Recording Requested by
and when recorded return to:
XXXXX FARGO BANK, N.A.
Commercial Mortgage Servicing
000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxx
Loan No. : 31-0900011A
D E E D O F T R U S T
and
A B S O L U T E A S S I G N M E N T O F R E N T S
A N D L E A S E S
and
S E C U R I T Y A G R E E M E N T
(A N D F I X T U R E F I L I N G)
The parties to this DEED OF TRUST AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES
AND SECURITY AGREEMENT (AND FIXTURE FILING) ("Deed of Trust"), dated as of
September 9, 1999 are FREMONT HOLDING L.L.C., a Delaware limited liability
company ("Trustor"), with a mailing address at 00000 Xxxxxx Xxxxx, Xxxxxxx, XX
00000, AMERICAN SECURITIES COMPANY, a California corporation ("Trustee"), with
a mailing address at 0000 Xxxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx
00000, and XXXXX FARGO BANK, NATIONAL ASSOCIATION ("Beneficiary"), with a
mailing address at 0000 Xxxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000.
R E C I T A L S
X. XXXXXXX HOLDING L.L.C., a Delaware limited liability company ("Borrower")
proposes to borrow from Beneficiary, and Beneficiary proposes to lend to
Borrower the principal sum of TEN MILLION ONE HUNDRED FIFTY THOUSAND AND
NO/100THS DOLLARS ($10,150,000.00) ("Loan"). The Loan is evidenced by a
promissory note ("Note") executed by Xxxxxxxx, dated the date of this Deed
of Trust, payable to the order of Beneficiary in the principal amount of
the Loan.
B. The loan documents include this Deed of Trust, the Note and the other
documents described in the Note as Loan Documents ("Loan Documents").
ARTICLE 1. DEED OF TRUST
1.1 GRANT. For the purposes of and upon the terms and conditions of this
Deed of Trust, Trustor irrevocably grants, conveys and assigns to Trust-
ee, in trust for the benefit of Beneficiary, with power of sale and right
of entry and possession, all estate, right, title and interest which
Trustor now has or may hereafter acquire in, to, under or derived from
any or all of the following:
a. That real property ("Land") located in Fremont, county of Alameda,
state of California, and more particularly described on Exhibit A
attached hereto;
b. All appurtenances, easements, rights of way, water and water
rights, pumps, pipes, flumes and ditches and ditch rights, water
stock, ditch and/or reservoir stock or interests, royalties,
development rights and credits, air rights, minerals, oil rights, and
gas rights, now or later used or useful in connection with,
appurtenant to or related to the Land;
c. All buildings, structures, facilities, other improvements and
fixtures now or hereafter located on the Land;
d. All apparatus, equipment, machinery and appliances and all
accessions thereto and renewals and replacements thereof and
substitutions therefor used in the operation or occupancy of the
Land, it being intended by the parties that all such items shall be
conclusively considered to be a part of the Land, whether or not
attached or affixed to the Land;
e. All land lying in the right-of-way of any street, road, avenue,
alley or right-of-way opened, proposed or vacated, and all sidewalks,
strips and gores of land adjacent to or used in connection with the
Land;
f. All additions and accretions to the property described above;
g. All licenses, authorizations, certificates, variances, consents,
approvals and other permits now or hereafter pertaining to the Land
and all estate, right, title and interest of Trustor in, to, under or
derived from all tradenames or business names relating to the Land or
the present or future development, construction, operation or use of
the Land; and
h. All proceeds of any of the foregoing.
All of the property described above is hereinafter collectively defined as
the "Property". The listing of specific rights or property shall not be
interpreted as a limitation of general terms.
ARTICLE 2. OBLIGATIONS SECURED
2.1 OBLIGATIONS SECURED. Trustor makes the foregoing grant and assignment
for the purpose of securing the following obligations ("Secured Obliga-
tions"):
a. Full and punctual payment to Beneficiary of all sums at any time
owing under the Note;
b. Payment and performance of all covenants and obligations of Trustor
under this Deed of Trust including, without limitation,
indemnification obligations and advances made to protect the
Property;
c. Payment and performance of all additional covenants and obligations
of Borrower and Trustor under the Loan Documents;
d. Payment and performance of all covenants and obligations, if any,
which any rider attached as an exhibit to this Deed of Trust recites
are secured hereby;
e. Payment and performance of all future advances and other
obligations that the then record owner of all or part of the Property
may agree to pay and/or perform (whether as principal, surety or
guarantor) for the benefit of Beneficiary, when the obligation is
evidenced by a writing which recites that it is secured by this Deed
of Trust;
f. All interest and charges on all obligations secured hereby
including, without limitation, prepayment charges, late charges and
loan fees; and
g. All modifications, extensions and renewals of any of the
obligations secured hereby, however evidenced, including, without
limitation: (i) modifications of the required principal payment dates
or interest payment dates or both, as the case may be, deferring or
accelerating payment dates wholly or partly; and (ii) modifications,
extensions or renewals at a different rate of interest whether or not
any such modification, extension or renewal is evidenced by a new or
additional promissory note or notes.
2.2 OBLIGATIONS. The term "obligations" is used herein in its broadest and
most comprehensive sense and shall be deemed to include, without
limitation, all interest and charges, prepayment charges, late charges
and loan fees at any time accruing or assessed on any of the Secured
Obligations.
2.3 INCORPORATION. All terms and conditions of the documents which evidence
any of the Secured Obligations are incorporated herein by this reference.
All persons who may have or acquire an interest in the Property shall be
deemed to have notice of the terms of the Secured Obligations and to have
notice that the rate of interest on one or more Secured Obligation may
vary from time to time.
ARTICLE 3. ABSOLUTE ASSIGNMENT OF RENTS AND LEASES
3.1 ASSIGNMENT. Trustor irrevocably assigns to Beneficiary all of Trustor's
right, title and interest in, to and under: (a) all present and future
leases of the Property or any portion thereof, all licenses and
agreements relating to the management, leasing or operation of the
Property or any portion thereof, and all other agreements of any kind
relating to the use or occupancy of the Property or any portion thereof,
whether such leases, licenses and agreements are now existing or entered
into after the date hereof ("Leases"); and (b) the rents, issues,
deposits and profits of the Property, including, without limitation, all
amounts payable and all rights and benefits accruing to Trustor under the
Leases ("Payments"). The term "Leases" shall also include all guarantees
of and security for the tenants' performance thereunder, and all
amendments, extensions, renewals or modifications thereto which are
permitted hereunder. This is a present and absolute assignment, not an
assignment for security purposes only, and Beneficiary's right to the
Leases and Payments is not contingent upon, and may be exercised without
possession of, the Property.
3.2 GRANT OF LICENSE. Beneficiary confers upon Trustor a revocable license
("License") to collect and retain the Payments as they become due and
payable, until the occurrence of a Default (as hereinafter defined). Upon
a Default, the License shall be automatically revoked and Beneficiary may
collect and apply the Payments pursuant to the terms hereof without notice
and without taking possession of the Property. All Payments thereafter
collected by Trustor shall be held by Trustor as trustee under a
constructive trust for the benefit of Beneficiary. Trustor hereby
irrevocably authorizes and directs the tenants under the Leases to rely
upon and comply with any notice or demand by Beneficiary for the payment
to Beneficiary of any rental or other sums which may at any time become
due under the Leases, or for the performance of any of the tenants'
undertakings under the Leases, and the tenants shall have no right or duty
to inquire as to whether any Default has actually occurred or is then
existing. Trustor hereby relieves the tenants from any liability to
Trustor by reason of relying upon and complying with any such notice or
demand by Beneficiary. Beneficiary may apply, in its sole discretion, any
Payments so collected by Beneficiary against any Secured Obligation or any
other obligation of Borrower, Trustor or any other person or entity, under
any document or instrument related to or executed in connection with the
Loan Documents, whether existing on the date hereof or hereafter arising.
Collection of any Payments by Beneficiary shall not cure or waive any
Default or notice of Default or invalidate any acts done pursuant to such
notice.
3.3 EFFECT OF ASSIGNMENT. The foregoing irrevocable assignment shall not
cause Beneficiary to be: (a) a mortgagee in possession; (b) responsible or
liable for the control, care, management or repair of the Property or for
performing any of the terms, agreements, undertakings, obligations,
representations, warranties, covenants and conditions of the Leases; (c)
responsible or liable for any waste committed on the Property by the
tenants under any of the Leases or by any other parties; for any dangerous
or defective condition of the Property; or for any negligence in the
management, upkeep, repair or control of the Property resulting in loss or
injury or death to any tenant, licensee, employee, invitee or other
person; or (d) responsible for or impose upon Beneficiary any duty to
produce rents or profits. Beneficiary shall not directly or indirectly be
liable to Trustor or any other person as a consequence of: (e) the
exercise or failure to exercise any of the rights, remedies or powers
granted to Beneficiary hereunder; or (f) the failure or refusal of
Beneficiary to perform or discharge any obligation, duty or liability of
Trustor arising under the Leases.
3.4 COVENANTS.
a. All Leases. Trustor shall, at Trustor's sole cost and expense:
(i) perform all obligations of the landlord under the Leases and
use reasonable efforts to enforce performance by the tenants of
all obligations of the tenants under the Leases;
(ii) use reasonable efforts to keep the Property leased at all
times to tenants which Trustor reasonably and in good faith
believes are creditworthy at rents not less than the fair market
rental value (including, but not limited to, free or discounted
rents to the extent the market so requires);
(iii) promptly upon Beneficiary's request, deliver to Beneficiary a
copy of each requested Lease and all amendments thereto and
waivers thereof; and
(iv) promptly upon Beneficiary's request, execute and record any
additional assignments of landlord's interest under any Lease to
Beneficiary and specific subordinations of any Lease to this
Deed of Trust, in form and substance satisfactory to
Beneficiary.
Unless consented to in writing by Beneficiary or otherwise permitted
under any other provision of the Loan Documents, Trustor shall not:
(v) grant any tenant under any Lease any option, right of first
refusal or other right to purchase all or any portion of the
Property under any circumstances;
(vi) grant any tenant under any Lease any right to prepay rent
more than 1 month in advance;
(vii) except upon Beneficiary's request, execute any assignment of
landlord's interest in any Lease; or
(viii) collect rent or other sums due under any Lease in advance,
other than to collect rent 1 month in advance of the time when
it becomes due.
Any such attempted action in violation of the provisions of this
Section shall be null and void.
Beneficiary's failure to deny any written request by Trustor for
consent under the foregoing provisions of this Section within
5 Business Days after Beneficiary's receipt of such request (and all
documents and information reasonably related thereto) shall be deemed
to constitute Beneficiary's consent to such request.
Trustor shall deposit with Beneficiary any sums received by Trustor
in consideration of any termination, modification or amendment of any
Lease or any release or discharge of any tenant under any Lease from
any obligation thereunder and any such sums received by Trustor shall
be held in trust by Trustor for such purpose. Notwithstanding the
foregoing, so long as no Default exists, the portion of any such sum
received by Trustor with respect to any Lease which is less than
$50,000 shall be payable to Trustor. All such sums received by
Beneficiary with respect to any Lease shall be deemed "Impounds" (as
defined in Section 6.12b) and shall be deposited by Beneficiary into
a pledged account in accordance with Section 6.12b. If no Default
exists, Beneficiary shall release such Impounds to Trustor from time
to time as necessary to pay or reimburse Trustor for such tenant
improvements, brokerage commissions and other leasing costs as may be
required to re-tenant the affected space; provided, however,
Beneficiary shall have received and approved each of the following
for each tenant for which such costs were incurred; (1) Trustor's
written request for such release, including the name of the tenant,
the location and net rentable area of the space and a description and
cost breakdown of the tenant improvements or other leasing costs
covered by the request; (2) Trustor's certification that any tenant
improvements have been completed lien-free and in a workmanlike
manner; (3) a fully executed Lease, or extension or renewal of the
current Lease; (4) an estoppel certificate executed by the tenant
including its acknowledgement that all tenant improvements have been
satisfactorily completed; and (5) such other information with respect
to such costs as Beneficiary may require. Following the re-tenanting
of all affected space (including, without limitation, the completion
of all tenant improvements), and provided no Default exists,
Beneficiary shall release any remaining such Impounds relating to the
affected space to Trustor. Trustor shall construct all tenant
improvements in a workmanlike manner and in accordance with all
applicable laws, ordinances, rules and regulations.
b. Major Leases. Trustor shall, at Trustor's sole cost and expense,
give Beneficiary prompt written notice of any material default by
landlord or tenant under any Major Lease (as defined below). Unless
consented to in writing by Beneficiary or otherwise permitted under
any other provision of the Loan Documents, Trustor shall not:
(i) enter into any Major Lease which (aa) is not on fair market
terms (which terms may include free or discounted rent to the
extent the market so requires); (bb) does not contain a
provision requiring the tenant to execute and deliver to the
landlord an estoppel certificate in form and substance
satisfactory to the landlord promptly upon the landlord's
request; or (cc) allows the tenant to assign or sublet the
premises without the landlord's consent;
(ii) reduce any rent or other sums due from the tenant under any
Major Lease;
(iii) terminate or materially modify or amend any Major Lease; or
(iv) release or discharge the tenant or any guarantor under any
Major Lease from any material obligation thereunder.
Any such attempted action in violation of the provisions of this
Section shall be null and void.
"Major Lease", as used herein, shall mean any Lease, which is, at any
time: (1) a Lease of more than 20% of the total rentable area of the
Property, as reasonably determined by Beneficiary; or (2) a Lease
which generates a gross base monthly rent exceeding 20% of the total
gross base monthly rent generated by all Leases (excluding all Leases
under which the tenant is then in default), as reasonably determined
by Beneficiary. Trustor's obligations with respect to Major Leases
shall be governed by the provisions of Section 3.4a as well as by the
provisions of this Section. Beneficiary's failure to deny any written
request by Trustor for consent under this Section within 5 Business
Days after Beneficiary's receipt of such request (and all documents
and information reasonably related thereto) such be deemed to
constitute Beneficiary's consent to such request.
3.5 ESTOPPEL CERTIFICATES. Within 30 days after request by Beneficiary,
Trustor shall deliver to Beneficiary and to any party designated by
Beneficiary, estoppel certificates relating to the Leases executed by
Trustor and by each of the tenants, in form and substance acceptable to
Beneficiary; provided, however, if any tenant shall fail or refuse to so
execute and deliver any such estoppel certificate upon request, Trustor
shall use reasonable efforts to cause such tenant to execute and deliver
such estoppel certificate but such tenant's continued failure or refusal
to do so, despite Trustor's reasonable efforts, shall not constitute a
default by Trustor under this Section.
3.6 RIGHT OF SUBORDINATION. Beneficiary may at any time and from time to
time by specific written instrument intended for the purpose unilaterally
subordinate the lien of this Deed of Trust to any Lease, without joinder
or consent of, or notice to, Trustor, any tenant or any other person.
Notice is hereby given to each tenant under a Lease of such right to
subordinate. No subordination referred to in this Section shall constitute
a subordination to any lien or other encumbrance, whenever arising, or
improve the right of any junior lienholder. Nothing herein shall be
construed as subordinating this Deed of Trust to any Lease.
ARTICLE 4. SECURITY AGREEMENT AND FIXTURE FILING
4.1 SECURITY INTEREST. Trustor grants and assigns to Beneficiary a security
interest to secure payment and performance of all of the Secured
Obligations, in all of the following described personal property in which
Trustor now or at any time hereafter has any interest ("Collateral"):
All goods, building and other materials, supplies, work in process,
equipment, machinery, fixtures, furniture, furnishings, signs and
other personal property, wherever situated, which are or are to be
incorporated into, used in connection with or appropriated for use
on the Property; all rents, issues, deposits and profits of the
Property (to the extent, if any, they are not subject to the
Absolute Assignment of Rents and Leases); all inventory, accounts,
cash receipts, deposit accounts, impounds, accounts receivable,
contract rights, general intangibles, chattel paper, instruments,
documents, notes, drafts, letters of credit, insurance policies,
insurance and condemnation awards and proceeds, any other rights to
the payment of money, trade names, trademarks and service marks
arising from or related to the Property or any business now or
hereafter conducted thereon by Trustor; all permits, consents,
approvals, licenses, authorizations and other rights granted by,
given by or obtained from, any governmental entity with respect to
the Property; all deposits or other security now or hereafter made
with or given to utility companies by Trustor with respect to the
Property; all advance payments of insurance premiums made by Trustor
with respect to the Property; all plans, drawings and specifications
relating to the Property; all loan funds held by Beneficiary,
whether or not disbursed; all funds deposited with Beneficiary
pursuant to any Loan Document, including, without limitation, all
"Restoration Funds" as defined herein; all reserves, deferred
payments, deposits, accounts, refunds, cost savings and payments of
any kind related to the Property or any portion thereof, including,
without limitation, all "Impounds" as defined herein; together with
all replacements and proceeds of, and additions and accessions to,
any of the foregoing, and all books, records and files relating to
any of the foregoing.
As to all of the above described personal property which is or which
hereafter becomes a "fixture" under applicable law, this Deed of Trust
constitutes a fixture filing under the California Uniform Commercial Code,
as amended or recodified from time to time ("UCC").
4.2 RIGHTS OF BENEFICIARY. In addition to Beneficiary's rights as a
"Secured Party" under the UCC, Beneficiary may, but shall not be
obligated to, at any time without notice and at the expense of Trustor:
(a) give notice to any person of Beneficiary's rights hereunder and
enforce such rights at law or in equity; (b) insure, protect, defend and
preserve the Collateral or any rights or interests of Beneficiary
therein; (c) inspect the Collateral; and (d) endorse, collect and
receive any right to payment of money owing to Trustor under or from the
Collateral. Notwithstanding the above, in no event shall Beneficiary be
deemed to have accepted any property other than cash in satisfaction of
any obligation of Trustor to Beneficiary unless Beneficiary shall make an
express written election of said remedy under the UCC or other applicable
law.
4.3 ADDITIONAL RIGHTS OF BENEFICIARY UPON DEFAULT. Upon the occurrence of a
Default hereunder, then in addition to all of Beneficiary's rights as a
"Secured Party" under the UCC or otherwise at law:
a. Sale of Collateral. Beneficiary may: (i) upon written notice,
require Trustor to assemble any or all of the Collateral and make it
available to Beneficiary at a place designated by Beneficiary;
(ii) without prior notice, enter upon the Property or other place
where any of the Collateral may be located and take possession of,
collect, sell and dispose of any or all of the Collateral, and store
the same at locations acceptable to Beneficiary at Trustor's
expense; or (iii) sell, assign and deliver at any place or in any
lawful manner all or any part of the Collateral and bid and become
purchaser at any such sales; and
b. Other Rights. Beneficiary may, for the account of Trustor and at
Trustor's expense: (i) operate, use, consume, sell or dispose of the
Collateral as Beneficiary deems appropriate for the purpose of
performing any or all of the Secured Obligations; (ii) enter into any
agreement, compromise or settlement including insurance claims, which
Beneficiary may deem desirable or proper with respect to any of the
Collateral; and (iii) endorse and deliver evidences of title for, and
receive, enforce and collect by legal action or otherwise, all
indebtedness and obligations now or hereafter owing to Trustor in
connection with or on account of any or all of the Collateral.
Trustor acknowledges and agrees that a disposition of the Collateral in
accordance with Beneficiary's rights and remedies as heretofore provided
is a disposition thereof in a commercially reasonable manner and that
5 days prior notice of such disposition is commercially reasonable notice.
Trustor further agrees that any sale or other disposition of all or any
portion of the Collateral may be applied by Beneficiary first to the
reasonable expenses in connection therewith, including reasonable
attorneys' fees and disbursements, and then to the payment of the Secured
Obligations.
4.4 POWER OF ATTORNEY. Trustor hereby irrevocably appoints Beneficiary as
Trustor's attorney-in-fact (such agency being coupled with an interest),
and as such attorney-in-fact, Beneficiary may, without the obligation to
do so, in Beneficiary's name or in the name of Trustor, prepare, execute,
file and record financing statements, continuation statements,
applications for registration and like papers necessary to create,
perfect or preserve any of Beneficiary's security interests and rights in
or to any of the Collateral, and upon a Default hereunder, take any other
action required of Trustor; provided, however, that Beneficiary as such
attorney-in-fact shall be accountable only for such funds as are actually
received by Beneficiary.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES
5.1 REPRESENTATIONS AND WARRANTIES. Trustor represents and warrants to
Beneficiary that, to Trustor's current actual knowledge after reasonable
investigation and inquiry, the following statements are true and correct
as of the Effective Date:
a. Legal Status. Trustor and Borrower are duly organized and
existing and in good standing under the laws of the state(s) in
which Trustor and Borrower are organized. Trustor and Borrower are
qualified or licensed to do business in all jurisdictions in which
such qualification or licensing is required.
b. Permits. Trustor and Borrower possess all permits, franchises and
licenses and all rights to all trademarks, trade names, patents and
fictitious names, if any, necessary to enable Trustor and Borrower to
conduct the business(es) in which Trustor and Borrower are now
engaged in compliance with applicable law.
c. Authorization and Validity. The execution and delivery of the Loan
Documents have been duly authorized and the Loan Documents constitute
valid and binding obligations of Trustor, Borrower or the party which
executed the same, enforceable in accordance with their respective
terms, except as such enforcement may be limited by bankruptcy,
insolvency, moratorium or other laws affecting the enforcement of
creditors' rights, or by the application of rules of equity.
d. Violations. The execution, delivery and performance by Trustor and
Borrower of each of the Loan Documents do not violate any provision
of any law or regulation, or result in any breach or default under
any contract, obligation, indenture or other instrument to which
Trustor or Borrower is a party or by which Trustor or Borrower is
bound.
e. Litigation. There are no pending or threatened actions, claims,
investigations, suits or proceedings before any governmental
authority, court or administrative agency which may adversely affect
the financial condition or operations of Trustor or Borrower other
than those previously disclosed in writing by Trustor or Borrower to
Beneficiary.
f. Financial Statements. The financial statements of Trustor and
Borrower, of each general partner (if Trustor or Borrower is a
partnership), of each member (if Trustor or Borrower is a limited
liability company) and of each guarantor, if any, previously
delivered by Trustor or Borrower to Beneficiary: (i) are materially
complete and correct; (ii) present fairly the financial condition of
such party; and (iii) have been prepared in accordance with the same
accounting standard used by Trustor or Borrower to prepare the
financial statements delivered to and approved by Beneficiary in
connection with the making of the Loan, or other accounting standards
approved by Beneficiary. Since the date of such financial
statements, there has been no material adverse change in such
financial condition, nor have any assets or properties reflected on
such financial statements been sold, transferred, assigned,
mortgaged, pledged or encumbered except as previously disclosed in
writing by Trustor or Borrower to Beneficiary and approved in writing
by Beneficiary.
g. Reports. All reports, documents, instruments and information
delivered to Beneficiary in connection with the Loan: (i) are correct
and sufficiently complete to give Beneficiary accurate knowledge of
their subject matter; and (ii) do not contain any misrepresentation
of a material fact or omission of a material fact which omission
makes the provided information misleading.
h. Income Taxes. There are no pending assessments or adjustments of
Trustor's or Borrower's income tax payable with respect to any year.
i. Subordination. There is no agreement or instrument to which
Borrower is a party or by which Borrower is bound that would require
the subordination in right of payment of any of Borrower's
obligations under the Note to an obligation owed to another party.
j. Title. Trustor lawfully holds and possesses fee simple title to
the Property, without limitation on the right to encumber same. This
Deed of Trust is a first lien on the Property prior and superior to
all other liens and encumbrances on the Property except: (i) liens
for real estate taxes and assessments not yet due and payable; (ii)
senior exceptions previously approved by Beneficiary and shown in the
title insurance policy insuring the lien of this Deed of Trust; and
(iii) other matters, if any, previously disclosed to Beneficiary by
Trustor in a writing specifically referring to this representation
and warranty.
k. Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no
rights are outstanding that under law could give rise to any such
liens) affecting the Property which are or may be prior to or equal
to the lien of this Deed of Trust.
l. Encroachments. Except as shown in the survey, if any, previously
delivered to Beneficiary, none of the buildings or other improvements
which were included for the purpose of determining the appraised
value of the Property lies outside of the boundaries or building
restriction lines of the Property and no buildings or other
improvements located on adjoining properties encroach upon the
Property.
m. Leases. All existing Leases are in full force and effect and are
enforceable in accordance with their respective terms. No material
breach or default by any party, or event which would constitute a
material breach or default by any party after notice or the passage
of time, or both, exists under any existing Lease. None of the
landlord's interests under any of the Leases, including, but not
limited to, rents, additional rents, charges, issues or profits, has
been transferred or assigned. No rent or other payment under any
existing Lease has been paid by any tenant for more than 1 month in
advance.
n. Collateral. Trustor has good title to the existing Collateral,
free and clear of all liens and encumbrances except those, if any,
previously disclosed to Beneficiary by Trustor in writing
specifically referring to this representation and warranty. Trustor's
principal place of business is located at the address shown in this
Deed of Trust.
o. Condition of Property. Except as shown in the property condition
survey or other engineering reports, if any, previously delivered to
or obtained by Beneficiary, the Property is in good condition and
repair and is free from any damage that would materially and
adversely affect the value of the Property as security for the Loan
or the intended use of the Property.
p. Hazardous Materials. Except as shown in the environmental
assessment report(s), if any, previously delivered to or obtained by
Beneficiary, the Property is not and has not been a site for the use,
generation, manufacture, storage, treatment, release, threatened
release, discharge, disposal, transportation or presence of
Hazardous Materials (as hereinafter defined) except as otherwise
previously disclosed in writing by Trustor to Beneficiary.
q. Hazardous Materials Laws. The Property complies with all Hazardous
Materials Laws (as hereinafter defined).
r. Hazardous Materials Claims. There are no pending or threatened
Hazardous Materials Claims (as hereinafter defined).
s. Wetlands. No part of the Property consists of or is classified as
wetlands, tidelands or swamp and overflow lands.
t. Compliance With Laws. All federal, state and local laws, rules and
regulations applicable to the Property, including, without
limitation, all zoning and building requirements and all
requirements of the Americans With Disabilities Act of 1990, as
amended from time to time (42 U. S. C. Section 12101 et seq.) have
been satisfied or complied with. Trustor is in possession of all
certificates of occupancy and all other licenses, permits and other
authorizations required by applicable law for the existing use of the
Property. All such certificates of occupancy and other licenses,
permits and authorizations are valid and in full force and effect.
u. Property Taxes and Other Liabilities. All taxes, governmental
assessments, insurance premiums, water, sewer and municipal charges,
and ground rents, if any, which previously became due and owing in
respect of the Property have been paid.
v. Condemnation. There is no proceeding pending or threatened for the
total or partial condemnation of the Property.
w. Homestead. There is no homestead or other exemption available to
Trustor which would materially interfere with the right to sell the
Property at a trustee's sale or the right to foreclose this Deed of
Trust.
x. Solvency. None of the transactions contemplated by the Loan will
be or have been made with an actual intent to hinder, delay or
defraud any present or future creditors of Trustor, and Trustor, on
the Effective Date, will have received fair and reasonably
equivalent value in good faith for the grant of the liens or
security interests effected by the Loan Documents. On the Effective
Date, Trustor will be solvent and will not be rendered insolvent by
the transactions contemplated by the Loan Documents. Trustor is able
to pay its debts as they become due.
y. Separate Tax Parcel(s). The Property is assessed for the real
estate tax purposes as one or more wholly independent tax parcels,
separate from any other real property, and no other real property is
assessed and taxed together with the Property or any portion
thereof.
5.2 REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING STATUS. Trustor and
FREMONT MANAGEMENT, INC., a Delaware corporation hereby represent,
warrant and covenant to Beneficiary as follows:
a. each such entity was organized solely for the purpose of (i)
owning the Property; (ii) acting as a general partner of a
partnership which owns the Property; or (iii) acting as a managing
member of a limited liability company which owns the Property;
b. each such entity has not and will not engage in any business
unrelated to (i) the ownership of the Property; (ii) acting as
general partner of a partnership which owns the Property; or (iii)
acting as a managing member of a limited liability company which
owns the Property;
c. each such entity has not and will not have any assets other than
the Property (and personal property incidental to the ownership and
operation of the Property) or its partnership or membership interest
in the partnership or limited liability company which owns the
Property;
d. each such entity has not and will not engage in, seek or consent
to any dissolution, winding up, liquidation, consolidation, merger,
asset sale, transfer of partnership or membership interest, or
amendment of its articles of incorporation, articles of
organization, certificate of formation, partnership agreement or
operating agreement, as applicable;
e. if such entity is a partnership, all of its general partners are
corporations that satisfy the requirements set forth in this
Section 5.2;
f. if such entity is a limited liability company, it has at least one
managing member that is a corporation that satisfies the
requirements set forth in this Section 5.2;
g. each such entity, without the unanimous consent of all of its
general partners, directors or members, as applicable, shall not
file a bankruptcy or insolvency petition or otherwise institute
insolvency proceedings with respect to itself or any other entity in
which it has a direct or indirect legal or beneficial ownership
interest;
h. each such entity has no indebtedness (and will have no
indebtedness) other than (i) the Loan (to the extent it is liable
under the terms of the Loan Documents); and (ii) unsecured trade
debt which is not evidenced by a note and is incurred in the
ordinary course of its business in connection with owning, operating
and maintaining the Property (or its interest in Trustor, as
applicable) and is paid within 30 days from the date incurred;
i. each such entity has not and will not fail to correct any known
misunderstanding regarding the separate identity of such entity;
j. each such entity has maintained and will maintain its accounts,
books and records separate from any other person or entity;
k. each such entity has maintained and will maintain its books,
records, resolutions and agreements as official records;
l. each such entity (i) has not and will not commingle its funds or
assets with those of any other entity; and (ii) has held and will
hold its assets in its own name;
m. each such entity has conducted and will conduct its business in
its own name;
n. each such entity has maintained and will maintain its financial
statements, accounting records and other entity documents separate
from any other person or entity;
o. each such entity has paid and will pay its own liabilities out of
its own funds and assets;
p. each such entity has observed and will observe all partnership,
corporate or limited liability company formalities, as applicable;
q. each such entity has not and will not assume or guarantee or
become obligated for the debts of any other entity or hold out its
credit as being available to satisfy the obligations of any other
entity except for liabilities permitted to be guaranteed by the Loan
Documents;
r. each such entity has not and will not acquire obligations or
securities of its partners, members or shareholders;
s. each such entity has allocated and will allocate fairly and
reasonably any overhead for shared office space and uses separate
stationery, invoices and checks;
t. each such entity has not and will not pledge its assets for the
benefit of any other person or entity;
u. each such entity has held and identified itself and will hold
itself out and identify itself as a separate and distinct entity
under its own name and not as a division or part of any other person
or entity;
v. each such entity has not made and will not make loans to any
person or entity;
w. each such entity has not and will not identify its partners,
members or shareholders, as applicable, or any affiliates of any of
the foregoing, as a division or part of it;
x. each such entity has not entered into and will not enter into or
be a party to, any transaction with its partners, members,
shareholders, or any affiliates of any of the foregoing, except in
the ordinary course of its business and on terms which are
intrinsically fair and are no less favorable to it than would be
obtained in a comparable arm's-length transaction with an unrelated
third party;
y. if such entity is a corporation, the directors of the corporation
shall consider the interests of the creditors of the corporation in
connection with all corporate action;
z. each such entity has paid and will pay the salaries of its own
employees and has maintained and will maintain a sufficient number
of employees in light of its contemplated business operations;
aa. each such entity has maintained and will maintain adequate capital
in light of its contemplated business operations;
bb. if such entity is a limited liability company (i) its articles of
organization, certificate of formation and/or operating agreement,
as applicable, provide that the vote of a majority-in-interest of
the remaining members is sufficient to continue the life of the
limited liability company in the event of a termination event, such
as a bankruptcy of the managing member; and (ii) if the vote of a
majority-in-interest of the remaining members is not obtained to
continue the life of the limited liability company upon a
termination event, its articles of organization, certificate of
formation and/or operating agreement, as applicable, provide that
the limited liability company may not liquidate its assets without
the consent of the Beneficiary;
cc. if such entity is a partnership with more than one general
partner, its partnership agreement requires the remaining partners
to continue the partnership as long as one solvent general partner
exists; and
dd. if such entity is a limited liability company, its operating
agreement, if such entity is a partnership, its partnership
agreement, and if such entity is a corporation, to the full extent
permitted by applicable law, its articles of incorporation, contain
the provisions set forth in this Section 5.2 and such entity shall
conduct its business and operations in strict compliance with the
terms contained therein.
ARTICLE 6. RIGHTS AND DUTIES OF THE PARTIES
6.1 MAINTENANCE AND PRESERVATION OF THE PROPERTY. Trustor shall: (a) keep
the Property in good condition and repair; (b) complete or restore
promptly and in workmanlike manner the Property or any part thereof which
may be damaged or destroyed (unless, if and to the extent permitted under
Section 6.11, Beneficiary elects to require that insurance proceeds be
used to reduce the Secured Obligations and after such repayment the ratio
of Secured Obligations to the value of the Property, as reasonably
determined by Beneficiary is the same as or lower than it was immediately
before the loss or taking occurred); (c) comply and cause the Property to
comply with (i) all laws, ordinances, regulations and standards, (ii) all
covenants, conditions, restrictions and equitable servitudes, whether
public or private, of every kind and character and (iii) all requirements
of insurance companies and any bureau or agency which establishes
standards of insurability, which laws, covenants or requirements affect
the Property and pertain to acts committed or conditions existing
thereon, including, without limitation, any work of alteration,
improvement or demolition as such laws, covenants or requirements
mandate; (d) operate and manage the Property at all times in a
professional manner and do all other acts which from the character or use
of the Property may be reasonably necessary to maintain and preserve its
value; (e) promptly after execution, deliver to Beneficiary a copy of any
management agreement concerning the Property and all amendments thereto
and waivers thereof; and (f) execute and acknowledge all further
documents, instruments and other papers as Beneficiary or Trustee deems
necessary or appropriate to preserve, continue, perfect and enjoy the
benefits of this Deed of Trust and perform Trustor's obligations,
including, without limitation, statements of the amount secured hereby
then owing and statements of no offset. Trustor shall not: (g) remove or
demolish all or any material part of the Property; (h) alter either (i)
the exterior of the Property in a manner which materially and adversely
affects the value of the Property or (ii) the roof or other structural
elements of the Property in a manner which requires a building permit
except for tenant improvements required under the Leases; (i) initiate or
acquiesce in any change in any zoning or other land classification which
affects the Property; (j) materially alter the type of occupancy or use
of all or any part of the Property; or (k) commit or permit waste of the
Property.
6.2 HAZARDOUS MATERIALS. Without limiting any other provision of this Deed
of Trust, Trustor agrees as follows:
a. Prohibited Activities. Trustor shall not cause or permit the
Property to be used as a site for the use, generation, manufacture,
storage, treatment, release, discharge, disposal, transportation or
presence of any oil or other petroleum products, flammable
explosives, asbestos, urea formaldehyde insulation, radioactive
materials, hazardous wastes, toxic or contaminated substances or
similar materials, including, without limitation, any substances
which are "hazardous substances," "hazardous wastes," "hazardous
materials" or "toxic substances" under the Hazardous Materials Laws
(defined below) and/or other applicable environmental laws,
ordinances or regulations ("Hazardous Materials").
The foregoing to the contrary notwithstanding, (i) Trustor may store,
maintain and use on the Property janitorial and maintenance supplies,
paint and other Hazardous Materials of a type and in a quantity
readily available for purchase by the general public and normally
stored, maintained and used by owners and managers of properties of a
type similar to the Property; and (ii) tenants of the Property may
store, maintain and use on the Property (and, if any tenant is a
retail business, hold in inventory and sell in the ordinary course of
such tenant's business) Hazardous Materials of a type and quantity
readily available for purchase by the general public and normally
stored, maintained and used (and, if tenant is a retail business,
sold) by tenants in similar lines of business on properties similar
to the Property; and (iii) tenants of the Property may store,
maintain and use on the Property Hazardous Materials of types and
quantities necessary or appropriate for carrying out their
biotechnology business operations so long as all such storage,
maintenance and use of Hazardous Material is carried on in compliance
with all applicable Hazards Materials Laws.
b. Hazardous Materials Laws. Trustor shall comply and cause the
Property to comply with all federal, state and local laws,
ordinances and regulations relating to Hazardous Materials
("Hazardous Materials Laws"), including, without limitation: the
Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq.; the
Federal Water Pollution Control Act, as amended, 33 U.S.C. Section
1251 et seq.; the Resource Conservation and Recovery Act of 1976, as
amended, 42 U.S.C. Section 6901 et seq.; the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended (including the Superfund Amendments and Reauthorization Act
of 1986, "CERCLA"), 42 U.S.C. Section 9601 et seq.; the Toxic
Substances Control Act, as amended, 15 U.S.C. Section 2601 et seq.;
the Occupational Safety and Health Act, as amended, 29 U.S.C.
Section 651; the Emergency Planning and Community Right-to-Know Act
of 1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health
Act of 1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe
Drinking Water Act, 42 U.S.C. Section 300f et seq.; and all
comparable state and local laws, laws of other jurisdictions or
orders and regulations.
c. Notices. Trustor shall immediately notify Beneficiary in writing
of: (i) the discovery of any Hazardous Materials on, under or about
the Property (other than Hazardous Materials permitted under
Section 6.2(a)); (ii) any knowledge by Trustor that the Property does
not comply with any Hazardous Materials Laws; (iii) any claims or
actions ("Hazardous Materials Claims") pending or threatened against
Trustor or the Property by any governmental entity or agency or any
other person or entity relating to Hazardous Materials or pursuant to
the Hazardous Materials Laws; and (iv) the discovery of any
occurrence or condition on any real property adjoining or in the
vicinity of the Property that could cause the Property or any part
thereof to become contaminated with Hazardous Materials.
d. Remedial Action. In response to the presence of any Hazardous
Materials on, under or about the Property, Trustor shall immediately
take, at Trustor's sole expense, all remedial action required by any
Hazardous Materials Laws or any judgment, consent decree, settlement
or compromise in respect to any Hazardous Materials Claims.
e. Inspection By Beneficiary. Upon reasonable prior notice to
Trustor, Beneficiary, its employees and agents, may from time to time
(whether before or after the commencement of a nonjudicial or
judicial foreclosure proceeding), enter and inspect the Property for
the purpose of determining the existence, location, nature and
magnitude of any past or present release or threatened release of any
Hazardous Materials into, onto, beneath or from the Property.
f. Legal Effect of Section. Trustor and Beneficiary agree that: (i)
this Hazardous Materials Section is intended as Beneficiary's written
request for information (and Trustor's response) concerning the
environmental condition of the real property security as required by
California Code of Civil Procedure Section 726.5; and (ii) each
representation and warranty and covenant in this Section (together
with any indemnity applicable to a breach of any such representation
and warranty) with respect to the environmental condition of the
Property is intended by Beneficiary and Trustor to be an
"environmental provision" for purposes of California Code of Civil
Procedure Section 736.
6.3 COMPLIANCE WITH LAWS. Trustor shall comply with all federal, state and
local laws, rules and regulations applicable to the Property, including,
without limitation, all zoning and building requirements and all
requirements of the Americans With Disabilities Act of 1990 (42 U.S.C.
Section 12101 et seq.), as amended from time to time. Trustor shall
possess and maintain or cause Borrower to possess and maintain in full
force and effect at all times (a) all certificates of occupancy and other
licenses, permits and authorizations required by applicable law for the
existing use of the Property and (b) all permits, franchises and licenses
and all rights to all trademarks, trade names, patents and fictitious
names, if any, required by applicable law for Trustor and Borrower to
conduct the business(es) in which Trustor and Borrower are now engaged.
6.4 LITIGATION. Trustor shall promptly notify Beneficiary in writing of any
litigation pending or threatened against Trustor or Borrower claiming
damages in excess of $50,000 and of all pending or threatened litigation
against Trustor or Borrower if the aggregate damage claims against Trustor
or Borrower exceed $100,000.
6.5 MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Trustor shall not: (a) merge
or consolidate with any other entity or permit Borrower to merge or
consolidate with any other entity; (b) make any substantial change in the
nature of Trustor's business or structure or permit Borrower to make any
substantial change in the nature of Borrower's business or structure; (c)
acquire all or substantially all of the assets of any other entity or
permit Borrower to acquire all or substantially all of the assets of any
other entity; or (d) sell, lease, assign, transfer or otherwise dispose of
a material part of Trustor's assets except in the ordinary course of
Trustor's business or permit Borrower to sell, lease, assign, transfer or
otherwise dispose of a material part of Borrower's assets except in the
ordinary course of Xxxxxxxx's business.
6.6 ACCOUNTING RECORDS. Trustor shall maintain and cause Borrower to
maintain adequate books and records in accordance with the same accounting
standard used by Trustor or Borrower to prepare the financial statements
delivered to and approved by Beneficiary in connection with the making of
the Loan or other accounting standards approved by Beneficiary. Trustor
shall permit and shall cause Borrower to permit any representative of
Beneficiary, at any reasonable time and from time to time, to inspect,
audit and examine such books and records and make copies of same.
6.7 COSTS, EXPENSES AND ATTORNEYS' FEES. Trustor shall pay to Beneficiary
the full amount of all costs and expenses, including, without limitation,
reasonable attorneys' fees and expenses of Beneficiary's in-house or
outside counsel, incurred by Beneficiary in connection with: (a)
appraisals and inspections of the Property or Collateral required by
Beneficiary as a result of (i) a Transfer or proposed Transfer (as defined
below), or (ii) a Default; (b) appraisals and inspections of the Property
or Collateral required by applicable law, including, without limitation,
federal or state regulatory reporting requirements; and (c) any acts
performed by Beneficiary at Trustor's request or wholly or partially for
the benefit of Trustor (including, without limitation, the preparation or
review of amendments, assumptions, waivers, releases, reconveyances,
estoppel certificates or statements of amounts owing under any Secured
Obligation). In connection with appraisals and inspections, Trustor
specifically (but not by way of limitation) acknowledges that: (aa) a
formal written appraisal of the Property by a state certified or licensed
appraiser may be required by federal regulatory reporting requirements on
an annual or more frequent basis; and (bb) Beneficiary may require
inspection of the Property by an independent supervising architect, a cost
engineering specialist, or both. Trustor shall pay all indebtedness
arising under this Section immediately upon demand by Beneficiary together
with interest thereon following notice of such indebtedness at the rate of
interest then applicable to the principal balance of the Note as specified
therein.
6.8 LIENS, ENCUMBRANCES AND CHARGES. Trustor shall immediately discharge by
bonding or otherwise any lien, charge or other encumbrance which attaches
to the Property in violation of Section 6.15. Subject to Trustor's right
to contest such matters under this Deed of Trust or as expressly permitted
in the Loan Documents, Trustor shall pay when due all obligations secured
by or reducible to liens and encumbrances which shall now or hereafter
encumber or appear to encumber all or any part of the Property or any
interest therein, whether senior or subordinate hereto, including, without
limitation, all claims for work or labor performed, or materials or
supplies furnished, in connection with any work of demolition, alteration,
repair, improvement or construction of or upon the Property, except such
as Trustor may in good faith contest or as to which a bona fide dispute
may arise (provided provision is made to the satisfaction of Beneficiary
for eventual payment thereof in the event that Trustor is obligated to
make such payment and that any recorded claim of lien, charge or other
encumbrance against the Property is immediately discharged by bonding or
otherwise).
6.9 TAXES AND OTHER LIABILITIES. Trustor shall pay and discharge when due
any and all indebtedness, obligations, assessments and taxes, both real
and personal and including federal and state income taxes and state and
local property taxes and assessments. Trustor shall promptly provide to
Beneficiary copies of all tax and assessment notices pertaining to the
Property. Trustor hereby authorizes Beneficiary to obtain, at Trustor's
expense, a tax service contract which shall provide tax information on the
Property to Beneficiary for the term of the Loan and any extensions or
renewals of the Loan.
6.10 INSURANCE COVERAGE. Trustor shall insure the Property against loss or
damage by fire and such other hazards as Beneficiary shall from time to
time require; provided, however, (a) Beneficiary, at Beneficiary's
election, may only require flood insurance if all or any portion of the
improvements located on the Property is or becomes located in a special
flood hazard area, and (b) Beneficiary, at Beneficiary's election, may
only require earthquake insurance if all or any portion of the Property is
or becomes located in an earthquake fault zone. Trustor shall also carry
public liability insurance and such other insurance as Beneficiary may
require, including, without limitation, business interruption insurance or
loss of rents insurance. Such policies shall contain a standard mortgage
clause naming Beneficiary and its successors in interest as a loss payee
and requiring at least 30 days prior notice to the holder at termination
or cancellation. Trustor shall maintain all required insurance throughout
the term of the Loan and while any liabilities of Borrower or Trustor to
Beneficiary under any of the Loan Documents remain outstanding at
Trustor's expense, with companies, and in substance and form satisfactory
to Beneficiary. Neither Beneficiary nor Trustee, by reason of accepting,
rejecting, approving or obtaining insurance shall incur any liability for:
(c) the existence, nonexistence, form or legal sufficiency of any
insurance; (d) the solvency of any insurer; or (e) the payment of claims.
6.11 INSURANCE AND CONDEMNATION PROCEEDS.
a. Assignment of Claims. Trustor absolutely and irrevocably assigns
to Beneficiary all of the following rights, claims and amounts
(collectively, "Claims"), all of which shall be paid to Beneficiary:
(i) all awards of damages and all other compensation payable
directly or indirectly by reason of a condemnation or proposed
condemnation for public or private use affecting all or any part of,
or any interest in, the Property; (ii) all other claims and awards
for damages to or decrease in value of all or any part of, or any
interest in, the Property; (iii) all proceeds of any insurance
policies payable by reason of loss sustained to all or any part of
the Property; and (iv) all interest which may accrue on any of the
foregoing. Trustor shall give Beneficiary prompt written notice of
the occurrence of any casualty affecting, or the institution of any
proceedings for eminent domain or for the condemnation of, the
Property or any portion thereof. So long as no Default has occurred
and is continuing at the time, Trustor shall have the right to
adjust, compromise and settle any Claim of $100,000 or less without
the consent of Beneficiary, provided, however, all awards, proceeds
and other sums described herein shall continue to be payable to
Beneficiary. Beneficiary may commence, appear in, defend or
prosecute any Claim exceeding $100,000, and may adjust, compromise
and settle all Claims (except for Claims which Trustor may settle as
provided herein), but shall not be responsible for any failure to
commence, appear in, defend, prosecute or collect any such Claim
regardless of the cause of the failure. All awards, proceeds and
other sums described herein shall be payable to Beneficiary.
b. Application of Proceeds; No Default. So long as no Default has
occurred and is continuing at the time of Beneficiary's receipt of
the proceeds of the Claims ("Proceeds") and no Default occurs
thereafter, Beneficiary shall apply the Proceeds in the following
order of priority: First, to Beneficiary's expenses in settling,
prosecuting or defending the Claims; Second, to the repair or
restoration of the Property; and Third, to Trustor if the repair or
restoration of the Property has been completed, but to the Secured
Obligations in any order without suspending, extending or reducing
any obligation of Trustor to make installment payments if the repair
or restoration of the Property has not been completed.
Notwithstanding the foregoing, Beneficiary shall have no obligation
to make any Proceeds available for the repair or restoration of the
Property unless and until all the following conditions have been
satisfied: (i) delivery to Beneficiary of the Proceeds plus any
additional amount which is needed to pay all costs of the repair or
restoration (including, without limitation, taxes, financing charges,
insurance and rent during the repair period); (ii) establishment of
an arrangement for lien releases and disbursement of funds acceptable
to Beneficiary; (iii) delivery to Beneficiary in form and content
acceptable to Beneficiary of all of the following: (aa) plans and
specifications for the work; (bb) a contract for the work, signed by
a contractor acceptable to Beneficiary; (cc) a cost breakdown for the
work; (dd) if required by Beneficiary, a payment and performance bond
for the work; (ee) evidence of the continuation of all Leases unless
consented to in writing by Beneficiary; (ff) evidence that, upon
completion of the work, the size, capacity, value, and income
coverage ratios for the Property will be at least as great as those
which existed immediately before the damage or condemnation occurred;
and (gg) evidence of the satisfaction of any additional conditions
that Beneficiary may reasonably establish to protect Beneficiary's
security. Trustor acknowledges that the specific conditions
described above are reasonable.
c. Application of Proceeds; Default. If a Default has occurred and is
continuing at the time of Beneficiary's receipt of the Proceeds or if
a Default occurs at any time thereafter, Beneficiary may, at
Beneficiary's absolute discretion and regardless of any impairment of
security or lack of impairment of security, but subject to applicable
law governing use of the Proceeds, if any, apply all or any of the
Proceeds to Beneficiary's expenses in settling, prosecuting or
defending the Claims and then apply the balance to the Secured
Obligations in any order without suspending, extending or reducing
any obligation of Trustor to make installment payments, and may
release all or any part of the Proceeds to Trustor upon any
conditions Beneficiary chooses.
6.12 IMPOUNDS.
a. Post-Default Impounds. If required by Beneficiary at any time
after a Default occurs (and regardless of whether such Default is
thereafter cured), Trustor shall deposit with Beneficiary such
amounts ("Post-Default Impounds") on such dates (determined by
Beneficiary as provided below) as will be sufficient to pay any or
all "Costs" (as defined below) specified by Beneficiary. Beneficiary
in its sole discretion shall estimate the amount of such Costs that
will be payable or required during any period selected by Beneficiary
not exceeding 1 year and shall determine the fractional portion
thereof that Trustor shall deposit with Beneficiary on each date
specified by Beneficiary during such period. If the Post-Default
Impounds paid by Trustor are not sufficient to pay the related Costs,
Trustor shall deposit with Beneficiary upon demand an amount equal to
the deficiency. All Post-Default Impounds shall be payable by
Trustor in addition to (but without duplication of) any other
Impounds (as defined below).
b. All Impounds. Post-Default Impounds and any other impounds that
may be payable by Borrower under the Note are collectively called
"Impounds". All Impounds shall be deposited into one or more
segregated or commingled accounts maintained by Beneficiary or its
servicing agent. Except as otherwise provided in the Note, such
account(s) shall not bear interest. Beneficiary shall not be a
trustee, special depository or other fiduciary for Trustor with
respect to such account, and the existence of such account shall not
limit Beneficiary's rights under this Deed of Trust, any other
agreement or any provision of law. If no Default exists, Beneficiary
shall apply all Impounds to the payment of the related Costs, or in
Beneficiary's sole discretion may release any or all Impounds to
Trustor for application to and payment of such Costs. If a Default
exists, Beneficiary may apply any or all Impounds to any Secured
Obligation and/or to cure such Default, whereupon Trustor shall
restore all Impounds so applied and cure all Defaults not cured by
such application. The obligations of Trustor hereunder shall not be
diminished by deposits of Impounds made by Trustor, except to the
extent that such obligations have actually been met by application of
such Impounds. Upon any assignment of this Deed of Trust,
Beneficiary may assign all Impounds in its possession to
Beneficiary's assignee, whereupon Beneficiary and Trustee shall be
released from all liability with respect to such Impounds. Within
60 days following full repayment of the Secured Obligations (other
than as a consequence of foreclosure or conveyance in lieu of
foreclosure) or at such earlier time as Beneficiary may elect,
Beneficiary shall pay to Trustor all Impounds in its possession, and
no other party shall have any right or claim thereto. "Costs" means
(i) all taxes and other liabilities payable by Trustor under Section
6.9, (ii) all insurance premiums payable by Trustor under Section
6.10, (iii) all other costs and expenses for which Impounds are
required under the Note, and/or (iv) all other amounts that will be
required to preserve the value of the Property. Trustor shall deliver
to Beneficiary, promptly upon receipt, all bills for Costs for which
Beneficiary has required Post-Default Impounds.
6.13 DEFENSE AND NOTICE OF LOSSES, CLAIMS AND ACTIONS. Trustor shall protect,
preserve and defend the Property and title to and right of possession of
the Property, the security of this Deed of Trust and the rights and powers
of Beneficiary and Trustee hereunder at Trustor's sole expense against all
adverse claims, whether the claim: (a) is against a possessory or non-
possessory interest; (b) arose prior or subsequent to the Effective Date;
or (c) is senior or junior to Trustor's or Beneficiary's rights. Trustor
shall give Beneficiary and Trustee prompt notice in writing of the
assertion of any claim, of the filing of any action or proceeding, of the
occurrence of any damage to the Property and of any condemnation offer or
action.
6.14 RIGHT OF INSPECTION. Beneficiary and its independent contractors, agents
and employees may enter the Property from time to time at any reasonable
time for the purpose of inspecting the Property and ascertaining Trustor's
compliance with the terms of this Deed of Trust. Beneficiary shall use
reasonable efforts to assure that Beneficiary's entry upon and inspection
of the Property shall not materially and unreasonably interfere with the
business or operations of Trustor or Trustor's tenants on the Property.
6.15 PROHIBITION OF TRANSFER OF PROPERTY OR INTERESTS IN TRUSTOR. Trustor
acknowledges that Beneficiary has relied upon the principals of Trustor
and Borrower and their experience in owning and operating properties
similar to the Property in connection with the closing of the Loan.
Accordingly, except with the prior written consent of Beneficiary or as
otherwise expressly permitted in the Note, Trustor shall not cause or
permit any sale, exchange, mortgage, pledge, hypothecation, assignment,
encumbrance or other transfer, conveyance or disposition, whether
voluntarily, involuntarily or by operation of law ("Transfer") of all or
any part of, or all or any direct or indirect interest in, the Property or
the Collateral (except for equipment and inventory in the ordinary course
of its business), or cause or permit a Transfer of any direct or indirect
interest (whether general or limited partnership interest, stock, limited
liability company interest, trust, or otherwise) in Trustor or Borrower.
In the event of any Transfer that is not expressly permitted in the Note
and is without the prior written consent of Beneficiary, Beneficiary shall
have the absolute right at its option, without prior demand or notice, to
declare all of the Secured Obligations immediately due and payable, except
to the extent prohibited by law, and pursue its rights and remedies under
Section 7.3 herein. Trustor agrees to pay any prepayment fee as set forth
in the Note in the event the Secured Obligations are accelerated pursuant
to the terms of this Section. Consent to one such Transfer shall not be
deemed to be a waiver of the right to require the consent to future or
successive Transfers.
6.16 ACCEPTANCE OF TRUST; POWERS AND DUTIES OF TRUSTEE. Trustee accepts this
trust when this Deed of Trust is recorded. From time to time upon written
request of Beneficiary and presentation of this Deed of Trust, or a
certified copy thereof, for endorsement, and without affecting the
personal liability of any person for payment of any indebtedness or
performance of any Secured Obligation, Trustee may, without liability
therefor and without notice: (a) reconvey all or any part of the
Property; (b) consent to the making of any map or plat of the Property;
(c) join in granting any easement on the Property; (d) join in any
declaration of covenants and restrictions; or (e) join in any extension
agreement or any agreement subordinating the lien or charge of this Deed
of Trust. Notwithstanding the foregoing, Beneficiary shall first obtain
from Trustor, subject to no Default, their consent to subparagraphs (b),
(c), and (d), and such consent shall not be unreasonably withheld.
Nothing contained in the preceding sentences shall be construed to limit,
impair or otherwise affect the rights of Trustor in any respect. Except
as may otherwise be required by applicable law, Trustee or Beneficiary may
from time to time apply to any court of competent jurisdiction for aid and
direction in the execution of the trusts hereunder and the enforcement of
the rights and remedies available hereunder, and Trustee or Beneficiary
may obtain orders or decrees directing or confirming or approving acts in
the execution of said trusts and the enforcement of said remedies.
Trustee has no obligation to notify any party of any pending sale or any
action or proceeding (including, without limitation, actions in which
Trustor, Beneficiary or Trustee shall be a party) unless held or commenced
and maintained by Trustee under this Deed of Trust. Trustee shall not be
obligated to perform any act required of it hereunder unless the
performance of the act is requested in writing and Trustee is reasonably
indemnified and held harmless against loss, cost, liability and expense.
6.17 COMPENSATION OF TRUSTEE. Trustor shall pay to Trustee reasonable
compensation and reimbursement for services and expenses in the
administration of this trust, including, without limitation, reasonable
attorneys' fees. Trustor shall pay all indebtedness arising under this
Section immediately upon demand by Trustee or Beneficiary together with
interest thereon from the date the indebtedness arises at the rate of
interest then applicable to the principal balance of the Note as specified
therein.
6.18 EXCULPATION. Beneficiary shall not directly or indirectly be liable to
Trustor or any other person as a consequence of: (a) the lawful exercise
of the rights, remedies or powers granted to Beneficiary in this Deed of
Trust; (b) the failure or refusal of Beneficiary to perform or discharge
any obligation or liability of Trustor under any agreement related to the
Property or under this Deed of Trust; or (c) any loss sustained by Trustor
or any third party resulting from Beneficiary's failure to lease the
Property after a Default (hereafter defined) or from any other act or
omission of Beneficiary in managing the Property after a Default unless
the loss is caused by the willful misconduct and bad faith of Beneficiary
and no such liability shall be asserted or enforced against Beneficiary,
all such liability being expressly waived and released by Trustor.
6.19 INDEMNITY. Without in any way limiting any other indemnity contained in
this Deed of Trust, Trustor agrees to defend, indemnify and hold harmless
Trustee and the Beneficiary Group from and against any claim, loss,
damage, cost, expense or liability directly or indirectly arising out of:
(a) the making of the Loan, except for violations of banking laws or
regulations by the Beneficiary Group; (b) this Deed of Trust; (c) the exe-
cution of this trust or the performance of any act required or permitted
hereunder or by law; (d) any failure of Trustor to perform Trustor's
obligations under this Deed of Trust or the other Loan Documents; (e) any
alleged obligation or undertaking on the Beneficiary Group's part to
perform or discharge any of the representations, warranties, conditions,
covenants or other obligations contained in any other document related to
the Property; (f) any act or omission by Trustor or any contractor, agent,
employee or representative of Trustor with respect to the Property; or (g)
any claim, loss, damage, cost, expense or liability directly or indirectly
arising out of: (i) the use, generation, manufacture, storage, treatment,
release, threatened release, discharge, disposal, transportation or
presence of any Hazardous Materials which are found in, on, under or about
the Property (including, without limitation, underground contamination);
or (ii) the breach of any covenant, representation or warranty of Trustor
under Section 6.2 above. The foregoing to the contrary notwithstanding,
this indemnity shall not include any claim, loss, damage, cost, expense or
liability directly or indirectly arising out of the gross negligence or
willful misconduct of any member of the Beneficiary Group or Trustee, or
any claim, loss, damage, cost, expense or liability incurred by the
Beneficiary Group or Trustee arising from any act or incident on the
Property occurring after the full reconveyance and release of the lien of
this Deed of Trust on the Property, or with respect to the matters set
forth in clause (g) above, any claim, loss, damage, cost, expense or
liability incurred by the Beneficiary Group resulting from the
introduction and initial release of Hazardous Materials on the Property
occurring after the transfer of title to the Property at a foreclosure
sale under this Deed of Trust, either pursuant to judicial decree or the
power of sale, or by deed in lieu of such foreclosure. This indemnity
shall include, without limitation: (aa) all consequential damages
(including, without limitation, any third party tort claims or
governmental claims, fines or penalties against Trustee or the Beneficiary
Group); (bb) all court costs and reasonable attorneys' fees (including,
without limitation, expert witness fees) paid or incurred by Trustee or
the Beneficiary Group; and (cc) the costs, whether foreseeable or
unforeseeable, of any investigation, repair, cleanup or detoxification of
the Property which is required by any governmental entity or is otherwise
necessary to render the Property in compliance with all laws and
regulations pertaining to Hazardous Materials. "Beneficiary Group", as
used herein, shall mean (1) Beneficiary (including, without limitation,
any participant in the Loan), (2) any entity controlling, controlled by or
under common control with Beneficiary, (3) the directors, officers,
employees and agents of Beneficiary and such other entities, and (4) the
successors, heirs and assigns of the entities and persons described in
foregoing clauses (1) through (3). Trustor shall pay immediately upon
Trustee's or Beneficiary's demand any amounts owing under this indemnity
together with interest from the date the indebtedness arises until paid at
the rate of interest applicable to the principal balance of the Note as
specified therein. Xxxxxxx agrees to use legal counsel reasonably
acceptable to Trustee and the Beneficiary Group in any action or
proceeding arising under this indemnity. THE PROVISIONS OF THIS SECTION
SHALL SURVIVE THE TERMINATION AND RECONVEYANCE OF THIS DEED OF TRUST, BUT
TRUSTOR'S LIABILITY UNDER THIS INDEMNITY SHALL BE SUBJECT TO THE
PROVISIONS OF THE SECTION IN THE NOTE ENTITLED "BORROWER'S LIABILITY."
6.20 SUBSTITUTION OF TRUSTEE. From time to time, by a writing signed and
acknowledged by Beneficiary and recorded in the Office of the Recorder of
the County in which the Property is situated, Beneficiary may appoint
another trustee to act in the place and stead of Trustee or any successor.
Such writing shall set forth any information required by law. The
recordation of such instrument of substitution shall discharge Trustee
herein named and shall appoint the new trustee as the trustee hereunder
with the same effect as if originally named trustee herein. A writing
recorded pursuant to the provisions of this Section shall be conclusive
proof of the proper substitution of such new trustee.
6.21 RELEASES, EXTENSIONS, MODIFICATIONS AND ADDITIONAL SECURITY. Without
notice to or the consent, approval or agreement of any persons or entities
having any interest at any time in the Property or in any manner obligated
under the Secured Obligations ("Interested Parties"), Beneficiary may,
from time to time: (a) fully or partially release any person or entity
from liability for the payment or performance of any Secured Obligation;
(b) extend the maturity of any Secured Obligation; (c) make any agreement
with Borrower increasing the amount or otherwise altering the terms of any
Secured Obligation; (d) accept additional security for any Secured
Obligation; or (e) release all or any portion of the Property, Collateral
and other security for any Secured Obligation. None of the foregoing
actions shall release or reduce the personal liability of any of said
Interested Parties, or release or impair the priority of the lien of this
Deed of Trust upon the Property.
6.22 SALE OR PARTICIPATION OF LOAN. Trustor agrees that Beneficiary may at
any time sell, assign, participate or securitize all or any portion of
Beneficiary's rights and obligations under the Loan Documents, and that
any such sale, assignment, participation or securitization may be to one
or more financial institutions or other entities, to private investors,
and/or into the public securities market, in Beneficiary's sole
discretion. Trustor further agrees that Beneficiary may disseminate to any
such actual or potential purchaser(s), assignee(s) or participant(s) all
documents and financial and other information heretofore or hereafter
provided to or known to Beneficiary with respect to: (a) the Property and
its operation; and/or (b) any party connected with the Loan (including,
without limitation, Trustor, any partner or member of Trustor, any
constituent partner or member of Trustor, any guarantor and any
nonborrower trustor). In the event of any such sale, assignment,
participation or securitization, Beneficiary and the other parties to the
same shall share in the rights and obligations of Beneficiary set forth in
the Loan Documents as and to the extent they shall agree among themselves.
In connection with any such sale, assignment, participation or
securitization, Trustor further agrees that the Loan Documents shall be
sufficient evidence of the obligations of Trustor to each purchaser,
assignee or participant, and Trustor shall, within 15 days after request
by Beneficiary, deliver an estoppel certificate verifying for the benefit
of Beneficiary and any other party designated by Beneficiary the status
and the terms and provisions of the Loan in form and substance acceptable
to Beneficiary, and enter into such amendments or modifications to the
Loan Documents as may be reasonably required in order to facilitate any
such sale, assignment, participation or securitization without impairing
Trustor's rights or increasing Trustor's obligations. The indemnity
obligations of Trustor under the Loan Documents shall also apply with
respect to any purchaser, assignee or participant.
6.23 RECONVEYANCE. Upon Beneficiary's written request, and upon surrender of
this Deed of Trust or certified copy thereof and any note, instrument or
instruments setting forth all obligations secured hereby to Trustee for
cancellation, Trustee shall reconvey, without warranty, the Property or
that portion thereof then held hereunder. The recitals of any matters or
facts in any reconveyance executed hereunder shall be conclusive proof of
the truthfulness thereof. To the extent permitted by law, the
reconveyance may describe the grantee as "the person or persons legally
entitled thereto". Neither Beneficiary nor Trustee shall have any duty to
determine the rights of persons claiming to be rightful grantees of any
reconveyance. When the Property has been fully reconveyed, the last such
reconveyance shall operate as a reassignment of all future rents, issues
and profits of the Property to the person or persons legally entitled
thereto.
6.24 SUBROGATION. Beneficiary shall be subrogated to the lien of all
encumbrances, whether released of record or not, paid in whole or in part
by Beneficiary pursuant to this Deed of Trust or by the proceeds of any
loan secured by this Deed of Trust.
6.25 YEAR 2000 COMPLIANCE. Trustor shall timely ensure that all software,
hardware, equipment, goods and systems used in the operation of Trustor
or the Property will properly perform date-sensitive functions before,
during and after the year 2000.
ARTICLE 7. DEFAULT
7.1 DEFAULT. For all purposes hereof, "Default" shall mean either an
"Optional Default" (as defined below) or an "Automatic Default" (as
defined below).
a. Optional Default. An "Optional Default" shall occur, at
Beneficiary's option, upon the occurrence of any of the following
events:
(i) Monetary. Borrower or Trustor shall fail to (aa) pay when
due any sums which by their express terms require immediate
payment without any grace period or sums which are payable on
the Maturity Date, or (bb) pay within 5 days when due any other
sums payable under the Note, this Deed of Trust or any of the
other Loan Documents, including without limitation, any monthly
payment due under the Note.
(ii) Failure to Perform. Borrower or Trustor shall fail to
observe, perform or discharge any of Borrower's or Trustor's
obligations, covenants, conditions or agreements, other than
Borrower's or Trustor's payment obligations, under the Note,
this Deed of Trust or any of the other Loan Documents, and (aa)
such failure shall remain uncured for 30 days after written
notice thereof shall have been given to Borrower or Trustor, as
the case may be, by Beneficiary or (bb) if such failure is of
such a nature that it cannot be cured within such 30 day period,
Borrower or Trustor shall fail to commence to cure such failure
within such 30 day period or shall fail to diligently prosecute
such curative action thereafter.
(iii) Representations and Warranties. Any representation,
warranty, certificate or other statement (financial or
otherwise) made or furnished by or on behalf of Borrower,
Trustor, or a guarantor, if any, to Beneficiary or in connection
with any of the Loan Documents, or as an inducement to
Beneficiary to make the Loan, shall be false, incorrect,
incomplete or misleading in any material respect when made or
furnished.
(iv) Condemnation; Attachment. The condemnation, seizure or
appropriation of any material portion (as reasonably determined
by Beneficiary) of the Property; or the sequestration or
attachment of, or levy or execution upon any of the Property,
the Collateral or any other collateral provided by Borrower or
Trustor under any of the Loan Documents, or any material portion
of the other assets of Borrower or Trustor, which sequestration,
attachment, levy or execution is not released or dismissed
within 45 days after its occurrence; or the sale of any assets
affected by any of the foregoing.
(v) Uninsured Casualty. The occurrence of an uninsured casualty
with respect to any material portion (as reasonably determined
by Beneficiary) of the Property unless: (aa) no other Default
has occurred and is continuing at the time of such casualty or
occurs thereafter; (bb) Trustor promptly notifies Beneficiary of
the occurrence of such casualty; and (cc) not more than 45 days
after the occurrence of such casualty, Trustor delivers to
Beneficiary immediately available funds ("Restoration Funds") in
an amount sufficient, in Beneficiary's reasonable opinion, to
pay all costs of the repair or restoration (including, without
limitation, taxes, financing charges, insurance and rent during
the repair period). So long as no Default has occurred and is
continuing at the time of Beneficiary's receipt of the
Restoration Funds and no Default occurs thereafter, Beneficiary
shall make the Restoration Funds available for the repair or
restoration of the Property. Notwithstanding the foregoing,
Beneficiary shall have no obligation to make any Restoration
Funds available for repair or restoration of the Property unless
and until all the conditions set forth in clauses (ii) and (iii)
of the second sentence of Section 6.11(b) of this Deed of Trust
have been satisfied. Trustor acknowledges that the specific
conditions described above are reasonable.
(vi) Adverse Financial Change. Any material adverse change in
the financial condition of Borrower or any general partner of
Borrower, any guarantor, or any other person or entity from the
condition shown on the financial statement(s) submitted to
Beneficiary and relied upon by Beneficiary in making the Loan,
and which change Beneficiary reasonably determines will have a
material adverse effect on (aa) the business, operations or
condition of the Property; or (bb) the ability of Borrower or
Trustor to pay or perform Borrower's or Trustor's obligations in
accordance with the terms of the Note, this Deed of Trust, and
the other Loan Documents.
b. Automatic Default. An "Automatic Default" shall occur
automatically upon the occurrence of any of the following events:
(i) Voluntary Bankruptcy, Insolvency, Dissolution. (aa)
Xxxxxxxx's filing a petition for relief under the Bankruptcy
Reform Act of 1978, as amended or recodified ("Bankruptcy
Code"), or under any other present or future state or federal
law regarding bankruptcy, reorganization or other relief to
debtors (collectively, "Debtor Relief Law"); or (bb) Borrower's
filing any pleading in any involuntary proceeding under the
Bankruptcy Code or other Debtor Relief Law which admits the
jurisdiction of a court to regulate Borrower or the Property or
the petition's material allegations regarding Xxxxxxxx's
insolvency; or (cc) Xxxxxxxx's making a general assignment for
the benefit of creditors; or (dd) Borrower's applying for, or
the appointment of, a receiver, trustee, custodian or
liquidator of Borrower or any of its property; or (ee) the
filing by or against Borrower of a petition seeking the
liquidation or dissolution of Borrower or the commencement of
any other procedure to liquidate or dissolve Borrower.
(ii) Involuntary Bankruptcy. Xxxxxxxx's failure to effect a full
dismissal of any involuntary petition under the Bankruptcy Code
or other Debtor Relief Law that is filed against Borrower or in
any way restrains or limits Borrower or Beneficiary regarding
the Loan or the Property, prior to the earlier of the entry of
any order granting relief sought in the involuntary petition or
45 days after the date of filing of the petition.
(iii) Partners, Guarantors. The occurrence of an event specified
in Sections (i) or (ii) as to Trustor, any general partner of
Borrower or Trustor, or any guarantor or other person or entity
in any manner obligated to Beneficiary under the Loan
Documents.
7.2 ACCELERATION. Upon the occurrence of an Optional Default, Beneficiary
may, at its option, declare all sums owing to Beneficiary under the Note
and the other Loan Documents immediately due and payable. Upon the
occurrence of an Automatic Default, all sums owing to Beneficiary under
the Note and the other Loan Documents shall automatically become
immediately due and payable.
7.3 RIGHTS AND REMEDIES. In addition to the rights and remedies in Section
7.2 above, at any time after a Default, Beneficiary shall have all of the
following rights and remedies:
a. Entry on Property. With or without notice, and without releasing
Trustor from any Secured Obligation, and without becoming a
mortgagee in possession, to enter upon the Property from time to
time and to do such acts and things as Beneficiary or Trustee deem
necessary or desirable in order to inspect, investigate, assess and
protect the security hereof or to cure any Default, including,
without limitation: (i) to take and possess all documents, books,
records, papers and accounts of Trustor, Borrower or the then owner
of the Property which relate to the Property; (ii) to make,
terminate, enforce or modify leases of the Property upon such terms
and conditions as Beneficiary deems proper; (iii) to make repairs,
alterations and improvements to the Property necessary, in Trustee's
or Beneficiary's sole judgment, to protect or enhance the security
hereof; (iv) to appear in and defend any action or proceeding
purporting to affect the security hereof or the rights or powers of
Beneficiary or Trustee hereunder; (v) to pay, purchase, contest or
compromise any encumbrance, charge, lien or claim of lien which, in
the sole judgment of either Beneficiary or Trustee, is or may be
senior in priority hereto, the judgment of Beneficiary or Trustee
being conclusive as between the parties hereto; (vi) to obtain
insurance; (vii) to pay any premiums or charges with respect to
insurance required to be carried hereunder; (viii) to obtain a court
order to enforce Beneficiary's right to enter and inspect the
Property for Hazardous Materials, in which regard the decision of
Beneficiary as to whether there exists a release or threatened
release of Hazardous Materials onto the Property shall be deemed
reasonable and conclusive as between the parties hereto; (ix) to
have a receiver appointed pursuant to applicable law to enforce
Beneficiary's rights to enter and inspect the Property for Hazardous
Materials; and/or (x) to employ legal counsel, accountants,
engineers, consultants, contractors and other appropriate persons to
assist them;
b. Appointment of Receiver. With or without notice or hearing, to
apply to a court of competent jurisdiction for and obtain appointment
of a receiver, trustee, liquidator or conservator of the Property,
for any purpose, including, without limitation, to enforce
Beneficiary's right to collect Payments and to enter on and inspect
the Property for Hazardous Materials, as a matter of strict right and
without regard to: (i) the adequacy of the security for the repayment
of the Secured Obligations; (ii) the existence of a declaration that
the Secured Obligations are immediately due and payable; (iii) the
filing of a notice of default; or (iv) the solvency of Trustor,
Borrower or any guarantor or other person or entity in any manner
obligated to Beneficiary under the Loan Documents;
c. Judicial Foreclosure; Injunction. To commence and maintain an
action or actions in any court of competent jurisdiction to foreclose
this instrument as a mortgage or to obtain specific enforcement of
the covenants of Trustor hereunder, and Trustor agrees that such
covenants shall be specifically enforceable by injunction or any
other appropriate equitable remedy and that for the purposes of any
suit brought under this subparagraph, Trustor waives the defense of
laches and any applicable statute of limitations;
d. Nonjudicial Foreclosure. To execute a written notice of such
Default and of the election to cause the Property to be sold to
satisfy the Secured Obligations. Trustee shall give and record such
notice as the law then requires as a condition precedent to a
trustee's sale. When the minimum period of time required by law
after such notice has elapsed, Trustee, without notice to or demand
upon Trustor except as required by law, shall sell the Property at
the time and place of sale fixed by it in the notice of sale, at one
or several sales, either as a whole or in separate parcels and in
such manner and order, all as Beneficiary in its sole discretion may
determine, at public auction to the highest bidder for cash, in
lawful money of the United States, payable at time of sale. Neither
Trustor nor any other person or entity other than Beneficiary shall
have the right to direct the order in which the Property is sold.
Subject to requirements and limits imposed by law, Trustee may, from
time to time postpone sale of all or any portion of the Property by
public announcement at such time and place of sale, and from time to
time may postpone the sale by public announcement at the time and
place fixed by the preceding postponement. A sale of less than the
whole of the Property or any defective or irregular sale made
hereunder shall not exhaust the power of sale provided for herein.
Trustee shall deliver to the purchaser at such sale a deed conveying
the Property or portion thereof so sold, but without any covenant or
warranty, express or implied. The recitals in the deed of any
matters or facts shall be conclusive proof of the truthfulness
thereof. Any person, including Trustee, Trustor or Beneficiary may
purchase at the sale;
Upon sale of the Property at any judicial or nonjudicial foreclosure,
Beneficiary may credit bid (as determined by Beneficiary in its sole
and absolute discretion) all or any portion of the Secured
Obligations. In determining such credit bid, Beneficiary may, but is
not obligated to, take into account all or any of the following: (i)
appraisals of the Property as such appraisals may be discounted or
adjusted by Beneficiary in its sole and absolute underwriting
discretion; (ii) expenses and costs incurred by Beneficiary with
respect to the Property prior to foreclosure; (iii) expenses and
costs which Beneficiary anticipates will be incurred with respect to
the Property after foreclosure, but prior to resale, including,
without limitation, costs of structural reports and other due
diligence, costs to carry the Property prior to resale, costs of
resale (e.g. commissions, attorneys' fees, and taxes), costs of any
Hazardous Materials clean-up and monitoring, costs of deferred
maintenance, repair, refurbishment and retrofit, costs of defending
or settling litigation affecting the Property, and lost opportunity
costs (if any), including the time value of money during any
anticipated holding period by Beneficiary; (iv) declining trends in
real property values generally and with respect to properties similar
to the Property; (v) anticipated discounts upon resale of the
Property as a distressed or foreclosed property; (vi) the fact of
additional collateral (if any), for the Secured Obligations; and
(vii) such other factors or matters that Beneficiary (in its sole and
absolute discretion) deems appropriate. In regard to the above,
Trustor acknowledges and agrees that: (viii) Beneficiary is not
required to use any or all of the foregoing factors to determine the
amount of its credit bid; (ix) this paragraph does not impose upon
Beneficiary any additional obligations that are not imposed by law at
the time the credit bid is made; (x) the amount of Beneficiary's
credit bid need not have any relation to any loan-to-value ratios
specified in the Loan Documents or previously discussed between
Trustor and Beneficiary; and (xi) Beneficiary's credit bid may be (at
Beneficiary's sole and absolute discretion) higher or lower than any
appraised value of the Property;
e. Multiple Foreclosures. To resort to and realize upon the security
hereunder and any other security now or later held by Beneficiary
concurrently or successively and in one or several consolidated or
independent judicial actions or lawfully taken nonjudicial
proceedings, or both, and to apply the proceeds received upon the
Secured Obligations all in such order and manner as Trustee and
Beneficiary or either of them determine in their sole discretion;
f. Rights to Collateral. To exercise all rights Trustee or
Beneficiary may have with respect to the Collateral under this Deed
of Trust, the UCC or otherwise at law; and
g. Other Rights. To exercise such other rights as Trustee or
Beneficiary may have at law or in equity or pursuant to the terms and
conditions of this Deed of Trust or any of the other Loan Documents.
In connection with any sale or sales hereunder, Beneficiary may elect to
treat any of the Property which consists of a right in action or which is
property that can be severed from the Property (including, without
limitation, any improvements forming a part thereof) without causing
structural damage thereto as if the same were personal property or a
fixture, as the case may be, and dispose of the same in accordance with
applicable law, separate and apart from the sale of the Property. Any
sale of Collateral hereunder shall be conducted in any manner permitted by
the UCC.
7.4 APPLICATION OF FORECLOSURE SALE PROCEEDS. If any foreclosure sale is
effected, Trustee shall apply the proceeds of such sale in the following
order of priority: First, to the costs, fees and expenses of exercising
the power of sale and of sale, including, without limitation, the payment
of the Trustee's fees and attorneys' fees permitted pursuant to
subdivision (b) of California Civil Code Section 2924d and subdivision
(b) of Section 2924k; Second, to the payment of the Secured Obligations
which are secured by this Deed of Trust, in such order as Beneficiary
shall determine in its sole discretion; Third, to satisfy the
outstanding balance of obligations secured by any junior liens or
encumbrances in the order of their priority; and Fourth, to the Trustor
or the Trustor's successor in interest, or in the event the Property has
been sold or transferred to another, to the vested owner of record at the
time of the Trustee's sale.
7.5 WAIVER OF MARSHALING RIGHTS. Trustor, for itself and for all parties
claiming through or under Trustor, and for all parties who may acquire a
lien on or interest in the Property, hereby waives all rights to have the
Property and/or any other property, including, without limitation, the
Collateral, which is now or later may be security for any Secured
Obligation, marshaled upon any foreclosure of this Deed of Trust or on a
foreclosure of any other security for any of the Secured Obligations.
7.6 NO CURE OR WAIVER. Neither Beneficiary's nor Trustee's nor any
receiver's entry upon and taking possession of all or any part of the
Property, nor any collection of rents, issues, profits, insurance
proceeds, condemnation proceeds or damages, other security or proceeds of
other security, or other sums, nor the application of any collected sum to
any Secured Obligation, nor the exercise of any other right or remedy by
Beneficiary or Trustee or any receiver shall cure or waive any Default or
notice of default under this Deed of Trust, or nullify the effect of any
notice of default or sale (unless all Secured Obligations then due have
been paid or performed and Trustor has cured all other Defaults
hereunder), or impair the status of the security, or prejudice Beneficiary
or Trustee in the exercise of any right or remedy, or be construed as an
affirmation by Beneficiary of any tenancy, lease or option or a
subordination of the lien of this Deed of Trust.
7.7 PAYMENT OF COSTS, EXPENSES AND ATTORNEYS' FEES. Trustor agrees to pay to
Beneficiary immediately and upon demand all costs and expenses incurred by
Trustee and Beneficiary in the enforcement of the terms and conditions of
this Deed of Trust (including, without limitation, statutory trustee's
fees, court costs and attorneys' fees, whether incurred in litigation or
not) with interest from the date of expenditure until said sums have been
paid at the rate of interest applicable to the principal balance of the
Note as specified therein.
7.8 POWER TO FILE NOTICES AND CURE DEFAULTS. Trustor hereby irrevocably
appoints Beneficiary and its successors and assigns, as its attorney-in-
fact, which agency is coupled with an interest, to perform any obligation
of Trustor hereunder upon the occurrence of an event, act or omission
which, with notice or passage of time or both, would constitute a Default,
provided, however, that: (i) Beneficiary as such attorney-in-fact shall
only be accountable for such funds as are actually received by
Beneficiary; and (ii) Beneficiary shall not be liable to Trustor or any
other person or entity for any failure to act under this Section.
7.9 REMEDIES CUMULATIVE. All rights and remedies of Beneficiary and Xxxxxxx
provided hereunder are cumulative and are in addition to all rights and
remedies provided by applicable law (including specifically that of
foreclosure of this instrument as though it were a mortgage) or in any
other agreements between Trustor and Beneficiary. Beneficiary may enforce
any one or more remedies or rights hereunder successively or concurrently.
ARTICLE 8. MISCELLANEOUS PROVISIONS
8.1 ADDITIONAL PROVISIONS. The Loan Documents contain or incorporate by
reference the entire agreement of the parties with respect to matters
contemplated herein and supersede all prior negotiations. The Loan
Documents grant further rights to Beneficiary and contain further
agreements and affirmative and negative covenants by Trustor which apply
to this Deed of Trust and to the Property and such further rights and
agreements are incorporated herein by this reference. THE OBLIGATIONS AND
LIABILITIES OF TRUSTOR UNDER THIS DEED OF TRUST AND THE OTHER LOAN
DOCUMENTS ARE SUBJECT TO THE PROVISIONS OF THE SECTION IN THE NOTE
ENTITLED "BORROWER'S LIABILITY."
8.2 NON-WAIVER. By accepting payment of any amount secured hereby after its
due date or late performance of any other Secured Obligation, Beneficiary
shall not waive its right against any person obligated directly or
indirectly hereunder or on any Secured Obligation, either to require
prompt payment or performance when due of all other sums and obligations
so secured or to declare default for failure to make such prompt payment
or performance. No exercise of any right or remedy by Beneficiary or
Trustee hereunder shall constitute a waiver of any other right or remedy
herein contained or provided by law. No failure by Beneficiary or Trustee
to exercise any right or remedy hereunder arising upon any Default shall
be construed to prejudice Beneficiary's or Trustee's rights or remedies
upon the occurrence of any other or subsequent Default. No delay by
Beneficiary or Trustee in exercising any such right or remedy shall be
construed to preclude Beneficiary or Trustee from the exercise thereof at
any time while that Default is continuing. No notice to nor demand on
Trustor shall of itself entitle Trustor to any other or further notice or
demand in similar or other circumstances.
8.3 CONSENTS AND APPROVALS. Wherever Beneficiary's consent, approval,
acceptance or satisfaction is required under any provision of this Deed of
Trust or any of the other Loan Documents, such consent, approval,
acceptance or satisfaction shall not be unreasonably withheld, conditioned
or delayed by Beneficiary unless such provision expressly so provides.
8.4 PERMITTED CONTESTS. After prior written notice to Beneficiary, Trustor
may contest, by appropriate legal or other proceedings conducted in good
faith and with due diligence, the amount, validity or application, in
whole or in part, of any lien, levy, tax or assessment, or any lien of any
laborer, mechanic, materialman, supplier or vendor, or the application to
Trustor or the Property of any law or the validity thereof, the assertion
or imposition of which, or the failure to pay when due, would constitute a
Default; provided that (a) Trustor pursues the contest diligently, in a
manner which Beneficiary determines is not prejudicial to Beneficiary, and
does not impair the lien of this Deed of Trust; (b) the Property, or any
part hereof or estate or interest therein, shall not be in any danger of
being sold, forfeited or lost by reason of such proceedings; (c) in the
case of the contest of any law or other legal requirement, Beneficiary
shall not be in any danger of any civil or criminal liability; and (d) if
required by Beneficiary, Trustor deposits with Beneficiary any funds or
other forms of assurance (including a bond or letter of credit)
satisfactory to Beneficiary to protect Beneficiary from the consequences
of the contest being unsuccessful. Trustor's right to contest pursuant to
the terms of this provision shall in no way relieve Trustor or Borrower of
its obligations under the Loan or to make payments to Beneficiary as and
when due.
8.5 FURTHER ASSURANCES. Trustor shall, upon demand by Beneficiary or
Trustee, execute, acknowledge (if appropriate) and deliver any and all
documents and instruments and do or cause to be done all further acts
reasonably necessary or appropriate to effectuate the provisions hereof.
8.6 ATTORNEYS' FEES. If any legal action, suit or proceeding is commenced
between Trustor and Beneficiary regarding their respective rights and
obligations under this Deed of Trust or any of the other Loan Documents,
the prevailing party shall be entitled to recover, in addition to damages
or other relief, costs and expenses, reasonable attorneys' fees and court
costs (including, without limitation, expert witness fees). As used
herein the term "prevailing party" shall mean the party which obtains the
principal relief it has sought, whether by compromise settlement or
judgment. If the party which commenced or instituted the action, suit or
proceeding shall dismiss or discontinue it without the concurrence of the
other party, such other party shall be deemed the prevailing party.
8.7 TRUSTOR AND BENEFICIARY DEFINED. The term "Trustor" includes both the
original Trustor and any subsequent owner or owners of any of the
Property, and the term "Beneficiary" includes the original Beneficiary and
any future owner or holder, including assignees, pledges and participants,
of the Note or any interest therein.
8.8 DISCLAIMERS.
a. Relationship. The relationship of Trustor and Beneficiary under
this Deed of Trust and the other Loan Documents is, and shall at all
times remain, solely that of borrower and lender; and Beneficiary
neither undertakes nor assumes any responsibility or duty to Trustor
or to any third party with respect to the Property. Notwithstanding
any other provisions of this Deed of Trust and the other Loan
Documents: (i) Beneficiary is not, and shall not be construed to
be, a partner, joint venturer, member, alter ego, manager,
controlling person or other business associate or participant of any
kind of Trustor, and Beneficiary does not intend to ever assume such
status; (ii) Beneficiary's activities in connection with this Deed
of Trust and the other Loan Documents shall not be "outside the
scope of activities of a lender of money" within the meaning of
California Civil Code Section 3434, as amended or recodified from
time to time, and Beneficiary does not intend to ever assume any
responsibility to any person for the quality, suitability, safety or
condition of the Property; and (iii) Beneficiary shall not be deemed
responsible for or a participant in any acts, omissions or decisions
of Trustor.
b. No Liability. Beneficiary shall not be directly or indirectly
liable or responsible for any loss, claim, cause of action,
liability, indebtedness, damage or injury of any kind or character
to any person or property arising from any construction on, or
occupancy or use of, the Property, whether caused by or arising
from: (i) any defect in any building, structure, grading, fill,
landscaping or other improvements thereon or in any on-site or off-
site improvement or other facility therein or thereon; (ii) any act
or omission of Trustor or any of Trustor's agents, employees,
independent contractors, licensees or invitees; (iii) any accident
in or on the Property or any fire, flood or other casualty or hazard
thereon; (iv) the failure of Trustor or any of Trustor's licensees,
employees, invitees, agents, independent contractors or other
representatives to maintain the Property in a safe condition; or (v)
any nuisance made or suffered on any part of the Property.
8.9 SEVERABILITY. If any term of this Deed of Trust, or the application
thereof to any person or circumstances, shall, to any extent, be invalid
or unenforceable, the remainder of this Deed of Trust, or the application
of such term to persons or circumstances other than those as to which it
is invalid or unenforceable, shall not be affected thereby, and each term
of this Deed of Trust shall be valid and enforceable to the fullest extent
permitted by law.
8.10 RELATIONSHIP OF ARTICLES. The rights, remedies and interests of
Beneficiary under the deed of trust established by Article I and the
security agreement established by Article IV are independent and
cumulative, and there shall be no merger of any lien created by the deed
of trust with any security interest created by the security agreement.
Beneficiary may elect to exercise or enforce any of its rights, remedies
or interests under either or both the deed of trust or the security
agreement as Beneficiary may from time to time deem appropriate. The
absolute assignment of rents and leases established by Article III is
similarly independent of and separate from the deed of trust and the
security agreement.
8.11 MERGER. No merger shall occur as a result of Beneficiary's acquiring any
other estate in, or any other lien on, the Property unless Beneficiary
consents to a merger in writing.
8.12 OBLIGATIONS OF TRUSTOR, JOINT AND SEVERAL. If more than one person has
executed this Deed of Trust as "Trustor", the obligations of all such
persons hereunder shall be joint and several.
8.13 SEPARATE AND COMMUNITY PROPERTY. Any married person who executes this
Deed of Trust as a Trustor agrees that any money judgment which Benefi-
ciary or Trustee obtains pursuant to the terms of this Deed of Trust or
any other obligation of that married person secured by this Deed of Trust
may be collected by execution upon any separate property or community
property of that person.
8.14 INTEGRATION; INTERPRETATION. The Loan Documents contain or expressly
incorporate by reference the entire agreement of the parties with respect
to the matters contemplated therein and supersede all prior negotiations
or agreements, written or oral. The Loan Documents shall not be modified
except by written instrument executed by all parties. Any reference in
any of the Loan Documents to the Property or Collateral shall include all
or any part of the Property or Collateral. Any reference to the Loan
Documents includes any amendments, renewals or extensions now or
hereafter approved by Beneficiary in writing. When the identity of the
parties or other circumstances make it appropriate, the masculine gender
includes the feminine and/or neuter, and the singular number includes the
plural.
8.15 CAPITALIZED TERMS. Capitalized terms not otherwise defined herein shall
have the meanings set forth in the Note.
8.16 SUCCESSORS IN INTEREST. The terms, covenants, and conditions herein
contained shall be binding upon and inure to the benefit of the heirs,
successors and assigns of the parties hereto. The foregoing sentence
shall not be construed to permit Trustor to assign the Loan except as
otherwise permitted under the Note or the other Loan Documents.
8.17 GOVERNING LAW. This Deed of Trust was accepted by Beneficiary in the
state of California and the proceeds of the Note secured hereby were
disbursed from the state of California, which state the parties agree has
a substantial relationship to the parties and to the underlying
transaction embodied hereby. Accordingly, in all respects, including,
without limiting the generality of the foregoing, matters of
construction, validity, enforceability and performance, this Deed of
Trust, the Note and the other Loan Documents and the obligations arising
hereunder and thereunder shall be governed by, and construed in
accordance with, the laws of the state of California applicable to
contracts made and performed in such state and any applicable law of the
United States of America, except that at all times the provisions for
enforcement of Beneficiary's STATUTORY POWER OF SALE granted hereunder
and the creation, perfection and enforcement of the security interests
created pursuant thereto and pursuant to the other Loan Documents shall
be governed by and construed according to the law of the state where the
Property is located. Except as provided in the immediately preceding
sentence, Trustor hereby unconditionally and irrevocably waives, to the
fullest extent permitted by law, any claim to assert that the law of any
jurisdiction other than California governs this Deed of Trust, the Note
and other Loan Documents.
8.18 CONSENT TO JURISDICTION. Trustor irrevocably submits to the jurisdiction
of: (a) any state or federal court sitting in the state of California over
any suit, action, or proceeding, brought by Trustor against Beneficiary,
arising out of or relating to this Deed of Trust, the Note or the Loan;
(b) any state or federal court sitting in the state where the Property is
located or the state in which Trustor's principal place of business is
located over any suit, action or proceeding, brought by Beneficiary
against Trustor, arising out of or relating to this Deed of Trust, the
Note or the Loan; and (c) any state court sitting in the county of the
state where the Property is located over any suit, action, or proceeding,
brought by Beneficiary to exercise its STATUTORY POWER OF SALE under this
Deed of Trust or any action brought by Beneficiary to enforce its rights
with respect to the Collateral. Trustor irrevocably waives, to the
fullest extent permitted by law, any objection that Trustor may now or
hereafter have to the laying of venue of any such suit, action, or
proceeding brought in any such court and any claim that any such suit,
action, or proceeding brought in any such court has been brought in an
inconvenient forum.
8.19 EXHIBITS. Exhibit A is incorporated into this Deed of Trust by this
reference.
8.20 ADDRESSES; REQUEST FOR NOTICE. All notices and other communications
that are required or permitted to be given to a party under this Deed of Trust
shall be in writing, refer to the Loan number, and shall be sent to such
party, either by personal delivery, by overnight delivery service, by
certified first class mail, return receipt requested, or by facsimile
transmission to the addressee or facsimile number below. All such notices
and communications shall be effective upon receipt of such delivery or
facsimile transmission. The addresses of the parties are set forth on page
1 of this Deed of Trust and the facsimile numbers for the parties are as
follows:
Beneficiary:
XXXXX FARGO BANK, N.A.
FAX No.: (000) 000-0000
Trustee:
AMERICAN SECURITIES COMPANY
FAX No.: (000) 000-0000
Trustor:
FREMONT HOLDING L.L.C.
FAX No.: (000) 000-0000
Trustor's principal place of business is at the address set forth on page
1 of this Deed of Trust.
Any Trustor whose address is set forth on page 1 of this Deed of Trust
hereby requests that a copy of notice of default and notice of sale be
delivered to it at that address. Failure to insert an address shall
constitute a designation of Trustor's last known address as the address
for such notice. Any party shall have the right to change its address for
notice hereunder to any other location within the continental United
States by giving 30 days notice to the other parties in the manner set
forth above.
8.21 COUNTERPARTS. This Deed of Trust may be executed in any number of
counterparts, each of which, when executed and delivered, will be deemed
an original and all of which taken together, will be deemed to be one and
the same instrument.
8.22 WAIVER OF JURY TRIAL. BENEFICIARY AND TRUSTOR HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER,
OR IN CONNECTION WITH, THIS DEED OF TRUST OR ANY OTHER LOAN DOCUMENT, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF BENEFICIARY OR TRUSTOR. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR BENEFICIARY TO ENTER INTO THIS DEED OF TRUST.
IN WITNESS WHEREOF, Xxxxxxx has executed this Deed of Trust as of the day and
year set forth above.
FREMONT HOLDING L.L.C.,
a Delaware limited liability company
By: Fremont Management, Inc.,
a Delaware corporation,
Manager
By: _______________________________
Its: _______________________________
(ALL SIGNATURES MUST BE ACKNOWLEDGED)
Loan No. 31-0900011A
EXHIBIT A
Description Of Land
Exhibit A to DEED OF TRUST AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND
SECURITY AGREEMENT (AND FIXTURE FILING) ("Deed of Trust") among FREMONT HOLDING
L.L.C., a Delaware limited liability company, as "Trustor", AMERICAN
SECURITIES COMPANY, as "Trustee", and XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as "Beneficiary".
Description of Land. The Land referred to in this Deed of Trust is situated in
the county of Alameda, state of California and is described as follows:
PARCEL 16, PARCEL MAP 4483, FILED MARCH 28, 1985 IN BOOK 152, PAGES 78 THROUGH
82 OF MAPS, ALAMEDA COUNTY RECORDS.
APN: 000-0000-000
000-0000-000
(..continued)
EXHIBIT A
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