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EXHIBIT 10.51
ESCROW AND SECURITY AGREEMENT
THIS ESCROW AND SECURITY AGREEMENT (this "Agreement") dated this 6th
day of April, 1998, by, between and among NATIONWIDE LIFE INSURANCE COMPANY, an
Ohio corporation ("Nationwide"), EMPLOYERS LIFE INSURANCE COMPANY OF WAUSAU, a
Wisconsin corporation ("Employers") (Nationwide and Employers collectively,
"Lender"), ▇▇▇▇▇▇/▇▇▇▇▇▇▇ 1, LTD., a Texas limited partnership ("Borrower"),
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., a Delaware limited partnership ("Escrow Agent")
and SOLO SERVE CORPORATION, a Delaware corporation ("Solo Serve");
W I T N E S S E T H :
WHEREAS, Lender has made a loan to Solo Serve in the amount of
$5,940,000 (the "Loan"), and in connection with the Loan, Solo Serve has
executed and delivered to Lender one certain Mortgage Note A ("Note A") dated
November 20, 1992, payable to the order of Nationwide in the original principal
sum of $4,940,000, with interest and principal payable as therein provided, and
one certain Mortgage Note B ("Note B") dated November 20, 1992, payable to the
order of Employers in the original principal sum of $1,000,000, with interest
and principal payable as therein provided (Note A and Note B being collectively
the "Note"), the payment of which Note is secured by Deed of Trust, Mortgage
and Security Agreement (the "Deed of Trust") dated of even date with the Note
from Maker to M. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇., Trustee, recorded in Volume 5504, Page
720, of the Real Property Records of Bexar County, Texas, covering certain real
and personal property described therein (the "Property");
WHEREAS, Solo Serve has sold, transferred and conveyed the Property to
Borrower and Borrower has assumed the Loan pursuant to an Assumption Agreement
dated of even date herewith between Borrower and Lender;
WHEREAS, Borrower and Solo Serve have entered into a lease (the
"Lease") covering the Property and in connection therewith $500,000 of prepaid
rent (the "Prepaid Rent") shall be deposited with Escrow Agent to be placed in
an escrow account (the "Escrow Account");
WHEREAS, Escrow Agent has agreed to accept the $500,000 and any
interest thereon (collectively, the "Escrow Funds") and to hold them as the
agent of Lender and Borrower for the purpose of perfecting Lender's security
interest therein, and to establish and administer the Escrow Account in
accordance with the terms and conditions set forth herein;
NOW, THEREFORE, for and in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Lender, Borrower and Escrow Agent
agree as follows:
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1. Appointment of Escrow Agent. Borrower, Solo Serve and Lender
hereby designate Escrow Agent to act as escrow agent for all purposes set forth
herein including, but not limited to, acting as the bailee and agent of Lender
and Borrower for the purpose of perfecting Lender's security interest in the
Escrow Funds, and Escrow Agent hereby agrees to such designation and assumes
and accepts the obligations of escrow agent as set forth herein. Escrow Agent
agrees to hold the Escrow Funds in its safekeeping in separate and segregated
accounts, and to deliver the Escrow Funds only in accordance with the
instructions provided herein.
2. Delivery of Escrow Funds. Contemporaneously with the
execution hereof, Borrower has delivered to the Escrow Agent the Escrow Funds.
The Escrow Account shall be opened in the name of the Escrow Agent. Escrow
Agent shall notify Lender in writing of the style and number of the Escrow
Account. Escrow Agent shall deposit the Escrow Funds with an FDIC insured
financial institution, provided that at no time shall any portion of the
principal thereof be exposed to any risk of loss. Neither Escrow Agent nor
Lender shall be responsible for any losses resulting from the investment said
deposit of the Escrow Funds or for obtaining any specific level or percentage
of earnings on such investment. Solo Serve, Borrower and Lender agree that the
Escrow Funds shall, until further notice, be deposited in a federally insured
interest-bearing account at Nationsbank, Dallas, Texas (the "Bank").
3. Interest on Escrow Funds. Any interest paid on Escrow Funds
deposited with Escrow Agent pursuant to this Agreement shall be added to and
become a part of the Escrow Funds. In the event of an Event of Default (as
hereinafter defined) all accrued interest of funds deposited with Escrow Agent
pursuant to this Agreement shall be disbursed to Lender to be applied in the
same manner as outlined in subparagraph 12(b) below. All earnings from the
investment of the Escrow Funds on deposit in the Escrow Account shall be
reported by Escrow Agent to applicable authorities, if at all, using the
federal tax identification number of Borrower. The parties hereto acknowledge
that the foregoing provision shall not in any way abrogate, vitiate or diminish
the effectiveness of the security interests granted to Lender in paragraph 6
below.
4. Acknowledgment by Escrow Agent. By its execution hereof,
Escrow Agent acknowledges receipt of the Escrow Funds from Borrower for deposit
into the Escrow Account, and hereby agrees to hold the same pursuant to the
terms hereof. Escrow Agent hereby agrees to hold and disburse the Escrow Funds
as directed by Lender, Solo Serve and Borrower in accordance with the terms and
conditions set forth herein. Escrow Agent further agrees to use commercially
reasonably efforts to obtain from the Bank and any other depository of the
Escrow Funds and provide to Lender, Solo Serve and Borrower a written waiver
provided by Solo Serve of any and all rights it may have in and to the Escrow
Funds and/or the Escrow Account including, without limitation, any security
interest, bank or other possessory lien, or right of offset.
5. Disbursement Procedures. The Escrow Funds may be disbursed to
Borrower according to the terms of Section 4.2c (i)- (iv) of the Lease or in
the event of a default under the Lease by Solo Serve in which Borrower is
entitled to damages, the Escrow Funds (or portion thereof) to which Borrower is
so entitled under the Lease shall be considered partial satisfaction of such
damages and shall remain in the Escrow Account, and if Lender consents thereto
upon
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occurrence of such a default (which consent shall not be unreasonably withheld
or delayed), the Escrow Funds (or said portion thereof, as is applicable) may
be used by Borrower to cover debt service for the Loan or for tenant
improvement expenses in connection with a substitute tenant. The Escrow Funds
to which Borrower is entitled under the Lease will be disbursed to Borrower in
accordance with the preceding sentence upon compliance with the provisions of
this Agreement and the following procedures:
(a) There exists no Event of Default and no event or
occurrence which, with the passage of time or the giving of notice, or
both, would constitute an Event of Default, hereunder or under the
Loan Documents;
(b) Borrower shall certify to Lender that there are no
uncured defaults under the Note, the Deed of Trust or any of the other
documents securing the Loan at the time the disbursement of a portion
or all of the Escrow Account is requested;
(c) Borrower shall deliver to Lender and the Escrow Agent
a written request for the disbursement of a portion or all of the
Escrow Funds; and
(d) Escrow Agent has received written authorization from
Lender for the proposed disbursement of a portion or all of the Escrow
Account.
(e) In the event Borrower wishes to receive a
disbursement of any portion of the Escrow Funds to which Borrower is
entitled to under the Lease in connection with tenant improvements for
a substitute tenant, Borrower shall furnish evidence satisfactory to
Lender in its reasonable discretion that occupancy leases approved by
Lender have been executed and are in full force and effect and that
the tenant improvements required by those leases have been completed
and the respective tenants are in occupancy and open for business,
which evidence shall include copies of such executed occupancy leases
approved by Lender, executed current tenant estoppel certificates on
Lender's form, approved by Lender, in its reasonable discretion, lien
waivers, invoices, unconditional certificates of occupancy and a
current inspection report of the Property prepared by Lender's
inspecting architect/engineer.
If, at any time during this Agreement, Solo Serve would be entitled to
the payment of all or any portion of the Escrow Funds pursuant to the terms of
the Lease because of a termination thereof resulting from (a) the condemnation
of all or any portion of the Property, or (b) any casualty loss at the
Property, the Escrow Agent shall disburse such portion to Solo Serve upon
notification of the occurrence of such event by Solo Serve, Borrower and
Lender, which notification shall not be unreasonably withheld or delayed by
such parties. Furthermore, in the event the Lease is terminated by Solo Serve
pursuant to any rights or remedies it may have at law or equity as a result of
Borrower's default thereunder, the then balance of the Escrow Funds shall be
paid to Solo Serve upon written notification by Lender and Solo Serve of such
termination to Escrow Agent, which notification shall not be unreasonably
withheld or delayed by such parties. Notwithstanding any of the foregoing to
the contrary, it is expressly agreed that Solo Serve's interest in and to the
Escrow Funds shall, at any time, only extend to that portion thereof equaling
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the difference obtained by subtracting any portion of the Escrow Funds
previously applied pursuant to the terms of the Lease from the original Prepaid
Rent deposited into the Escrow Account. In no event shall Solo Serve have any
right, title or interest in and to any portion of the interest or other
earnings on the Escrow Funds.
6. Grant of Security Interest. As security for the payment of
the Note and all indebtedness now or hereafter incurred or arising pursuant to
the provisions of, or secured by, the Deed of Trust, or any other deed of trust
and security agreement executed by Borrower to secure the Loan, which
indebtedness includes all indebtedness incurred or arising pursuant to the
provisions of this Agreement (the indebtedness referred to in this paragraph
herein called the "secured indebtedness" or the "indebtedness secured hereby"),
Borrower hereby pledges, assigns and transfers to Lender and hereby grants to
Lender a security interest in all of Borrower's right, title and interest in
and to the Escrow Funds and any and all interest of Borrower therein and rights
of Borrower thereto, whether Borrower's ownership or other rights therein are
presently held or hereafter acquired and howsoever Borrower's interests therein
may arise or appear, which security interest shall be subject to the rights of
Solo Serve in and to the Escrow Funds pursuant to the Lease. Escrow Agent and
Borrower hereby agree that Escrow Agent will hold the Escrow Funds as the agent
of Lender and Borrower for the purpose of perfecting Lender's security interest
therein. Subject to Solo Serve's rights in and to the Prepaid Rent, Escrow
Agent hereby recognizes Lender's first and prior right to the Escrow Account
and the grant of such security interest to Lender in the Escrow Funds, and
agrees that Escrow Agent shall have no security interest, bank or other
possessory lien, right of offset or other claim against the Escrow Funds. In
addition to Lender's other rights at law or in equity, Lender shall have all
rights of a secured party under the Texas Business and Commerce Code, as
amended (the "Code") whether or not the security interest granted herein is
covered by the Code. It is understood and agreed that consistent with the
terms of the Lease and that certain Security Agreement by and between Solo
Serve, as debtor and Borrower, as secured party (the "Security Agreement"),
Solo Serve has granted to Borrower a security interest in the Prepaid Rent.
Lender consents to the Security Agreement and the security interest created
therein.
7. Borrower's Taxpayer Identification Number. Borrower's federal
taxpayer identification number is 74- 2872440.
8. Covenants of Borrower. So long as the indebtedness secured
hereby or any part thereof remains unpaid, Borrower covenants and agrees with
Lender as follows:
(a) Borrower shall furnish Lender such instruments and
shall take such action as may be reasonably required by Lender to
assure transferability of the Escrow Funds when and as often as may be
reasonably requested by Lender consistent with the provisions of this
Agreement and the Deed of Trust;
(b) Borrower will not pledge, assign, transfer or
otherwise dispose of all or any interest of Borrower in the Escrow
Funds or right of Borrower thereto, or permit any of the foregoing, or
attempt to make any withdrawal from the Escrow Account except as
specifically permitted hereunder;
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(c) Except in connection with the Security Agreement
described in Section 6 hereof, Borrower will not, without the prior
written consent of Lender, create, place or permit to be created or
placed, or through any act or failure to act, acquiesce in the placing
of, or allow to remain, any voluntary or involuntary lien, security
interest, encumbrance or charge, or other title retention document,
against or covering the Escrow Funds, or any part thereof, or any
interest of Borrower therein or right of Borrower thereto regardless
of whether the same are expressly or otherwise subordinate to the
security interest created in this Agreement, and should any of the
foregoing become attached hereafter in any manner to any part of the
Escrow Funds without the prior written consent of Lender, Borrower
will cause the same to be promptly discharged and released;
(d) Borrower shall promptly execute and deliver to Lender
any financing statement or financing statement change or continuation
statement required by Lender to establish or maintain the validity,
perfection or priority of the security interest granted herein.
Lender shall be authorized to file, without the signature of Borrower
where permitted by law, one or more financing or continuation
statements, and/or amendments thereto, relating to the interest of
Borrower in the Escrow Funds or right of Borrower thereto (a copy of
which shall be provided by Lender to Borrower). Borrower further
agrees that a carbon, photographic or other reproduction of this
Agreement or any financing statement describing any Escrow Funds is
sufficient as a financing statement and may be filed in any
jurisdiction Lender may deem appropriate; and
(e) In the event that Borrower shall file a petition with
any bankruptcy court or be the subject of any petition filed under 11
U.S.C. Section 101 et seq. (the "Bankruptcy Code"), Borrower
acknowledges and agrees that its interest in the Escrow Funds is the
property of Lender and shall not constitute property of the bankruptcy
estate within the meaning of Section 541 of the Bankruptcy Code. In
the event that, notwithstanding the foregoing, the bankruptcy court
shall determine that Borrower has any continuing right, title or
interest in or to the Escrow Funds and that all or any portion of the
Escrow Funds are property of the bankruptcy estate, Borrower hereby
acknowledges and agrees that all such Escrow Funds to which Borrower
is entitled shall constitute Lender's cash collateral within the
meaning of Section 363 of the Bankruptcy Code. Borrower further
acknowledges that in such event, Lender does not consent to Borrower's
use of such cash collateral, and that Borrower shall have no right to
use or apply any such cash collateral unless and until Borrower shall
have received a court order authorizing use of the same, and Lender
shall have been provided with adequate protection as contemplated by
Section 361 of the Bankruptcy Code.
9. Right of Lender to Perform. Borrower agrees that, if Borrower
fails to perform any act or to take any action which hereunder Borrower is
required to perform or take, or to pay any money which hereunder Borrower is
required to pay, or takes any action prohibited hereby, Lender, in Borrower's
name or in its own name, may but shall not be obligated to perform or cause to
be performed such act or take such action or pay such money or remedy any
action so
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taken, and any expenses so incurred by Lender, and any money paid by Lender in
connection therewith, shall be a demand obligation owing by Borrower to Lender
and Lender, upon making such payment, shall be subrogated to all of the rights
of the person, corporation or body politic receiving such payment. Any amounts
due and owing by Borrower to Lender pursuant to this Agreement shall bear
interest from the date such amount becomes due until paid at the rate of
interest payable on matured but unpaid principal of or interest on the Note and
such amounts and interest thereon shall be a part of the secured indebtedness
and shall be secured by this Agreement and the Deed of Trust and by any other
instrument securing the secured indebtedness.
10. Termination of Escrow.
(a) If any Escrow Funds remain in the Escrow Account after
the Note has been paid in full and all other obligations of Borrower
under the Note and Deed of Trust have been satisfied, then Lender
shall have no further rights hereunder and the Escrow Funds shall be
held by Escrow Agent for disbursement in accordance with the terms of
the Lease.
(b) If Solo Serve or Borrower has terminated the Lease due to
their respective rights under the Lease in the event of a casualty
loss at the Property, or if Solo Serve terminates the Lease because of
a taking of the Property or pursuant to any rights it may have at law
as a result of Borrower's default under the Lease, and provided Solo
Serve and/or Borrower have complied with the provisions of that
certain Estoppel Certificate and Non-Disturbance and Attornment
Agreement of even date herewith, executed by Borrower, Lender, and
Solo Serve, the Escrow Funds shall be disbursed by Escrow Agent in
accordance with the terms of the Lease.
(c) The Escrow Account shall terminate upon the last to occur
of (i) the date the Note has been paid in full and all other
obligations of Borrower under the Note and Deed of Trust have been
satisfied of (ii) the date on which the last of the Escrow Funds is
applied in accordance with the terms of the Lease.
11. Mortgage Banker. Solo Serve, Borrower and Lender recognize
that Escrow Agent, as mortgage banker in the transaction, has represented the
interest of Borrower and Lender in the negotiation of the Commitment and the
closing of the loan. Borrower understands that, during the escrow period,
Escrow Agent will have a continuing relationship to the transaction as Lender's
servicing agent for the loan. Solo Serve, Borrower and Lender agree to appoint
Escrow Agent in the capacity set forth in this Agreement notwithstanding Escrow
Agent may have represented or continues to represent Borrower and Lender.
12. Events of Defaults and Remedies.
(a) The term "Event of Default" as used in this Agreement
shall mean (i) any default under and as defined in the Deed of Trust
or in any other deed of trust, assignment of leases and rents and
security agreement executed by Borrower to secure the Loan, and (ii)
any default by Borrower in its obligations under this Agreement;
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(b) Upon the occurrence of an Event of Default, Lender
may at its option, and without notice to Borrower, require Escrow
Agent to deliver any and all portions of the Escrow Funds which
Borrower becomes entitled to under the Lease to Lender. Failure of
Lender to so require the delivery of and to apply such funds upon the
occurrence of an Event of Default shall not be deemed a waiver of the
right to do so in the event of a subsequent Event of Default. Upon
the occurrence of an Event of Default, Borrower hereby authorizes
Lender, and Lender shall have full right and authority, (i) to ask,
demand, collect, receive, receipt for, ▇▇▇ for, compound and give
acquittance for any portion of the Escrow Funds to which Borrower is
entitled under the Lease, (ii) to execute any and all withdrawal
receipts or other orders for the payment such portion of the Escrow
Funds from the Escrow Account, and (iii) in the discretion of Lender,
to file any claim or take any other action or proceeding, either in
Borrower's name or in its own name, which Lender may deem necessary or
appropriate to protect and preserve the rights of Lender hereunder.
Escrow Agent shall be entitled to rely on Lender's statement in
writing that an Event of Default has occurred and shall, upon Lender's
request after the receipt of such a statement, turn any or all of the
Escrow Funds so requested over to Lender without any right to
investigate the actual occurrence or non-occurrence of an Event of
Default;
(c) Upon the occurrence of an Event of Default, Lender
may exercise its right of enforcement under the Code with respect to
the portion of the Escrow Funds to which Borrower is then entitled
under the Lease, whether or not the security interest granted herein
is covered by the Code, and in conjunction with, in addition to or in
substitution for those rights and remedies and the other rights and
remedies provided for herein (including specifically, without
limitation, the rights and remedies provided for in the immediately
preceding subparagraph:
(i) written notice mailed to Borrower as provided
herein five (5) days prior to the date of public sale of the
portion of the Escrow Funds to which Borrower is entitled under
the Lease or prior to the date after which private sale of said
portion of the Escrow Funds will be made shall constitute
reasonable notice;
(ii) it shall not be necessary that Lender take
possession of said portion of the Escrow Funds or any part
thereof prior to the time that any sale pursuant to the
provisions of this paragraph is conducted and it shall not be
necessary that said portion of the Escrow Funds or any part
thereof be present at the location of such sale;
(iii) prior to application of proceeds of
disposition of said portion of the Escrow Funds to the secured
indebtedness, such proceeds shall be applied to the reasonable
expenses of retaking, holding, preparing for sale, selling,
and the like and the reasonable attorneys' fees and legal
expenses incurred by Lender;
(iv) the sale by Lender of less than the whole of
said portion of the Escrow Funds shall not exhaust the rights
of Lender hereunder, and Lender is specifically
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empowered to make successive sale or sales hereunder until the
whole of said portion of the Escrow Funds shall be sold; and,
if the proceeds of such sale of less than the whole of said
portion of the Escrow Funds shall be less than the aggregate
of the indebtedness secured hereby, this Agreement and the
security interest created hereby shall remain in full force
and effect as to the unsold portion of said portion of the
Escrow Funds just as though no sale had been made; provided,
however, that Borrower shall never have any right to require
the sale of less than the whole of said portion of the Escrow
Funds but Lender shall have the right, at its sole election,
to sell less than the whole of said portion of the Escrow
Funds;
(v) in the event any sale hereunder is not
completed or is defective in the opinion of Lender, such sale
shall not exhaust the rights of Lender hereunder and Lender
shall have the right to cause a subsequent sale or sales to be
made hereunder;
(vi) any and all statements of fact or other
recitals made in any ▇▇▇▇ of sale or assignment or other
instrument evidencing any foreclosure sale hereunder as to
nonpayment of the indebtedness or as to the occurrence of an
Event of Default, or as to Lender having declared all of such
indebtedness to be due and payable, or as to notice of time,
place and terms of sale and the properties to be sold having
been duly given, or as to any other act or thing having been
duly done by Lender, shall be taken as prima facie evidence of
the truth of the facts so stated and recited; and
(vii) Lender may appoint or delegate any one or
more persons as agent to perform any act or acts necessary or
incident to any sale held by Lender, including the sending of
notices and the conduct of sale, but in the name and on behalf
of Lender;
(d) Upon the occurrence of an Event of Default, Lender
may reduce its claim to judgment or foreclose or otherwise enforce, in
whole or in part, the security interest created hereby by any
available judicial procedure;
(e) Upon the occurrence of an Event of Default, Lender
may at any time cause any or all of the Escrow Funds to which Borrower
is then entitled to under the Lease to be transferred into its name or
into the name or names of any nominee or nominees of Lender;
(f) In addition to all other remedies herein provided
for, Borrower agrees that, upon the occurrence of an Event of Default,
Lender shall as a matter of right be entitled to the appointment of a
receiver or receivers for the portion of the Escrow Funds to which
Borrower is entitled under the Lease, whether such receivership be
incident to a proposed sale of the portion of the Escrow Funds to
which Borrower is then entitled under the Lease or otherwise, and
without regard to the value of said portion of the Escrow Funds or the
solvency of any person or persons liable for the payment of the
indebtedness secured hereby, and Borrower does hereby consent to the
appointment of such receiver or
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receivers, waives any and all defenses to such appointment and agrees
not to oppose any application therefor by Lender, but nothing herein
is to be construed to deprive Lender of any other right, remedy or
privilege it may now have under the law to have a receiver appointed.
Any money advanced by Lender in connection with any such receivership
shall be a demand obligation owing by Borrower to Lender and shall
bear interest from the date of making such advancement by Lender until
paid at the rate of interest payable on matured but unpaid principal
of or interest on the Note and such money plus interest shall be a
part of the secured indebtedness and shall be secured by this
Agreement and the Deed of Trust and by any other instrument securing
the secured indebtedness;
(g) All remedies herein expressly provided for are
cumulative of any and all other remedies existing at law or in equity
and are cumulative of any and all other remedies provided for in any
other instrument securing the payment of the secured indebtedness, or
any part thereof, or otherwise benefiting Lender. Upon the occurrence
of an Event of Default, Lender shall, in addition to the remedies
herein provided, be entitled to exercise any and all rights and
remedies reserved to Lender in the Note, the Deed of Trust and each
and every other document evidencing or securing, or otherwise executed
and delivered in connection with, the Loan and shall also be entitled
to avail itself of all such other remedies as may now or hereafter
exist at law or in equity for the collection of the secured
indebtedness and the enforcement of the covenants herein, and the
resort to any remedy provided for hereunder or under any such other
instrument or provided for by law shall not prevent the concurrent or
subsequent employment of any other appropriate remedy or remedies;
(h) Lender may resort to any security given by this
Agreement or to any other security now existing or hereafter given to
secure the payment of the secured indebtedness, in whole or in part,
and in such portions and in such order as may seem best to Lender in
its sole and uncontrolled discretion, and any such action shall not in
anyway be considered as a waiver of any of the rights, benefits or
security interests evidenced by this Agreement; and
(i) If following an Event of Default, Lender succeeds to
the interest of Borrower in and to the Property, by way of foreclosure
of the lien of the Deed of Trust, conveyance in lieu thereof or
otherwise, it is expressly agreed that Lender shall also succeed to
all rights of Borrower in and to any portion of the Escrow Funds which
have not been previously applied in accordance with the terms of the
Lease and, upon Lender succeeding to the interest of Borrower in and
to the Property, Escrow Agent is authorized to thereafter make all
disbursements to which Borrower would otherwise be entitled hereunder
directly to Lender.
13. Expenses. Borrower shall pay all charges and reasonable
expenses of Escrow Agent and any substitute in its capacity as escrow agent
pursuant to this Agreement, including but not limited to reasonable attorneys'
fees, expenses and other out-of-pocket costs as may be incurred by Escrow Agent
and any substitute in connection with the administration of this Agreement, and
all charges and expenses of Lender incurred in connection with the
administration of this Agreement including, without limitation, reasonable
attorneys' fees. Borrower
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acknowledges that there is a $500 fee to establish the Escrow Account, and a
fee of $100 per disbursement, plus any charges that might be incurred in the
event an inspection is required.
14. Limitation of Liability of Escrow Agent. Escrow Agent shall
act under this Agreement only as an escrow agent pursuant to the terms of this
Agreement and instructions given pursuant hereto, and otherwise as a depository
only, and shall not be responsible or liable in any manner whatsoever for the
sufficiency of escrowed funds or for the sufficiency, correctness, genuineness
or validity of any instrument or signature thereon deposited with or delivered
to Escrow Agent hereunder, with respect to the form or execution of any such
instrument thereof or the identity, authority or rights of any person
executing, depositing or delivering the same. Escrow Agent may act in reliance
on any instrument reasonably believed to be genuine and may assume that any
person reasonably purporting to give any written notice or advice or
instruction in connection with the provisions hereof has been duly authorized
to do so. Escrow Agent shall not be responsible to see to the correct
application of any amounts released from the Escrow Funds. Escrow Agent may
from time to time consult with legal counsel of its own choosing in the event
of any disagreement, controversy, question or doubt as to the construction of
any of the provisions hereof or its duties hereunder, and Escrow Agent shall
incur no liability and shall be fully protected in acting in good faith in
accordance with the written opinion and instructions of such counsel. In the
event of a dispute over the Escrow Funds, Escrow Agent shall have the right, at
its sole discretion, to interplead and pay over the Escrow Funds to a court of
competent jurisdiction in Bexar County, Texas and thereafter Escrow Agent shall
have no obligation to see to the application of the Escrow Funds and shall have
no liability with respect to such Escrow Funds or this Agreement arising after
the time of such payment. Escrow Agent shall not be liable for any action
taken or omitted hereunder other than that constituting gross negligence or
willful misconduct. THE FOREGOING SHALL APPLY TO ESCROW AGENT WITH RESPECT TO
ACTION CONSTITUTING NEGLIGENCE OF ESCROW AGENT but shall not apply to Escrow
Agent with respect to action constituting gross negligence or willful
misconduct of Escrow Agent.
15. Indemnification of Escrow Agent. Borrower will indemnify and
hold Escrow Agent harmless from all suits, claims, actions, judgments, losses,
liabilities, fees, costs, expenses, damages or other charges which may be
imposed upon or incurred by Escrow Agent in connection with the performance of
its duties hereunder, except with respect to any of the foregoing incurred as
the result of Escrow Agent's gross negligence or willful misconduct. THE
FOREGOING INDEMNITIES SHALL APPLY TO ESCROW AGENT WITH RESPECT TO SUITS,
CLAIMS, ACTIONS, JUDGMENTS, LOSSES, LIABILITIES, FEES, COSTS, EXPENSES, DAMAGES
AND OTHER CHARGES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE
NEGLIGENCE OF ESCROW AGENT. However, such indemnity shall not apply to Escrow
Agent to the extent the subject of the indemnification is caused by or arises
out of the gross negligence or willful misconduct of Escrow Agent.
16. Notices. Any notice or communication required or permitted
hereunder shall be given in writing, sent by (a) personal delivery, or (b)
expedited delivery service with proof of delivery, or (c) United States mail,
postage prepaid, registered or certified mail, or (d) prepaid telecopy,
telegram or telex, addressed as follows:
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To Borrower: ▇▇▇▇▇▇/▇▇▇▇▇▇▇ 1, Ltd.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
To Lender: Nationwide Life Insurance Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Real Estate Investments 34-T
Employers Life Insurance Company of Wausau
c/o Nationwide Life Insurance Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Real Estate Investments 34-T
To Escrow Agent: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
To Solo Serve: Solo Serve Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Chief Financial Officer
or to such other address or to the attention of such other person as hereafter
shall be designated in writing by the applicable party sent in accordance
herewith. Any such notice or communication shall be deemed to have been given
either at the time of personal delivery or, in the case of delivery service or
mail, as of the date of first attempted delivery at the address and in the
manner provided herein, or in the case of telecopy, telegram or telex, upon
receipt.
17. Replacement of Escrow Agent. The duties of Escrow Agent
hereunder may be terminated in either of the following manners:
(a) Upon written notice given by Lender, Solo Serve and
Borrower of cancellation of designation of Escrow Agent to act and serve
in said capacity, in which event, cancellation shall take effect no
earlier than thirty (30) days after notice to Escrow Agent of such
cancellation unless such cancellation is for cause, in which event
cancellation shall take effect immediately upon delivery of such notice;
or
(b) Escrow Agent may resign as escrow agent at any time
upon giving notice to Lender, Solo Serve and Borrower of its desire to
so resign; provided, however, that resignation of Escrow Agent shall
take effect no earlier than sixty (60) days after the giving of notice
of resignation.
Upon termination of the duties of Escrow Agent in either manner set forth in
subparagraphs (a) or (b) above, Escrow Agent shall deliver the balance of the
Escrow Funds, together with all interest
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accrued on the Escrow Funds, to the newly appointed escrow agent designated by
Lender and shall not have the right to withhold the Escrow Funds or the
interest accrued thereon from said newly appointed escrow agent. Lender,
Borrower and Solo Serve hereby agree that if the duties of Escrow Agent are
terminated in either manner set forth in subparagraphs (a) or (b) above, then
Lender, subject to the approval of Borrower and Solo Serve (such approval not
to be unreasonably withheld or delayed), may appoint another nationally
recognized title insurance underwriter or a national banking association to
serve as the escrow agent under this Agreement and such nationally recognized
title insurance underwriter or national banking association shall succeed to
all the rights, titles, interests and duties of Escrow Agent hereunder;
provided, however, if Lender has not appointed such a replacement escrow agent
within fifteen (15) days after the termination of Escrow Agent, then the Bank
shall become the escrow agent under this Agreement and shall succeed to all the
rights, titles, interests and duties of Escrow Agent hereunder.
18. Applicable Law. This Agreement and the rights and duties of the
parties hereunder shall be governed for all purposes by the law of the State of
Texas.
19. Headings. The headings used herein are for convenience only and
are not to be used in interpreting this Agreement.
20. Multiple Original Counterparts. This Agreement may be executed
in several counterparts, each of which shall be deemed an original. The
signatures to this Agreement may be executed on separate pages, and when
attached to this Agreement shall constitute one complete document.
21. Amendments. Any agreement hereafter made shall be ineffective
to change, modify, waive, release, discharge, terminate or effect the
abandonment of this Agreement, in whole or in part, unless such agreement is in
writing and signed by the party against whom enforcement of the change,
modification, release, discharge, termination or the effecting of the
abandonment is sought.
22. Assignment. None of this Agreement, the Escrow Funds or any
interest of Borrower therein or right of Borrower therein, or the Escrow
Account may be assigned by Borrower without the prior written consent of Lender
and Solo Serve and any attempt to do so without the prior written consent of
Lender and Solo Serve shall be void. In the event Lender consents, in its sole
and absolute discretion, to a sale of the Property, or in the event of a sale
of the Property after the loan has been paid in full, the provisions of this
Agreement shall be binding on any such approved subsequent owner of the
Property. This Agreement shall inure to the benefit of and bind the successors
and permitted assigns of the parties hereto.
23. Waiver. To the full extent Borrower may do so, Borrower agrees
that Borrower will not at any time insist upon, plead, claim or take the
benefit or advantage of any law now or hereafter in force providing for any
appraisement, valuation, stay, extension or redemption, and Borrower, for
Borrower, Borrower's successors and assigns, and for any and all persons ever
claiming any interest in the Escrow Funds (other than Solo Serve), to the
extent permitted by law, hereby waives and releases all rights of redemption,
valuation, appraisement, stay of execution,
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notice of intention to mature or declare due the whole of the secured
indebtedness, notice of election to mature or declare due the whole of the
secured indebtedness and all rights to a marshaling of the assets of Borrower,
including any portion of the Escrow Funds to which Borrower is entitled to
under the Lease, or to a sale in inverse order of alienation in the event of
foreclosure of the security interest hereby created. Borrower shall not have
or assert any right under any statute or rule of law pertaining to the
marshaling of assets, sale in inverse order of alienation, the administration
of estates of decedents, or other matters whatever to defeat, reduce or affect
the right of Lender under the terms of this Agreement to payment under the
Escrow Account, or to a sale of any portion of the Escrow Funds to which
Borrower is entitled under the Lease for the payment of the secured
indebtedness without any prior or different resort for payment, or the right of
Lender under the terms of this Agreement to the payment of such indebtedness
out of the proceeds of sale of such portion of the Escrow Funds in preference
to every other claimant whatsoever (other than Solo Serve). If any law
referred to in this paragraph and now in force, of which Borrower or Borrower's
successors and assigns and such other persons claiming any interest in the
Escrow Funds (other than Solo Serve) might take advantage despite this
paragraph, shall hereafter be repealed or cease to be in force, such law shall
not thereafter be deemed to preclude the application of this paragraph.
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the day
and year first above written.
▇▇▇▇▇▇/▇▇▇▇▇▇▇ 1, LTD., a Texas limited
partnership
By ▇▇▇▇▇▇/▇▇▇▇▇▇▇, LLC, a Texas limited
liability company, General Partner
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Title: President
----------------------------
BORROWER
NATIONWIDE LIFE INSURANCE COMPANY,
an Ohio corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Title: Vice President
-------------------------------------
EMPLOYERS LIFE INSURANCE COMPANY OF
WAUSAU, a Wisconsin corporation
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Title: Vice President
-------------------------------------
LENDER
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., a Delaware
limited partnership
By: AMRESCO Mortgage Capital, Inc., a
Delaware corporation, general partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
Title: Director - Loan Servicing
---------------------------
ESCROW AGENT
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SOLO SERVE CORPORATION, a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Title: Executive Vice President
----------------------------------
SOLO SERVE
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SCHEDULE A
Property