea
(r) Supply Tank Modified
(s) Heat Shrink Tunnel
(t) Tank 1025 Gal 2 ea
(u) Tank 305 Gal
(v) Crane 1 Ton
(w) Fiber Drum Lifter
(x) Drum Cradle
(y) Pump, Magnetic Drive
(z) Pump, Magnetic Drive
(aa) Rack
(bb) Stepladder, Fiberglass
(cc) N-Sink-Erator
(dd) Pallet Truck Standard
(ee) Hot Water Heater 50 Gal
(ff) Hot Water Heater 100 Gal
(gg) Wet/Dry Vacuum
(hh) Air Compressor
(ii) Ink Jet Printer
(jj) Mixer, Neptune D-4
(kk) Refrigerated Trailer
(ll) 10 Filling Trays (Required for Lip Balm)
(mm) Motorized Collection Table
(nn) Air Driven Mixer
(oo) Spare Parts
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(pp) Dayton Pumps, -1/4 HP 2 ea
(qq) Aro Diaphram Variable Speed Air Pump
(rr) Ohaus Portable Check Weight Scale, 500g
2. Hardware and related software and accessories, including but not
limited to all replacements, parts, repairs, additions and attachments
incorporated therein or affixed thereto, now or hereafter acquired.
3. One (1) Compaq Proliant 4500 P5/133 P/N: 213420-004, S/N: 6547HRW40415
Mod ▇, ▇▇/▇▇▇ ▇▇▇ ▇/▇▇▇ ▇▇▇▇▇, ▇▇▇ P5/133 CPU, 64 MB RAM, Integrated; Fast wide
SCSI Adapter, SVGA, 4X CD ROM Dr., 1.44 MB ▇▇, ▇ ser, 1 par, 101 Enhanced
keyboard, mouse.
4. Four (4) Compaq 2.1 GB Pluggable hard drive P/N: 146742-007, SN:
K3965391, T3353478, K3450953, T3365166.
5. One (1) OCE" 2475s/16682 together with all spare parts, accessories,
attachments, replacements, substitutions, and additions thereto now or hereafter
acquired and the proceeds thereof (including insurance proceeds).
6. Fourteen (14) refurbed ▇▇▇▇▇▇ ▇▇▇▇▇▇ 6x6 panels.
7. Eleven (11) 5 drawer lateral files
8. Fifty-seven (57) Recovered ▇▇▇▇▇▇ ▇▇▇▇▇▇ Equa task chairs
9. Three (3) Recovered ▇▇▇▇▇▇ ▇▇▇▇▇▇ Equa side chairs
10. One (1) Provide category 3 voice/modem cables
11. One (1) Provide category 5 RJ45 patch cables
12. One (1) Provide RJ11 patch cables
13. One (1) Provide trunk cable
14. One (1) Wooden coffee bar
15. One (1) Wooden display cases
16. One (1) Wooden reception
17. One (1) Wooden cashier's desk
18. One (1) BTA S-2000.
19. Axxess Telephone System, including all substitutions, modifications,
replacements and proceeds thereof.
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20. 12K InkJet Printer AM1 Folder Inserter 8000 Tabber Equipment.
21. One (1) project-royal bulk system 175 unarco uprights 330 pr unarco
beams 1 lot 12" row ties & wall ties 1 versa conveyor (25'-0) 2 LSA Conveyors
(93'-0) & (58"-0) 1 LSD Conveyors (spurline Lineshaft) 5 Versa Gravity Conveyors
1 84" High Spaceguard Wire (Partitioning).
22. Category 5 data cable Three (3) 5-drawer later file Fifteen (15) ▇▇▇▇▇▇
▇▇▇▇▇▇ chairs.
23. One (1) used refurbished Kohler generator S/N 4358471 - Used
refurbished UPS system 75 KVA EPE S/N 573779-021 - New diesel fuel tank system -
One (1) ▇▇▇▇▇ Wire Partitioning 7' High Color Light Grey - Two (2) 4"x4"x1/4"
structural angel 10' long - One (1) 4"x4"x1/4" structural angel 8' long.
24. All computer equipment and peripherals, wherever located heretofore or
hereafter, including, without limitation, all substitutions, additions
accessions and replacements thereto, and thereof, now or hereafter installed in,
affixed to, or used in, conjunction with the aforesaid equipment and proceeds
thereof, together with all rental or installment payments, insurance proceeds,
other proceeds and payments due and to become due and arising from or relating
to said equipment.
25. Various Epicor Software & Professional Services as detailed in vendor
invoices held at Leastec Systems Credit, together with any and all
substitutions, replacements or exchanges therefor, replacement parts, additions,
attachments and accessories incorporated therein or affixed thereto, or used in
connection therewith, and proceeds thereof (both cash and non-cash), including
insurance proceeds and also including, without limitation, claims of the Debtor
against third parties for loss or damage to, or destruction of, such equipment.
26. Globenet Software-License to World 2000 Source Code, including interim
use of Enterprise 4.0.
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