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EXHIBIT 10.11(c)
MASTER FORM LOAN NO. ________
DEED OF TRUST
RECORDED BY
____________________________
VICE PRESIDENT
GUARANTY FEDERAL BANK, F.S.B.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
MASTER FORM OF DEED OF TRUST
(WITH SECURITY AGREEMENT AND
ASSIGNMENT OF RENTS AND LEASES)
By this agreement dated, _____________, 1997, the undersigned, NEWMARK
HOMES, L.P., a Texas limited partnership ("Grantor," whether one or more), whose
address is ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, to secure the
indebtedness and obligations hereinafter described, does hereby GRANT, BARGAIN,
SELL, ASSIGN, and CONVEY unto ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as trustee ("Trustee"), for the
benefit of GUARANTY FEDERAL BANK, F.S.B., a federal savings bank organized and
existing under the laws of the United States ("Beneficiary"), whose address is
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, the real property (the "Land")
situated in the County or Counties in the State of Texas as more particularly
described in Deed(s) of Trust Incorporating by Reference a Master Form Deed Of
Trust that specifically incorporates by reference provisions of this Master Form
of Deed of Trust (this "Deed of Trust").
TOGETHER WITH the following, whether now owned or hereafter acquired by
Grantor: (a) all improvements (the "Improvements") now or hereafter attached to
or placed, elected, constructed or developed on the Land; (b) all equipment,
fixtures, furnishings, inventory and articles of personal property (the
"Personal Property") now or hereafter attached to or used in or about the
Improvements or which are necessary or useful for the complete and comfortable
use and occupancy of the Improvements for the purposes for which they are to be
constructed, and all replacements or substitutions for any of the foregoing,
whether or not the same are or shall be attached to the Land or Improvements;
(c) all building materials and equipment now or hereafter delivered to and
intended to be installed in or on the Land or the Improvements; (d) all plans
and specifications for the Improvements; (e) all of Grantor's rights (but not
its obligations) under any contracts relating to the Land, the Improvements or
the Personal Property; (f) all permits, licenses, and other rights and
privileges obtained in connection with the Land, the Improvements or the
Personal Property; (g) all proceeds arising from or by virtue of the sale,
lease or other disposition of the Land, (the Improvements or the Personal
Property; (h) all proceeds (including premium refunds) of each policy of
insurance relating to the Land, the Improvements or the Personal Property; (i)
all proceeds from the taking of any of the Land, the Improvements, the Personal
Property or any rights appurtenant thereto by right of eminent domain or by
private or other purchase in lieu thereof; (j) all right, title and interest of
Grantor in and to all streets, roads, public places, easements and rights-of-
way, existing or proposed, public or private, adjacent to or used in connection
with, belonging or pertaining to the Land; (k) all of the leases, rents,
royalties, bonuses, issues, profits, revenues or other benefits of the Land,
the Improvements or the Personal Property, including without limitation, cash
or securities deposited pursuant to leases to secure performance by the lessees
of their obligations thereunder; (l) all rights, hereditaments and
appurtenances pertaining to the foregoing; and (m) other interests of every
kind and character that Grantor now has or at any time hereafter acquires in
and to the Land, Improvements and Personal Property described herein and all
property described herein and all property that is used or useful in connection
therewith, including rights of ingress and egress and all reversionary rights
or interests of Grantor with respect to such property. The above-described
property is collectively called the "Mortgaged Property."
TO HAVE AND TO HOLD the Mortgaged Property, together with the rights,
privileges and appurtenances thereto belonging, unto the Trustee and his
substitutes or successors, forever,
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and Grantor hereby binds itself and its heirs, executors, administrators,
personal representatives, successors and assigns to warrant and forever defend
the Mortgaged Property unto the Trustee, his substitutes or successors and
assigns, against the claim or claims of all persons claiming or to claim the
same or any part thereof.
ARTICLE I
INDEBTEDNESS
This Deed of Trust is given to secure the following:
Section 1.1 Note. Payment of the indebtedness evidenced by the
promissory note (such note and all amendments thereto, if any, collectively
referred to as the "Note"), dated ______________________________, 199_, in the
stated principal amount of TEN MILLION AND NO/100 DOLLARS ($10,000,000.00),
executed by Grantor, payable to the order of Beneficiary and bearing interest
and being payable as set forth therein, and all modifications, increases,
refinancings, renewals and extensions thereof.
Section 1.2 Loan Agreement. Performance of all obligations of Grantor
under any loan agreement (the "Loan Agreement") between Grantor and Beneficiary
pertaining to the use of the proceeds of the Note.
Section 1.3 Deed of Trust. Payment of all sums advanced by Beneficiary
to or for the benefit of Grantor contemplated hereby and performance of all
obligations and covenants herein contained.
Section 1.4 Other Indebtedness. (a) Payment of all other indebtedness,
of whatever kind or character, now owing or which may hereafter become owing by
Grantor to Beneficiary, and (b) payment of all other indebtedness, of whatever
kind or character, now owing or which may hereafter become owing to
Beneficiary, by any of the entities set forth in Exhibit A to the Loan
Agreement, whether such indebtedness is evidenced by note, open account,
overdraft, endorsement, surety agreement, guaranty, letter(s) of credit, or
otherwise, it being reasonably contemplated that such additional indebtedness
owing to Beneficiary may be incurred, from time to time, subsequent to the date
hereof.
The obligations above described are hereinafter collectively called the
"Indebtedness." This Deed of Trust, the Note, the Loan Agreement, any guaranty
guaranteeing the payment and performance of any of the Indebtedness, and any
other instrument given to evidence or further secure the Indebtedness are
hereinafter collectively called the "Loan Instruments."
ARTICLE II
ASSIGNMENT OF RENTS AND LEASES
Section 2.1 Assignment of Rents, Profits, etc. All of the rents,
royalties, bonuses, issues, profits, revenue, income, and other benefits
derived from the Mortgaged Property or arising from the use or enjoyment of any
portion thereof or from any lease or agreement pertaining thereto and
liquidated damages following default under such leases, and all proceeds
payable under any policy of insurance covering loss of rents resulting from
untenantability caused by damage to any part of the Mortgaged Property,
together with any and all rights that Grantor may have against any tenant under
such leases or any subtenants or occupants of any part of the Mortgaged
Property (hereinafter called the "Rents") are hereby absolutely and
unconditionally assigned to Beneficiary to be applied by Beneficiary in payment
of the Indebtedness. Notwithstanding any provision of this Deed of Trust or
any other of the Loan Instruments which might be construed to the contrary, the
assignment in this Section is an absolute assignment and not merely a security
interest. However, Beneficiary's rights as to the assignment shall be exercised
only upon the occurrence of an Event of Default (as hereinafter defined).
Prior to an Event of Default, Grantor shall have a license to collect and
receive all Rents as trustee for the
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benefit of Beneficiary and Grantor, and Grantor shall apply the funds so
collected first to the payment of the Indebtedness in such manner as
Beneficiary elects and thereafter to the account of Grantor. All Rents not
actually paid to Beneficiary to apply on the Indebtedness shall not constitute
payment on the Indebtedness.
Section 2.2 Assignment of Leases. Grantor hereby assigns to Beneficiary
all existing and future leases, including subleases thereof, and any and all
extensions, renewals, modifications, and replacements thereof, upon any part of
the Mortgaged Property (the "Leases"), Grantor hereby further assigns to
Beneficiary all guaranties of tenants' performance under the Leases. Prior to
an Event of Default, Grantor shall have the right, without joinder of
Beneficiary, to enforce the Leases, unless Beneficiary directs otherwise.
Section 2.3 Leasing. Grantor covenants and agrees that, without the
prior written consent of Beneficiary, it shall not enter into any Lease of the
Mortgaged Property.
Section 2.4 Beneficiary in Possession; Indemnification. Beneficiary's
acceptance of this assignment shall not, prior to entry upon and taking
possession of the Mortgaged Property by Beneficiary, be deemed to constitute
Beneficiary a "mortgagee in possession," nor obligate the Beneficiary to appear
in or defend any proceeding relating to any of the Leases or to the Mortgaged
Property, take any action hereunder, expend any money, incur any expenses, or
perform any obligation or liability under the Leases, or assume any obligation
for any deposits delivered to Grantor by any lessee and not delivered to
Beneficiary. Beneficiary shall not be liable for any injury or damage to
person or property in or about the Mortgaged Property. Grantor hereby
indemnifies and holds Beneficiary harmless from all liability, damage or
expense incurred by Beneficiary from any claims under the Leases, including,
without limitation, claims by Tenants for security deposits or for rental
payments more than one (1) month in advance and not delivered to Beneficiary.
All amounts indemnified against hereunder, including reasonable attorneys'
fees, if paid by Beneficiary shall bear interest at the maximum lawful rate and
shall be payable by Grantor immediately without demand, and shall be secured
hereby.
ARTICLE III
SECURITY AGREEMENT
Section 3.1 Security Interest. This Deed of Trust shall be a security
agreement between Grantor, the debtor, and Beneficiary, as the secured party,
covering the Mortgaged Property constituting personal property or fixtures
governed by the Texas Uniform Commercial Code (hereinafter called the "Code"),
and Grantor grants to Beneficiary a security interest in such portion of the
Mortgaged Property. In addition to Beneficiary's other rights hereunder,
Beneficiary shall have all rights of a secured party under the Code. Grantor
shall execute and deliver to Beneficiary all financing statements that may be
required by Beneficiary to establish and maintain the validity and priority of
Beneficiary's security interest, and Grantor shall bear all costs thereof,
including all Uniform Commercial Code searches reasonably required by
Beneficiary. If Beneficiary should dispose of any of the Mortgaged Property
pursuant to the Code, ten (10) days' written notice by Beneficiary to Grantor
shall be deemed to be reasonable notice; provided, however, Beneficiary may
dispose of such property in accordance with the foreclosure procedures of this
Deed of Trust in lieu of proceeding under the Code.
Section 3.2 Notice of Changes. Grantor shall give advance notice in
writing to Beneficiary of any proposed change in Grantor's name, identity, or
structure and will execute and deliver to Beneficiary, prior to or concurrently
with the occurrence of any such change all additional financing statements that
Beneficiary may require to establish and maintain the validity and priority of
Beneficiary's security interest with respect to any of the Mortgaged Property
described or referred to herein.
Section 3.3 Fixtures. Some of the items of the Mortgaged Property
described herein are goods that are or are to become fixtures to the Land, and
it is intended that, as to those goods, this Deed of Trust shall be effective
as a financing statement filed as a fixture filing from the date of its filing
for record in the real estate records of the county in which the
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Mortgaged Property is situated. Information concerning the security interest
created by this instrument may be obtained from Beneficiary, as secured party,
at the address of Beneficiary stated above. The mailing address of the Grantor,
as debtor, is as stated above.
ARTICLE IV
REPRESENTATIONS, WARRANTIES, COVENANTS
AND AGREEMENTS OF GRANTOR
Grantor does hereby covenant, warrant and represent to and agree with
Beneficiary as follows:
Section 4.1 Payment and Performance. Grantor shall make all payments
on the Indebtedness when due and shall punctually and properly perform all of
Grantor's covenants, obligations and liabilities under the Loan Instruments.
Section 4.2 Title to Mortgaged Property and Lien of this Deed of Trust.
Grantor has good and indefeasible fee simple title to the Land and the
Improvements, and good and indefeasible title to the Personal Property, free
and clear of any liens, charges, encumbrances, security interests, and adverse
claims whatsoever, except as otherwise provided herein. If the interest of
Beneficiary in the Mortgaged Property, or any part thereof, shall be endangered
or shall be attacked, directly or indirectly, Grantor hereby authorizes
Beneficiary, at Grantor's expense, to take all necessary and proper steps for
the defense of such interest, including the employment of counsel, the
prosecution or defense of litigation, and the compromise or discharge of claims
made against such interest.
Section 4.3 Organization, Power, and Existence. Grantor (a) is duly
organized and validly existing under applicable state laws and in good standing
under the laws of the state of its formation and the laws of the State of
Texas, (b) has complied with all conditions prerequisite to its lawfully doing
business in the state where the Land is situated, and (c) has all requisite
power and all governmental certificates of authority, licenses, permits,
qualifications, and documentation to own, lease and operate its properties and
to carry on its business as it is now being, and as it is proposed to be,
conducted. All Loan Instruments are within Grantor's powers, have been duly
authorized by all requisite action and are not in contravention of law or the
powers of Grantor's organizational documents. Grantor will preserve and keep
in full force and effect its existence, rights, franchises, and trade names.
Section 4.4 Insurance. Grantor shall, at its sole cost and expense,
obtain and maintain title insurance, public liability insurance and builder's
risk and casualty insurance in such forms and amounts as are required by the
Loan Agreement, or otherwise required by Beneficiary. Grantor shall deliver the
policies of insurance to Beneficiary promptly as issued; and, if Grantor fails
to do so, Beneficiary, at its option, may procure such insurance at Grantor's
expense. All renewal and substitute policies of insurance shall be delivered
at the office of Beneficiary, premiums paid, at least ten (10) days before
termination of policies theretofore delivered to Beneficiary. In case of loss,
Beneficiary, at its option, shall be entitled to receive and retain the
proceeds of the insurance policies, applying the same on the Indebtedness in
such manner as Beneficiary may elect. If any loss shall occur at any time when
Grantor shall be in default hereof, Beneficiary shall be entitled to the
benefit of all insurance held by or for any Grantor, to the same extent as if
it had been made payable to Beneficiary, and upon foreclosure hereunder,
Beneficiary shall become the owner thereof.
Section 4.5 Taxes and Assessments. Grantor will pay all taxes and
assessments against or affecting the Mortgaged Property as the same become due
and payable, and, upon request by Beneficiary, Grantor will deliver to
Beneficiary such evidence of the payment thereof as Beneficiary may require,
and, if Grantor fails to do so, Beneficiary may pay them, together with all
costs and penalties thereon, at Grantor's expense.
Section 4.6 Tax and Insurance Escrow. At the request of Beneficiary,
Grantor shall create a fund or reserve for the payment of all insurance
premiums, taxes and assessments against
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or affecting the Mortgaged property in such amount and in such manner as
Beneficiary shall request.
Section 4.7 Condemnation. All judgments, decrees and awards for injury
or damage to the Mortgaged Property, and all awards pursuant to proceedings for
condemnation thereof are hereby assigned in their entirely to Beneficiary, who
may apply the same to the Indebtedness in such manner as it may elect; and
Beneficiary is hereby authorized, in the name of Grantor, to execute and
deliver valid acquittance for, and to appeal from, any such award, judgment or
decree. Immediately upon its obtaining knowledge of the institution or the
threatened institution of any proceedings for the condemnation of the Mortgaged
Property, Grantor shall notify Beneficiary of such fact. Grantor shall then,
if requested by Beneficiary, file or defend its claim thereunder and prosecute
same with due diligence to its final disposition, and shall cause any awards or
settlements to be paid over to Beneficiary for disposition pursuant to the
terms of this Deed of Trust. Beneficiary shall be entitled to participate in
and to control same and to be represented therein by counsel of its own choice,
and Grantor will deliver, or cause to be delivered, to Beneficiary such
instruments as may be requested by it from time to time to permit such
participation. In the event Beneficiary, as a result of any such judgment,
decree or award, reasonably believes that the payment or performance of any
obligation secured by this Deed of Trust is impaired, Beneficiary may, without
notice, declare all of the indebtedness immediately due and payable.
Section 4.8 Taxes on Note or Deed of Trust. If any time any law shall
be enacted imposing or authorizing the imposition of any tax upon this Deed of
Trust, or upon any rights, titles, liens, or security interests created hereby,
or upon the Note, or any part thereof, Grantor shall immediately pay all such
taxes; provided, that if it is unlawful for Grantor to pay such taxes, Grantor
shall prepay the Note in full after demand therefor by Beneficiary.
Section 4.9 Statements by Grantor. At the request of Beneficiary,
Grantor shall furnish promptly a written statement or affidavit, in such form
as may be required by Beneficiary, stating the unpaid balance of the Note, the
date to which interest has been paid and that there are no offsets or defenses
against full payment of the Note and performance of the terms of the Loan
Instruments, or if there are any such offsets or defenses, specifying them.
Section 4.10 Repair, Waste, etc. Grantor will keep every part of the
Mortgaged Property in good operating order, repair and condition and shall not
commit or permit any waste thereof. Grantor will make promptly all repairs,
renewals and replacements necessary to such end. Grantor will discharge all
claims for labor performed and material furnished therefor, and will not suffer
any lien of mechanics or materialmen to attach to any part of the Mortgaged
Property. Grantor shall have the right to contest in good faith the validity
or any such mechanics' or materialmen's lien, provided Grantor shall first
deposit with Beneficiary a bond or other security satisfactory to Beneficiary
in such amount as Beneficiary shall require, and provided further that Grantor
shall thereafter diligently proceed to cause such lien to be removed and
discharged. Grantor will guard every part of the Mortgaged Property from
removal, destruction and damage, and will not do or suffer to be done any act
whereby the value of any part of the Mortgaged Property may be lessened.
Section 4.11 No Pledge or Change of Stock or Partnership Interest. If
Grantor is a corporation, the shareholders of Grantor shall not sell, pledge or
assign any shares of the stock of Grantor without the prior written consent of
Beneficiary. If Grantor is a partnership or joint venture, the partners or
joint venturers of Grantor shall not sell, pledge or assign any of their
partnership or joint venture interest in Grantor and no general partners or
joint venturers shall withdraw from or be admitted into Grantor without the
prior written consent of Beneficiary; provided, however, in no event shall this
section apply with respect to the sale, pledge or assignment of limited
partnership interests.
Section 4.12 Compliance with Laws. Grantor, the Mortgaged Property, and
the use thereof by Grantor shall comply with all laws, rules, ordinances,
regulations, covenants, conditions, restrictions, orders and decrees of any
governmental authority or court applicable to Grantor, Mortgaged Property, and
its use, and Grantor shall pay all fees or charges of any kind in connection
therewith.
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Section 4.13 Hold Harmless. Grantor will defend, at its own cost and
expense, and hold Beneficiary harmless from, any proceeding or claim in any way
relating to the Mortgaged Property or the Loan Instruments. All costs and
expenses incurred by Beneficiary in protecting its interests hereunder,
including all court costs and reasonable attorneys' fees, shall be borne by
Grantor. The provisions of this Section shall survive the payment in full of
the Indebtedness and the release of this Deed of Trust as to events occurring
and causes of action arising before such payment and release.
Section 4.14 Further Assurances. Grantor, upon the request of
Beneficiary, will execute, acknowledge, deliver, and record such further
instruments and do such further acts as may be necessary, desirable or proper
to carry out the purposes of the Loan Instruments and to subject to the liens
and security interests created thereby any property intended by the terms
thereof to be covered thereby, including specifically but without limitation,
any renewals, additions, substitutions, replacements, improvements, or
appurtenances to the Mortgaged Property.
Section 4.15 Payment of Debts. Grantor shall promptly pay when due all
obligations regarding the ownership and operation of the Mortgaged Property
except any such obligations which are being diligently contested in good faith
by appropriate proceedings and as to which Grantor, if requested by
Beneficiary, shall have furnished to Beneficiary security satisfactory to
Beneficiary.
Section 4.16 Modification by Subsequent Owners. Unless and until such
time as this Deed of Trust is released with respect to any applicable portion
of the Mortgaged Property, each Grantor agrees that it shall be bound by any
modification of this Deed of Trust or any of the other Loan Instruments made by
Beneficiary and any subsequent owner of such Mortgaged Property, with or
without notice to such Grantor, and no such modifications shall impair the
obligations of such Grantor under this Deed of Trust or any other of the Loan
Instruments. Nothing in this Section shall be construed as permitting any
transfer of the Mortgaged Property which would constitute an Event of Default
under other provisions of this Deed Of Trust.
ARTICLE V
ADDITIONAL LIENS
Except as expressly set forth in the Loan Agreement, Grantor will not,
without the prior written consent of Beneficiary, grant any lien, security
interest, or other encumbrance affecting any of the Mortgaged Property
("Additional Lien"). If Beneficiary consents to an Additional Lien or if the
foregoing prohibition is determined by a court of competent jurisdiction to be
unenforceable, any such Additional Lien shall contain express covenants to the
effect that the Additional Lien is unconditionally subordinate to this Deed of
Trust and all modifications, renewals, extensions or increases thereof. Any
default under an Additional Lien shall be an Event of Default hereunder.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Collection. If the Indebtedness shall be collected by
legal proceedings, whether through a probate or bankruptcy court or otherwise,
or shall be placed in the hands or an attorney for collection after default or
maturity, Grantor agrees to pay the reasonable attorneys' and collection fees
in the amount set forth in the Note, and such fees shall be a part of the
Indebtedness.
Section 6.2 Change in Ownership. If the ownership of the Mortgaged
Property or any part thereof becomes vested in a person other than Grantor, or
in the event of a change of ownership of Grantor, Beneficiary may, without
notice to Grantor, deal with such successor or successors in interest with
reference to this Deed of Trust and to the Indebtedness in the same
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manner as with Grantor without in any way vitiating or discharging Grantor's
liability hereunder or on the Indebtedness. No sale of the Mortgaged Property,
and no forbearance on the part of Beneficiary, and no extension of the time for
the payment of the Indebtedness, shall operate to release or affect the
original liability of Grantor.
Section 6.3 Release of Lien. Grantor shall perform each of the
covenants and agreements herein contained, then this conveyance shall become
null and void and shall be released at Grantor's written request and expense;
otherwise, it shall remain in full force and effect. No release or
modification of this conveyance, or of any of the liens, security interests or
assignments created and evidenced hereby shall be valid unless executed by
Beneficiary.
Section 6.4 Partial Release of Lien, Extension, etc. Any part of' the
Mortgaged property may be released by Beneficiary without affecting the liens,
security interests and assignments hereof against the remainder. The lien,
security interest and other rights granted hereby shall not affect or be
affected by any other security taken for the Indebtedness. The taking of
additional security, or the extension or renewal of the Indebtedness or any
part thereof, shall not release or impair the then, security interest and other
rights granted hereby, or affect the liability of any endorser or guarantor or
improve the right of any permitted junior lienholder; and this Deed of Trust,
as well as any instrument given to secure any renewal or extension of the
Indebtedness, or any part thereof, shall be and remain a first and prior lien,
except as otherwise provided herein, on all of the Mortgaged Property not
expressly released until the Indebtedness is paid.
Section 6.5 Waiver of Marshalling and Certain Rights. To the extent
that Grantor may lawfully do so, Grantor hereby expressly waives any right
pertaining to the marshaling of assets, the exemption of homestead,
administration of estates of decedents, or other matter to defeat, reduce or
affect the right of Beneficiary to sell the Mortgaged Property for the
collection of the Indebtedness (without any prior or different resort for
collection), or the right of Beneficiary to the payment of the Indebtedness out
of the proceeds of sale of the Mortgaged Property in preference to every other
person and claimant.
Section 6.6 No Waiver. No waiver of any default on the part of Grantor
or breach of any of the provisions of this Deed of Trust or of any other
instrument executed in connection with the Indebtedness shall be considered a
waiver of any other or subsequent default or breach, and no delay or omission
in exercising or enforcing the rights and powers herein granted shall be
construed as a waiver of such rights and powers, and likewise no exercise or
enforcement of any rights or powers hereunder shall be held to exhaust such
rights and powers, and every such rights and powers may be exercised from time
to time. Acceptance by Beneficiary of partial payments shall not constitute a
waiver of the default by failure to make full payments.
Section 6.7 Limitation on Interest. All agreements between Grantor and
Beneficiary, whether now existing or hereafter arising and whether written or
oral, are hereby limited, in accordance with the Note and the other Loan
Instruments, so that in no contingency shall the interest contracted for,
charged or received by Beneficiary exceed the maximum amount permissible under
applicable law.
Section 6.8 Successor and Assigns; Use of Terms. The covenants herein
contained shall bind, and the benefits and advantages shall inure to, the
respective heirs, executors administrators, personal representatives,
successors, and assigns of the parties hereto. Whenever used, the singular
number shall include the plural and the plural the singular, and the use of any
gender shall be applicable to all genders. The term "Grantor" shall include in
their individual capacities and jointly all parties hereinabove named as a
Grantor. The term "Beneficiary" shall include any lawful owner, holder,
pledgee, or assignee of any of the Indebtedness. The duties, covenants,
conditions, obligations, and warranties of Grantor in this Deed of Trust shall
be joint and several obligations of Grantor and each Grantor, if more than one,
and Grantor's heirs, executors, administrators, personal representatives,
successors and assigns. Each party who executes this Deed of Trust and each
subsequent owner of the Mortgaged Property, or any part thereof (other than
Beneficiary), covenants and agrees that it will perform, or cause to be
performed, each term and covenant of this Deed of Trust.
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Section 6.9 Beneficiary's Consent. In any instance hereunder where
Beneficiary's approval or consent is required or the exercise of Beneficiary's
judgment is required, the granting or denial of such approval or consent and
the exercise of such judgment shall be within the sole discretion of
Beneficiary, and Beneficiary shall not, for any reason or to any extent, be
required to grant such approval or consent or exercise judgment in any
particular manner regardless of the reasonableness of either the request or
Beneficiary's judgment.
Section 6.10 Severability. If any provision of this Deed of Trust is
held to be illegal, invalid, or unenforceable under present or future laws
effective while this Deed or Trust is in effect, the legality, validity and
enforceability or the remaining provisions of this Deed of Trust shall not be
affected thereby, and in lieu of each such illegal, invalid or unenforceable
provision there shall be added automatically as a part of this Deed of Trust a
provision which is legal, valid and enforceable and as similar in terms to such
illegal, invalid or unenforceable provision as may be possible. If any of the
Indebtedness should be unsecured, the unsecured portion of the Indebtedness
shall be completely paid prior to the payment of the secured portion of such
Indebtedness, and all payments made on account of the Indebtedness shall be
considered to have been paid on and applied first to the complete payment of
the unsecured portion of the Indebtedness.
Section 6.11 Modification or Termination. The Loan Instruments may
only be modified or terminated by a written instrument or instruments executed
by the party against which enforcement of the modification or termination is
asserted. Any alleged modification or termination which is not so documented
shall not be effective as to any party.
Section 6.12 No Partnership. Nothing contained in the Loan Instruments
is intended to create any partnership, joint venture or association between
Grantor and Beneficiary, or in any way make Beneficiary a co-principal with
Grantor with reference to the Mortgaged Property, and any inferences to the
contrary are hereby expressly negated.
Section 6.13 No Homestead. With respect to each Grantor who is an
individual, no part of the Mortgaged Property constitutes any part of his
business or residential homestead.
Section 6.14 Headings. The Article, paragraph and Subparagraph
headings hereof are inserted for convenience of reference only and shall not
alter, define, or be used in construing the text of such Articles, Paragraphs
or Subparagraphs
Section 6.15 Construction Deed of Trust. This Deed of Trust constitutes
a "construction mortgage" as defined in Section 9.313 of the Code and secures
an obligation incurred for the construction of the Improvements, including the
acquisition cost of the Land.
Section 6.16 Notices. Except as otherwise provided in subparagraph (c)
of Section 8.1 of this Deed of Trust, all notices, demands, requests, approvals
and other communications required or permitted hereunder shall be in writing
and shall be deemed to have been given when presented personally or deposited
in a regularly maintained mail receptacle of the United States Postal Service,
postage prepaid, registered or certified, return receipt requested, addressed
to Grantor at its address set forth in the first paragraph of this Deed of
Trust or to Beneficiary at its address set forth in Section 1.1 hereof, or such
other address as Grantor or Beneficiary may from time to time designate by
written notice to the other as herein required.
ARTICLE VII
EVENTS OF DEFAULT
The occurrence of any one of the following shall be a default hereunder
("Event of Default"):
Section 7.1 Failure to Pay Indebtedness. Any of the Indebtedness is
not paid when due, whether by acceleration or otherwise.
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Section 7.2 Non-Performance of Covenants. Any covenant in the Loan
Instruments (other than any covenant involving the payment of money) is not
fully and timely performed, or the occurrence of any default thereunder
(following thirty [30] days written notice thereof).
Section 7.3 False Representation. Any statement, representation or
warranty in the Loan Instruments, any financial statement or any other writing
delivered to Beneficiary in connection with the Indebtedness or by any
guarantor thereof is false, misleading or erroneous in any material respect.
Section 7.4 Bankruptcy or Insolvency. If the owner of the Mortgaged
Property or any person obligated to pay the Indebtedness: (a) does not pay its
debts as they become due or admits in writing its inability to pay its debts or
makes a general assignment for the benefit of creditors; or (b) commences, or
involuntarily becomes the subject of, any case, proceeding or other action
seeking reorganization, arrangement, adjustment, liquidation, dissolution or
composition of it or its debts under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors; or (c) has a trustee,
receiver, custodian or other similar official appointed for or take possession
of all or any part of the Mortgaged Property or any other of its property, or
has any court take jurisdiction of any other of its property through
attachment, sequestration, or similar writ.
Section 7.5 Transfer of the Mortgaged Property. Except with respect to
a Partial Release (as defined in the Loan Agreement) as permitted under
Paragraph 16 of the Loan Agreement, title to all or any part of the Mortgaged
Property (other than obsolete or worn Personal Property replaced by adequate
substitutes of equal or greater value than the replaced items when new) shall
become vested in any party other than Grantor, whether by operation of law or
otherwise.
Section 7.6 Abandonment. Grantor abandons any of the Mortgaged
Property.
Section 7.7 Foreclosure of Other Liens. If the holder of any lien,
security interest or assignment on the Mortgaged Property or any other property
securing the payment or performance of any of the Indebtedness institutes
foreclosure or other proceedings for the enforcement of its remedies
thereunder.
ARTICLE VIII
REMEDIES
Section 8.1 Exercise of Specific Remedies. If an Event of Default shall
occur, Beneficiary may exercise any one or more of the following remedies,
without notice:
(a) Acceleration. Beneficiary may declare the Indebtedness
immediately due and payable, without notice (except as required under
Article VII above) whether the same shall become immediately due and
payable. Grantor hereby waives notice of intent to accelerate and
notice of acceleration.
(b) Enforcement of Assignment of Rents and Leases.
Beneficiary may:
(1) terminate the license granted to Grantor to collect
the Rents, collect and ▇▇▇ for the Rents in Beneficiary's own
name, give receipts and releases therefor, and after deducting
all expenses of collection, including reasonable attorneys' fees,
apply the net proceeds thereof to any Indebtedness as Beneficiary
may elect; and
(2) make, modify, enforce, cancel, terminate or accept
surrender of any Leases, evict tenants, adjust the Rents,
maintain, decorate, refurbish, repair, clean, and make space
ready for renting, and otherwise do anything Beneficiary deems
advisable in connection with the Mortgaged Property.
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(c) Foreclosure. Beneficiary may require the Trustee to
foreclose this Deed of Trust and sell all or part of the Mortgaged
Property, at public auction, in which case Beneficiary or Beneficiary's
agent shall give notice of the foreclosure sale as provided by the Texas
Property Code, as then amended, and/or otherwise in accordance with the
requirements of the applicable laws of the State of Texas in effect at
the time of such sale. Trustee may sell all or any portion of the
Mortgaged Property. together or in lots or parcels, and may execute and
deliver to the purchaser or purchasers of such property, good and
sufficient deeds of conveyance of fee simple title with covenants of
general warranty made on behalf of Grantor. In no event shall Trustee
be required to exhibit, present or display at any such sale, any of the
personalty described herein to be sold at such sale. Trustee making such
sale shall receive the proceeds thereof and shall apply the same as
follows: first, he shall pay the reasonable expenses of Trustee and a
reasonable Trustee's fee or commission; second, he shall pay, so far as
may be possible, the Indebtedness, discharging first that portion of the
Indebtedness arising under the covenants or agreements herein contained
and not evidenced by the Note, and third, he shall pay the residue, if
any, to the persons legally entitled thereto. Payment of the purchase
price to Trustee shall satisfy the obligation of the purchaser at such
sale therefor, and such purchaser shall not be responsible for the
application thereof. The sale or sales by Trustee of less than the
whole of the Mortgaged Property shall not exhaust the power of sale
herein granted, and Trustee is specifically empowered to make successive
sale or sales under such power until the whole of the Mortgaged Property
shall be sold; and if the proceeds of such sale or sales of less than
the whole of the Mortgaged Property shall be less than the aggregate of
the Indebtedness and the expenses thereof, this Deed of Trust and the
lien, security interest and assignment hereof shall remain in full force
and effect as to the unsold portion of the Mortgaged Property just as
though no sale or sales had been made; provided, however, that Grantor
shall never have any right to require the sale or sales of less than the
whole of the Mortgaged Property, but Beneficiary shall have the right,
at its sole election, to request Trustee to sell less than the whole of
the Mortgaged Property. If default is made hereunder, the holder of the
Indebtedness or any part thereof on which the payment is delinquent
shall have the option to proceed with foreclosure in satisfaction of
such item either through judicial proceedings or by directing Trustee to
proceed as if under a full foreclosure, conducting the sale as herein
provided without declaring the entire Indebtedness due, and if sale is
made because of default of an installment, or a part of an installment,
such sale may be made subject to the unmatured part of the Indebtedness;
and it is agreed that such sale, if so made, shall not in any manner
affect the unmatured part of the Indebtedness, but as to such unmatured
part, this Deed of Trust shall remain in full force and effect as though
no sale had been made under the provisions of this paragraph. Several
sales may be made hereunder without exhausting the right of sale for any
unmatured part of the Indebtedness. At any such sale (1) Grantor hereby
agrees, in its behalf and in behalf of its heirs, executors,
administrators, successors, personal representatives and assigns, that
any and all recitals made in any deed of conveyance given by Trustee
with respect to the identity of Beneficiary, the occurrence or existence
of any default, the acceleration of the maturity of any of the
Indebtedness, the request to sell, the notice of sale, the giving of
notice to all debtors legally entitled thereto, the time, place, terms,
and manner of sale, and receipt, distribution and application of the
money realized therefrom, or the due and proper appointment of a
substitute Trustee, and, without being limited by the foregoing, with
respect to any other act or thing having been duly done by Beneficiary
or by Trustee hereunder, shall be taken by all courts of law and equity
as prima facie evidence that the statements or recitals state facts and
are without further question to be so accepted, and Grantor hereby
ratifies and confirms every act that Trustee or any substitute Trustee
hereunder may lawfully do in the premises by virtue hereof, (2) the
purchaser may disaffirm any easement granted, or rental, lease or other
contract made, in violation of any provision of this Deed of Trust, and
may take immediate possession of the Mortgaged Property free from, and
despite the terms of, such grant of easement and rental or lease
contract; and (3) Beneficiary may bid and become the purchaser of all or
any part of the Mortgaged Property at any trustee's or foreclosure sale
hereunder, and the amount of Beneficiary's successful bid may be
credited on the Indebtedness.
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(d) Lawsuits. Beneficiary may proceed by a suit or suits in
equity or at law, whether for the specific performance of any covenant
or agreement herein contained or in aid of the execution or any power
herein granted, or for any foreclosure hereunder or for the sale of the
Mortgaged Property under the judgment or decree of any Court or courts
of competent jurisdiction.
(e) Entry on Mortgaged Property. Upon occurrence of an event of
default hereunder, Beneficiary may enter into and upon and take
possession of all or any part of the Mortgaged Property, and may exclude
Grantor, and all persons claiming under Grantor, and its or their agents
or servants, wholly or partly therefrom; and, holding the same,
Beneficiary may use, administer, manage, operate, and control the
Mortgaged Property and may exercise all rights and powers of Grantor in
the name, place and stead of Grantor, or otherwise, as Beneficiary shall
deem best; and in the exercise of any of the foregoing rights and powers
Beneficiary shall not be liable to Grantor for any loss or damage
thereby sustained unless due solely to the willful misconduct or gross
negligence of Beneficiary.
(f) Trustee or Receiver. Beneficiary may make application to
a court of competent jurisdiction as a matter of strict right and
without notice to Grantor or regard to the adequacy of the Mortgaged
Property for the repayment of the Indebtedness, for appointment of a
receiver of the Mortgaged Property and Grantor does hereby irrevocably
consent to such appointment. Any such receiver shall have all the usual
powers and duties of receivers in similar cases, including the full
power to rent, maintain and otherwise operate the Mortgaged Property
upon such terms as may be approved by the Court, and shall apply the
Rents in accordance with the provisions of Section 2.1 hereof.
Section 8.2 Tenancy at Will. In the event of a trustee's sale
hereunder, if at the time of such sale Grantor occupies the portion of the
Mortgaged Property so sold or any part thereof, Grantor shall immediately
become the tenant of the purchaser at such sale, which tenancy shall be a
tenancy from day to day, terminable at the will of either tenant or landlord,
at a reasonable rental per day based upon the value of the portion of the
Mortgaged Property so occupied, such rental to be due and payable daily to the
purchaser. An action of forcible detainer shall lie if the tenant holds over
after a demand in writing for possession of such Mortgaged Property.
Section 8.3 Substitute Trustee. If, for any reason, Beneficiary
prefers to appoint a substitute Trustee hereunder, Beneficiary may, from time
to time, by written instrument, appoint one or more substitute Trustees, who
shall succeed to all the estate, rights, powers, and duties of the original
Trustee named herein. Such appointment may be executed by anyone acting in a
representative capacity, and such appointment shall be conclusively presumed to
have been executed with appropriate authority.
Section 8.4 Indemnification of Trustee. Trustee shall not be liable
for any act or omission or error of judgment. Trustee may rely on any document
believed by him in good faith to be genuine. All money received by Trustee
shall, until used or applied as herein provided, be held in trust, but need not
be segregated (except to the extent required by law), and Trustee shall not be
liable for interest thereon. Grantor hereby indemnifies Trustee against all
liability and expenses which he may incur in the performance of his duties
hereunder (other than for the gross negligence or willful misconduct of
Trustee).
Section 8.5 Beneficiary's Right to Perform. Upon Grantor's failure to
make any payment or perform any act required by the Loan Instruments, then at
any time thereafter, and without notice to or demand upon Grantor and without
waiving or releasing any other right, remedy or recourse, Beneficiary may (but
shall not be obligated to) make such payment or perform such act for the
account of and at the expense of Grantor, and shall have the right to enter the
Mortgaged Property for such purpose and to take all such action thereon as it
may deem necessary or appropriate.
Section 8.6 Reimbursement of Expenditure. If Beneficiary shall expend
any money chargeable to Grantor or subject to reimbursement by Grantor under
the terms of the Loan Instruments, Grantor will repay the same to Beneficiary
immediately at the place where the Note
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is payable. together with interest thereon at the highest rate permitted by
applicable law from and after the date of each such expenditure by Beneficiary.
Section 8.7 Other. Beneficiary may exercise any and all other rights,
remedies and recourse granted under the Loan Instruments now or hereafter
existing in equity or at law for the protection and preservation of the
Mortgaged Property.
Section 8.8 Remedies Cumulative, Concurrent and Nonexclusive.
Beneficiary shall have all rights, remedies and recourse granted in the Loan
Instruments available at law or equity (including, without limitation, those
granted by the Code and applicable to the Mortgaged Property, or any portion
thereof) and same (a) shall be cumulative and concurrent, (b) may be pursued
separately, successively or concurrently against Grantor or others obligated
for the Indebtedness, or any part thereof or against any one or more of them,
or against the Mortgaged Property, at the sole discretion of Beneficiary, (c)
may be exercised as often as occasion therefor shall arise, it being agreed by
Grantor that the exercise or failure to exercise any of same shall in no event
be construed as a waiver or release thereof or of any other right, remedy or
recourse, and (d) are intended to be, and shall be, nonexclusive.
Section 8.9 Rights and Remedies of Sureties. Grantor waives any right
or remedy which Grantor may have or be able to assert pursuant to Chapter 34 of
the Business and Commerce Code of the State of Texas pertaining to the rights
and remedies of sureties.
ARTICLE IX
HAZARDOUS MATERIAL
Section 9.1 Grantor's Warranties. Grantor hereby represents and
warrants that, to the best of Grantor's knowledge, no hazardous waste (as
defined in 42 U.S.C. Section 6901, et seq.) or hazardous substance (as defined
in 42 U.S.C. Section 9601, et seq.), or other prohibited materials (together
"Hazardous Materials") are now located on the Mortgaged Property and that
neither Grantor nor, to the best of Grantor's knowledge, any other person has
ever caused or permitted any Hazardous Materials to be placed, held, located or
disposed of on, under or at the Mortgaged Property or any part thereof. To the
best of Grantor's knowledge, no part of the Mortgaged Property has ever been
used as a manufacturing, storage or dump site for Hazardous Materials nor is
any part of the Mortgaged Property affected by an Hazardous Materials
("Hazardous Materials Contamination").
Section 9.2 Grantor's Covenants. Grantor agrees to (a) give notice to
Beneficiary immediately upon Grantor's acquiring knowledge of the presence of
any Hazardous Materials on the Mortgaged Property or of any Hazardous Materials
Contamination with a full description thereof; (b) promptly comply with any
governmental requirement requiring the removal, treatment or disposal of such
Hazardous Materials or Hazardous Materials Contamination and provide
Beneficiary with satisfactory evidence of such compliance; and (c) provide
Beneficiary, within thirty (30) days after demand by Beneficiary, with a bond,
letter of credit or similar financial assurance evidencing to Beneficiary's
satisfaction that the necessary funds are available to pay the cost of
removing, treating and disposing of such Hazardous Materials or Hazardous
Materials Contamination and discharging any assessments which may be
established on the Mortgaged Property as a result thereof; provided, however,
in any event the terms and provisions of this section shall be of no force and
effect for such portions of the Mortgaged Property that Grantor has obtained a
Partial Release (in accordance with the terms of the Loan Agreement) from this
Deed of Trust and the Deeds of Trust Incorporated By Reference a Master Form
Deed of Trust described in Article X below (and in no event shall any breach of
this section be a basis for a refusal by Beneficiary to grant such Partial
Release).
Section 9.3 Indemnification. Grantor shall defend, indemnify and hold
harmless Beneficiary and Trustee from any and all liabilities (including,
without limitation, reasonable attorneys' fees and remedial costs), suits,
costs of any settlement or judgment and claims of any and every kind whatsoever
which may now or in the future (whether before or after the release of this
Deed of
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Trust) be paid, incurred or suffered by or asserted against, Beneficiary or
Trustee by any person or entity or governmental agency for, with respect to, or
as a direct or indirect result of, the presence on or under, or the escape,
seepage, leakage, spillage, discharge, emission, discharging or release from
the Mortgaged Property of any Hazardous Materials or any Hazardous Materials
Contamination or which arise out of or result from the environmental condition
of the Mortgaged Property or the applicability of any governmental requirement
relating to Hazardous Materials caused by Grantor, regardless of whether or not
caused by or within the control of Beneficiary or Trustee; provided, however,
in no event shall this Section 9.3 apply with respect to matters solely caused
by or arising solely out of the gross negligence or willful misconduct of
Beneficiary, nor shall this Section 9.3 limit or preclude any other right or
remedy available to Beneficiary, either at law or in equity. The
representations, covenants and warranties contained in this Article 9 shall
survive the foreclosure, deed-in-lieu of foreclosure and/or release of this
Deed of Trust.
Section 9.4 Beneficiary's Right to Remove Hazardous Materials.
Beneficiary shall have the right (but not the obligation), without in any way
limiting Beneficiary's other rights and remedies under this Deed of Trust, to
enter onto the Mortgaged Properly or to take such other actions as if deems
necessary or advisable to clean up, remove, resolve or minimize the impact of,
or otherwise deal with, any Hazardous Materials or Hazardous Materials
Contamination on the Mortgaged Property following receipt of any notice from
any person or entity asserting the existence of any Hazardous Materials or
Hazardous Materials Contamination pertaining to the Mortgaged Property. All
reasonable costs and expenses paid or incurred by Beneficiary in the exercise
of any such rights shall be secured by this Deed of Trust and shall be payable
by Grantor to Beneficiary upon demand.
ARTICLE X
ADDITIONAL DEEDS OF TRUST
It is anticipated that Grantor from time to time will execute one or
more Deeds of Trust Incorporating by Reference a Master Form Deed of Trust
incorporating by reference this Deed of Trust, to further secure the
Indebtedness from time to time. A release of this Deed of Trust shall not
effect a full release of this Deed of Trust so long as any Deed of Trust
Incorporating by Reference a Master Form Deed of Trust that incorporates by
reference this Deed of Trust is not released. Notwithstanding the previous
sentence, if this Deed of Trust is released at such time as a Deed of Trust
Incorporating by Reference a Master Form Deed of Trust that incorporates by
reference provisions of this Deed of Trust is not released, then the Deed of
Trust Incorporating by Reference a Master Form Deed of Trust shall continue in
full force and effect, including the applicable provisions of this Deed of
Trust incorporated by reference.
(The balance of this page is intentionally left blank.)
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DATED AND EFFECTIVE AS OF the date first set forth above.
GRANTOR:
NEWMARK HOMES, L.P.,
a Texas limited partnership
By: NEWMARK HOME CORPORATION,
a Nevada corporation,
General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
----------------------
Title:
---------------------
STATE OF TEXAS )
)
COUNTY OF FORT BEND )
This instrument was acknowledged before me on September 3, 1997, by ▇▇▇▇▇
▇▇▇▇▇, Sr. Vice President of NEWMARK HOME CORPORATION, a Nevada corporation,
General Partner of NEWMARK HOMES, L.P., a Texas limited partnership, on behalf
of said limited partnership.
(SEAL) /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
Notary Public in and for the State of Texas
My Commission Expires:
3-10-2001 ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------- -------------------------------------------
Printed Name of Notary
[SEAL]
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