DEED OF TRUST AND SECURITY AGREEMENT,
FIXTURE FINANCING STATEMENT AND ASSIGNMENT OF RENTS AND LEASES
THIS INDENTURE, made effective as of this 6th day of
November, 1996, between and among ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, jointly and severally, whose post office address is
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇ and 16418 Silver
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇. ▇▇▇▇▇, respectively (herein called
"First Party"), and ▇▇▇▇ ▇▇▇▇▇▇▇▇, whose post office address is
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (herein
called "Trustee"), and AEI Net Lease Income & Growth Fund XIX
Limited Partnership, a Minnesota limited partnership, whose
corporate general partner is AEI Fund Management XIX, Inc., a
Minnesota corporation, whose post office address is 1300
Minnesota World Trade Center, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (herein called "Third Party").
WITNESSETH, that the said First Party hereby irrevocably
MORTGAGES, GRANTS, BARGAINS, SELLS, TRANSFERS, CONVEYS AND
WARRANTS TO TRUSTEE IN TRUST WITH POWER OF SALE AND GRANTS A
SECURITY INTEREST TO THIRD PARTY IN, the following properties
(all the following being hereinafter collectively referred to as
the "Premises"):
A. REAL PROPERTY
All the tracts or parcels of real property lying and being
in the County of ▇▇▇▇▇▇▇▇▇▇, State of Texas, all as more fully
described in Exhibit "A" attached hereto and made a part hereof,
together with all the estates, title, dower, rights of
homestead,claims, demands, and rights of First Party of, in, and
to such rights in and to the real property and in and to lands
lying in streets, alleys strips or gores of land and roads
adjoining the real property and all buildings, structures,
improvements, fixtures and annexations, access rights, easements,
rights of way or use, servitudes, licenses, tenements,
hereditaments and appurtenances now or hereafter belonging or
pertaining to the real property, (and including all water, water
rights, and ditches connected with or usually had and enjoyed in
connection with the real property, whether represented by shares
of capital stock in a ditch company or by individual ownership or
otherwise); and
B. PERSONAL PROPERTY
Together with all buildings, equipment, fixtures,
improvements, building supplies and materials and personal
property now or hereafter attached to, located in, placed in or
necessary to the use of the improvements on the Premises
including, but without being limited to all machinery, fittings,
fixtures, apparatus, equipment or articles used to supply
heating, gas, electricity, air conditioning, water, light, waste
disposal, power, refrigeration, ventilation, and fire and
sprinkler protection, as well as all elevators, escalators,
overhead cranes, hoists and assists, and the like, and all
furnishings, supplies, draperies, maintenance and repair
equipment, floor coverings, screens, storm windows, blinds,
awnings, shrubbery and plants, ranges, ovens, refrigerators,
dishwashers, disposals, (it being understood that the enumeration
of any specific articles of property shall in no way be held to
exclude any items of property not specifically enumerated), as
well as renewals, replacements, proceeds, additions, accessories,
increases, parts, fittings, insurance payments, awards and
substitutes thereof, together with all interest of First Party in
any such items hereafter acquired, all of which personal property
mentioned herein shall be deemed fixtures and accessory to the
freehold and a part of the realty and not severable in whole or
in part without material injury to the Premises, but excluding
therefrom the trade fixtures, inventory and removable personal
property of any tenant or licensee of the Premises. Third Party
agrees to subordinate its lien on all such personal property in
favor of a purchase money security interest of First Party's
lender; and
C. RENTS, LEASES AND PROFITS
Together with all rents, leases and profits now due or which
may hereafter become due under or by virtue of any lease,
license, sublease, or agreement, whether written or verbal, for
the use or occupancy of the Premises or any part thereof,
including, specifically, that certain lease by and between Third
Party and Taco Cabana, Inc. dated August 13, 1992 (the "Lease"),
which Lessee's interest in said lease was assigned to Texas Taco
Cabana, LP pursuant to the General Assignment and Assumption of
Leases between Taco Cabana, Inc. and TC Lease Holding III, V, and
VI, Inc., and pursuant to the General Assignment and Assumption
of Leases between TC Lease Holding III, V, and VI, Inc. and Texas
Taco Cabana, LP, both dated October 31, 1993 (Texas Taco Cabana,
LP hereinafter referred to as "Tenant") and in and to that
certain Assignment of Alcohol Sales Lease dated June 30, 1994, by
and among Tenant, Cabana Beverages, Inc.; and
D. JUDGMENTS AND AWARDS
Together with any and all awards or compensation made by any
governmental or other lawful authorities for the taking or
damaging by eminent domain of the whole or any part of the
Premises, including any awards for a temporary taking, change of
grade of streets or taking of access.
TO HAVE AND TO HOLD THE SAME, together with the possession
and right of possession of the Premises unto the Trustee, its
successors and assigns, forever, in Trust;
HOWEVER, THIS CONVEYANCE IS MADE IN TRUST FOR THE PURPOSE
OF SECURING: (i) Payment of the principal sum of Six Hundred
Sixty Thousand and 00/100 Dollars ($660,000.00), with interest
thereon, according to the terms and conditions of that certain
Promissory Note (hereinafter referred to as "Note") of even date
herewith, the terms and conditions of which are incorporated
herein by reference and made a part hereof, together with any
extensions under or renewals or modifications thereof, made by
First Party and payable to the order of Third Party due and
payable with interest thereon at the rate(s) set forth in the
Note, the balance of said principal sum together with interest
thereon being due and payable in any event on May 1, 1997, unless
extended pursuant to the terms of the Note; (ii) payment at the
times demanded and with interest thereon at the same rate
specified in the Note of all sums advanced in protecting the lien
of this Indenture, in payment of taxes on the Premises and in
payment of insurance premiums covering improvements on the
Premises, in payment of principal and interest on prior liens, in
payment of expenses and attorney's fees herein provided for and
all sums advanced for any other purpose authorized herein; and
(iii) performance of all of the covenants and agreements of the
First Party herein and in said Note; (the Note and all sums,
together with interest thereon, being collectively referred to as
the "Indebtedness Secured Hereby").
AND THE SAID FIRST PARTY for itself, its heirs,
administrators, successors and assigns, does covenant that it is
lawfully seized of the Premises and has good right to sell, and
convey the same; that the Premises are free from all encumbrances
except those of record as of the date hereof and incorporated
herein in this Indenture; that the Trustee, its successors and
assigns, shall quietly enjoy and possess the Premises; and that
the First Party will WARRANT AND DEFEND the title to the same
against all lawful claims not specifically excepted in this
Indenture.
THE TRUST, PURPOSES, COVENANTS, AGREEMENTS AND CONDITIONS FOR AND
UPON WHICH THE PREMISES ARE CONVEYED AND THE OBLIGATIONS OF FIRST
PARTY ARE AS FOLLOWS, TO-WIT:
ARTICLE ONE
GENERAL COVENANTS, AGREEMENTS, WARRANTIES
SECTION 1.1 PAYMENT OF INDEBTEDNESS: OBSERVANCE OF
COVENANTS. First Party will duly and punctually pay each and
every installment of principal and interest on the Note and all
other Indebtedness Secured Hereby, as and when the same shall
become due, and shall duly and punctually perform and observe all
of the covenants, agreements and provisions contained herein, in
the Note, and any other instrument given as security for the
payment of the Note.
SECTION 1.2 MAINTENANCE: REPAIRS. First Party agrees that
it will keep and maintain the Premises in good condition, repair
and operating condition free from any waste or misuse, and will
comply with all requirements of law, municipal ordinances and
regulations, restrictions and covenants affecting the Premises
and their use, and will promptly repair or restore any buildings,
improvements or structures now or hereafter on the Premises which
may become damaged or destroyed to their condition prior to any
such damage or destruction. First Party further agrees that
without the prior consent of the Third Party, which consent shall
not be unreasonably withheld, it will not expand any improvements
on the Premises, erect any new improvements or make any material
alterations in any improvements which will alter the basic
structure, affect the market value or change the existing
architectural character of the Premises, and will complete within
a reasonable time any buildings now or at any time in the process
of erection on the Premises. First Party agrees not to acquiesce
in any rezoning classification, modification or restriction
affecting the Premises. First Party agrees that it will not
vacate or abandon the Premises.
SECTION 1.3 PAYMENT OF OPERATING COSTS: PRIOR MORTGAGES
AND LIENS. First Party agrees that it will pay all operating
costs and expenses of the Premises; keep the Premises free from
mechanics', materialmens' and other liens not expressly
subordinated to this Indenture or provide security satisfactory
to Third Party for the payment thereof; keep the Premises free
from levy, execution or attachment and will pay when due all
indebtedness which may be secured by mortgage, lien or charge on
the Premises and upon request will exhibit to Third Party
satisfactory evidence of such payment and discharge.
SECTION 1.4 PAYMENT OF IMPOSITIONS. First Party will pay
when due and before any penalty all taxes, assessments, water
charges, sewer charges, and other fees, taxes, charges and
assessments of every kind and nature whatsoever assessed or
charged against or constituting a lien on the Premises or any
interest therein, or the Indebtedness Secured Hereby
("Impositions") and will upon demand furnish to the Third Party
proof of the payment of any such Impositions. In the event of a
court decree or an enactment after the date hereof by any
legislative authority of any law imposing upon a trustee or third
party under a trust indenture or a mortgagee the payment of the
whole or any part of the Impositions herein required to be paid
by the First Party, or changing in any way the laws relating to
the taxation of debts secured by trust indentures or mortgages or
a trustee's, third party's or mortgagee's interest in premises
conveyed as security, so as to impose such Imposition on the
Trustee or Third Party or on the interest of the Trustee or Third
Party in the Premises, then, in any such event, First Party shall
bear and pay the full amount of such Imposition, provided that if
for any reason payment by First Party of any such Imposition
would be unlawful, or if the payment thereof would constitute
usury or render the Indebtedness Secured Hereby wholly or
partially usurious, Third Party, at its option, may declare the
whole sum secured by this Indenture with interest thereon to be
immediately due and payable, without prepayment premium, or Third
Party at its option, may pay that amount or portion of such
Imposition as renders the Indebtedness Secured Hereby unlawful or
usurious, in which event First Party shall concurrently therewith
pay the remaining lawful and non-usurious portion or balance of
said Imposition.
SECTION 1.5 CONTEST OF IMPOSITIONS, LIENS AND LEVIES.
First Party shall not be required to pay, discharge or remove any
Imposition, lien or levy so long as the First Party shall in good
faith contest the same or the validity thereof by appropriate
legal proceedings which shall operate to prevent the collection
of the ▇▇▇▇, ▇▇▇▇ or Imposition so contested and the sale of the
Premises, or any part thereof to satisfy the same, provided that
the First Party shall, prior to the date such ▇▇▇▇, ▇▇▇▇ or
Imposition is due and payable, have given such reasonable
security as may be demanded by the Third Party to insure such
payments and prevent any sale or forfeiture of the Premises by
reason of such nonpayment. Any such contest shall be prosecuted
with due diligence and the First Party shall promptly after final
determination thereof pay the amount of any such ▇▇▇▇, ▇▇▇▇ or
Imposition so determined, together with all interest and
penalties, which may be payable in connection therewith.
Notwithstanding the provisions of this Section, First Party shall
(and if First Party shall fail so to do, Third Party, may but
shall not be required to) pay any such ▇▇▇▇, ▇▇▇▇ or Imposition
notwithstanding such contest if in the reasonable opinion of the
Third Party, the Premises shall be in jeopardy or in danger of
being forfeited or foreclosed.
SECTION 1.6 PROTECTION OF SECURITY. First Party agrees to
promptly notify Third Party of and appear in and defend any suit,
action or proceeding that affects the value of the Premises, the
Indebtedness Secured Hereby or the rights or interest of Trustee
and Third Party hereunder. The Third Party may elect to appear
in or defend any such action or proceeding and First Party agrees
to indemnify and reimburse Third Party from any and all loss,
damage, expense or cost arising out of or incurred in connection
with any such suit, action or proceeding, including costs of
evidence of title and reasonable attorney's fees.
SECTION 1.7 ANNUAL STATEMENTS. First Party will within
ninety (90) days after the end of each fiscal year furnish to the
Third Party financial and operating statements of the Premises
and First Party, including a balance sheet and a profit and loss
statement, all in reasonable detail and conforming to generally
accepted accounting principles. Such financial statements shall
be prepared and certified by an officer of First Party
satisfactory to Third Party at the expense of First Party. In
the event First Party fails to furnish any such statements the
Third Party may cause an audit to be made of the respective books
and records at the sole cost and expense of the First Party.
Third Party also shall have the right after forty-eight (48)
hours advance notice to First Party, or without notice if the
Third Party deems the situation to be an emergency to examine at
their place of safekeeping at reasonable times all books,
accounts and records relating to the operation of the Premises
and First Party.
SECTION 1.8 ADDITIONAL ASSURANCES. First Party agrees
upon reasonable request by the Third Party to execute and deliver
such further instruments, financing statements under the Uniform
Commercial Code now in effect in Texas (presently being Chapter 9
of the Texas Business and Commerce Code) or as it may hereafter
be amended ("Code") and assurances and will do such further acts
as may be necessary or proper to carry out more effectively the
purposes of this Indenture and without limiting the foregoing, to
make subject to the lien hereof any property agreed to be
subjected hereto or covered by the granting clause hereof, or
intended so to be. First Party agrees to pay any recording fees,
filing fees, stamp taxes or other charges arising out of or
incident to the filing or recording of this Indenture, such
further assurances and instruments and the issuance and delivery
of the Note.
SECTION 1.9 DUE ON SALE OR MORTGAGING, ETC. In the event
First Party sells, conveys, transfers, further mortgages or
encumbers or disposes of the Premises, or any part thereof, or
any interest therein, or agrees so to do, without the written
consent of Third Party being first obtained, or if any
controlling interest in First Party is sold, conveyed, or
transferred without the written consent of Third Party being
first obtained, then at the sole option of Third Party, the Third
Party may declare the entire Indebtedness Secured Hereby due and
payable in full and call for payment of the same in full at once.
Third Party's consent as to any one transaction shall not be
deemed to be a waiver of the right to require consent to future
or successive transactions.
SECTION 1.10 RENEWALS AND EXTENSIONS. The Note may be from
time to time renewed or extended by the holder or holders
thereof, and in any such case all the provisions of this
Indenture, and the lien hereof, shall remain in full force and
with the same effect as if said Note had originally been made to
mature at such extended time or times.
SECTION 1.11 PURPOSE. The Indebtedness Secured Hereby is
in part payment of the purchase price of the Premises; the
Indebtedness Secured Hereby is secured both by this Indenture and
by a vendor's lien on the Premises, which is expressly retained
in a deed to First Party of even date. This Indenture does not
waive the vendor's lien, and the two liens and the rights created
by this instrument shall be cumulative. Third Party may elect to
foreclose under either of the liens without waiving the other or
may foreclose under both. The deed is incorporated into this
Indenture.
ARTICLE TWO
INSURANCE AND ESCROWS
SECTION 2.1 INSURANCE. First Party shall obtain and keep
in full force and effect during the term of this Indenture, at
First Party's sole cost and expense, such insurance as called for
in the Lease, if Tenant shall fail to obtain and maintain the
same, including but not limited to insurance against loss by
fire, lightning and risk customarily covered by standard extended
coverage endorsement, including the cost of debris removal,
together with a vandalism and malicious mischief endorsement, all
in the amounts of not less than the full insurable value or full
replacement cost of the improvements on the Premises, whichever
is greater, also, Broad Form Boiler and Machinery insurance on
all equipment and pressure fired vehicles or apparatus situate on
the Premises, and providing for full repair and replacement cost
coverage; also flood insurance in the maximum obtainable amount
unless evidence is provided that the Premises are not within a
flood plain as defined by the Federal Insurance Administration;
also, Rents Loss or Business Interruption Insurance covering
risk of loss due to the occurrence of any hazards insured against
under the required fire and extended coverage insurance in an
amount equal to the annual debt service on the Note plus the
amount of insurance premiums, taxes and special assessments in
that period.
Such insurance policies shall be written on forms and with
insurance companies satisfactory to Third Party, shall name as
the insured parties the First Party, and Third Party as their
interests may appear, shall be in amounts sufficient to prevent
the First Party from becoming a co-insurer of any loss
thereunder, and shall bear a satisfactory mortgagee clause in
favor of the Third Party with loss proceeds under any such
policies to be made payable to the Third Party. First Party
shall also obtain and keep in full force and effect during the
term of this Indenture comprehensive general public liability
insurance covering the legal liability of the First Party against
claims for bodily injury, death or property damage occurring on,
in or about the Premises in such minimal amounts and with such
minimal limits as the Third Party may reasonably require. All
required policies of insurance or acceptable certificates thereof
together with evidence of the payment of current premiums
therefor shall be delivered to the Third Party. The First Party
shall, within thirty (30) days prior to the expiration,
termination, or change in or of any such policy, deliver other
original policies or certificates of the insurer evidencing the
renewal of such insurance together with evidence of the payment
of current premiums therefor. In the event of a trustee's sale
or foreclosure of this Indenture or any acquisition of the
Premises by Third Party all such policies and any proceeds
payable therefrom, whether payable before or after a foreclosure
sale, or during a period of redemption, if any, shall become the
absolute property of the Third Party to be utilized at its
discretion. In the event of a Trustee's sale or foreclosure or
the failure to obtain and keep any required insurance the First
Party empowers the Third Party to effect insurance upon the
Premises at First Party's expense and for the benefit of the
Third Party in the amounts and types aforesaid for a period of
time covering the time of redemption, if any, from foreclosure
sale, and if necessary therefore, to cancel any or all existing
insurance policies. First Party agrees to furnish Third Party
copies of all inspection reports and insurance recommendations
received by First Party from any insurer.
SECTION 2.2 ESCROWS. Upon the written request of Third
Party, First Party shall deposit with the Third Party, or at
Third Party's request, with its servicing agent on the first day
of each and every month hereafter, an amount equal to one-twelfth
(1/12th) of the estimated annual taxes and assessments and
insurance premiums ("Charges") due on the Premises. From time to
time out of such deposits Third Party will, upon the presentation
to the Third Party by the First Party of the bills therefor, pay
the Charges or will upon presentation of receipted bills
therefor, reimburse the First Party for such payments made by the
First Party. In the event the deposits on hand shall not be
sufficient to pay all of the estimated Charges when the same
shall become due from time to time, or the prior payments shall
be less than the currently estimated monthly amounts, then the
First Party shall pay to the Third Party on demand any amount
necessary to make up the deficiency. The excess of any such
deposits shall be credited to subsequent payments to be made for
such items. If a default or an event of default shall occur
under the terms of this Indenture or the Note the Third Party
may, at its option, without being required so to do, apply any
deposits on hand to the Indebtedness Secured Hereby, in such
order and manner as the Third Party may elect. When the
Indebtedness Secured Hereby has been fully paid any remaining
deposits shall be returned to the First Party as its interest may
appear. All deposits are hereby pledged as additional security
for the Indebtedness Secured Hereby, shall be held for the
purposes for which made as herein provided, but may be commingled
with other funds of the holder, shall be held without any
allowance of interest thereon and shall not be subject to the
decision or control of the First Party.
ARTICLE THREE
UNIFORM COMMERCIAL CODE
SECTION 3.1 FIXTURE FILING. This Indenture shall
constitute a security agreement as defined in the Code as adopted
in the State of Texas and until the grant of this Deed of Trust
shall terminate as provided herein, a first and prior pledge and
assignment and a first and prior lien security under the Code
with respect to the Premises. This INDENTURE SHALL BE EFFECTIVE
AS A FINANCING STATEMENT FILED AS A FIXTURE FILING from the date
of its filing in the real estate records of the County where the
Premises are situate. Information concerning the security
interest created by this instrument may be obtained from Third
Party, as secured party, at its address as set forth in page one
of this Indenture. The name of the record owner of the Premises
is the First Party and the address of the First Party, as debtor,
is as set forth in page one to this Indenture. This document
covers goods which are or are to become fixtures related to the
Premises of which the First Party is the record title owner as
more fully set forth on the first two pages of this Deed of
Trust.
SECTION 3.2 REPRESENTATIONS AND AGREEMENTS. (a) First
Party is and will be the true and lawful owner of the Premises,
subject to no liens, charges, security interest and encumbrances
other than the lien hereof and liens disclosed in writing prior
to the date hereof to Third Party; (b) any equipment or fixtures
are to be used by the First Party solely for business purposes
being installed upon the Premises for First Party's own use or as
the equipment and furnishings leased or furnished by the First
Party, as landlord, to tenants of the Premises; (c) such
equipment or fixtures will be kept at the buildings comprised in
the Premises and will not be removed therefrom without the
consent of the Third Party and may be affixed to such building
but will not be affixed to any other real estate; (d) unless
stated otherwise in this Indenture, the only persons having any
interest in the Premises are the First Party and the Third Party
and no financing statement covering any such property and any
proceeds thereof is on file in any public office except pursuant
hereto or purchase money security interests of First Party's
equipment vendors or lenders; (e) the remedies of the Third Party
hereunder are cumulative and separate, and the exercise of any
one or more of the remedies provided for herein or under the Code
shall not be construed as a waiver of any of the other rights of
the Third Party including having such non realty items deemed
part of the realty upon any sale or foreclosure thereof; (f) if
notice to any party of the intended disposition of the Premises
is required by law in a particular instance, such notice shall be
deemed commercially reasonable if given at least ten (l0) days
prior to such intended disposition and may be given by posting or
advertisement in a newspaper accepted for legal publications
either separately or as part of a notice given to sell or
foreclose the real property or may be given by private notice if
such parties are known to Third Party; (g) First Party will from
time to time provide Third Party on request with itemizations of
all such non-realty items on the Premises; (h) the filing of a
financing statement pursuant to the Code shall never impair the
stated intention of this Indenture that all the equipment,
personal property and fixtures comprising the Premises are, and
at all times and for all purposes and in all proceedings both
legal or equitable shall be regarded as part of the real property
mortgaged hereunder irrespective of whether such item is
physically attached to the real property or any such item is
referred to or reflected in a financing statement; (i) First
Party will on demand deliver all financing statements that may
from time to time be required by Third Party to establish and
perfect the priority of Third Party's security interest in such
Collateral; and (j) First Party shall give advance written notice
of any proposed change in First Party's name, identity or
structure and will execute and deliver to Third Party prior to or
concurrently with such change all additional financing statements
that Third Party may require to establish and perfect the
priority of Third Party's security interest.
SECTION 3.3 MAINTENANCE OF PROPERTY. Subject to the
provisions of this Section, in any instance where First Party in
its sound discretion determines that any item subject to a
security interest under this Indenture has become inadequate,
obsolete, worn out, unsuitable, undesirable or unnecessary for
the operation of the Premises, First Party may, at its expense,
remove and dispose of it and substitute and install other items
not necessarily having the same function, provided, that such
removal and substitution shall not impair the operating utility
and unity of the Premises. All substituted items shall become a
part of the Premises and subject to the lien of the Indenture.
Any amounts received or allowed First Party upon the sale or
other disposition of the removed items of property shall be
applied first against the cost of acquisition and installation of
the substituted items. Nothing herein contained shall be
construed to prevent any tenant or subtenant from removing from
the Premises trade fixtures, furniture and equipment installed by
it and removable by tenant under its terms of the lease, on the
condition, however, that the tenant or subtenant shall at its own
cost and expense, repair any and all damages to the Premises
resulting from or caused by the removal thereof, and shall not
remove such items without prior written notice to Third Party.
ARTICLE FOUR
APPLICATION OF INSURANCE AND AWARDS
SECTION 4.1 DAMAGE OR DESTRUCTION OF THE PREMISES. First
Party will give the Third Party prompt notice of any damage to or
destruction of the Premises and in case of loss covered by
policies of insurance the Third Party (whether before or after
foreclosure sale) is hereby authorized at its option to settle
and adjust any claim arising out of such policies and collect and
receipt for the proceeds payable therefrom, provided, that the
First Party may itself adjust and collect for any losses arising
out of a single occurrence aggregating not in excess of Ten
Thousand Dollars ($10,000.00). Any expense incurred by the Third
Party in the adjustment and collection of insurance proceeds
(including the cost of any independent appraisal of the loss or
damage on behalf of Third Party) shall be reimbursed to the Third
Party first out of any proceeds. The proceeds or any part
thereof shall be applied to reduction of the Indebtedness Secured
Hereby then most remotely to be paid, whether due or not, without
the application of any prepayment premium, or to the restoration
or repair of the Premises, the choice of application to be solely
at the discretion of Third Party.
SECTION 4.2 CONDEMNATION. First Party will give the Third
Party prompt notice of any action, actual or threatened, in
condemnation or eminent domain and hereby assigns, transfers, and
sets over to the Third Party the entire proceeds of any award or
claim for damages for all or any part of the Premises taken or
damaged under the power of eminent domain or condemnation, the
Third Party being hereby authorized to intervene in any such
action and to collect and receive from the condemning authorities
and give proper receipts and acquittances for such proceeds.
First Party will not enter into any agreements with the
condemning authority permitting or consenting to the taking of
the Premises unless prior written consent of Third Party is
obtained. To enforce its rights hereunder, Third Party shall be
entitled to participate in and control any condemnation
proceedings and to be represented therein by counsel of its own
choice, and First Party will deliver, or cause to be delivered,
to Third Party such instruments as may be requested by it from
time to time to permit such participation. In the event Third
Party, in its reasonable judgement, as a result of any such
decree, award or judgement, believes that the payment or
performance of any obligation secured by this Deed of Trust is
impaired, Third Party may, without notice, declare all of the
Indebtedness Secured Hereby immediately due and payable in full.
Any expenses incurred by the Third Party in intervening in such
action or collecting such proceeds shall be reimbursed to the
Third Party first out of the proceeds. The proceeds or any part
thereof shall be applied upon or in reduction of the Indebtedness
Secured Hereby then most remotely to be paid, whether due or not,
without the application of any prepayment premium, or to the
restoration or repair of the Premises, the choice of application
to be solely at the discretion of Third Party.
SECTION 4.3 DISBURSEMENT OF INSURANCE AND CONDEMNATION
PROCEEDS. Should any insurance or condemnation proceeds be
applied to the restoration or repair of the Premises the
restoration or repair shall be done under the supervision of an
architect acceptable to Third Party and pursuant to plans and
specifications approved by the Third Party. In such case the
proceeds shall be held by Third Party for such purposes and will
from time to time be disbursed by Third Party to defray the costs
of such restoration or repair under such safeguards and controls
as Third Party may reasonably require to assure completion in
accordance with the approved plans and specifications and free of
liens or claims. First Party shall on demand deposit with Third
Party and sums necessary to make up any deficits between the
actual cost of the work and the proceeds and provide such lien
waivers and completion bonds as Third Party may reasonably
require. Any surplus which may remain after payment of all costs
of restoration or repair may at the option of the Third Party be
applied on account of the Indebtedness Secured Hereby then most
remotely to be paid, whether due or not, without application of
any prepayment premium or shall be returned to First Party as its
interest may appear, the choice of application to be solely at
the discretion of Third Party.
SECTION 4.4 DISBURSEMENT OF INSURANCE AND CONDEMNATION
PROCEEDS PURSUANT TO THE LEASE. Should any insurance or
condemnation proceeds be required to be applied to the
restoration or repair of the Premises according to the terms of
the Lease, Third Party shall make the same available pursuant to
such terms.
ARTICLE FIVE
LEASES AND RENTS
SECTION 5.1 FIRST PARTY TO COMPLY WITH LEASES. First
Party will, at its own cost and expense, perform, comply with and
discharge all of the obligations of First Party under any leases
or agreements for the use of the Premises and use its best
efforts to enforce or secure the performance of each obligation
and undertaking of the respective tenants under any such leases
and will appear in and defend, at its own cost and expense, any
action or proceeding arising out of or in any manner connected
with the First Party's interest in any leases of the Premises.
First Party shall permit no assignment or surrender of any
tenant's interest under said leases unless the right to assign or
surrender is expressly reserved under the lease nor anticipate
any installment of rent for more than one month in advance of its
due date nor execute any mortgage or indenture or create or
permit a lien which may be or become superior to any such leases,
nor permit a subordination of any lease to such mortgage,
indenture, or lien. First Party will not modify or amend the
terms of any such leases nor borrow against or pledge the rentals
from such leases nor excuse or waive any default of the tenant
thereunder without the prior written consent of the Third Party.
SECTION 5.2 THIRD PARTY'S RIGHT TO PERFORM UNDER LEASES.
Should the First Party fail to perform, comply with or discharge
any obligations of First Party under any lease or other
obligation affecting the Premises or should the Third Party
become aware of or be notified by any tenant under any lease or
by other party to any agreement affecting the Premises of a
failure on the part of First Party to so perform, comply with or
discharge its obligations under said lease or agreement, Third
Party may, but shall not be obligated to, and without further
demand upon the First Party, and without waiving or releasing
First Party from any obligation in this Indenture contained,
remedy such failure, and the First Party agrees to repay upon
demand all sums incurred by the Third Party in remedying any such
failure together with interest at the rate as specified in the
Note. All such sums, together with interest as aforesaid shall
become so much additional Indebtedness Secured Hereby, but no
such advance shall be deemed to relieve the First Party from any
default hereunder.
SECTION 5.3 ASSIGNMENT OF LEASES,PROFITS, AND RENTS. The
First Party does hereby sell, assign and transfer unto the Third
Party all of the leases, rents and profits now due and which may
hereafter become due under or by virtue of the Lease, and any
other lease, whether written or verbal, or any agreement for the
use or occupancy of the Premises, it being the intention of this
Indenture to establish an absolute transfer and assignment of all
such leases and agreements and all of the rents and profits from
the Premises unto the Third Party including the right to collect
in its own name all of said rents and profits; provided, First
Party acknowledges that Third Party shall have the right to
collect and retain such rents and profits unless and until the
Indebtedness Secured Hereby has been paid in full. Until an
event of default exists under this Indenture, any rents from the
Premises received by Third Party shall be first applied to
accrued interest, then to principal. Upon an event of default
and whether before or after a trustees sale or the institution of
legal proceedings to foreclose this Indenture or before or after
sale thereunder or during any period of redemption existing by
law, the Third Party, and without regard to waste, adequacy of
the security or solvency of the First Party, may revoke the
application of rents stated above, and may at its option, without
notice and without in any way waiving such default, either (a) in
person or by agent, with or without taking possession of or
entering the Premises, with or without bringing any action or
proceeding, give, or require First Party to give, notice to any
or all tenants under any Lease authorizing and directing the
tenant to pay such rents and profits to Third Party; continue to
collect all of the rents and profits; enforce the payment thereof
and exercise all of the rights of the Landlord under the leases
and all of the rights of Third Party hereunder; may enter upon,
take possession of, manage and operate said Premises, or any part
thereof; may cancel, enforce or modify the leases, and fix or
modify rents make from time to time all alterations, renovations,
repairs or replacements and do any acts which the Third Party
deems proper to protect the security hereof with or without the
taking possession of the Premises;or (b) apply for the
appointment of a receiver in accordance with the statutes and
laws made and provided for, which receivership First Party hereby
consents to, who shall collect the rents and profits, and all
other income of any kind; manage the premises so as to prevent
waste; execute leases within or beyond the period of
receivership, and perform the terms of the Indenture and apply
the rents and profits as hereinafter provided. Any such rents,
issues, and profits shall be applied to the payment when due of:
(i) all reasonable fees of any receiver appointed hereunder, (ii)
tenants security deposits, (iii) prior or current real state
taxes or special assessments then due,(iv) premiums for insurance
of the type required by the Indenture or, if the Indenture so
requires, to the periodic escrow for payment of the taxes or
special assessments then due, and (v) such alterations,
renovations, repairs and replacements and expenses incident to
taking and retaining possession of the Premises and managing and
operating the same and keeping the same properly insured and all
expenses for normal maintenance of the Premises, with interest on
all such items, in such order of priority as to any of such items
as Third Party in its sole discretion may determine, any statute,
law, custom, or use to the contrary notwithstanding. Any rents
remaining after application or the above items shall be applied
to the Indebtedness Secured Hereby. If the Premises shall be
foreclosed and sold pursuant to a foreclosure sale, then:
(a) If the Third Party is the purchaser at the
foreclosure sale, the rents shall be paid to the Third
Party to be applied to the extent of any deficiency
remaining after the sale, the balance to be retained by
the Third Party, and if the Premises be redeemed by the
First Party or any other party entitled to redeem, to
be applied as a credit against the redemption price
with any remaining excess rents to be paid to the First
Party, provided, if the Premises not be redeemed, any
remaining excess rents to belong to the Third Party,
whether or not a deficiency exists;
(b) If the Third Party is not the purchaser at the
foreclosure sale, the rents shall be paid to the Third
Party to be applied first, to the extent of any
deficiency remaining after the sale, the balance to be
retained by the purchaser, and if the Premises be
redeemed by the First Party or any other party entitled
to redeem, to be applied as credit against the
redemption price with any remaining excess rents to
paid to the First Party; provided, if the Premises are
not redeemed, any remaining excess rents shall be paid
first the purchaser at the foreclosure sale in an
amount equal to the interest accrued upon the sale
price, then to the Third Party to the extent of any
deficiency remaining unpaid and then the remainder to
the purchaser.
The entering upon and taking possession of the Premises, the
collection of such rents and profits and the application thereof
as aforesaid shall not cure or waive any defaults under this
Indenture nor in any way operate to prevent the Third Party from
pursuing any other remedy which it may now or hereafter have
under the terms of this Indenture or shall it in any way be
deemed to constitute the Third Party a mortgagee-in-possession.
The rights and powers of the Third Party hereunder shall remain
in full force and effect both prior to and after any foreclosure
of the Indenture and any sale pursuant thereto and until
expiration of the period of redemption from said sale, regardless
of whether a deficiency remains from the sale.
First Party covenants and represents to Third Party that (i)
First Party has full right, title, power and authority to assign
the leases and the rents, income and profits due or to become due
thereunder, (ii) no other assignment of any interest therein has
been made, (iii) there are no existing defaults under the
provisions of the leases, (iv) First Party has not performed any
act or executed any instrument which might prevent Third Party
from operating under any terms and conditions hereof or which
would have limited First Party in such operation, and (v) First
Party has not accepted and will not accept rent in excess of one
month in advance.
First Party hereby authorizes Third Party to give notice in
writing of this Assignment at any time and from time to time to
any tenant under any of the leases. The Third Party shall not be
obligated to perform or discharge any obligation or liability of
the landlord under any of said leases or under or by reason of
this Assignment; and the First Party shall and does hereby agree
to indemnify and hold the Third Party harmless of and from any
and all expenses, liability, loss or damage which it might incur
under said leases or under or by reason of this Assignment, and
of and from any and all claims by reason of any alleged
obligations or undertakings on its part to perform or discharge
any of the terms, covenants, or agreements contained in the
leases except by reason of Third Party's gross negligence or
willful misconduct.
Should Third Party incur any liability, loss, or damage under the
leases or under or by reason of this Assignment, or in the
defense of any such claims or demands, the amount thereof,
including costs, expenses, and reasonable attorney's fees, shall
be secured hereby; First Party shall reimburse Third Party
therefor immediately upon demand, and upon failure of First Party
so to do, Third Party may declare all sums secured hereby
immediately due and payable.
The purchaser at any foreclosure sale, including the Third Party,
shall have the right, at any time and without limitation, to
advance money to any receiver appointed hereunder to pay any part
or all of the items which the receiver would otherwise be
authorized to pay if cash were available from the Premises and
the sum so advanced, with interest at the rate provided for in
the Note, shall be a part of the sum required to be paid to
redeem from any foreclosure sale.
The rights hereunder shall in no way be dependent upon and shall
apply without regard to whether the Premises are in danger of
being lost, materially injured or damaged or whether the Premises
are adequate to discharge the Indebtedness Secured Hereby. The
rights contained herein are in addition to and shall be
cumulative with the rights given in any separate instrument, if
any, assigning any leases, rents and profits of the Premises and
shall not amend or modify the rights in any such separate
agreement.
Third Party may take or release other security, may release any
party primarily or secondarily liable for any Indebtedness
Secured Hereby, may grant extensions, renewals or indulgences
with respect to such indebtedness, and may apply any other
security therefor held by it to the satisfaction of such
indebtedness, without prejudice to any of its rights hereunder.
The violation of any of the covenants, representations, or
provisions contained herein by First Party shall be deemed to be
a default hereunder and under the terms of the Note and Deed of
Trust. A default by First Party under the terms of any of the
leases which would entitled the lessee or tenant thereunder to
cancel and terminate such lease shall be deemed a default under
the terms of the Note and the Deed of Trust. Any expenditures
made by Third Party in curing any such default on First Party's
behalf, with interest thereon at the highest lawful rate, shall
become part of the Indebtedness Secured Hereby.
ARTICLE SIX
RIGHTS OF THIRD PARTY
SECTION 6.1 RIGHT TO CURE DEFAULT. If the First Party
shall fail to comply with any of the covenants or obligations of
this Indenture, the Third Party may, but shall not be obligated
to, without further demand upon First Party, and without waiving
or releasing First Party from any obligation in this Indenture
contained, remedy such failure, and the First Party agrees to
repay upon demand all sums incurred by the Third Party in
remedying any such failure together with interest at the rate as
specified in the Note. All such sums, together with interest as
aforesaid shall become so much additional Indebtedness Secured
Hereby, but no such advance shall be deemed to relieve the First
Party from any failure hereunder.
SECTION 6.2 NO CLAIM AGAINST THE THIRD PARTY OR TRUSTEE.
Nothing contained in this Indenture shall constitute any consent
or request by the Third Party or Trustee, express or implied, for
the performance of any labor or services or for the furnishing of
any materials or other property in respect of the Premises or any
part thereof, nor as giving the First Party or any party in
interest with First Party any right, power or authority to
contract for or permit the performance of any labor or services
or the furnishing of any materials or other property in such
fashion as would create any personal liability against the Third
Party or Trustee in respect thereof or would permit the making of
any claim that any lien based on the performance of such labor or
services or the furnishing of any such materials or other
property is prior to this Indenture.
SECTION 6.3 INSPECTION. First Party will permit the Third
Party's authorized representatives to enter the Premises at all
times for the purpose of inspecting the same; provided the Third
Party shall have no duty to make such inspections and shall not
incur any liability or obligation for making or not making any
such inspections.
SECTION 6.4 WAIVERS; RELEASES; RESORT TO OTHER SECURITY,
ETC. Without affecting the liability of any party liable for
payment of any Indebtedness Secured Hereby or performance of any
obligation contained herein, and without affecting the rights of
the Third Party or Trustee with respect to any security not
expressly released in writing, the Third Party may, at any time,
and without notice to or the consent of the First Party or any
party in interest with the Premises or the Note (a) release any
person liable for payment of all or any part of the Indebtedness
Secured Hereby or for performance of any obligation herein, (b)
make any agreement extending the time or otherwise altering the
terms of payment of all or any part of the Indebtedness Secured
Hereby or modifying or waiving any obligation, or subordinating,
modifying or otherwise dealing with the lien or charge hereof,
(c) accept any additional security, (d) release or otherwise deal
with any property, real or personal, including any or all of the
Premises, including making partial releases of the Premises; or
(e) resort to any security agreements, pledges, contracts of
guarantee, assignments of rents and leases or other securities,
and exhaust any one or more of said securities and the security
hereunder, either concurrently or independently and in such order
as it may determine.
SECTION 6.5 RIGHTS CUMULATIVE. Each right, power or
remedy herein conferred upon the Third Party is cumulative and in
addition to every other right, power or remedy, express or
implied, now or hereafter arising, available to Third Party, at
law or in equity, or under the Code, or under any other
agreement, and each and every right, power and remedy herein set
forth or otherwise so existing may be exercised from time to time
as often and in such order as may be deemed expedient by the
Third Party and shall not be a waiver of the right to exercise at
any time thereafter any other right, power or remedy. No delay
or omission by the Third Party in the exercise of any right,
power or remedy arising hereunder or arising otherwise shall
impair any such right, power or remedy or the right of the Third
Party to resort thereto at a later date or be construed to be a
waiver of any default or event of default under this Indenture or
the Note.
SECTION 6.6 SUBSEQUENT AGREEMENTS. Any agreement
hereafter made by First Party and Third Party pursuant to this
Indenture shall be superior to the rights of the holder of any
intervening lien or encumbrance.
SECTION 6.7 WAIVER OF APPRAISEMENT, HOMESTEAD, MARSHALING.
The First Party hereby waives to the full extent lawfully allowed
the benefit of any homestead, appraisement, evaluation, stay and
extension laws now or hereinafter in force. First Party hereby
waives any rights available with respect to marshaling of assets
so as to require the separate sales of any portion of the
Premises, or as to require the Third Party to exhaust its
remedies against a specific portion of the Premises before
proceeding against the other and does hereby expressly consent to
and authorize the sale of the Premises or any part thereof as a
single unit or parcel.
SECTION 6.8 BUSINESS LOAN REPRESENTATIONS. The First
Party represents and warrants to Third Party that the loan
evidenced by the Note is a business loan transacted solely for
the purpose of carrying on the business of First Party and does
not constitute the homestead of First Party.
ARTICLE SEVEN
EVENTS OF DEFAULT AND REMEDIES
SECTION 7.1 EVENTS OF DEFAULT. It shall be an event of
default under this Indenture if (a) the First Party or any co-
maker, guarantor or surety shall fail to pay any principal or
interest on the Note when and as the same becomes due (whether
Tenant shall pay rent under the Lease or not, or whether such
failure of First Party to pay shall occur at the stated maturity
or at a date fixed for any installment payment or any accelerated
payment date or otherwise); or (b) the First Party shall fail to
comply with or perform any of the terms, conditions or covenants
of the Note or of this Indenture; or (c) the First Party shall
fail to pay when due any other Indebtedness Secured Hereby; or
(d) the First Party, or any maker, guarantor or surety of the
Note shall make an assignment for the benefit of its creditors,
or shall admit in writing its inability to pay its debts as they
become due or shall file a petition in bankruptcy, or shall be
adjudicated a bankrupt or insolvent, or shall file a petition
seeking any reorganization, dissolution, liquidation,
arrangement, composition, readjustment or similar relief under
any present or future bankruptcy or insolvency statute, law or
regulation or shall file an answer admitting to or not contesting
the material allegations of a petition filed against it in such
proceedings, or shall not within sixty (60) days after the filing
of such a petition have the same dismissed or vacated, or shall
seek or consent to or acquiesce in the appointment of any
trustee, receiver or liquidator of a material part of its
properties, or shall not within sixty (60) days after the
appointment without the consent or acquiescence of it of a
trustee, receiver or liquidator of any material part of its
properties have such appointment vacated; or (e) the First Party
shall default in the performance of any terms, conditions or
covenants of any other instrument securing the Note; or (f) any
representation or warranty made by First Party herein, in the
Note or in any other instrument securing the Note shall be false,
breached or dishonored; or (g) the First Party or any maker,
guarantor or surety of the Note shall be adjudged incompetent or
die and satisfactory provisions are not made for the substitution
of the liability of said party's estate for the repayment of the
Indebtedness Secured Hereby or the First Party shall be
dissolved, liquidated or wound up.
SECTION 7.2 THIRD PARTY AND TRUSTEE'S POWER TO ACCELERATE
AND SELL.
(a) Upon default by First Party in the payment when
due, time being of the essence, of any Indebtedness
Secured Hereby, or default by First Party in the
performance of any agreement hereunder, or an event of
default shall occur, then all of the unpaid principal
Indebtedness Secured Hereby, including any payments or
advances made by Third Party under the provisions
hereof, together with all earned or accrued interest,
court costs, and reasonable attorney's fees hereunder,
shall without demand or presentment, notice, protest,
or action of any nature (each of which is expressly
waived by First Party hereby) at the option of Third
Party immediately become due and payable, and the said
Trustee hereunder shall at the request of said Third
Party enforce this Trust;and
(b) and after advertising the time, place and terms of
the sale, and the property to be sold, by posting or
causing to be posted written or printed notice thereof
for at least the number of days required by applicable
law or statute, including but not limited to Section
51.002, Texas Property Code, as amended, successively
next before the date of said sale at the courthouse
door of the county or counties where said real estate
is situated, and with the County Clerk of such county
or counties, which notices may be posted by the Trustee
acting or by any other person, the Trustee shall sell
the same, in accordance with such advertisement at
public auction in front of the courthouse door of such
county or counties where such real estate is situated
on the first Tuesday of any month between the hours of
l0:00 A.M. and 4:00 P.M. to the highest bidder for cash
and sell all the property so advertised, as an entirety
or in parcels as the Trustee acting may elect, and make
due conveyance to the purchaser or purchasers with
general warranty binding said First Party herein, its
successors and assigns. And a sale of less than the
whole of the property herein conveyed or any defective
or irregular sale made hereunder shall not exhaust the
power of sale herein conferred, but subsequent sales
hereunder may be made as long and as often as any of
this Indebtedness Secured Hereby remains unpaid and any
of said property exists. The recitals in any conveyance
executed by the Trustee shall be full evidence of the
truth of the matters therein stated, and all
prerequisites to said sale shall be presumed to have
been performed, and such sale and conveyance shall be
conclusive against First Party, regardless of whether
such prerequisites actually shall have been performed.
Third Party may become the purchaser at any sale, being
the highest bidder, and
(c) In addition to the posting of the notice provided
above, Third Party shall, at least twenty-one (21) days
preceding the date specified in the hereinabove
described notice as the date upon which said property
will be sold as aforesaid, serve written notice of the
proposed sale by certified mail on each debtor
obligated to pay such debt according to the records of
the Third Party, which service shall be completed upon
deposit of the notice, or a copy thereof, enclosed in a
postpaid wrapper, properly addressed to each of such
debtors at the most recent address as shown by the
records of Third Party, in a post office or official
depository under the care and custody of the United
States Postal Service, or its successors. It is
expressly agreed that the affidavit of any person
having knowledge of the facts to the effect that such
service was completed as aforesaid, shall be prima
facie evidence of the fact of such service and it is
further expressly agreed and stipulated that Third
Party, or employee, agent, or representative of Third
Party may make such service as aforesaid, and
(d) The Trustee making such sale shall receive the
proceeds thereof and apply the same as follows: (1) pay
the reasonable expenses of this trust and the
attorney's fees provided in said Note; (2) all amounts
with interest as aforesaid that may have been expended
by the holder of any part of the Indebtedness Secured
Hereby arising under the covenants and agreements
hereinabove contained and not evidenced by the Note;
(3) all past due interest and accrued interest; (4) the
unpaid principal of the Indebtedness Secured Hereby;
and (5) the remainder of such proceeds of sale, if any,
shall be paid to First Party or its assigns. In the
event the hereinbefore described property becomes
vacant and remains vacant for a period of thirty (30)
days, or in case any default is made in the payment of
the Indebtedness Secured Hereby, or any portion
thereof, or in case default is made in any covenant or
agreement made herein, or in the Note secured hereby,
then all rents, revenues, rights and profits arising or
accruing from said property, are hereby assigned,
transferred and set out to Third Party, and Third Party
is hereby expressly authorized and empowered to enter
upon said Premises, take possession thereof and rent
same for such rental as it may deem proper; to collect
and receive all rentals, revenues, rights and profits
arising or accruing therefrom, and to manage and
control said property so long as such vacancy or
default shall continue, and all tenants, or other
persons then in possession of said property, are hereby
directed upon production of this Indenture or certified
copy hereof, to pay all such rents, revenues, rights
and profits to Third Party. The provision of this
Section shall become effective immediately upon the
happening of any such vacancy or default, and as often
as same shall occur, and shall remain effective so long
as any such vacancy or default shall continue. Any
monies or rents collected by Third Party, less
reasonable expenses of collection, shall be applied on
the Indebtedness Secured Hereby, and to such portion or
items of said indebtedness as Third Party may elect.
The exercise of its rights under this Section by Third
Party shall not in anyway prejudice or impair otherwise
its right of foreclosure hereunder, nor shall Third
Party be liable for any inability or failure to collect
such rents. First Party specifically agrees that after
any sale under this Indenture it shall be a mere tenant
at sufferance of the purchaser of said property at the
Trustee's sale, and that purchaser shall be entitled to
immediate possession thereof, and that if the First
Party fails to vacate the Premises immediately, the
purchaser may, and he shall have the right to go into
any justice court in the precinct or county in which
the property is located and file an action in forcible
entry and detainer, which action shall lie against the
First Party as tenant at sufferance,and
(e) Third Party may, at its option, accomplish all or
any of the aforesaid in such manner as permitted or
required by Chapter 51 of the Texas Property Code as
then amended relating to the sale of real estate or by
Chapter 9 of the Texas Business and Commerce Code
relating to the sale of collateral after default by a
debtor (as said article or chapter now exist or may be
hereinafter amended or succeeded), or by any other
present or subsequent articles or enactments relating
to same. In instances where the personalty is located
in states other than Texas, such sales shall be made in
accordance with local law for such state, including, to
the extent there relevant, the Uniform Commercial Code
there in effect. Nothing contained in the Paragraph
shall be construed to limit in any way Trustee's right
to sell the Premises by private sale if, and to the
extent that such private sale is permitted under
applicable law or by public or private sale after entry
of a judgment by any court of competent jurisdiction
ordering same. At any such sale:
(i) whether made under the
power herein contained, the aforesaid Chapter
51 the Texas Property Code, any other
applicable law or by virtue of any judicial
proceedings or any other legal right, remedy or
recourse, it shall not be necessary for Trustee
to have physically present, or to have
constructive possession of, the Premises (First
Party shall deliver to Trustee any portion of
the Premises not actually or constructively
possessed by Trustee immediately upon demand by
Trustee) and the title to and right of
possession of any such property shall pass to
the purchaser thereof as completely as if the
same had been actually present and delivered to
purchaser at such sale;
(ii) each instrument
of conveyance executed by Trustee shall contain
a general warranty of title, binding upon First
Party;
(iii) each and every
recital contained in any instrument of
conveyance made by Trustee shall conclusively
establish the truth and accuracy of the matters
recited therein, including, without limitation,
matters recited therein, including, without
limitation, nonpayment of the Indebtedness,
advertisement and conduct of such sale in the
manner provided herein and otherwise by law and
appointment of any successor Trustee hereunder;
(iv) any and all
prerequisites to the validity thereof shall be
conclusively presumed to have been performed;
(v) the receipt of Trustee
or of such other party or officer making the
sale shall be sufficient to discharge to the
purchaser or purchasers for his or their
purchase money, and no such purchaser or
purchasers, or his or their assigns or personal
representatives, shall thereafter be obligated
to see to the application of such purchase
money be in any way answerable for any loss,
misapplication or nonapplication thereof;
(vi) to the fullest
extent permitted by law, First Party shall be
completely and irrevocably divested of all of
its right, title, interest, claim and demand
whatsoever, either at law or in equity, in and
to the property sold, and such sale shall be a
perpetual bar, both at law and in equity,
against First Party and against all other
persons claiming or to claim the property sold
or to any part thereof by, through or under
First Party; and
(vii) to the extent and
under such circumstances as are permitted by
law, Third Party may be a purchaser at any such
sale.
SECTION 7.3 DIVESTMENT OF RIGHTS; TENANT AT SUFFERANCE.
After sale of the Premises, or any portion thereof, First Party
will be divested of any and all interest and claim thereto,
including any interest or claim to all insurance policies, bonds,
loan commitments and other intangible property covered hereby.
Additionally, with respect to the Premises, after a sale of all
or any portion thereof, First Party will be considered a tenant
at sufferance of the purchaser of the same, and said purchaser
shall be entitled to immediate possession thereof, and if First
Party shall fail to vacate the Premises immediately, purchaser
may and shall have the right, without further notice to First
Party, to go into any justice court in any precinct or county in
which the Premises is located and file an action in forcible
entry and detainer, which action shall lie against the First
Party or its assigns or legal representatives, as a tenant at
sufferance. This remedy is cumulative of any and all remedies
the Third Party may have hereunder or otherwise.
SECTION 7.4 RECEIVER. Upon an event of default or
bringing of any suit or action to foreclose this Indenture or to
enforce any other remedy available hereunder, the Third Party
shall be entitled as a matter of right without notice and without
giving bond and without regard to the solvency or insolvency of
the First Party, or waste of the Premises or adequacy of the
security of the Premises, to obtain the appointment of a receiver
of all of the Premises and of the earnings, rents and profits
thereof under any statute or law providing for the same with the
right to apply the earnings, rents and payments to the costs and
expenses of the receivership, including reasonable attorney's
fees, to the repayment of the Indebtedness Secured Hereby and to
the operation, maintenance, upkeep and repair of the Premises,
including payment of taxes on the Premises and payments of
premiums of insurance on the Premises to which appointment the
First Party does hereby irrevocably consent.
SECTION 7.5 RIGHTS UNDER CODE. In addition to the rights
available to the Third Party hereunder, Third Party shall also
have all the rights, remedies and recourse available to a secured
party under the Uniform Commercial Code including the right to
proceed under the provisions of the Uniform Commercial Code
governing default as to any Personal Property which may be
included in the Premises or which may be deemed non-realty or to
proceed as to such personal property in accordance with the
procedures and remedies available pursuant to a trustee's sale or
foreclosure of real estate, in addition to, and not in limitation
of the other rights, remedies, and recourses afforded by the Note
and at law or in equity.
SECTION 7.6 RIGHT TO DISCONTINUE PROCEEDINGS. In the
event Third Party shall have requested Trustee to invoke any
right, remedy or recourse permitted under this Indenture and
shall thereafter elect to discontinue or abandon the same for any
reason, Third Party shall have the unqualified right to do so and
in such event First Party, Trustee and Third Party shall be
restored to their former positions with respect to the
Indebtedness Secured Hereby. This Indenture, the Premises and
all rights, remedies and recourse of Third Party shall continue
as if the same had not been invoked.
SECTION 7.7 SUCCESSOR TRUSTEE. At the option of the Third
Party, with or without any reason, a successor or substitute
Trustee may be appointed by Third Party without any formality
other than a designation in writing of a successor or substitute
Trustee, who shall thereupon become vested with and succeed to
all the powers and duties given to the Trustee herein named, the
same as if the successor or substitute Trustee had been named
original Trustee herein; and such right to appoint a successor or
substitute Trustee shall exist as often and whenever Third Party
desires. If Third Party is a corporation, the corporation may
act through any authorized officer, or by any agent or attorney
in fact properly authorized by any such officer.
ARTICLE EIGHT
HAZARDOUS MATERIALS
SECTION 8.1 DEFINITIONS.
a. "Hazardous Substance" means hazardous substance
or waste, toxic substances, polychlorinated
biphenyls. asbestos or related materials, including
but not limited to, substances defined as "hazardous
substance(s)," "toxic substance(s)," "hazardous
waste," "pollutant," or "contaminant" in the
Comprehensive Environmental Response Compensation and
Liability Act of 1980, as amended, 42 U.S.C. Sec.
9061, et seq. ("CERCLA"), the Hazardous Materials
Transportation Act, 49 U.S.C. Sec. 6901, et seq., the
Federal Resource Conservation and Recovery Act of
1976 ("RCRA") and any other federal, state or local
environmental laws, statutes, regulations,
requirements and ordinances. The term does include
petroleum, including crude oil or any fraction
thereof, natural gas and natural gas liquids,
liquefied natural gas, and synthetic gas usable for
fuel or mixtures thereof.
b. Hazardous Substance Claim ("Claim") means
discovery of Hazardous Substance on the Premises or
receipt of a notice, claim, demand or complaint from
any government agency or office or from any third
party for the payment of damages, costs or expenses
for Hazardous Substance disposal or remedial action
pursuant to federal, state or local law relative to
the Premises and relating to Hazardous Substance
deposited on the Premises prior to the time that
Third Party becomes an owner of the Premises,
including, but not limited to, legal, engineering,
testing and other fees. A "Claim" shall not include
deposits of any Hazardous Substance by Third Party,
its agents or employees.
c. Hazardous Substance Liability ("Liability")
means the occurrence of a claim, and all damages,
costs and expenses in connection therewith, including
but not limited to legal, engineering, testing and
other fees, and including a final determination or
judgment entered or agreed upon.
SECTION 8.1 CERTIFICATION. First Party covenants,
represents and warrants to Third Party, its successors and
assigns, (i) that it has not used or permitted the Premises to be
used, and will not knowingly permit the Premises to be used,
whether directly or through contractors, agents or tenants, and
to the best of First Party's knowledge after reasonable
investigation and except as disclosed to Third Party in writing
prior to the date thereof, the Premises has not at any time been
used for the generating, transporting, treating, storage,
manufacture, emission or, disposal of any Hazardous Substance;
(ii) to the best of First Party's actual knowledge, that except
as disclosed to Third Party in writing prior to the date thereof,
there have been no investigations or reports involving First
Party or the Premises by any governmental authority which in any
way pertain to Hazardous Substances; (iii) to the best of First
Party's actual knowledge, except as disclosed to Third Party
prior to the date hereof, that the operation of the Premises has
not violated and is not currently violating, and shall not
violate during the term of this Deed of Trust, any federal, state
or local law, regulation, ordinance or requirement governing
Hazardous Substance; (iv) to the best of First Party's actual
knowledge, that the Premises is not listed in the United States
Environmental Protection Agency's National Priorities List of
Hazardous Waste Sites nor any other list, schedule, log,
inventory or record of Hazardous Substance or hazardous waste
sites, whether maintained by the United States Government or any
state or local agency; and (v) that, to the best of First Party's
actual knowledge, the Premises does not contain any formaldehyde,
urea or asbestos, except as may have been disclosed in writing to
the Third Party by the First Party at the time of execution and
delivery of this Deed of Trust.
SECTION 8.3 NOTICE. If a Claim occurs, the First Party
upon receiving actual or constructive notice thereof shall
immediately notify the Third Party in writing.
SECTION 8.4 DISPOSAL. If a Claim occurs, First Party
will proceed immediately and diligently after receipt of notice
of the Claim to dispose of or secure the Hazardous Substance in
full compliance with all applicable laws and regulations, and if
First Party fails to commence disposal or security within five
(5) days after receipt of notice of a Claim or if in the sole
opinion of Third Party the Hazardous Substance imposes a threat
requiring immediate attention, Third Party may at its option
proceed to so dispose of or secure the Hazardous Substance,
provided, however, if the First Party in good faith believes that
the claimed Hazardous Substance is not in fact a Hazardous
Substance, First Party shall have the right to challenge such
Claim in an appropriate forum before commencing such disposal
work.
SECTION 8.5 LEGAL ACTIONS. In the event legal action is
taken against Third Party or the Premises regarding a Claim, or
commenced by First Party to challenge a Claim, First Party shall
defend such action at its own expense, and Third Party shall
cooperate with First Party in the defense thereof, or at Third
Party's election, assume the defense at the expense of First
Party. Third Party shall have the right to join First Party as
party defendant in any such legal action brought against it or
the Premises, and First Party hereby consents to the entry of an
order making it a party defendant.
SECTION 8.6 INDEMNITY. First Party shall at all times
indemnify and save Third Party harmless from and against all
liability which Third Party may, for any cause and at any time,
sustain or incur by reason of a Claim, including but not limited
to any loss, including attorneys fees, as a result of any
inaccuracy in any statements herein certified.
SECTION 8.7 PAYMENT BY FIRST PARTY. First Party shall
pay, upon demand by Third Party, the amount of any Liability paid
by Third Party. First Party shall satisfy and discharge any
judgment recovered against Third Party or the Premises by reason
of such Liability promptly after the entry thereof, unless an
appeal is taken and any bonds required to stay the collection
thereof are procured and filed by First Party. If a final
judgment is entered against Third Party or the Premises after
appeal, Third Party shall satisfy and discharge such judgment.
Third Party may in its reasonable discretion make any payment as
required herein, and First Party shall promptly repay to Third
Party the amount of such payment, with interest.
SECTION 8.8 RELIANCE AND BENEFIT. First Party is aware
that Third Party is relying on the representations and covenants
contain in this Article in making the loan secured by this Deed
of Trust, and all collateral security documents. This Article
shall be binding upon and shall inure to the benefit of the
parties, their legal representatives, successors, and assigns and
shall survive the foreclosure of this Deed of Trust or acceptance
of a deed in lieu of such a foreclosure.
ARTICLE NINE
MISCELLANEOUS
SECTION 9.1 RELEASE OF TRUST. When all Indebtedness
Secured Hereby has been paid, this Indenture and all assignments
herein contained shall be released at the cost and expense of the
First Party, otherwise to remain in full force and effect.
SECTION 9.2 CHOICE OF LAW. This Indenture is intended to
be construed under the laws of the state where the Premises are
situate.
SECTION 9.3 CHANGES OF OWNERSHIP. In the event that the
ownership of the Premises becomes vested in a person or persons
other than the First Party, the Third Party may continue to deal
with the First Party without any obligation to deal with such
successor or successors in interest with reference to this
Indenture and the Indebtedness Secured Hereby until notified of
such vesting. Upon such notification, the Third Party may
thereafter deal with such successor in place of First Party
without any obligation to thereafter deal with First Party and
without waiving any liability of First Party hereunder or under
the Note. The First Party shall give immediate written notice to
the Third Party of any conveyance, transfer or change of
ownership of the Premises but nothing in this Section contained
shall constitute the consent of the Third Party to any such
conveyance, transfer or change or negate any provisions elsewhere
in this Indenture giving Third Party the right to declare the
entire unpaid balance of the Indebtedness Secured Hereby due and
payable immediately on such vesting.
SECTION 9.4 SUCCESSORS AND ASSIGNS. This Indenture and
each and every covenant, agreement and other provision hereof
shall be binding upon the First Party and its successors and
assigns including without limitation each and every from time to
time record owner of the Premises or any other person having an
interest therein, shall run with the land, and shall inure to the
benefit of the Third Party and its successors and assigns. As
used herein the words "successors and assigns" shall also be
deemed to include the heirs, representatives, administrators and
executors of any natural person who is a party to this Indenture.
SECTION 9.5 UNENFORCEABILITY OF CERTAIN CLAUSES. The
enforceability or invalidity of any provisions hereof shall not
render any other provision or provisions herein contained
unenforceable or invalid.
SECTION 9.6 CAPTIONS AND HEADINGS. The captions and
headings of the various sections of this Indenture are for
convenience only and are not to be construed as confining or
limiting in any way the scope or intent of the provisions hereof.
Whenever the context requires or permits the singular shall
include the plural, the plural shall include the singular and the
masculine, feminine and neuter shall be freely interchangeable.
SECTION 9.7 NOTICES. Any notice which any party hereto
may desire or may be required to give to any other party shall be
in writing and the mailing thereof by certified mail or
nationally recognized overnight carrier to their respective
addresses as set forth in this Indenture or to such other places
any party hereto may hereafter by notice in writing designate
shall constitute service of notice hereunder.
SECTION 9.9 LIMITATIONS. All agreements between First
Party hereof and Third Party hereof are hereby expressly limited
so that in no contingency or event whatsoever, shall the amount
paid, or agreed to be paid, to the Third Party hereof for the
use, forbearance or detention of the money to be loaned under
said Note exceed the maximum amount permissible under applicable
law. If, for any circumstances whatsoever, fulfillment of any of
the provisions hereof or of said Note at the time performance of
such provision shall be due, shall involve transcending the limit
of validity prescribed by law, then, ipso facto, the obligation
to be fulfilled shall be reduced to the limit of such validity,
and if from any circumstances Third Party hereof should ever
receive as interest an amount that would exceed the highest
lawful rate, such amount that would be excessive interest shall
be applied to the reduction of the principal amount owed under
said Note and not to the payment of interest or shall be refunded
to First Party hereof.
SECTION 9.9 TRUSTEE. Trustee accepts this Trust when
this Indenture, duly executed and acknowledged is made a public
record as provided by law.
SECTION 9.10 REQUEST FOR COPY OF NOTICE OF DEFAULT. First
Party requests that a copy of any notice of default and of any
notice of sale hereunder be mailed to him at the address
hereinabove set forth.
SECTION 9.11 REMEDIES CUMULATIVE, CONCURRENT AND NON-
EXCLUSIVE. Trustee and Third Party shall have all rights,
remedies and recourses granted in the documentation executed by
First Party or Third Party respecting the Premises and available
at law or equity (including specifically, but not limited to,
those granted by the Uniform Commercial Code in effect and
applicable to the Premises or any portion thereof) and same (a)
shall be cumulative and concurrent; (b) may be pursued
separately, successively or concurrently against First Party, any
Guaranty or others obligated under the Note, or against the
Premises, or against any one or more of them at the sale
discretion of Third Party; (c) may be exercised as often as
occasion thereof shall arise, it being agreed by First Party that
the exercise or failure to exercise any of the same shall in no
event be construed as a waiver or release thereof or of any other
right, remedy or recourse; and (d) are intended to be, and shall
be, nonexclusive.
SECTION 9.12 RELEASE OF AND RESORT TO COLLATERAL. Any
part of the Premises may be released by the Third Party without
affecting, subordinating or releasing the lien, security interest
and assignment hereof against the remainder. The lien, security
interest and other rights granted hereby shall not affect or be
affected by any other security taken for the same indebtedness or
any part thereof. The taking of additional security, or the
rearrangement, extension or renewal of the Indebtedness, or any
part thereof, shall not release or impair the lien, security
interest and other rights granted hereby or affect the liability
of any endorser, guarantor or surety, or improve the right of any
permitted junior lienholder; and this Deed of Trust, as well as
any instrument given to secure any rearrangement, renewal or
extension of the Indebtedness Secured Hereby, or any part
thereof, shall be and remain a first and prior lien, except as
otherwise provided herein, on all of the Premises not expressly
released until the Indebtedness is completely paid.
SECTION 9.13 WAIVER OF REDEMPTION, NOTICE AND MARSHALLING
OF ASSETS. To the fullest extent permitted by law, First Party
hereby irrevocably and unconditionally waives and releases (a)
all benefits that might accrue to First Party by any present or
future laws exempting the Premises from attachment, levy or sale
on or providing for any appraisement, valuation, stay of
execution, exemption from civil process, redemption or extension
of time for payment; (b) all notices of any Event of Default
(except as may be provided for under the terms hereof) or of
Third Party's or Trustee's election to exercise or the actual
exercise of any right, remedy or recourse provided for under the
documents of this transaction between the First Party and the
Third Party; (c) any right to appraisal or ▇▇▇▇▇▇▇▇ of assets or
a sale in inverse order of alienation; (d) the exemption of
homestead; and (e) the administration of estates of decedents, or
other matters whatever to defeat, reduce or affect the right of
Third Party under the terms of this Deed of Trust, to sell the
Premises for the collection of the Indebtedness Secured Hereby
(without any prior or different resort for collection) or the
right of Third Party, under the terms of this Deed of Trust, to
the payment of the Indebtedness Secured Hereby out of the
proceeds of sale of the Premises in preference to every other
person and claimant whatever (only reasonable expenses of such
sale being first deducted). First Party expressly waives and
relinquishes any right or remedy which it may have or be able to
assert by reason of the provisions of Chapter 34 of the Business
and Commerce Code of the State of Texas pertaining to the rights
and remedies of sureties.
IN WITNESS WHEREOF, the First Party has caused these
presents to be executed effective as of the date first above
written.
/s/ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ /s/ JS [changed to conform
to the facts]
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
STATE OF California)
)ss.
COUNTY OF San Diego)
The foregoing instrument was acknowledged before me this
5th day of November, 1996, by ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇.
/s/ ▇. ▇▇▇▇▇▇▇
Notary Public
[notary seal]
THIS DOCUMENT WAS DRAFTED BY and AFTER RECORDING, RETURN THIS
DOCUMENT TO:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
1300 Minnesota World Trade Center
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Exhibit A
Legal Description
Lot 2, ▇▇▇▇▇▇▇ Crossing Shopping Center, a subdivision of
▇▇▇▇▇▇▇▇▇▇ County, Texas, according to the map or plat of record
in Cabinet H, Slide 221, Plat Records of ▇▇▇▇▇▇▇▇▇▇ County,
Texas.