DEED OF TRUST, SECURITY AGREEMENT,
AND FINANCING STATEMENT
THE STATE OF TEXAS )
) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF ▇▇▇▇ )
THIS DEED OF TRUST AND SECURITY AGREEMENT dated as of the 31st day of
May, 2000, is given by OUR FOOD PRODUCTS GROUP, INC., a Texas corporation
(herein called the "Grantors," whether one or more), whose mailing address is #▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ unto ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Trustee (herein called
the "Trustee") whose mailing address is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, in trust for ▇▇▇▇▇ FARGO BUSINESS CREDIT, INC., a Minnesota
corporation (herein called the "Beneficiary"), whose address is Norwest Center,
▇▇▇▇▇-▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
W I T N E S S E T H:
- - - - - - - - - -
FOR AND IN CONSIDERATION of the Indebtedness hereinafter described,
Grantors have granted, bargained, sold and conveyed, and by these presents do
grant, bargain, sell and convey, in trust, unto the Trustee, his successors and
assigns, forever, all and singular the property hereinafter described, situated
in the County of ▇▇▇▇ and State of Texas, to wit:
(a) All that certain tract or parcel of land located at #▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇, and more particularly described in EXHIBIT "A" attached
hereto and incorporated herein by reference for all purposes;
(b) All rights, titles, interests, estates, reversions and remainders
owned or to be owned by Grantors in and to the above described premises and in
and to the properties covered hereby;
(c) All rents, income, issues and profits thereof, subject however, to
the right, power and authority given to and conferred upon Beneficiary to
collect and apply such rents, issues and profits;
(d) All lands owned or to be owned by Grantors next or adjacent to any
land herein described or herein mentioned including, without limitation, all
rights, titles and interests of Grantors owned or to be owned in and to all
easements, streets and rights-of-way of every kind and nature adjoining
the said lands and all public or private utility connections thereto and all
appurtenances, servitudes, rights, ways, privileges and prescriptions thereunto,
including without limitation easement rights for ingress, egress, parking,
utilities and drainage;
(e) All buildings and improvements of every kind and description now
or hereafter erected or placed on said real property and all materials intended
for construction, reconstruction, alterations and repairs of such improvements
now or hereafter so erected;
(f) All rights, titles and interests of Grantors owned or to be owned
in and to all oil, gas, coal, uranium and other minerals in, under or which may
be produced or saved from the above described premises and properties covered
hereby, all leases, pooling agreements, farmout agreements and other agreements
relating to said minerals, and all products of any kind refined from said
minerals;
(g) All goods, machinery, apparatus, equipment, fittings, fixtures,
inventory, furniture, furnishings, and articles of personal property of every
kind and nature whatsoever owned or hereafter acquired by Grantors, or in which
Grantors have an interest, and now or hereafter affixed to, or located on or
about said real property or used in connection with the operations of said real
property (including, without limitation, all heating, lighting, laundry, power
equipment, engines, pipes, pumps, tanks, motors, conduits, switchboards,
plumbing, cleaning, fire prevention, fire extinguishing, refrigerating,
ventilating, and communications apparatus, air cooling and air conditioning
apparatus, ducts and compressors, elevators, alarm systems, escalators, shades,
carpets, awnings, screens, doors and windows, dishwashers, disposals, stoves,
refrigerators, ovens, attached cabinets, partitions, plants, shrubbery, swimming
pool, office and clubhouse furniture and furnishings, other furniture and
furnishings);
(h) All awards heretofore and hereafter made by reason of the taking
by eminent domain of the whole or any part of said real property and any
improvements, including any awards for use and occupation and for change of
grade of streets;
(i) All proceeds of insurance monies hereafter paid by reason of loss
or damage by fire, lightning, explosion, tornado, windstorm, earthquake or other
hazard to the whole or any part of said real property and improvements thereon;
(j) Without limitation of the foregoing, any and all rights, rents,
revenues, benefits, leases, contracts, bonds including any and all payment and
performance bonds, accounts, general intangibles (including without limitation,
tradenames, trademarks, service marks and copyrights), books and records,
computers, computer programs and software, chattel paper, money, instruments,
documents, receipts, agreements for architectural and engineering services,
agreements for construction, plans, studies and analyses (including without
limitation architectural, engineering, electrical and mechanical plans, studies
and analyses), permits, certificates of occupancy, building certificates,
commitments (including without limitation loan commitments), surveys, licenses,
rights to water and wastewater availability and capacity, franchises, agreements
and any other contract or agreement relating to or
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in connection with said real property or any business conducted on said real
property, tenements, hereditaments and appurtenances now or hereafter owned by
Grantors and appertaining to, generated from, arising out of or belonging to the
above described properties or any part thereof;
(k) All proceeds, products, additions to, substitutions for and
accessions of any and all of the foregoing property and estates;
(all of the aforesaid being hereinafter sometimes called the "Mortgaged
Property").
TO HAVE AND TO HOLD the Mortgaged Property unto Trustee, his
successors in this trust and his assigns, forever, and Grantors do hereby bind
Grantors, their respective heirs, legal representatives, successors and assigns,
to warrant and forever defend the Mortgaged Property unto Trustee, his
successors and assigns, forever, against the claim or claims of all persons
whomsoever claiming or to claim the same, or any part thereof, subject only to
the Permitted Encumbrances.
ARTICLE I
DEFINITIONS
Section 1.01 TERMS DEFINED ABOVE. As used in this Deed of Trust, the
terms "Beneficiary," "Grantors," "Mortgaged Property" and "Trustee" shall have
the respective meanings indicated above.
Section 1.02 CERTAIN DEFINITIONS. The following terms shall have the
meanings assigned to them below whenever they are used in this Deed of Trust,
unless the context clearly otherwise requires. Except where the context
otherwise requires, words imparting the singular number shall include the plural
number and vice versa.
"Beneficial Ownership Interest" shall mean any shareholder or other
equity interest in Grantors.
"Collateral" shall mean all personal property described in the
granting clause hereof which is secured hereby, and all proceeds thereof.
"Credit Agreement " shall mean that certain Credit and Security
Agreement of even date herewith executed by and between the Grantors, as
borrower and the Beneficiary, as lender, as the same may be hereafter amended,
supplemented, extended and modified from time to time, pursuant to which the
Beneficiary has agreed to extend a certain revolving loan and term credit
facilities to the Grantors as more specifically set forth therein.
"Deed of Trust" shall mean this Deed of Trust, Security Agreement and
Financing Statement and any amendments or supplements hereto.
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"DTPA" shall mean the Texas Deceptive Trade Practices-Consumer
Protection Act, Subchapter E of Chapter 17 of the Texas Business and Commerce
Code.
"Event of Default" shall mean the events described in Article IV
hereof.
"Governmental Requirements" shall mean all laws, ordinances, statutes,
codes, rules, regulations, orders, and decrees of the United States, the State
of Texas, and all local or governmental or regulatory authorities exercising
jurisdiction over the Grantors or the Mortgaged Property.
"Grantors' Agents" shall mean the Grantors' agents, contractors,
authorized representatives and employees.
"Hazardous Material" shall mean any radioactive, hazardous, or toxic
substance, material, waste or similar term, the presence of which on the
Mortgaged Property, or the discharge or emission of which from the Mortgaged
Property, is prohibited by Governmental Requirements or which require special
handling in collection, storage, treatment, or disposal by any Governmental
Requirements. The term Hazardous Material includes, but is not limited to, any
material, substance, waste or similar term which is:
(a) Defined as hazardous material under the laws of the State of
Texas, as amended from time to time;
(b) Defined as a hazardous substance under Section 311 of the Federal
Water Pollution Control Act (33 U.S.C. Section 1317) as amended from time to
time;
(c) Defined as a hazardous waste under Section 1004 of the federal
Resource Conservation and Recovery Act (RCRA) (42 U.S.C. Section 6901, ET SEQ.)
as amended from time to time;
(d) Defined as a hazardous waste substance under Section 101 of the
Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)
and as amended by the Superfund Amendments and Reauthorization Act (▇▇▇▇) (42
U.S.C. Section 9601, ET SEQ.) as amended from time to time;
(e) Defined as a radioactive, hazardous, or toxic substance, waste,
material or similar term in any rules and regulations, as amended from time to
time, which are adopted by any administrative agency; including, but not limited
to the Environmental Protection Agency, the Occupational Safety and Health
Administration, and any such similar state or local agency having jurisdiction
over the Mortgaged Property, whether or not such rules and regulations have the
force of law;
(f) Determined to contain asbestos or polychlorinated biphenyls;
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(g) Defined as radioactive, hazardous, or toxic waste, substance,
material or similar term in any other statute, regulation, rule or law presently
in effect, or enacted or adopted at any time after the date of this Deed of
Trust, by local authorities, the State of Texas, or the United States
government; or
(h) Subject to regulation under the Toxic Substances Control Act
(TSCA) (15 U.S.C. Section 2601, ET -- SEQ.) as amended from time to time.
"Hazardous Material Contamination" shall mean the contamination
(whether presently existing or hereafter occurring) of the Mortgaged Property,
or the contamination of the buildings, facilities, soil, ground water, aquifer,
air or other elements on, or of, any other property owned by the Grantors, as a
result of Hazardous Material at any time (whether before or after the date of
this Deed of Trust) emanating from the Mortgaged Property.
"Indebtedness" or "said Indebtedness" shall mean the following debts
and obligations each whether now existing or hereafter incurred:
(a) The Notes;
(b) The performance of all covenants and agreements of Grantors
herein;
(c) The payment and performance of all sums and covenants of Grantors
pursuant to this Deed of Trust, the Credit Agreement and any and all documents
relating to the Credit Agreement, Notes or this Deed of Trust;
(d) All funds hereafter advanced by Beneficiary to or for the benefit
of Grantors, or otherwise, as contemplated by any covenant or provision herein
contained, in the Notes or Credit Agreement or for any other purpose, and all
other indebtedness, of whatever kind or character, owing or which may hereafter
become owing by Grantors to Beneficiary, whether such indebtedness is direct or
indirect, primary or secondary, fixed or contingent or arises out of or is
evidenced by note, deed of trust, open account, overdraft, endorsement, surety
agreement, guaranty or otherwise, it being contemplated that Grantors may
hereafter become indebted to Beneficiary in further sum or sums and whether
owned directly by Beneficiary or acquired from a third party;
(e) All renewals, extensions, rearrangements, increases and
modifications of any of the indebtedness described hereinabove; and
(f) Any and all attorneys' fees and expenses of collection payable
under the terms hereof and of the Notes.
"Notes" shall mean those certain promissory notes of even date
herewith executed by Grantors and payable to the order of the Beneficiary to
evidence Grantors' repayment obligations
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under the credit facilities provided in the Credit Agreement, together with any
renewals, extensions, rearrangements and modifications thereof, which notes
contain a stated maturity date of May 31, 2003.
"Other Liable Party" shall mean any Person, other than Grantors,
primarily or secondarily liable for any of the Indebtedness or one who grants
Beneficiary a lien on any property as security for the Indebtedness.
"Permitted Encumbrances" shall mean those matters described in EXHIBIT
"B" attached hereto and incorporated herein by reference for all purposes.
"Person" shall mean any individual, corporation, trust, trustee,
partnership, unincorporated association, government, governmental agency, or
court or other authority, including without limitation any officer appointed by
any court or other authority.
"Security Instruments" shall mean all instruments and documents given
in connection with or as security for the Notes or other Indebtedness, executed
by the Grantors or any other Person including, without limitation, this Deed of
Trust.
"Termination Date" shall mean the date on which this Deed of Trust
shall be paid and satisfied in full; except that if this Deed of Trust shall be
paid and satisfied by foreclosure, sale under the power of sale herein
contained, or the acceptance of a deed in lieu of foreclosure, or by any other
means by which title to the Mortgaged Property, or any part thereof, becomes
vested in the Beneficiary under this Deed of Trust, the Beneficiary, or any
transferee, assignee, subsidiary, or other successor in interest to the
Beneficiary, then the Termination Date shall be the later of (i) the date on
which this Deed of Trust is paid and satisfied in full, or (ii) the date on
which the Grantors and the Grantors' employees, agents, and officers have fully
and finally relinquished, surrendered, and delivered up the ownership, use,
occupancy, and possession of all portions of the Mortgaged Property.
"Trustee" shall mean the Trustee named in the opening paragraph
hereof, and any substitute or successor trustee.
"Uniform Commercial Code" shall mean, subject to the terms of Section
7.12 hereof, the Uniform Commercial Code as adopted in the State of Minnesota
and heretofore and hereafter amended or succeeded.
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ARTICLE II
INDEBTEDNESS SECURED
Section 2.01 SECURITY FOR INDEBTEDNESS. This conveyance is made in
trust to secure and enforce the payment of all of the Indebtedness.
Section 2.02 PLACE OF PAYMENT. The Indebtedness shall be payable at
the above stated address of Beneficiary or at such other place as Beneficiary
may hereafter direct in writing.
Section 2.03 INTEREST ON SAID INDEBTEDNESS. Unless otherwise provided
in any instrument evidencing the Indebtedness, the Indebtedness and all portions
thereof shall bear interest at the same rate per annum as the Revolving Note (as
defined in the Credit Agreement) bears, from date of accrual of Indebtedness
until paid.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF GRANTORS
In order to better secure payment of the Indebtedness, and to secure
performance of Grantors' covenants and agreements set forth herein, Grantors do
hereby jointly and severally represent, warrant, covenant and agree with
Beneficiary and with Trustee as follows:
Section 3.01 PAYMENT OF SAID INDEBTEDNESS. Grantors shall pay all of
the Indebtedness, together with the interest and other appurtenant charges
thereon, when the same shall become due, in accordance with the terms of the
Notes and all other instruments evidencing the Indebtedness or evidencing any
renewals, rearrangements or extensions of the same or any part thereof. The
Grantors will do and perform every act and discharge all of the obligations
provided to be performed and discharged by the Grantors under the Security
Instruments, including this Deed of Trust, at the time or times and in the
manner specified.
Section 3.02 WARRANTY OF TITLE. Grantors represent and warrant that
they have in their own right good and indefeasible title in fee simple to the
above described land, that the Mortgaged Property is free from encumbrance
superior to the liens and security interests hereby created, subject only to the
Permitted Encumbrances, and that Grantors have full right and authority to make
this conveyance. Grantors agree to maintain and preserve their legal existence
and all related rights, franchises and privileges. Grantors shall at all times
comply with and perform all obligations under any applicable laws, statutes,
regulations or ordinances relating to the Mortgaged Property and Grantors' use
and operation thereof.
Section 3.03 RIGHT OF INSPECTION. The Grantors will permit any
officer, employee or agent of the Beneficiary to visit and inspect any of the
Mortgaged Property of the Grantors, examine the Grantors' books of record and
accounts, take copies and extracts therefrom, and discuss the affairs, finances
and accounts of the Grantors with the Grantors' officers, accountants and
auditors, all at such times and as often as the Beneficiary may desire.
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Section 3.04 TAX AND INSURANCE RESERVE. If requested by Beneficiary,
Grantors shall create a reserve for the payment of all insurance premiums, taxes
and assessments against or affecting the Mortgaged Property by paying the
Beneficiary, on the first day of each calendar month prior to the maturity of
the Notes, a sum equal to one-twelfth (1/12) of the estimated taxes, assessments
and insurance premiums that will next become due and payable on the Mortgaged
Property as reasonably estimated by Beneficiary. All such sums shall be held by
Beneficiary without interest, unless interest is required by applicable law, for
the purposes of paying such premiums, taxes and assessments. Any excess reserve
shall, at the discretion of Beneficiary, be credited by Beneficiary on
subsequent reserve payments or subsequent payments to be made on the Notes. If
Beneficiary elects to credit excess reserves to subsequent reserves or note
payments, Beneficiary will credit such excess first to subsequent reserves,
provided there is then no event of default and no event has occurred which with
notice or the passage of time could result in an event of default. Any
deficiency shall be paid by Grantors to Beneficiary on or before the date when
such premiums, taxes and assessments shall become delinquent. Transfer of legal
title to the Mortgaged Property shall automatically transfer the interest of
Grantors in all sums deposited with Beneficiary under the provisions hereof.
Section 3.05 TAXES. Grantors shall pay all taxes and assessments
against the Mortgaged Property, including, without limitation, all taxes in lieu
of ad valorem taxes, as the same become due and payable. In the event of the
passage after the date of this Deed of Trust of any law by the State of Texas
deducting from the Mortgaged Property for the purposes of taxation any lien
thereon, or changing in any way the laws now in force for the taxation of
mortgages, deeds of trust or indebtedness secured thereby, for state or local
purposes, or the manner of the operation of any such taxes so as to affect the
interest of Beneficiary, then and in such event, Grantors shall bear and pay the
full amount of such taxes. If Grantors fail to pay any such taxes and
assessments, including, without limitation, taxes in lieu of ad valorem taxes
and taxes against this Deed of Trust or the Indebtedness secured hereby,
Beneficiary may pay the same, together with all costs and penalties thereon, at
Grantors' expense; provided, however, that if for any reason payment by Grantors
of any such new or additional taxes would be unlawful or if the payment thereof
would constitute usury or render said indebtedness wholly or partially usurious
under any of the terms or provisions of the Notes or this Deed of Trust, or
otherwise, Beneficiary may, at its option, declare the Indebtedness with all
accrued interest thereon to be immediately due and payable, or Beneficiary may,
at its option, pay the amount or portion of such taxes as renders the
Indebtedness unlawful or usurious, in which event Grantors shall concurrently
therewith pay the remaining lawful and nonusurious portion or balance of said
taxes. Grantors shall cause the Mortgaged Property to be segregated on any tax
rolls from all other property.
Section 3.06 CONDEMNATION PROCEEDS. All judgments, decrees and awards
or payment for injury or damage to the Mortgaged Property, and all awards
pursuant to proceedings for condemnation thereof, including interest thereon,
are hereby assigned in their entirety to Beneficiary, who shall apply the same
first to reimbursement of all costs and expenses incurred by Beneficiary in
connection with such condemnation proceeding and the balance shall be applied to
said Indebtedness in such manner as it may elect; and Beneficiary is hereby
authorized, in the name of Grantors, to
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execute and deliver valid acquittances for, and to appeal from, any such award,
judgment or decree. If Beneficiary elects to allow a portion of the proceeds of
any condemnation proceeding to be paid to Grantors to be used in rebuilding,
restoration or repair of the Mortgaged Property, then the disbursement of such
proceeds shall be on such terms and subject to such conditions as Beneficiary
may specify. Grantors shall promptly notify Beneficiary of the institution or
threatened institution of any proceeding for the condemnation of any of the
Mortgaged Property. Beneficiary shall have the right to participate in any such
condemnation proceeding.
Section 3.07 DEFENSE OF TITLE. If while this Deed of Trust is in force
the title of Trustee to the Mortgaged Property, or any part thereof, shall be
endangered or shall be attacked directly or indirectly, Grantors hereby
authorize Beneficiary, at Grantors' expense, to take all necessary and proper
steps for the defense of said title, including the employment of counsel, the
prosecution or defense of litigation, and the compromise or discharge of claims
made against said title.
Section 3.08 COSTS IN COMPLYING WITH COVENANTS. The Grantors will pay
all legal fees incurred by the Beneficiary in connection with the preparation,
amendment, interpretation, administration and enforcement of this Deed of Trust
and any and all other Security Instruments contemplated hereby, and any action
in defending any claim or liability arising out of or related to the
transactions contemplated by this Deed of Trust. All costs and expenses incurred
in performing and complying with Grantors' covenants set forth herein shall be
borne solely by Grantors. If, in pursuance of any covenant herein contained,
Beneficiary shall pay out any money chargeable to Grantors, or subject to
reimbursement by Grantors under the terms of this Deed of Trust, Grantors shall
repay the same to Beneficiary immediately at the place where the Notes or other
Indebtedness hereby secured is payable, together with interest thereon at the
default rate of interest set forth in the Notes or, if no such rate is
applicable, then at the maximum lawful rate of interest permitted by applicable
federal or state law to be charged to and paid by Grantors from and after the
date of Beneficiary's making such payment. The sum of each such payment shall be
added to the Indebtedness hereby secured and thereafter shall form a part of the
same; and it shall be secured by this Deed of Trust and by subrogation to all
the rights of the Person receiving such payment.
Section 3.09 CONDITION OF PROPERTY; LIENS; REMOVAL OF LIENS. Grantors
shall keep every part of the Mortgaged Property in first class condition and
presenting a first class appearance, make promptly all repairs, renewals and
replacements necessary to such end, prevent waste to any part of the Mortgaged
Property, and do promptly all else necessary to such end; and Grantors shall
discharge all claims for labor performed and material furnished therefor, and
shall not suffer any lien of mechanics or materialmen therefor to attach to any
part of the Mortgaged Property. Grantors shall guard every part of the Mortgaged
Property from removal, destruction and damage, and shall not do or suffer to be
done any act whereby the value of any part of the Mortgaged Property may be
lessened. No building or other property now or hereafter covered by the lien of
this Deed of Trust shall be removed, demolished or materially altered or
enlarged, nor shall any new building be constructed, without the prior written
consent of Beneficiary. Grantors shall not initiate, join in, or consent to any
change in any private restrictive covenants, zoning ordinances or other public
or
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private restrictions limiting or defining the uses that may be made of the
Mortgaged Property or any part thereof without the prior written consent of
Beneficiary. Beneficiary and its agents or representatives shall have access to
the Mortgaged Property at all reasonable times in order to inspect same and
verify Grantors' compliance with their duties and obligations under this
document.
Section 3.10 PROHIBITION OF SALE, ETC. Except as otherwise expressly
permitted under the Credit Agreement, Grantors shall not sell, contract for
sale, exchange, assign, convey, transfer, mortgage, grant a security interest in
or otherwise dispose of or encumber all or any portion of the Mortgaged Property
or any Beneficial Ownership Interest or any legal or equitable right or interest
in or to the Mortgaged Property or any Beneficial Ownership Interest without the
prior written consent of Beneficiary; nor shall Grantors grant any easement or
right-of-way whatever with respect to any of the Mortgaged Property without the
joinder therein of Beneficiary, or rent or lease any of the Mortgaged Property
for any purpose whatever for a longer period than one (1) year without the prior
written consent of Beneficiary; nor shall Grantors subject the Mortgaged
Property or any part thereof to any condominium regime or deed or declaration of
joint ownership or cooperative housing unit without the prior written consent of
Beneficiary.
Section 3.11 SUCCESSORS TO GRANTORS. In the event the ownership of the
Mortgaged Property or any part thereof becomes vested in a person other than
Grantors, Beneficiary may, without notice to Grantors, deal with such successor
or successors in interest with reference to this Deed of Trust and to the
Indebtedness in the same manner as with Grantors, without in any way vitiating
or discharging Grantors' liability hereunder or upon 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, given by Beneficiary,
shall operate to release, discharge, modify, change or affect, either in whole
or in part, any original liability of Grantors or the liability of the sureties
of Grantors or of any Other Liable Party.
Section 3.12 RESERVED.
Section 3.13 RESERVED.
Section 3.14 BINDING OBLIGATIONS. This Deed of Trust does, and the
Notes and other Security Instruments to which the Grantors are a party upon
their creation, issuance, execution and delivery will, constitute valid and
binding obligations of the Grantors, enforceable in accordance with their terms.
Section 3.15 NO LEGAL BAR OR RESULTANT LIEN. The Notes and the
Security Instruments, including this Deed of Trust, to which the Grantors are a
party, do not and will not violate any provisions of the organizational
documents of the Grantors, or any contract, agreement, law, regulation, order,
injunction, judgment, decree or writ to which the Grantors are subject, or
result in the creation or imposition of any lien upon any properties of the
Grantors, other than those contemplated by this Deed of Trust.
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Section 3.16 NO CONSENT. The execution, delivery and performance of
the Notes and the Security Instruments, including this Deed of Trust, to which
the Grantors are a party do not require the consent or approval of any other
person, including without limitation any regulatory authority or governmental
body of the United States or any state thereof or any political subdivision of
the United States or any state thereof.
Section 3.17 RESERVED.
Section 3.18 DEFAULTS. The Grantors are not in default (in any respect
which materially and adversely affects their business, properties, operations or
condition, financial or otherwise) under any indenture, mortgage, deed of trust,
agreement or other instrument to which the Grantors are a party or by which the
Grantors are bound, except as disclosed to the Beneficiary in writing. No
default hereunder has occurred and is continuing.
Section 3.19 COMPLIANCE WITH THE LAW. The Grantors:
(a) are not in violation of any law, ordinance, or governmental rule
or regulation to which the Grantors or any of their properties are subject;
(b) have not failed to obtain any license, permit, franchise or other
governmental authorization necessary to the ownership of any of its properties
or the conduct of its businesses;
which violation or failure might materially and adversely affect the business,
prospects, profits, properties or condition (financial or otherwise) of the
Grantors.
Section 3.20 MAINTENANCE. The Grantors will (i) observe and comply
with all valid laws, judgments, injunctions, rules, regulations, certificates,
franchises, permits and licenses (including without limitation applicable
statutes, regulations, orders and restrictions relating to environmental
standards or controls or to energy regulations) of all federal, state, county,
municipal and other governmental authorities; and (ii) maintain their
properties, including the Mortgaged Property, (and any properties leased by or
consigned to them or held under title retention or conditional sales contracts)
in good and workable condition at all times and make all repairs, replacements,
additions, betterments and improvements to their properties as are needful and
proper so that the business carried on in connection therewith may be conducted
properly and efficiently at all times.
Section 3.21 REQUIRED INSURANCE. The Grantors will, at the Grantors'
sole cost and expense, maintain or cause to be maintained with respect to the
Mortgaged Property and each part thereof, the following insurance:
(a) Insurance from companies acceptable to Beneficiary against any
loss or damage to the improvements, covered by an insurance policy of the type
known as an "all risk policy," including without limitation coverage for
earthquakes and sinkholes, in an amount of the full replacement cost of the
improvements but in no event less than $1.5 Million and No/100 Dollars
($1,500,000)
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(exclusive of the cost of excavations, foundations, and footings below the
lowest basement floor), and with no more than One Thousand and No/100 Dollars
($1,000.00) deductible for the loss payable for any casualty. The policies of
insurance carried in accordance with this subsection (a) shall contain the
"Replacement Cost Endorsement" with the "Agreed Amount Endorsement", and a
standard mortgagee clause in favor of Beneficiary, including Beneficiary's
address;
(b) Business interruption insurance and/or loss of "rental value"
insurance in an amount equal to at least twelve (12) months rental income from
all leases or subleases;
(c) Comprehensive public liability and property insurance satisfactory
to Beneficiary, listing Beneficiary as an additional insured (including coverage
for elevators and escalators, if any) on the Mortgaged Property (and, if any
construction of new improvements occurs after execution of this Deed of Trust,
completed operations coverage for two (2) years after construction of the
improvements has been completed) on an "occurrence basis" against claims for
"personal injury," including, without limitation, bodily injury, death, or
property damage occurring on, in or about the Mortgaged Property and the
adjoining streets, sidewalks, and passageways, such insurance to afford
immediate minimum protection to a limit of not less than 1 Million and No/100
Dollars ($__,000,000.00) with respect to personal injury or death to any one or
more persons or damage to property. Such insurance shall include a Broad Form
Comprehensive General Liability Endorsement;
(d) During the course of any future construction or repair of
improvements on the Mortgaged Property, workmen's compensation insurance
(including employer's liability insurance, if requested by Beneficiary) for all
employees of the Grantors engaged on or with respect to the Mortgaged Property
in such amount as is reasonably satisfactory to Beneficiary, or, if such limits
are established by law, in such amounts;
(e) During the course of any future construction or repair of
improvements on the Mortgaged Property, builder's completed value risk insurance
against "all risks of physical loss," including collapse and transit coverage,
during construction of such Improvements, with deductibles not to exceed One
Thousand and No/100 Dollars ($1,000.00) in non-reporting form, covering the
total value of work performed and equipment, supplies and materials furnished.
Said policy of insurance shall contain the "permission to occupy upon completion
of work or occupancy" endorsement;
(f) Boiler and machinery insurance covering pressure vessels, air
tanks, boilers, machinery, pressure piping, heating, air conditioning, elevator
equipment, and escalator equipment, provided the improvements contain equipment
of such nature, and insurance against loss of occupancy or use arising from any
such breakdown, in such amounts as are reasonably satisfactory to the
Beneficiary;
(g) If the Mortgaged Property described herein is ever designated as
part of a flood plain area or any other designation which would make such
Mortgaged Property subject to the Federal Flood Insurance Act of 1968, as
amended heretofore or hereafter, or any similar law, and flood insurance is
available, then the Grantors agree to comply with the requirements of said law
(including all regulations and other requirements applicable thereto) in order
that flood
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insurance will be available to said Grantors, and the Grantors agree to obtain
for the benefit of the Beneficiary an insurance policy satisfactory to the
Beneficiary in all respects (including amount, insurer, form and otherwise), to
deliver such policy to the Beneficiary, to pay all expenses in connection
therewith and to maintain such insurance in full force and effect at all times
at Grantors' expense; and
(h) Such other insurance, and in such amounts, as may from time to
time be customarily required by lending institutions for commercial loans
insuring the Beneficiary against the same or other hazards.
All policies of insurance required by the terms of this Deed of Trust
shall contain an endorsement or agreement by the insurer that any loss shall be
payable in accordance with the terms of such policy to Beneficiary,
notwithstanding any act or negligence of the Grantors which might otherwise
result in forfeiture of said insurance and the further agreement of the insurer
waiving all rights of set off, counterclaim, or deductions against the Grantors.
The Grantors may effect for their own account any insurance not
required under this section, but any such insurance effected by the Grantors on
the Mortgaged Property, whether or not so required, shall be for the mutual
benefit of the Grantors and the Beneficiary and shall be subject to the other
provisions of this Deed of Trust.
Section 3.22 DELIVERY OF POLICIES, PAYMENT OF PREMIUMS. All policies
of insurance shall be issued by companies and in amounts in each company
satisfactory to the Beneficiary. All policies of insurance shall have attached
thereto a lender's loss payable endorsement for the benefit of the Beneficiary
in form satisfactory to the Beneficiary, including, without limitation, any
contribution clause. The Grantors shall furnish the Beneficiary with an original
policy of all required policies of insurance. If the Beneficiary consents to the
Grantors providing any of the required insurance through blanket policies
carried by the Grantors and covering more than one location, then the Grantors
shall furnish the Beneficiary with a certificate of insurance for such policy
setting forth the coverage, the limits of liability, the name of the carrier,
the policy number, and the expiration date. At least fifteen (15) days prior to
the expiration of each such policy the Grantors shall furnish the Beneficiary
with evidence satisfactory to the Beneficiary of the payment of premium and the
reissuance of a policy continuing insurance in force as required by this Deed of
Trust. All such policies shall contain a provision that such policies will not
be cancelled or materially amended, which term shall include any reduction in
the scope or limits of coverage, without at least thirty (30) days prior written
notice of the Beneficiary. In the event the Grantors fail to provide, maintain,
keep in force, or deliver and furnish to the Beneficiary any of the policies of
insurance required by the Security Instruments, the Beneficiary, without waiving
or releasing any obligations, defaults or Events of Default by Grantor, may (but
shall be under no obligation to do so) procure and maintain such insurance or
single-interest insurance for such risks covering the Beneficiary's interest and
take any other action with respect thereto which Beneficiary deems advisable,
and the Grantors will pay all premiums thereon promptly upon demand by the
Beneficiary, and until such payment is made by the
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Grantors, the amount of all such premiums together with interest thereon at the
default rate hereinafter defined shall be secured by this Deed of Trust.
Section 3.23 INSURANCE PROCEEDS. After the happening of any casualty
to the Mortgaged Property or any part thereof, the Grantors shall give prompt
written notice thereof to the Beneficiary.
(a) In the event of any damage to or destruction of the improvements,
the Beneficiary shall have the option in its sole discretion of applying or
paying all or part of the insurance proceeds (i) to any Indebtedness secured
hereby and in such order as the Beneficiary may determine, or (ii) to the
restoration of the improvements, or (iii) to Grantors.
(b) In the event of such loss or damage, all proceeds of insurance
shall be payable to the Beneficiary, and the Grantors hereby authorize and
direct any affected insurance company to make payment of such proceeds directly
to the Beneficiary. The Beneficiary is hereby authorized and empowered by the
Grantors to settle, adjust, or compromise any claims for loss, damage, or
destruction under any policy or policies of insurance.
(c) Except to the extent that insurance proceeds are received by the
Beneficiary and applied to the Indebtedness secured hereby, nothing herein
contained shall be deemed to excuse the Grantors from repairing or maintaining
the Mortgaged Property as provided in this Deed of Trust or restoring all damage
or destruction to the Mortgaged Property, regardless of whether or not there are
insurance proceeds available or whether any such proceeds are sufficient in
amount, and the application or release by the Beneficiary of any insurance
proceeds shall not cure or waive any default or notice of default under this
Deed of Trust or invalidate any act done pursuant to such notice.
(d) No prepayment premium shall be applicable to any insurance
proceeds received by the Beneficiary under this section.
Section 3.24 ASSIGNMENT OF POLICIES UPON FORECLOSURE. In the event of
foreclosure of this Deed of Trust or other transfer of title or assignment of
the Mortgaged Property in extinguishment, in whole or in part, of the debt
secured hereby all right, title and interest of the Grantors in and to all
policies of insurance required by Section 3.20 shall inure to the benefit of and
pass to the successor in interest to the Grantors or the purchaser or grantee of
the Mortgaged Property. The Grantors hereby appoint the Beneficiary their
attorney-in-fact to endorse any checks, drafts or other instruments representing
any proceeds of such insurance, whether payable by reason of loss thereunder or
otherwise. This appointment is irrevocable and is coupled with an interest in
such proceeds.
Section 3.25 UTILITIES. Grantors shall pay when due all utility
charges which are incurred by the Grantors for the benefit of the Mortgaged
Property or which may become a charge or lien against the premises for gas,
electricity, water or sewer services furnished to the premises and all
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other assessments or charges of a similar nature, whether public or private,
affecting the Mortgaged Property or any portion thereof, whether or not such
taxes, assessments or charges are liens thereon.
Section 3.26 APPROVAL OF MANAGEMENT COMPANY. Grantors shall not retain
or contract to retain any Person for the purpose of managing the Mortgaged
Property, or any part thereof, without the prior written consent of the
Beneficiary.
Section 3.27 SURVIVAL OF WARRANTIES. The Grantors agree to fully and
faithfully satisfy and perform the obligations of the Grantors contained in the
Grantors' loan application and the Beneficiary's loan commitment, and any such
application and commitment between the Grantors and any assignee of the
Beneficiary, and each agreement of the Grantors incorporated by reference
therein or herein, and any modification or amendment thereof. All agreements,
representations, warranties, and covenants of the Grantors contained therein or
incorporated by reference shall have been true and correct when made and shall
survive the close of escrow and funding of the loan evidenced by the Notes.
Section 3.28 ADDITIONAL SECURITY. In the event the Beneficiary at any
time holds additional security for any of the obligations secured hereby, it may
enforce the sale thereof or otherwise realize upon the same, at its option,
either before or concurrently herewith or after a sale is made hereunder.
Section 3.29 RESERVED.
Section 3.30 MANAGEMENT AGREEMENT. Grantors shall assign to
Beneficiary any and all management agreements relating to the Mortgaged Property
in form satisfactory to Beneficiary executed by Grantors and the management
company.
Section 3.31 LEGALITY OF LOAN. The loan transactions represented by
the Notes and the Security Instruments complies with all Governmental
Requirements and does not violate any governmental restrictions.
Section 3.32 RESERVED.
Section 3.33 THE AMERICAN WITH DISABILITIES ACT. Grantors shall at all
times comply with and cause the Mortgaged Property to comply with all laws
concerning access of disabled persons, including, without limitation, The
Americans with Disabilities Act. Grantors agree to indemnify Beneficiary from
and against all loss or damage incurred by Beneficiary as a result of Grantors'
failure (i) to comply with such laws, or (ii) to cause any lessee to comply with
such laws.
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ARTICLE IV
DEFAULT; FORECLOSURE
Section 4.01 EVENTS. Any of the following events shall be considered
an "Event of Default" as that term is used herein:
(a) the occurrence of any "Event of Default" in such term as defined
in the Credit Agreement; or
(b) any representation or warranty made by Grantors in this Deed of
Trust proves to have been incorrect in any material respect as of the date
thereof; or any representation, statement (including financial statements),
certificate or data furnished or made by Grantors or any Other Liable Party
under any other Security Instrument proves to have been untrue in any material
respect, as of the date as of which the facts therein set forth were stated or
certified; or
(c) default is made in the due observance or performance by Grantors
or any Other Liable Party of any of the covenants or agreements contained in
this Deed of Trust or any other Security Instrument, and such default continues
unremedied beyond the expiration of any applicable grace period which may be
expressly allowed thereunder; or
(d) any Grantor shall have concealed, removed, or permitted to be
concealed or removed, any part of its property, with intent to hinder, delay or
defraud its creditors or any of them, or made or suffered a transfer of any of
its property which may be fraudulent under any bankruptcy, fraudulent transfer
or similar law; or shall have made any transfer of its property to or for the
benefit of a creditor at a time when other creditors similarly situated have not
been paid; or shall have suffered or permitted, while insolvent, any creditor to
obtain a lien upon any of its property through legal proceedings or distraint or
other process which is not vacated within 60 days from the date thereof; or
(e) the filing of formal charges under a federal or state law for
which forfeiture of any Grantor's property is a potential penalty; or
(f) except as otherwise expressly permitted under the Credit
Agreement, the voluntary or involuntary sale, exchange, assignment, conveyance,
transfer, contract for sale, mortgage, grant of security interest or other
disposition or encumbrance of all or any portion of the Mortgaged Property (or
any interest therein), or all or any part of the Beneficial Ownership Interest
or any legal or equitable right or interest in or to the Mortgaged Property or
any Beneficial Ownership Interest without the prior written consent of
Beneficiary; or
(g) the grant of any easement or right-of-way whatever with respect to
any of the Mortgaged Property without the joinder therein of Beneficiary; or
(h) the designation of the Mortgaged Property as a condominium or
cooperative housing unit or subject to joint ownership, without the prior
written consent of Beneficiary.
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Section 4.02 REMEDIES. Upon the happening of any event of default
specified in Section 4.01, then, in any such event, Beneficiary, at
Beneficiary's option, and without notice (including without limitation notice of
default or Beneficiary's intent to take the action described herein)
presentment, demand, protest, notice of protest or dishonor, notice of intent to
accelerate maturity or notice of acceleration of maturity, all of which are
hereby expressly waived by Grantors, may declare the entire unpaid principal and
accrued interest on the Indebtedness secured hereby immediately due and payable,
whereupon it shall be so due and payable.
Section 4.03 RIGHT TO FORECLOSE; METHOD OF SALE. If Grantors shall
fail to perform faithfully any covenant or agreement herein contained, Grantors
hereby authorize and empower Trustee, and each and all of his successors in this
trust, at the request of Beneficiary, at any time when Grantors shall be in
default in the performance of any such covenant or agreement, to sell the
Mortgaged Property at public vendue to the highest bidder, for cash, at the door
of the county courthouse of the county in Texas in which the Mortgaged Property
or any part thereof is situated, or at the area of such courthouse designated by
the commissioners court as the location where real property sales are to take
place, as herein described, on the first Tuesday of any month between the hours
of 10:00 a.m. and 4:00 p.m. and beginning not later than three (3) hours after
the earliest time at which the sale will occur as set forth in the notice of
sale hereinafter described, after advertising the time, place and terms of said
sale, and the Mortgaged Property to be sold, by posting (or by having some
person or persons acting for him post), for at least twenty-one (21) days
preceding the date of the sale, written or printed notice of the proposed sale
at the courthouse door of said county in which the sale is to be made, and by
filing a copy of the notice in the office of the county clerk of the county in
which the sale is to be made at least twenty-one (21) days preceding the date of
the sale, and if such property is in more than one county, one such notice of
sale shall be posted at the courthouse door of each county in which part of such
property is situated and such property may be sold at the courthouse door of any
one of such counties, and the notice so posted shall designate in which county
such property shall be sold; in addition to such posting of notice, the holder
of the Indebtedness hereby secured shall at least twenty-one (21) days preceding
the date of sale serve written or printed notice of the proposed sale by
certified mail on Grantors and on each other debtor, if any, obligated to pay
the Indebtedness hereby secured according to the records of such holder. Service
of such notice shall be completed upon deposit of the notice, enclosed in a
postpaid wrapper, properly addressed to Grantors and such other debtors at their
most recent address or addresses as shown by the records of the holder of the
Indebtedness hereby secured, 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. Grantors agree
that no notice of any sale other than as set out in this section need be given
by Trustee, Beneficiary or any other person. Grantors hereby designate as their
address for the purposes of such notice, the address set out above, and agree
that such address shall be changed only by depositing notice of such change,
enclosed in a postpaid wrapper, in a post office or official depository under
the care and custody of the United States Postal Service, certified mail postage
prepaid, return receipt requested, addressed to Beneficiary at the address for
Beneficiary set out
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herein (or to such other address as Beneficiary may have designated by notice
given as above provided to Grantors and such other debtors); any such notice of
change of address of Grantors or other debtors shall be effective upon receipt
by Beneficiary. Any change of address of Beneficiary shall be effective three
(3) business days after deposit thereof in the above described manner in the
care and custody of the United States Postal Service. Grantors do hereby
authorize and empower Trustee, and each and all of his successors in this trust,
to sell the Mortgaged Property, or any interest or estate in the Mortgaged
Property, together or in lots or parcels, as such Trustee shall deem expedient,
and to execute and deliver to the purchaser or purchasers of the Mortgaged
Property good and sufficient deed or deeds of conveyance thereof and bills of
sale with covenants of general warranty binding on Grantors and Grantors'
respective heirs, legal representatives, successors and assigns.
Section 4.04 APPLICATION OF PROCEEDS. Trustee making such sale shall
receive the proceeds thereof and shall apply the same as follows: (i) he shall
pay the reasonable expense of executing this trust, including a commission to
himself of five percent (5%) of the gross proceeds of the sale; (ii) after
paying such expenses, he shall pay so far as may be possible the Indebtedness
hereby secured, discharging first that portion of the Indebtedness arising under
the covenants or agreements herein contained and not evidenced by the Notes;
(iii) he shall pay the residue, if any, to Grantors, their respective heirs,
legal representatives, successors or assigns. Payment of the purchase price to
Trustee shall satisfy the obligation of the purchaser at such sale therefor, and
he shall not be bound to look after the application thereof.
Section 4.05 SUCCESSOR TRUSTEE. If the herein named Trustee shall die
or become disqualified from acting in the execution of this trust, or shall fail
or refuse to execute the same when requested by Beneficiary so to do, or if, for
any reason, Beneficiary shall prefer to appoint a substitute trustee to act
instead of the herein named Trustee, Beneficiary shall have full power to
appoint, at any time by written instrument, a substitute trustee, and, if
necessary, several substitute trustees in succession, who shall succeed to all
the estates, rights, powers and duties of Trustee named herein, and no notice of
such appointment need be given to Grantors or to any other person or filed for
record in any public office. Such appointment may be executed by any authorized
agent of Beneficiary; and if Beneficiary is a corporation and such appointment
is executed in its behalf by any 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. Grantors, severally, hereby ratify and
confirm any and all acts that Trustee, or his successor or successors in this
trust, shall do lawfully by virtue hereof. Grantors hereby agree, on behalf of
Grantors and of Grantors' respective heirs, legal representatives, successors
and assigns, that the recitals contained in any deed or deeds or other
instrument executed in due form by any Trustee or substitute trustee, acting
under the provisions of this instrument, shall be prima facie evidence of the
facts recited, and that it shall not be necessary to prove in any court,
otherwise than by such recitals, the existence of the facts essential to
authorize the execution and delivery of such deed or deeds or other instrument
and the passing of title thereby, and all prerequisites and requirements of any
sale or sales shall be conclusively presumed to have been performed, and all
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persons subsequently dealing with the mortgaged property purported to be
conveyed by such deed or deeds or other instrument, including without
limitation, the purchaser or purchasers thereof, shall be fully protected in
relying upon the truthfulness of such recitals.
Section 4.06 DISAFFIRMANCE OF AGREEMENTS. The purchaser at any
trustee's or foreclosure sale hereunder may disaffirm any easement granted, or
rental or lease 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.
Section 4.07 BENEFICIARY MAY PURCHASE. Beneficiary may bid and being
the highest bidder therefor, become the purchaser of any or all of the Mortgaged
Property at any trustee's or foreclosure sale hereunder and shall have the right
to credit the amount of the bid upon the amount of the Indebtedness owing to
Beneficiary, in lieu of cash payment.
Section 4.08 PARTIAL FORECLOSURE AND SALE. It is agreed that if
default be made in the payment of any installment of the Notes or other
Indebtedness secured by this Deed of Trust, or in the observance or performance
of any covenant or agreement of Grantors contained or referred to herein, the
holder of the Indebtedness or any part thereof under which such default occurs
shall have the option to proceed with foreclosure in satisfaction of such item
either through the courts or by directing Trustee or his successors in trust to
proceed as if under a full foreclosure, conducting the sale as herein provided,
and without declaring the whole Indebtedness due, and provided that 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 Notes or other
Indebtedness secured by this Deed of Trust; and it is agreed that such sale, if
so made, shall not in any manner affect the unmatured portion of the
Indebtedness, but as to such unmatured portion of the Indebtedness, this Deed of
Trust shall remain in full force and effect just as though no sale had been made
under the provisions of this Section. It is further agreed that several sales
may be made hereunder without exhausting the right of sale for any unmatured
portion of the Indebtedness, it being the intention of the parties hereto to
provide for a foreclosure and sale of the security for any matured portion of
the Indebtedness without exhausting the power to foreclose and to sell the
security for any other portion of the Indebtedness whether matured at the time
or subsequently maturing. It is agreed that an assignee holding any installment
or part of any installment of the Notes or other Indebtedness secured hereby
shall have the same powers as are hereby conferred on the holder of the
Indebtedness to proceed with foreclosure on a matured installment or
installments, and also to request Trustee or successors in trust to sell the
Mortgaged Property or any part thereof; but if an assignee forecloses or causes
a sale to be made to satisfy any installment, part of an installment, or
installments, then such foreclosure or sale shall be made subject to all of the
terms and provisions hereof with respect to the unmatured part of the Notes and
other Indebtedness secured hereby owned by the then holder of such Indebtedness.
Section 4.09 GRANTORS' TENANCY AT SUFFERANCE UPON SALE. In the event
that there be a Trustee's sale hereunder, and, if at the time of such sale,
Grantors, or their heirs, legal representatives, successors or assigns, are
occupying the Mortgaged Property so sold, each and all shall immediately
19
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 said property, such rental
to be due daily to the purchaser. An action of forcible detainer and/or any
other legal proceedings shall lie if the tenant holds over after a demand in
writing for possession of said property; and this agreement and Trustee's deed
shall constitute a lease and agreement under which the tenant's possession, each
and all, arose and continued.
ARTICLE V
SECURITY AGREEMENT
Section 5.01 SECURITY INTEREST. To further secure the Indebtedness,
Grantors hereby grant a security interest to Beneficiary in and to the
Collateral; but the mention of proceeds of Collateral in this Deed of Trust
shall not be construed as an authorization for the sale or surrender by Grantors
of Collateral. This document shall constitute a security agreement as well as a
mortgage and deed of trust.
Section 5.02 SPECIFIC COVENANTS. The following applies with respect to
Collateral:
A. In addition to and cumulative of any other remedies granted in this
Deed of Trust to Beneficiary, Beneficiary may, upon default hereunder, proceed
under Chapter 9 of the Uniform Commercial Code as to all or any part of the
Collateral and shall have and may exercise with respect to all or any part of
the Collateral all of the rights, remedies and powers of a secured party under
the Uniform Commercial Code, including, without limitation, the right and power
to repossess, retain and to sell, at public or private sale or sales, or
otherwise dispose of, lease or utilize the Collateral or any part thereof and to
dispose of the proceeds in any manner authorized or permitted under the
applicable provisions of the Uniform Commercial Code, and to apply the proceeds
thereof toward payment of Beneficiary's reasonable attorneys' fees and other
expenses and costs of pursuing, searching for, receiving, taking, keeping,
storing, advertising, and selling the Collateral thereby incurred by
Beneficiary, and toward payment of the Indebtedness in such order and manner as
Beneficiary may elect consistent with the provisions of the Uniform Commercial
Code. Nothing in this Section 5.02 shall be construed to impair or limit any
other right or power to which Beneficiary may be entitled at law or in equity.
B. Among the rights of Beneficiary upon default and acceleration of
the Indebtedness pursuant to the provisions hereof, and without limitation,
Beneficiary shall have the right (but not the obligation), without being deemed
guilty of trespass and without liability for damages thereby occasioned: (i) to
enter upon any premises where said Collateral may be situated and take
possession of the Collateral, or render it unusable, or dispose of the
Collateral on Grantors' premises, and Grantors agree not to resist or to
interfere; and (ii) to take any action deemed necessary or appropriate or
desirable by Beneficiary at Beneficiary's option and in its discretion, to
repair, refurbish
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or otherwise prepare the Collateral for sale, lease or other use or disposition
as herein authorized. Beneficiary may at Beneficiary's discretion require
Grantors to assemble the Collateral and make it available to Beneficiary at a
place designated by Beneficiary.
C. Upon the occurrence of an Event of Default, Beneficiary shall be
deemed irrevocably appointed agent and attorney-in-fact as to performance by the
Grantors of Grantors' obligations under all permits, certificates, licenses,
rights to water and wastewater availability and capacity, franchises,
commitments and contracts described in Granting Clause (j) hereof, and as to the
enforcement of Grantors' rights and remedies under such permits, certificates,
licenses, rights to water and wastewater availability and capacity, franchises,
commitments, and contracts, and all costs, expenses and liabilities incurred and
payments made by Beneficiary as such agent and attorney-in-fact shall be
considered a loan by Beneficiary to Grantors which shall be repayable on demand
and which shall bear interest at the applicable rate of interest under the
Notes. Such appointment of Beneficiary as agent and attorney-in-fact shall be
deemed to be coupled with an interest. Regarding the existence of any Event of
Default for purposes of this Deed of Trust, Grantors agree that the issuers of
such permits, certificates, licenses, rights to water and wastewater
availability and capacity, franchises, and commitments and the contractors and
other parties under the contracts may rely upon written certifications from
Beneficiary that such an Event of Default exists. Notwithstanding the foregoing,
Beneficiary shall have no obligation whatsoever to perform any of Grantors'
obligations under such permits, certificates, licenses, rights to water and
wastewater availability and capacity, franchises, commitments or contracts.
D. Beneficiary shall give Grantors notice, by certified mail, postage
prepaid, of the time and place of any public sale of any of the Collateral or of
the time after which any private sale or other intended disposition thereof is
to be made by sending notice to Grantors at the addresses of Grantors set out
above at least five (5) days before the time of the sale or other disposition,
which provisions for notice Grantors and Beneficiary agree are reasonable;
provided, however, that nothing herein shall preclude Beneficiary from
proceeding as to both real and personal property in accordance with
Beneficiary's rights and remedies in respect to real property as provided in the
Uniform Commercial Code, and without any notice to Grantors except for the
notices provided for in Section 4.03 hereof.
E. To the extent such may now or hereafter be permitted under
applicable law, Beneficiary is authorized to execute and file financing
statements and continuation statements under the Uniform Commercial Code with
respect to the Collateral without joinder of Grantors in such execution or
filing. Grantors shall execute and deliver to Beneficiary such financing
statements, continuation statements and other documents relating to the
Collateral as Beneficiary may reasonably request from time to time to preserve
and maintain the priority of the security interest created by this Deed of Trust
and shall pay to Beneficiary on demand any expenses and attorneys' fees incurred
by Beneficiary in connection with the preparation, execution, and filing of this
Deed of Trust and of any financing statements, continuation statements, partial
releases, termination statements or other documents necessary or desirable to
continue or confirm Beneficiary's security interest, or any modification
thereof. This document, and any carbon, photographic or other reproduction of
this
21
document may be filed by Beneficiary and shall be sufficient as a financing
statement. All or part of the Collateral is or is to become fixtures on the real
estate constituting a portion of the Mortgaged Property, but this statement
shall not impair or limit the effectiveness of this document as a security
agreement or financing statement for other purposes, and this Deed of Trust
shall constitute a fixture financing statement and, as such, shall be filed for
record in the real estate records of the county in which the land covered hereby
is located. Grantors shall not change Grantors' name without the prior express
written consent of Beneficiary. The name of the record owner of the land covered
hereby is the party or parties defined herein as Grantors.
F. Unless otherwise disclosed to Beneficiary as herein provided,
Grantors agree that, except for the security interest granted hereby in the
Collateral, Grantors are the owners of the Collateral free of any adverse claim,
security interest or encumbrance, and Grantors shall defend the Collateral
against all claims and demands of any person at any time claiming the same or
any interest therein. Grantors have not heretofore signed any financing
statement and no financing statement signed by Grantors is now on file in any
public office except those statements, true and correct copies of which have
been delivered to Beneficiary. So long as any amount remains unpaid on the
Indebtedness, Grantors shall not execute and there shall not be filed in any
public office any such financing statement or statements affecting the
Collateral other than financing statements in favor of Beneficiary hereunder.
G. The security interest granted herein shall not be construed or
deemed to constitute Beneficiary or Trustee as a trustee or mortgagee in
possession of the Mortgaged Property so as to obligate Beneficiary or Trustee to
lease the Mortgaged Property or attempt to do the same, or to take any action,
incur any expenses or perform or discharge any obligation, duty or liability
with respect to the Mortgaged Property or any part thereof or otherwise.
H. Grantors' and Beneficiary's addresses are as hereinabove set forth.
ARTICLE VI
ENVIRONMENTAL COMPLIANCE
Section 6.01 NO HAZARDOUS MATERIAL. The Grantors warrant and represent
that, as of the date hereof, there is no Hazardous Material on or in the
Mortgaged Property, or being released or discharged therefrom including, without
limitation, all real and personal property described in the granting clause
hereof, the soil and the ground water thereof, including the streams crossing or
abutting the Mortgaged Property and the aquifer underlying the Mortgaged
Property, whether such Hazardous Material be located or placed on or within the
Mortgaged Property by spill, release, discharge, disposal, storage, or
otherwise. To the best of the Grantors' knowledge after due and diligent
inquiry: (i) no part of the Mortgaged Property has ever been used as a
manufacturing, storage, or dump site for Hazardous Material, nor is any part of
the Mortgaged Property affected by
22
any Hazardous Material Contamination; (ii) no property adjoining the Mortgaged
Property has ever been used as a manufacturing, storage, or dump site for
Hazardous Material; and (iii) no property adjoining the Mortgaged Property is
affected by Hazardous Material Contamination. The Grantors covenant and agree
that from the date hereof through the Termination Date, the Grantors and the
Grantors' Agents shall not engage in any of the following prohibited activities,
and the Grantors shall use their best and diligent efforts to see that the
Grantors' invitees and tenants, and such tenants' employees, agents, and
invitees shall not:
(a) Cause or permit any releases or discharges of Hazardous Material
from the Mortgaged Property; or
(b) Cause or permit any manufacturing, holding, handling, retaining,
transporting, spilling, leaking, or dumping of Hazardous Material in or on any
portion of the Mortgaged Property; or
(c) Otherwise place, keep, or maintain, or allow to be placed, kept,
or maintained, any Hazardous Material on any portion of the Mortgaged Property;
provided however that Grantors may use janitorial and similar cleaning supplies
in the ordinary course of its business provided further that the same are at all
times used, stored and disposed of in accordance with all applicable laws.
Section 6.02 COMPLIANCE WITH LAW. From the date hereof through the
Termination Date, the Grantors shall comply, and cause the Grantors' Agents and
the Mortgaged Property to comply, with all laws, ordinances, rules, and
regulations of all authorities having jurisdiction over the Grantors, the
Grantors' Agents, the Mortgaged Property, or the use of the Mortgaged Property,
and pertaining to any Hazardous Material.
Section 6.03 REMOVAL OF HAZARDOUS MATERIAL AND FREEDOM FROM LIENS. If
Hazardous Material is discovered on the Mortgaged Property, the Grantors shall
pay immediately when due the cost of removal of any Hazardous Material from the
Mortgaged Property in compliance with all Governmental Requirements, and keep
the entire Mortgaged Property free of any lien imposed pursuant to any laws,
regulations, or orders of any governmental or regulatory authority having to do
with the removal of Hazardous Material. Within thirty (30) days after demand by
the Beneficiary, the Grantors shall obtain and deliver to the Beneficiary a
bond, letter of credit, or similar financial assurance for the benefit of the
Beneficiary evidencing, to the Beneficiary's satisfaction, that the necessary
funds are available to pay the cost of removing, treating, and disposing of all
Hazardous Material or Hazardous Material Contamination on the Mortgaged Property
and discharging any assessments or liens which may be established on the
Mortgaged Property as a result thereof.
Section 6.04 HAZARDOUS MATERIAL REPORTS. No report, analysis, study,
or other document asserting that Hazardous Material Contamination exists on the
Mortgaged Property or identifying any Hazardous Material as being located upon
or released or discharged from the Mortgaged Property has been issued. The
Grantors shall:
23
(a) Give notice to the Beneficiary immediately upon the Grantors'
acquiring knowledge of the presence of any Hazardous Material on the Mortgaged
Property or of any Hazardous Material Contamination thereon, with a full
description thereof;
(b) Immediately advise the Beneficiary in writing of any notices
received by the Grantors or the Grantors' Agents alleging that the Mortgaged
Property contains Hazardous Material or Hazardous Material Contamination or that
a violation or potential violation of any Governmental Requirements relating to
Hazardous Material by the Grantors, the Grantors' Agents, or the Mortgaged
Property exists (whether such notices are received from the Environmental
Protection Agency, the Occupational Safety and Health Agency, or any other
federal, state or local governmental agency or regional office thereof);
(c) Immediately advise the Beneficiary in writing of any and all
enforcement, cleanup, removal or other governmental or regulatory actions
instituted, completed or threatened with respect to the Mortgaged Property or
any property adjoining the Mortgaged Property pursuant to any Governmental
Requirements relating to Hazardous Material;
(d) Immediately advise the Beneficiary in writing of all claims made
or threatened by any third party against the Grantors, the Grantors' Agents, or
the Mortgaged Property relating to damage, contribution, cost recovery
compensation, loss or injury resulting from any Hazardous Material or Hazardous
Material Contamination pertaining to the Mortgaged Property; and
(e) Immediately advise the Beneficiary in writing upon the Grantors'
discovery of any occurrence or condition on any real property adjoining or in
the vicinity of the Mortgaged Property which does, or could, cause the Mortgaged
Property, or any part thereof, to contain Hazardous Material or Hazardous
Material Contamination or otherwise be in violation of any Governmental
Requirements relating to Hazardous Material, or cause the Mortgaged Property to
be subject to any restrictions on the ownership, occupancy, transferability or
use thereof under any Governmental Requirements relating to Hazardous Material.
Section 6.05 OTHER PROPERTY OF THE GRANTORS. The Grantors covenant,
warrant, and represent that there is no property owned or used by the Grantors
which contains Hazardous Material or Hazardous Material Contamination, emits or
discharges Hazardous Material, or otherwise violates any Governmental
Requirements relating to Hazardous Material, such that a charge or lien as a
result thereof could be placed upon the Mortgaged Property, or any liability
therefor could be imposed upon the Grantors.
Section 6.06 REMEDIAL ACTION, THE BENEFICIARY'S CONSENT. Without the
Beneficiary's prior written consent, which shall not be unreasonably withheld,
the Grantors shall not take any remedial action in response to the presence of
any Hazardous Material or Hazardous Material Contamination upon or about the
Mortgaged Property, nor enter into any settlement agreement, consent decree, or
other compromise in respect to any violation or alleged violation of any
Governmental Requirements
24
relating to Hazardous Material, which remedial action, settlement, consent or
compromise might, in the Beneficiary's judgment, impair the value of the
Beneficiary's security hereunder; provided, however, that the Beneficiary's
prior consent shall not be necessary in the event that the presence of Hazardous
Material or Hazardous Material Contamination on or about the Mortgaged Property
either poses an immediate threat to the health, safety or welfare of any
individual or is of such a nature that an immediate remedial response is
necessary and it is not possible to obtain the Beneficiary's consent before
taking such action. In such event, the Grantors shall notify the Beneficiary as
soon as practicable of any action so taken. The Beneficiary shall not withhold
its consent, where such consent is required hereunder, if either: (i) a
particular remedial action is ordered by a court of competent jurisdiction; or
(ii) the Grantors establish to the reasonable satisfaction of the Beneficiary
that there is no reasonable alternative to such remedial action which would
result in less impairment of the Beneficiary's security hereunder.
Section 6.07 THE BENEFICIARY'S CORRECTIVE ACTION. In addition to the
other remedies provided to the Beneficiary elsewhere in the Security
Instruments, the Beneficiary shall have the right, but not the obligation to
cause all Hazardous Material or Hazardous Material Contamination found on or in
the Mortgaged Property to be removed therefrom, and in such event, the cost of
the removal, including all expenses, charges, and fees incurred by the Grantors
in connection therewith, including attorneys, engineers, and consultants fees,
shall be secured by this Deed of Trust, shall be payable by the Grantors on
demand and shall bear interest at the default rate provided in the Notes from
the date advanced until paid. The Grantors shall give to the Beneficiary and its
agents and employees access to the Mortgaged Property for such purposes; and the
Grantors hereby grant to the Beneficiary, its agents and employees, full right
and authority to remove any such Hazardous Material or Hazardous Material
Contamination from the Mortgaged Property.
Section 6.08 ENVIRONMENTAL ASSESSMENT. The Beneficiary, at any time
and from time to time during the term of the Notes, if it has reasonable cause
to suspect that any provision of this Article VI is not being complied with, may
notify the Grantors in writing that it desires an environmental site assessment
of the Mortgaged Property to be made, and at any time thereafter cause such
environmental site assessment to be made of the Mortgaged Property at the
Grantors' sole expense. Such assessment(s) shall be performed in a manner
reasonably calculated to confirm and verify compliance with the provisions of
this Article VI. Such results shall be kept confidential by both the Grantors
and the Beneficiary unless either party is legally compelled or required to
disclose such results, or disclosure is reasonably required in order to pursue
rights or remedies provided herein or at law. If the Grantors fail to pay for
the assessment(s) as provided for herein within fifteen (15) days of receipt of
billing therefor, the Beneficiary may, at its election, declare a default
hereunder, and, with or without declaring such default, add the cost thereof to
the indebtedness secured by this Deed of Trust, in which case interest shall
accrue at the default rate provided in the Notes on such amount from the day
after billing until paid by the Grantors. The Grantors covenant to reasonably
cooperate with the persons conducting the assessment to allow entry and
reasonable access to all portions of the Mortgaged Property for the purpose of
the assessment, to supply such persons with all available historical and
operational information regarding the Mortgaged Property as may
25
reasonably be requested by such persons, and to make available for meetings with
the persons conducting the assessment appropriate personnel having knowledge of
matters relevant to the assessment. The Grantors covenant to comply, at its sole
cost and expense, with all recommendations contained in the assessment,
including any recommendation for additional testing and studies to detect the
presence of Hazardous Material or Hazardous Material Contamination, or to
otherwise confirm and verify Grantors' compliance with the provisions of this
Article VI, to the extent required by Beneficiary.
Section 6.09 INDEMNITY AND HOLD HARMLESS. The Grantors shall be solely
responsible for, and hereby agree to indemnify and hold the Beneficiary
(including the respective successors, assigns, shareholders, directors,
officers, employees and agents of Beneficiary) harmless from, any and all
actions, loss, liability, damage, cost, imposition of a lien or expense
occasioned by, resulting from, or consequent to any Hazardous Material or
Hazardous Material Contamination on the Mortgaged Property; any releases or
discharges of Hazardous Material from the Mortgaged Property; any manufacturing,
maintaining, holding, handling, transporting, spilling, leaking or dumping of
Hazardous Material on or at the Mortgaged Property, or any other violation of
any Governmental Requirements relating to Hazardous Material; any claim or
assertion that any such Hazardous Material or Hazardous Material Contamination
is so located on the Mortgaged Property or that any such activities or
violations have been, or are being, engaged in on the Mortgaged Property; or any
other failure or alleged failure of Grantors, Grantors' Agents, or the Mortgaged
Property to comply with the provisions of this Article VI, notwithstanding any
and all attempts by the Grantors to exercise due diligence in ascertaining
whether or not any of the events outlined above affect the Mortgaged Property.
Such loss, liability, damage, cost, or expense hereby indemnified against shall
include, without limitation:
(a) All consequential damages;
(b) The costs of any required or necessary repair, cleanup or
detoxification of the Mortgaged Property, including the soil and ground water
thereof, and the preparation and implementation of any closure, remedial or
other required plans;
(c) Damage to any natural resources; and,
(d) All reasonable costs and expenses incurred by the Beneficiary in
connection with clauses (a), (b) and (c) above, including but not limited to
reasonable attorneys' and consultants' fees. All costs and expenses incurred by
the Beneficiary for which the Grantors are responsible, or for which the
Grantors have indemnified the Beneficiary shall be paid by the Grantors to the
Beneficiary upon demand therefore.
The Beneficiary shall have the right, but not the obligation, to join and
participate in (as a party if it so elects), any legal or administrative
proceedings or actions initiated in connection with any allegation that
Grantors, Grantors' Agents, or the Mortgaged Property violate, or have violated,
any
26
provision of this Article VI, and to have their reasonable attorneys' and
consultants' fees in connection therewith paid by the Grantors upon demand. The
aforesaid indemnification and hold harmless agreement shall benefit the
Beneficiary from the date hereof and shall not be terminated on the Termination
Date, but shall continue thereafter notwithstanding payment, release or
discharge of this Deed of Trust or the Indebtedness secured hereby; and, without
limiting the generality of the foregoing such obligations shall continue for the
benefit of Beneficiary, and their successors and assigns, during and following
any possession of the Mortgaged Property thereby or any ownership of the
Mortgaged Property by the Beneficiary or its successors and assigns, whether
arising by foreclosure or sale under the power of sale contained herein,
transfer by deed in lieu of any such sale, or otherwise; such indemnification
and hold harmless agreement to continue forever. In the event that the Notes,
this Deed of Trust or any other Security Instrument contains a provision
pursuant to which the Grantors are relieved of personal liability for such
indebtedness, such release of personal liability shall not include a release
from Grantors' liabilities and obligations under this Article VI.
Section 6.10 GRANTORS' FAILURE TO COMPLY. In addition to any other
right or remedy contained in this Deed of Trust, or in any other Security
Instrument, if the Grantors shall fail to comply with any term, provision, or
requirement of this Article VI, and if such failure to comply shall not be
corrected within the lesser of the following time periods:
(a) Fifteen (15) days after notice thereof from Beneficiary; or
(b) The time period specified by any governmental or regulatory body
for corrective action with respect to such failure to comply;
then such failure to comply shall, at Beneficiary's election and without further
notice, constitute an Event of Default under this Deed of Trust. Provided,
however, if Grantors' failure to comply shall be of such nature that it cannot
reasonably be corrected within the correction period, and if the Grantors shall,
within said correction period, commence during such failure to comply, and
thereafter diligently prosecute such corrective action to completion, and
provided the governmental or regulatory body having jurisdiction with respect to
such failure shall not object, then the Grantors shall have a reasonable
additional period beyond said correction period in which to cure such failure to
comply.
ARTICLE VII
GENERAL
Section 7.01 PARTIAL RELEASES. Any part of the Mortgaged Property may
be released by Beneficiary without affecting the lien, security interest and
rights hereof against the remainder. The lien, security interest and rights
hereby granted shall not affect or be affected by any other security taken for
the Indebtedness or any part thereof. The taking of additional security, or the
extension or
27
renewal of the Indebtedness or any part thereof, shall at no time release or
impair the lien, security interest and rights granted hereby, or affect the
liability of any Other Liable Party, or improve the right of any 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 and security interest on all of the Mortgaged
Property not expressly released, until the Indebtedness is completely paid.
Section 7.02 INVALIDITY. The invalidity, or unenforceability in
particular circumstances, of any provision of this Deed of Trust shall not
extend beyond such provision or such circumstances and no other provision of
this instrument shall be affected thereby.
Section 7.03 USURY. It is the intention of Beneficiary to conform
strictly to applicable usury laws. Accordingly, if the transactions contemplated
hereby would be usurious under applicable law, then, in that event,
notwithstanding anything to the contrary in any agreement entered into in
connection with or as security for the Notes or any instrument evidencing the
Indebtedness, it is agreed as follows: (a) the aggregate of all consideration
which constitutes interest under applicable law that is taken, reserved,
contracted for, charged or received under the Notes or under any of the other
aforesaid agreements or otherwise in connection with the Notes or the
Indebtedness shall under no circumstances exceed the maximum amount of interest
allowed by applicable law, and any excess shall be credited on the Notes and the
Indebtedness by the holder thereof (or, if the Notes and the Indebtedness shall
have been paid in full, refunded to Grantors); (b) determination of the rate of
interest for determining whether the loans under the Notes and the Indebtedness
are usurious shall be made by amortizing, prorating, allocating and spreading,
during the term of such loans if no demand is made, all interest at any time
contracted for, charged or received from the Grantors in connection with such
loans, and any excess shall be cancelled, or credited or refunded as set forth
in (a) herein; and (c) in the event that maturity of the Notes or the
Indebtedness is accelerated by reason of an election by the holder hereof
resulting from any default hereunder or otherwise, or in the event of any
required or permitted prepayment, then such consideration that constitutes
interest may never include more than the maximum amount allowed by applicable
law, and excess interest, if any, provided for in the Notes or otherwise shall
be cancelled automatically as of the date of such acceleration or prepayment
and, if theretofore prepaid, shall be credited on the Notes or the Indebtedness
(or if the Notes and the Indebtedness shall have been paid in full, refunded to
Grantors).
Section 7.04 WAIVERS. Grantors, or Grantors' respective heirs, legal
representatives, successors or assigns, shall not have or assert, and do hereby
waive, any right, under any statute or rule of law pertaining to the marshaling
of assets, a sale in inverse order of alienation, the exemption of homestead,
the administration of estates of decedents, or other matter whatever, to defeat,
reduce or affect the lien, security interest and rights of Beneficiary, under
the terms of this Deed of Trust, to a sale of the Mortgaged Property for the
collection of the Indebtedness (without any prior or different resort for
collection), or the right of Beneficiary, under the terms of this Deed of Trust,
to the payment of the Indebtedness out of the proceeds of sale of the Mortgaged
Property in preference
28
to every other person and claimant whatever (only reasonable expenses as
aforesaid being first deducted).
Section 7.05 ACTION BY BENEFICIARY NOT A WAIVER. It is expressly
agreed that: (a) no waiver of any default on the part of Grantors or breach of
any of the provisions of this Deed of Trust 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
right and power may be exercised from time to time; (b) any failure by
Beneficiary to insist upon the strict performance by Grantors of any of the
terms and provisions hereof shall not be deemed to be a waiver of any of the
terms and provisions hereof, and Beneficiary, notwithstanding any such failure,
shall have the right thereafter to insist upon the strict performance by
Grantors of any and all of the terms and provisions of this Deed of Trust; (c)
neither Grantors nor any Other Liable Party shall be relieved of such obligation
by reason of the failure of Beneficiary or Trustee to comply with any request of
Grantors, or of any other person so obligated, to take action to foreclose this
Deed of Trust or otherwise enforce any of the provisions of this Deed of Trust
or of any obligations secured by this Deed of Trust, or by reason of the
release, regardless of consideration, of the whole or any part of the security
held for the Indebtedness, or by reason of the subordination in whole or in part
by Beneficiary of the lien, security interest or rights evidenced hereby, or by
reason of any agreement or stipulation with any subsequent owner or owners of
the Mortgaged Property extending the time of payment or modifying the terms of
the Indebtedness or this Deed of Trust without first having obtained the consent
of Grantors or such other person, and, in the latter event, Grantors and all
such other persons shall continue liable to make such payments according to the
terms of any such agreement of extension or modification unless expressly
released and discharged in writing by Beneficiary; (d) regardless of
consideration, and without the necessity for any notice to or consent by the
holder of any subordinate lien or security interest on the Mortgaged Property,
Beneficiary may release the obligation of anyone at any time liable for any of
the Indebtedness or any part of the security held for the Indebtedness and may
extend the time of payment or otherwise modify the terms of the Indebtedness
and/or this Deed of Trust without, as to the security or the remainder thereof,
in anywise impairing or affecting the lien or security interest of this Deed of
Trust or the priority of such lien or security interest, as security for the
payment of the Indebtedness as it may be so extended or modified, over any
subordinate lien or security interest; (e) the holder of any subordinate lien or
security interest shall have no right to terminate any lease affecting the
Mortgaged Property whether or not such lease be subordinate to this Deed of
Trust; and (f) Beneficiary may resort for the payment of the Indebtedness to any
security therefor held by Beneficiary in such order and manner as Beneficiary
may elect.
Section 7.06 APPLICATION OF PAYMENTS. In the event any portion of the
Indebtedness is not, for any reason whatsoever, secured by this Deed of Trust on
the Mortgaged Property, the full amount of all payments made on the Indebtedness
shall first be applied to such unsecured portion of the Indebtedness until the
same has been fully paid.
29
Section 7.07 PRIOR INDEBTEDNESS. To the extent that proceeds of the
Notes are used to pay any prior indebtedness secured by an outstanding lien,
security interest, charge or prior encumbrance against the Mortgaged Property,
such proceeds have been advanced by Beneficiary at Grantors' request; and
Beneficiary shall be subrogated to any and all rights, powers, equities, liens
and security interests owned or granted by any owner or holder of such prior
indebtedness, irrespective of whether said security interests, liens, charges or
encumbrances are released of record.
Section 7.08 WITHDRAWAL OF ACTION. In the event Beneficiary shall
elect to invoke any of the rights or remedies provided for herein, but shall
thereafter determine to withdraw or discontinue same for any reason, it shall
have the unqualified right to do so, whereupon all parties shall be
automatically restored and returned to their respective positions regarding the
Indebtedness and this document as shall have existed prior to the invocation of
Beneficiary's rights hereunder and the rights, powers and remedies of
Beneficiary hereunder shall be and remain in full force and effect.
Section 7.09 FURTHER ACTION. Grantors agree that they shall execute
and deliver such other and further documents and do and perform such other acts
as may be reasonably necessary and proper to carry out the intention of the
parties as herein expressed and to effect the purposes of this document and the
loan transaction referred to herein. Without limitation of the foregoing,
Grantors agree to execute and deliver such documents as may be necessary to
cause the liens and security interests granted hereby to cover and apply to any
property placed in, or about the Mortgaged Property in addition to, or
replacement or substitute for any of the Mortgaged Property.
Section 7.10 SUCCESSORS AND ASSIGNS. The covenants herein contained
shall inure to the benefit of Beneficiary and Trustee, their heirs, legal
representatives, successors and assigns, and shall be binding upon the
respective heirs, legal representatives, successors and assigns of Grantors, and
any subsequent owner or owners of the Mortgaged Property, but nothing in this
Section shall constitute an authorization for Grantors to sell or in any way
dispose of the Mortgaged Property or any part thereof if otherwise prohibited by
any of the terms hereof.
Section 7.11 DEFEASANCE. All of the covenants and agreements of
Grantors set forth herein shall survive the execution and delivery of this
document and shall continue in full force until the Indebtedness is paid in
full. No release of this conveyance or the lien thereof shall be valid unless
executed by Beneficiary.
Section 7.12 CHOICE OF LAW. This Deed of Trust and the Indebtedness
arising in connection herewith shall be governed by, and construed in accordance
with, the laws of the State of Minnesota applicable to contracts made and
performed in such State and any applicable law of the United States of America,
including, without limiting the generality of the foregoing, matters of
construction, validity and performance, except that at all times the provisions
for the creation, perfection, and enforcement of the liens and security
interests created pursuant hereto shall be governed by and construed according
to the law of Texas, it being understood that, to the fullest extent permitted
by the law of Texas, the law of the State of Minnesota shall govern the validity
and the enforceability
30
of this Deed of Trust and the Indebtedness arising in connection herewith. To
the fullest extent permitted by law, Mortgagor hereby unconditionally and
irrevocably waives any claim to assert that the law of any other jurisdiction
governs this Deed of Trust, the Credit Agreement, the Notes and the other Loan
Documents and this Deed of Trust, the Credit Agreement, the Notes and the other
Loan Documents shall be governed by and construed in accordance with the laws of
the State of Minnesota.
Section 7.13 REMEDIES CUMULATIVE. The execution and delivery of this
Deed of Trust in no manner shall impair or affect any other security (by
endorsement or otherwise) for the Indebtedness. No security taken hereafter as
security for the Indebtedness shall impair in any manner or affect this Deed of
Trust. All such present and future additional security, and all rights and
remedies under any and all Security Instruments, shall be cumulative and may be
pursued singly or together.
SECTION 7.14 DTPA WAIVER. GRANTORS ACKNOWLEDGE AND AGREE, ON GRANTORS'
OWN BEHALF AND ON BEHALF OF ANY PERMITTED ASSIGNS AND SUCCESSORS HEREAFTER, THAT
THE DTPA IS NOT APPLICABLE TO THIS TRANSACTION. ACCORDINGLY, GRANTORS' RIGHTS
AND REMEDIES WITH RESPECT TO THE TRANSACTION CONTEMPLATED UNDER THIS DEED OF
TRUST, THE NOTES AND ALL OTHER SECURITY INSTRUMENTS, AND WITH RESPECT TO ALL
ACTS OR PRACTICES OF THE BENEFICIARY, PAST, PRESENT OR FUTURE, IN CONNECTION
WITH SUCH TRANSACTION, SHALL BE GOVERNED BY LEGAL PRINCIPLES OTHER THAN THE
DTPA. IN FURTHERANCE THEREOF, GRANTORS AGREE AS FOLLOWS:
(A) GRANTORS REPRESENT THAT GRANTORS HAVE KNOWLEDGE AND EXPERIENCE IN
FINANCIAL AND BUSINESS MATTERS THAT ENABLE GRANTORS TO EVALUATE THE MERITS AND
RISKS OF THE BUSINESS TRANSACTION THAT IS THE SUBJECT OF THIS DEED OF TRUST.
GRANTORS ALSO REPRESENT THAT GRANTORS ARE NOT IN A SIGNIFICANTLY DISPARATE
BARGAINING POSITION IN RELATION TO BENEFICIARY. GRANTORS HAVE NEGOTIATED THE
LOAN DOCUMENTS WITH BENEFICIARY AT ARM'S LENGTH AND HAVE WILLINGLY ENTERED INTO
THE LOAN DOCUMENTS.
(B) GRANTORS REPRESENT THAT (I) GRANTORS HAVE BEEN REPRESENTED BY
FISCHBEIN, BADILLO, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, AS LEGAL COUNSEL IN THE TRANSACTION
CONTEMPLATED BY THIS DEED OF TRUST, THE NOTES AND ALL OTHER SECURITY
INSTRUMENTS, AND (II) SUCH LEGAL COUNSEL WAS NOT DIRECTLY OR INDIRECTLY
IDENTIFIED, SUGGESTED OR SELECTED BY BENEFICIARY OR AN AGENT OF BENEFICIARY.
(C) THIS AGREEMENT RELATES TO A TRANSACTION INVOLVING TOTAL
CONSIDERATION BY GRANTOR OF MORE THAN $100,000.00 AND DOES NOT INVOLVE THE
GRANTORS' RESIDENCE.
GRANTORS AGREE, ON GRANTORS' OWN BEHALF AND ON BEHALF OF GRANTORS' PERMITTED
ASSIGNS AND SUCCESSORS, THAT ALL OF THE GRANTORS' RIGHTS AND REMEDIES UNDER THE
DTPA ARE WAIVED AND RELEASED, INCLUDING SPECIFICALLY, WITHOUT LIMITATION, ALL
RIGHTS AND REMEDIES UNDER THE DTPA RESULTING FROM OR ARISING OUT OF ANY AND ALL
ACTS OR PRACTICES OF BENEFICIARY IN CONNECTION WITH THIS TRANSACTION, WHETHER
SUCH ACTS OR PRACTICES OCCUR BEFORE OR AFTER THE EXECUTION OF THIS
31
DEED OF TRUST; PROVIDED, HOWEVER, NOTWITHSTANDING ANYTHING TO THE CONTRARY
HEREIN, GRANTORS DO NOT WAIVE SECTION 17.555 OF THE DTPA.
IN FURTHERANCE THEREOF, GRANTORS AGREE THAT BY SIGNING THIS AGREEMENT,
GRANTORS AND ANY PERMITTED ASSIGNS AND SUCCESSORS ARE BOUND BY THE FOLLOWING
WAIVER:
WAIVER OF CONSUMER RIGHTS. GRANTORS WAIVE THEIR RIGHTS UNDER THE
DECEPTIVE TRADE PRACTICES--CONSUMER PROTECTION ACT, SECTION 17.41 ET
SEQ., BUSINESS & COMMERCE CODE, TO THE EXTENT APPLICABLE, A LAW THAT
GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTION. AFTER CONSULTATION WITH
AN ATTORNEY OF GRANTORS' OWN SELECTION, GRANTORS VOLUNTARILY CONSENT TO
THIS WAIVER.
Section 7.15 RELEASE OF LIABILITY. To the maximum extent permitted by
law from time to time in effect, each Grantor hereby knowingly, voluntarily and
intentionally (and after each has consulted with its own attorney) irrevocably
and unconditionally agrees that no claim may be made by any Grantor against the
Beneficiary or any of its affiliates, participants, shareholders, directors,
officers, employees, attorneys, accountants, or agents or any of its or their
successors and assigns, for any actual, special, indirect, consequential or
punitive damages in respect of any breach or wrongful conduct (whether the claim
is based on contract, tort or statute) arising out of, or related to, the
transactions contemplated by any of this Deed of Trust, the Notes, the Security
Instruments or any other related documents, or any act, omission, or event
occurring in connection herewith or therewith. In furtherance of the foregoing,
each Grantor hereby waives, releases and agrees not to ▇▇▇ upon any claim for
any such damages, whether or not accrued and whether or not known or suspected
to exist in its favor, and each Grantor shall indemnify and hold harmless
Beneficiary and its affiliates, participants, shareholders, directors, officers,
employees, attorneys, accountants and agents and their successors and assigns of
and from any such claims. Upon the full payment of the Indebtedness, and prior
to Beneficiary releasing any lien or security interest in property given to
secure the Indebtedness, Grantors shall execute a release agreement, in form and
substance satisfactory to Beneficiary, releasing Beneficiary and Beneficiary's
affiliates, participants, shareholders, directors, officers, employees, agents
and attorneys from any and all claims, demands, actions, causes of action,
costs, expenses and liabilities whatsoever, known or unknown, at law or in
equity, which the Grantors may have, as of the date of execution of such release
or in the future, against the Beneficiary and Beneficiary's affiliates,
participants, shareholders, directors, officers, employees, agents and
attorneys, arising out of or in connection with this Deed of Trust or any
related documents.
Section 7.16 MODIFICATIONS. All modifications of any of the terms,
provisions, conditions or requirements of the Notes, Security Instruments or any
other related document must be in writing and signed by a Vice President of
Beneficiary.
Section 7.17 NOTICE. Any notice given hereunder or under the Notes or
Security Instruments shall be given in accordance with the terms or provisions
set forth in the Credit Agreement.
32
Section 7.18 RESERVED.
Section 7.19 NON-ASSIGNABILITY OF PROCEEDS. The loan proceeds provided
for pursuant to the Notes and the Security Instruments are not assignable by the
Grantors. The Notes and Security Instruments pertain to financial accommodations
for the benefit of the Grantors and cannot be transferred to, assigned to or
assumed by any other person or entity either voluntarily or by operation of law.
In the event any Grantor becomes a debtor under the Bankruptcy Code of the
United States or under the law of any foreign country, any trustee or debtor in
possession may not assume or assign this agreement nor delegate the performance
of any provision hereunder.
Section 7.20 VENUE; WAIVER OF JURY TRIAL. The parties hereto hereby
(i) consent to the personal jurisdiction of the state and federal courts located
in the State of Minnesota in connection with any controversy related to this
Deed of Trust; (ii) waives any argument that venue in any such forum is not
convenient, (iii) agrees that any litigation initiated by any party in
connection with this Deed of Trust or the other Loan Documents shall be venued
in either the District Court of Hennepin County, Minnesota, or the United States
District Court, District of Minnesota, Fourth Division; and (iv) agrees that a
final judgment in any such suit, action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Notwithstanding the forgoing, nothing herein shall
affect the right of the Lender to effect service of process in any other manner
permitted by law or shall limit the right to ▇▇▇ in any other jurisdiction. THE
PARTIES WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED ON OR
PERTAINING TO THIS DEED OF TRUST.
Section 7.21 SOLE DISCRETION OF LENDER. Wherever pursuant to any
Security Instruments (a) Beneficiary exercises any right given to it to approve
or disapprove, (b) any arrangement or term is to be satisfactory to Beneficiary,
or (c) any other decision or determination is to be made by Beneficiary at its
option or discretion, the decision of Beneficiary to approve or disapprove, all
decisions that arrangements or terms are satisfactory or not satisfactory AND
all other decisions and determinations made by Beneficiary, shall be in the sole
and absolute discretion of Beneficiary and shall be final and conclusive, except
as may be otherwise expressly and specifically provided in the Security
Instrument.
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33
IN TESTIMONY WHEREOF, Grantors have executed this document as of the
date first above written.
GRANTORS:
--------
OUR FOOD PRODUCTS GROUP, INC.
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Title: CFO
---------------------------
THE STATE OF TEXAS )
)
COUNTY OF ▇▇▇▇ )
This instrument was acknowledged before me on the 31st day of May,
2000, by ▇▇▇▇▇ ▇▇▇▇▇▇▇, the Chief Financial Officer of Our Food Products Group,
Inc., a Texas corporation, on behalf of said corporation.
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Notary Public, State of Texas
EXHIBIT "A"
PROPERTY DESCRIPTION
EXHIBIT B
TO
DEED OF TRUST, SECURITY AGREEMENT, AND FINANCING STATEMENT
PERMITTED ENCUMBRANCES
1. Electric Utility Easement from Texxstar Resources (USA), Inc. to Pedernales
Electric Cooperative, Inc., recorded in Volume 953, Page 386, ▇▇▇▇▇ County
Official Public Records.
2. Subject to the rights of others, if any, and in to the grave sites and the
"▇▇▇▇▇ Cemetery": located on said property, as shown on surveyor's plat
prepared by Bury and ▇▇▇▇▇▇▇ surveyors.
3. Easement Agreement dated July 21, 1992, from Texxstar Resources (USA), Inc.
and The City of Buda, for public utilities, recorded in Volume 939, Page
640, ▇▇▇▇▇ County Official Public Records.
4. Wire fence protruding over portion of most northerly east line, as shown on
surveyor's plat dated May 1, 1998 by Bury ▇▇▇▇▇▇▇, Inc.
5. Overhead Electric lines crossing said tract as shown on surveyor's plat
dated May 1, 1998 by Bury ▇▇▇▇▇▇▇, Inc.
6. That certain Deed of Trust, Security Agreement and Assignment of Rents and
Leases dated May 15, 1998, executed by ▇▇▇▇▇▇ Food Products Group, Inc.,
recorded in Volume 1414, page 690, ▇▇▇▇ County Official Public Records and
that certain Financing Statement dated May 21, 1998, recorded in Document
No. 9810148, Volume 1414, page 710, ▇▇▇▇ County Official Public Records
("KBK Lien"), provided however that such liens shall at all times remain
junior and subordinate to this Deed of Trust on such terms and conditions
as required by ▇▇▇▇▇ Fargo Business Credit, Inc.