EXHIBIT 4.1
BUSINESS LOAN AGREEMENT
▇▇▇▇▇'▇ Liquid Gold-Inc. Citywide Banks
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The undersigned applicant(s) (hereinafter called "Debtor") has made an
application to Citywide Banks (hereinafter called "Bank") for a loan in the
amount of $6,000,000.00 to be evidenced by the promissory note of "Debtor"
payable to the order of "Bank" as follows:
See promissory note for description
In consideration of the "Bank" granting said loan, "Debtor" covenants and agrees
to the following terms and conditions:
1. Said Note and any extensions or renewals thereof, to be secured by a
first deed of trust on ▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇.
2. The Debtor agrees as follows:
(a) To furnish the Bank on an ANNUAL basis, business financial
statements.
(b) To furnish the Bank on a QUARTERLY basis, business financial
statements.
(c) To maintain at the end of each fiscal quarter a consolidated
current ratio of at least 1:1, (determined in accordance with
Generally Accepted Accounting Principles (GAAP) as currently in
effect.)
(d) To Maintain long term debt/consolidated net worth (in accordance
with Generally Accepted Accounting Principles (GAAP) as currently
in effect) of not more than 1:1.
(e) No dividends will be declared that would result in long term
debt/consolidated net worth (in accordance with Generally
Accepted Accounting Principles (GAAP)) being greater than 1:1.
(f) Borrower shall advise bank immediately of any adverse change in
the business, property or operating conditions, including
litigation or threat of litigation.
3. Failure of the Bank to exercise any option hereunder, or declare
immediately due and payable the balance remaining unpaid on any note
or any renewal or part renewal thereof by reason of any breach on the
part of the Debtor of any of the terms, provisions, agreements,
warranties or conditions herein, or by reason of the happening of the
events of default as set forth in this Agreement shall not constitute
a waiver thereof by the Bank or preclude the Bank from exercising such
option at any time by reason of such breach or happening of such event
or any subsequent happening of such event.
4. The Bank shall not be deemed to have waived any of the terms,
agreements, conditions and covenants thereof, except in writing,
signed by an officer of the "Bank" and delivered to the Debtor.
5. The Bank may at its option, declare immediately due and payable
without presentation, protest or notice of any kind, all of which are
hereby waived, the balance remaining unpaid on any note or notes
evidencing the debt created hereby, upon the happening of any of the
following events of default:
(a) If any certificate of statement furnished by the Debtor; pursuant
to or in connection with this Agreement shall prove to have been
false in any material respect at the date of which the facts
therein set forth were certified, or have omitted any substantial
contingent or unliquidated liability or claim against the Debtor
known to the Debtor or if upon the date of the execution of this
Agreement there shall have been any material adverse change in
any of the facts disclosed on any such statement, which change
shall not have been disclosed by the Debtor to the Bank in
writing at or prior to the time of such execution.
PAGE 2
(b) The entry of any judgment or judgments against the Debtor
aggregating at any one time in excess of $1,000,000.00 shall
remain unsatisfied, undischarged or unsecured for a period of
twenty (20) days, or as to which a stay of execution shall not
have been obtained within twenty (20) days of the entry thereof.
The Debtor may not, however, be declared in default by reason of
the entry of any judgment so long as the same shall be contested
by the Debtor in good faith, and proper security be given
therefor. The Bank may however, upon the entry of any judgment or
judgments against the Debtor aggregating at any one time in
excess of $1,000,000.00, immediately exercise any banker's lien
or right of offset against the Debtor with the same force and
effect as though the note or notes given hereunder were matured.
(c) If any governmental agency or department shall take control of a
substantial part of the Property of the Debtor and shall continue
such control for thirty (30) days.
(d) If any tax lien is filed by the government against the real
Property of the Debtor and remains unsatisfied, undischarged or
unsecured for a period of ten days.
6. This Loan Agreement may be amended by a supplemental Loan Agreement
setting forth such amendment or amendments when properly executed by
all the parties of this Loan Agreement.
7. Lender agrees that all provisions enforced by Lender shall be
reasonable and Grantors performance shall be acceptable if performed
in all material respects.
8. Application of proceeds shall be applicable on losses from any
casualty or condemnation exceeding $500,000.00.
9. Payment default is defined as payment not made within 10 days after
due date. It is agreed that Grantor will have 30 days, after Grantor
is notified by Lender of defaults, to cure each default.
10. The representations and warranties of the Borrower made in the Deed of
Trust and any other loan documentation are modified by the disclosure
letter dated 11/21/00 delivered by the Borrower to the Bank.
11. If there are any inconsistencies or conflicts between the terms of
this Business Loan Agreement and any other loan documentation, the
terms of this Business Loan Agreement shall control.
This Loan Agreement and all rights hereunder, shall be governed by the laws of
the State of Colorado and shall be binding upon the Debtor, its heirs,
executors, administrators, successors and/or assigns, and shall inure to the
benefit of the Bank, and its successors and/or assigns. The obligations and
conditions of this Loan Agreement shall continue until all indebtedness and
liability of the Debtor, now or hereafter existing, to the Bank has been paid
and satisfied in full.
Dated this 21st day of November, 2000.
Citywide Banks ▇▇▇▇▇'▇ Liquid Gold-Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
PROMISSORY NOTE
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Principal Loan Date Maturity Loan No. Call/Coll Account Officer Initials
$6,000,000.00 11-21-2000 11-21-2007 697515169 150/040 WFL JM
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References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item. Any item above
containing "***" has been omitted due to text length limitations.
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Borrower: ▇▇▇▇▇'▇ LIQUID GOLD-INC. (TIN: ▇▇-▇▇▇▇▇▇▇) Lender: Citywide Banks
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(▇▇▇) ▇▇▇-▇▇▇▇
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Principal Amount: $6,000,000.00 Initial Rate: 9.500% Date of Note: November 21, 2000
PROMISE TO PAY. ▇▇▇▇▇'▇ LIQUID GOLD-INC. ("Borrower") promises to pay to
Citywide Banks ("Lender"), or order, in lawful money of the United States of
America, the principal amount of Six Million & 00/100 Dollars
($6,000,000.00), together with interest on the unpaid principal balance from
November 21, 2000, until paid in full.
PAYMENT. Subject to any payment changes resulting from changes in the index,
Borrower will pay this loan in 83 payments of $98,465.28; each payment and an
irregular last payment estimated at $98,465.72. Borrower's first payment is
due December 21, 2000, and all subsequent payments are due on the same day of
each month after that Borrower's final payment will be due on November 21,
2007, and will be for all principal and all accrued interest not yet paid.
Payments include principal and interest. Unless otherwise agreed or required
by applicable law, payments will be applied first to accrued unpaid interest,
then to principal, and any remaining amount to any unpaid collection costs
and late charges. The annual interest rate for this Note is computed on a
365/360 basis; that is, by applying the ratio of the annual interest rate
over a year of 360 days, multiplied by the outstanding principal balance,
multiplied by the actual number of days the principal balance is outstanding.
Borrower will pay Lender at Lender's address shown above or at such other
place as Lender may designate in writing.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
from time to time based on changes in an index which is the Bank Base Rate
(the "Index"). The Index is not necessarily the lowest rate charged by
Lender on its loans and is set by Lender in its sole discretion. If the Index
becomes unavailable during the term of this loan, Lender may designate a
substitute index after notifying Borrower. Lender will tell Borrower the
current index rate upon Borrower's request. The interest rate change will not
occur more often than each year. Borrower understands that Lender may make
loans based on other rates as well. THE INDEX CURRENTLY IS 9.500% PER ANNUM.
THE INTEREST RATE TO BE APPLIED TO THE UNPAID PRINCIPAL BALANCE OF THIS NOTE
WILL BE AT A RATE EQUAL TO THE INDEX, RESULTING IN AN INITIAL RATE OF 9.500%
PER ANNUM. NOTICE: Under no circumstances will the interest rate on this Note
be more than the maximum rate allowed by applicable law. Whenever increases
occur in the interest rate, Lender, at its option may do one or more of the
following: (A) increase Borrower's payments to ensure Borrower's loan will
pay off by its original final maturity date, (B) increase Borrower's payments
to cover accruing interest, (C) increase the number of Borrower's payments,
and (D) continue Borrower's payments at the same amount and increase
Borrower's final payment.
PREPAYMENT; MINIMUM INTEREST CHARGE. Borrower agrees that all loan fees and
other prepaid finance charges are earned fully as of the date of the loan and
will not be subject to refund upon early payment (whether voluntary or as a
result of default), except as otherwise required by law. In any event, even upon
full prepayment of this Note, Borrower understands that Lender is entitled to a
MINIMUM INTEREST CHARGE OF $25.00. Other than Borrower's obligation to pay any
minimum interest charge, Borrower may pay without penalty all or a portion of
the amount owed earlier than it is due. Early payments will not, unless agreed
to by Lender in writing, relieve Borrower of Borrower's obligation to continue
to make payments under the payment schedule. Rather, early payments will reduce
the principal balance due and may result in Borrower's making fewer payments.
Borrower agrees not to send Lender payments marked "paid in full", "without
recourse", or similar language. If Borrower sends such a payment, Lender may
accept it without losing any of Lender's rights under this Note, and Borrower
will remain obligated to pay any further amount owed to Lender. All written
communications concerning disputed amounts, including any check or other payment
instrument that indicates that the payment constitutes "payment in full" of the
amount owed or that is tendered with other conditions or limitations or as full
satisfaction of a disputed amount must be mailed or delivered to: Citywide
Banks, ▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇.
LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
5.000% OF THE REGULARLY SCHEDULED PAYMENT.
INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final
maturity, at Lender's option, and if permitted by applicable law, Lender may
add any unpaid accrued interest to principal and such sum will bear interest
therefrom until paid at the rate provided in this Note (including any increased
rate). Upon default, Lender, at its option, may, if permitted under applicable
law, increase the variable interest rate on this Note to 21.000% per annum. The
interest rate will not exceed the maximum rate permitted by applicable law.
DEFAULT. Each of the following shall constitute an event of default ("Event
of Default") under this Note:
PAYMENT DEFAULT. Borrower fails to make any payment when due under this
Note.
OTHER DEFAULTS. Borrower fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Note or in any of the
Related Documents or to comply with or to perform any term, obligation,
covenant or condition contained in any other agreement between Lender and
Borrower.
FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower's behalf under this Note or
the Related Documents is false or misleading in any material respect,
either now or at the time made or furnished or becomes false or misleading
at any time thereafter.
INSOLVENCY. The dissolution or termination of Borrower's existence as a
going business, the insolvency of Borrower, the appointment of a receiver
for any part of Borrower's Property, any Assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Borrower.
CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower or by any
governmental agency against any collateral securing the loan. This includes
a garnishment of any of Borrower's accounts, including deposit accounts,
with Lender. However, this Event of Default shall not apply if there is a
good faith dispute by Borrower as to the validity or reasonableness of the
claim which is the basis of the creditor or forfeiture proceeding and if
Borrower gives Lender written notice of the creditor or forfeiture
proceeding and deposits with Lender monies or a surety bond for the
creditor or forfeiture proceeding, in an amount determined by Lender, in
its sole discretion, as being an adequate reserve or bond for the dispute.
EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with respect
to any guarantor, endorser, surety, or accommodation party of any of the
indebtedness or any guarantor, endorser, surety, or accommodation party
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any guaranty of the indebtedness evidenced by this Note.
ADVERSE CHANGE. A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of
this Note is impaired.
INSECURITY. Lender in good faith believes itself insecure.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, and then
Borrower will pay that amount.
ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect
this Note if Borrower does not pay. Borrower will pay Lender that amount. This
includes, subject to any limits under applicable law, Lender's attorneys' fees
and Lender's legal expenses, whether or not there is a lawsuit, including
without limitation all attorneys' fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), and appeals. If not prohibited by applicable law, Borrower also
will pay any court costs, in addition to all other sums provided by law.
GOVERNING LAW. THIS NOTE WILL BE GOVERNED BY, CONSTRUED AND ENFORCED IN
ACCORDANCE WITH FEDERAL LAW AND THE LAWS OF THE STATE OF COLORADO. THIS NOTE HAS
BEEN ACCEPTED BY LENDER IN THE STATE OF COLORADO.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender
reserves a right of setoff in all Borrower's accounts with Lender (whether
checking, savings, or some other account). This includes all accounts Borrower
holds jointly with someone else and all accounts Borrower may open in the
future. However, this does not include any ▇▇▇ or ▇▇▇▇▇ accounts, or any trust
accounts for which setoff would be prohibited by law. Borrower authorizes
Lender, to the extent permitted by applicable law, to charge or setoff all sums
owing on the indebtedness against any and all such accounts.
COLLATERAL. Borrower acknowledges this Note is secured by 1ST DEED OF TRUST ON
▇▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇.
SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and
upon Borrower's heirs, personal representatives, successors and assigns, and
shall inure to the benefit of Lender and its successors and assigns.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, and notice of
PROMISSORY NOTE
(CONTINUED)
PAGE 2
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dishonor. Upon any change in the terms of this Note, and unless otherwise
expressly stated in writing, no party who signs this Note, whether as maker,
guarantor, accommodation maker or endorser, shall be released from liability.
All such parties agree that Lender may renew or extend (repeatedly and for any
length of time) this loan or release any party or guarantor or collateral; or
impair, fail to realize upon or perfect Lender's security interest in the
collateral; and take any other action deemed necessary by Lender without the
consent of or notice to anyone. All such parties also agree that Lender may
modify this loan without the consent of or notice to anyone other than the party
with whom the modification is made. The obligations under this Note are joint
and several.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE.
BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.
BORROWER:
▇▇▇▇▇'▇ LIQUID GOLD-INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President of ▇▇▇▇▇'▇
LIQUID GOLD-INC.
RECORDATION REQUESTED BY:
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▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
WHEN RECORDED MAIL TO:
Citywide Banks
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FOR RECORDER'S USE ONLY
DEED OF TRUST
THIS DEED OF TRUST is dated November 21, 2000, among ▇▇▇▇▇'▇ LIQUID
GOLD-INC., whose address is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Grantor");
Citywide Banks, whose address is P0 ▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ (referred
to below sometimes as "Lender" and sometimes as "Beneficiary"); and the
Public Trustee of the City and County of Denver, Colorado (referred to below
as "Trustee").
CONVEYANCE AND GRANT. For valuable consideration, Grantor hereby irrevocably
grants, transfers and assigns to Trustee for the benefit of Lender as
Beneficiary all of Grantor's right, title, and interest in and to the
following described real property, together with all existing or subsequently
erected or affixed buildings, improvements and fixtures; all easements,
rights of way, and appurtenances; all water, water rights and ditch rights
(including stock in utilities with ditch or irrigation rights); and all other
rights, royalties, and profits relating to the real property, including
without limitation all minerals, oil, gas, geothermal and similar matters,
(the "Real Property") located in The City and County of Denver, State of
Colorado:
SEE ATTACHED EXHIBIT "A" FOR LEGAL DESCRIPTION
The Real Property or its address is commonly known as ▇▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇.
Grantor presently assigns to Lender (also known as Beneficiary in this Deed of
Trust) all of Grantor's right, title, and interest in and to all present and
future leases of the Property and all Rents from the Property. In addition,
Grantor grants to Lender a Uniform Commercial Code security interest in the
Personal Property and Rents.
THIS DEED OF TRUST, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST
IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE
INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE, THE
RELATED DOCUMENTS, AND THIS DEED OF TRUST. THIS DEED OF TRUST IS GIVEN AND
ACCEPTED ON THE FOLLOWING TERMS:
PAYMENT AND PERFORMANCE. Except as otherwise provided in this Deed of Trust,
Grantor shall pay to Lender all amounts secured by this Deed of Trust as they
become due, and shall strictly and in a timely manner perform all of Grantor's
obligations under the Note, this Deed of Trust, and the Related Documents.
POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's
possession and use of the Property shall be governed by the following
provisions:
POSSESSION AND USE. Until the occurrence of an Event of Default, Grantor
may (1) remain in possession and control of the Property; (2) use, operate
or manage the Property; and (3) collect the Rents from the Property.
DUTY TO MAINTAIN. Grantor shall maintain the Property in tenantable
condition and promptly perform all repairs, replacements, and maintenance
necessary to preserve its value.
COMPLIANCE WITH ENVIRONMENTAL LAWS. Grantor represents and warrants to
Lender that: (1) During the period of Grantor's ownership of the Property,
there has bean no use, generation, manufacture, storage, treatment,
disposal, release or threatened release of any Hazardous Substance by any
person on, under, about or from the Property; (2) Grantor has no knowledge
of, or reason to believe that there has been, except as previously
disclosed to and acknowledged by Lender in writing; (a) any breach or
violation of any Environmental Laws, (b) any use, generation, manufacture,
storage, treatment, disposal, release or threatened release of any
Hazardous Substance, on, under, about or from the Property by any prior
owners or occupants of the Property, or (c) any actual or threatened
litigation or claims of any kind by any person relating to such matters;
and (3) Except as previously disclosed to and acknowledged by Lender in
writing, (a) neither Grantor nor any tenant, contractor, agent or other
authorized user of the Property shall use, generate, manufacture, store,
treat, dispose of or release any Hazardous Substance on, under, about or
from the Property; and (b) any such activity shall be conducted in
compliance with all applicable federal, state, and local laws, regulations
and ordinances, including without limitation all Environmental Laws.
Grantor authorizes Lender and its agents to enter upon the Property to make
such inspections and tests, at Grantor's expense, as Lender may deem
appropriate to determine compliance of the Property with this section of
the Deed of Trust. Any inspections or tests made by Lender shall be for
Lender's purposes only and shall not be construed to create any
responsibility or liability on the part of Lender to Grantor or to any
other person. The representations and warranties contained herein are based
on Grantor's due diligence in investigating the Property for Hazardous
Substances. Grantor hereby (1) releases and waives any future claims
against Lender for indemnity or contribution in the event Grantor becomes
liable for cleanup or other costs under any such laws; and (2) agrees to
indemnify and hold harmless Lender against any and all claims, losses,
liabilities, damages, penalties, and expenses which Lender may directly or
indirectly sustain or suffer resulting from a breach of this section of the
Deed of Trust or as a consequence of any use, generation, manufacture,
storage, disposal, release or threatened release occurring prior to
Granter's ownership or interest in the Property, whether or not the same
was or should have been known to Grantor. The provisions of this section of
the Deed of Trust, including the obligation to indemnify, shall survive the
payment of the Indebtedness and the satisfaction and reconveyance of the
lien of this Deed of Trust and shall not be affected by Lender's
acquisition of any interest in the Property, whether by foreclosure or
otherwise.
NUISANCE WASTE. Grantor shall not cause, conduct or permit any nuisance
nor commit, permit, or suffer any stripping of or waste on or to the
Property or any portion of the Property. Without limiting the generality of
the foregoing, Grantor will not remove, or grant to any other party the
right to remove, any timber, minerals (including oil and gas), coal, clay,
scoria, soil, gravel or rock products without Lender's prior written
consent.
REMOVAL OF IMPROVEMENTS. Grantor shall not demolish or remove any
Improvements from the Real Property without Lender's prior
DEED OF TRUST
(Continued) PAGE 2
written consent. As a condition to the removal of any Improvements, Lender
may require Grantor to make arrangements satisfactory to Lender to replace
such Improvements with Improvements of at least equal value.
LENDER'S RIGHT TO ENTER. Lender and Lender's agents and representatives may
enter upon the Real Property at all reasonable times to attend to Lender's
interests and to Inspect the Real Property for purposes of Grantor's
compliance with the terms and conditions of this Deed of Trust.
COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Grantor shall promptly comply
with all laws, ordinances, and regulations, now or hereafter in effect, of
all governmental authorities applicable to the use or occupancy of the
Property, including without limitation, the Americans With Disabilities
Act. Grantor may contest in good faith any such law, ordinance, or
regulation and withhold compliance during any proceeding, including
appropriate appeals, so long as Grantor has notified Lender in writing
prior to doing so and so long as, in Lender's sole opinion, Lender's
interests in the Property are not jeopardized. Lender may require Grantor
to post adequate security or a surety bond, reasonably satisfactory to
Lender, to protect Lender's interest;
DUTY TO PROTECT. Grantor agrees neither to abandon nor leave unattended the
Property. Grantor shall do all other acts, in addition to those acts set
forth above in this section, which from the character and use of the
Property are reasonably necessary to protect and preserve the Property.
TAXES AND LIENS. The following provisions relating to the taxes and liens on the
Property are part of this Deed of Trust:
PAYMENT. Grantor shall pay when due (and in all events prior to
delinquency) all taxes, special taxes, assessments, charges (including
water and sewer), fines and Impositions levied against or on account of the
Property, and shall pay when due all claims for work done on or for
services rendered or material furnished to the Property. Grantor shall
maintain the Property free of all liens having priority over or equal to
the interest of Lender under this Deed of Trust, except for the lien of
taxes and assessments not due and except as otherwise provided in this
Deed of Trust.
RIGHT TO CONTEST. Grantor may withhold payment of any tax, assessment, or
claim in connection with a good faith dispute over the obligation to pay,
so long as Lender's interest in the Property is not jeopardized. If a lien
arises or is filed as a result of nonpayment, Grantor shall within fifteen
(15) days after the lien arises or, if a lien is filed, within fifteen (15)
days after Grantor has notice of the filing, secure the discharge of the
lien, or if requested by Lender, deposit with Lender cash or a sufficient
corporate surety bond or other security satisfactory to Lender in an amount
sufficient to discharge the lien plus any costs and attorneys' fees, or
other charges that could accrue as a result of a foreclosure or sale under
the lien. In any contest, Grantor shall defend itself and Lender and shall
satisfy any adverse judgment before enforcement against the Property.
Grantor shall name Lender as an additional obligee under any surety bond
furnished in the contest proceedings.
EVIDENCE OF PAYMENT. Grantor shall upon demand furnish to Lender
satisfactory evidence of payment of the taxes or assessments and shall
authorize the appropriate governmental official to deliver to Lender at
any time a written statement of the taxes and assessments against the
Property.
NOTICE OF CONSTRUCTION. Grantor shall notify Lender at least fifteen (15)
days before any work is commenced, any services are furnished, or any
materials are supplied to the Property, if any mechanic's lien,
materialmen's lien, or other lien could be asserted on account of the work,
services, or materials. Grantor will upon request of Lender furnish to
Lender advance assurances satisfactory to Lender that Grantor can and will
pay the cost of such improvements.
PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the
Property are a part of this Deed of Trust.
MAINTENANCE OF INSURANCE. Grantor shall procure and maintain policies of
fire insurance with standard extended coverage endorsements on a fair value
basis for the full insurable value covering all Improvements on the Real
Property in an amount sufficient to avoid application of any coinsurance
clause, and with a standard mortgagee clause in favor of Lender. Grantor
shall also procure and maintain comprehensive general liability insurance
in such coverage amounts as Lender may request with
TRUSTEE. The word "Trustee" means the Public Trustee of the City and County
of Denver, Colorado, and Lender being named as additional insureds in such
liability insurance policies. Additionally, Grantor shall maintain such
other insurance, including but not limited to hazard, business
interruption, and boiler insurance, as Lender may reasonably require.
Policies shall be written in form, amounts, coverages and basis reasonably
acceptable to Lender and issued by a company or companies reasonably
acceptable to Lender. Grantor, upon request of Lender, will deliver to
Lender from time to time the policies or certificates of insurance in form
satisfactory to Lender, including stipulations, that coverages will not be
cancelled or diminished without at least ten (10) days prior written notice
to Lender. Each insurance policy also shall include an endorsement
providing that coverage in favor of Lender will not be impaired in any way
by any act, omission or default of Grantor or any other person. Should the
Real Property be located in an area designated by the Director of the
Federal Emergency Management Agency as a special flood hazard area, Grantor
agrees to obtain and maintain Federal Flood Insurance, if available, within
45 days after notices given by Lender that the Property is located in a
special flood hazard area, for the full unpaid principal balance of the
loan and any prior liens on the Property securing the loan, up to the
maximum policy limits set under the National Flood Insurance Program, or as
otherwise required by Lender, and to maintain such insurance for the term
of the loan.
APPLICATION OF PROCEEDS. Grantor shall promptly notify Lender of any loss
or damage to the Property. Lender may make proof of loss if Grantor fails
to do so within fifteen (15) days of the casualty. Whether or not Lender's
security is impaired, Lender may, at Lender's election, receive and retain
the proceeds of any insurance and apply the proceeds to the reduction of
the Indebtedness, payment of any lien affecting the Property, or the
restoration and repair of the Property. If Lender elects to apply the
proceeds to restoration and repair, Grantor shall repair or replace the
damaged or destroyed Improvements in a manner satisfactory to Lender.
Lender shall, upon satisfactory proof of such expenditure, pay or reimburse
Grantor from the proceeds for the reasonable cost of repair or restoration
if Grantor is not in default under this Deed of Trust. Any proceeds which
have not been disbursed within 180 days after their receipt and which
Lender has not committed to the repair or restoration of the Property shall
be used first to pay any amount owing to Lender under this Deed of Trust,
then to pay accrued interest, and the remainder, if any, shall be applied
to the principal balance of the Indebtedness. If Lender holds any proceeds
after payment in full of the Indebtedness, such proceeds shall be paid to
Grantor as Grantor's interests may appear.
UNEXPIRED INSURANCE AT SALE. Any unexpired insurance shall inure to the
benefit of, and pass to, the purchaser of the Property covered by this Deed
of Trust at any trustee's sale or other sale held under the provisions of
this Deed of Trust, or at any foreclosure sale of such Property.
GRANTOR'S REPORT ON INSURANCE. Upon request of Lender, however not more
than once a year, Grantor shall furnish to Lender a report on each existing
policy of insurance showing: (1) the name of the insurer; (2) the risks
insured; (3) the amount of the policy; (4) the property insured, the then
current replacement value of such property, and the manner of determining
that value; and (5) the expiration date of the policy. Grantor shall, upon
request of Lender, have an independent appraiser satisfactory to Lender
determine the cash value replacement cost of the Property.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest in the Property or if Grantor fails to
comply with any provision of this Deed of Trust or any Related Documents,
including but not limited to Grantor's failure to discharge or pay when due
any amounts Grantor is required to discharge or pay under this Deed of Trust
or any Related Documents, Lender on Grantor's behalf may (but shall not be
obligated to) take any action that Lender deems appropriate, including but
not limited to discharging or paying all taxes, liens, security interests,
encumbrances and other claims, at any time levied or placed on the Property
and paying all costs for insuring, maintaining and preserving the Property.
All such expenditures incurred or paid by Lender for such purposes will then
bear interest at the rate charged under the Note from the date incurred or
paid by Lender to the date of repayment by Grantor. All such expenses will
become a part of the Indebtedness and, at Lender's option, will (A) be
payable on demand; (B) be added to the balance of the Note and be apportioned
among and be payable with any Installment payments to become due during
either (1) the term of
DEED OF TRUST
(Continued) PAGE 3
any applicable insurance policy; or (2) the remaining term of the Note; or (C)
be treated as a balloon payment which will be due and payable at the Note's
maturity. The Deed of Trust also will secure payment of these amounts. Such
right shall be in addition to all other rights and remedies to which Lender may
be entitled upon Default.
WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of
the Property are a part of this Deed of Trust:
TITLE. Grantor warrants that: (a) Grantor holds good and marketable title
of record to the Property in fee simple; free and clear of all liens and
encumbrances other than those set forth in the Real Property description
or in any title insurance policy, title report, or final title opinion
issued in favor of, and accepted by, Lender in connection with this Deed of
Trust, and (b) Grantor has the full right, power, and authority to execute
and deliver this Deed of Trust to Lender.
DEFENSE OF TITLE. Subject to the exception in the paragraph above, Grantor
warrants and will forever defend the title to the Property against the
lawful claims of all persons. In the event any action or proceeding is
commenced that questions Grantor's title or the interest of Trustee or
Lender under this Deed of Trust, Grantor shall defend the action at
Grantor's expense. Grantor may be the nominal party in such proceeding, but
Lender shall be entitled to participate in the proceeding and to be
represented in the proceeding by counsel of Lender's own choice, and
Grantor will deliver, or cause to be delivered, to Lender such instruments
as Lender may request to time to permit such participation.
COMPLIANCE WITH LAWS. Grantor warrants that the Property and Grantor's use
of the Property complies with all existing applicable laws, ordinances, and
regulations of governmental authorities.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations,
warranties, and agreements made by Grantor in this Deed of Trust shall
survive the execution and delivery of this Deed of Trust, shall be
continuing in nature, and shall remain in full force and effect until such
time as Grantor's Indebtedness shall be paid in full.
CONDEMNATION. The following provisions relating to condemnation proceedings are
a part of this Deed of Trust:
PROCEEDINGS. If any proceeding in condemnation is filed, Grantor shall
promptly notify Lender in writing, and Grantor shall promptly take such
steps as may be necessary to defend the action and obtain the award.
Grantor may be the nominal party in such proceeding, but Lender shall be
entitled to participate in the proceeding and to be represented in the
proceeding by counsel of its own choice, and Grantor will deliver or cause
to be delivered, to Lender such instruments and documentation as may be
requested by Lender from time to time to permit such participations.
APPLICATION OF NET PROCEEDS. If all or any part of the Property is
condemned by eminent domain proceedings or by any proceeding or purchase in
lieu of condemnation, Lender may at its election require that all or any
portion of the net proceeds of the award be applied to the Indebtedness or
the repair or restoration of the Property. The net proceeds of the award
shall mean the award after payment of all reasonable costs, expenses, and
attorneys' fees incurred by Trustee or Lender in connection with the
condemnation.
IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following
provisions relating to governmental taxes, fees and charges are a part of this
Deed of Trust:
CURRENT TAXES, FEES AND CHARGES. Upon request by Lender, Grantor shall
execute such documents in addition to this Deed of Trust and take whatever
other action is requested by Lender to perfect and continue Lender's lien
on the Real Property. Grantor shall reimburse Lender for all taxes, as
described below, together with all expenses incurred in recording,
perfecting or continuing this Deed of Trust, including without limitation
all taxes, fees, documentary stamps, and other charges for recording or
registering this Deed of Trust.
TAXES. The following shall constitute taxes to which this section applies:
(1) a specific tax upon this type of Deed of Trust or upon all or any part
of the Indebtedness secured by this Deed of Trust; (2) a specific tax on
Grantor which Grantor is authorized or required to deduct from payments on
the Indebtedness secured by this type of Deed of Trust; (3) a tax on this
type of Deed of Trust chargeable against the Lender or the holder of the
Note; and (4) a specific tax on all or any portion of the Indebtedness or
on payments of principal and interest made by Grantor.
SUBSEQUENT TAXES. If any tax to which this section applies is enacted
subsequent to the date of this Deed of Trust, this event shall have the
same effect as an Event of Default, and Lender may exercise any or all of
its available remedies for an Event of Default as provided below unless
Grantor either (1) pays the tax before it becomes delinquent, or (2)
contests the tax as provided above in the Taxes and Liens section and
deposits with Lender cash or a sufficient corporate surety bond or other
security satisfactory to Lender.
SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to
this Deed of Trust as a security agreement are a part of this Deed of Trust:
SECURITY AGREEMENT. This instrument shall constitute a Security Agreement
to the extent any of the Property constitutes fixtures or other personal
property, and Lender shall have all of the rights of a secured party under
the Uniform Commercial Code as amended from time to time.
SECURITY INTEREST. Upon request by Lender, Grantor shall execute
financing statements and take whatever other action is requested by Lender
to perfect and continue Lender's security interest in the Rents and
Personal Property. In addition to recording this Deed of Trust in the real
property records, Lender may, at any time and without further authorization
from Grantor, file executed counterparts, copies or reproductions of this
Deed of Trust as a financing statement. Grantor shall reimburse Lender for
all expenses incurred in perfecting or continuing this security interest.
Upon default, Grantor shall assemble the Personal Property in a manner
and at a place reasonably convenient to Grantor and Lender and make it
available to Lender within three (3)days after receipt of written demand
from Lender.
ADDRESSES. The mailing addresses of Grantor (debtor) and Lender
(secured party) from which information concerning the security interest
granted by this Deed of Trust may be obtained (each as required by the
Uniform Commercial Code) are as stated on the first page of this Deed of
Trust.
FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to
further assurances and attorney-in-fact are a part of this Deed of Trust:
FURTHER ASSURANCES. At any time, and from time to time, upon request of
Lender, Grantor will make, execute and deliver, or will cause to be made,
executed or delivered, to Lender or to Lender's designee, and when
requested by Lender, cause to be filed/recorded, refiled, or rerecorded, as
the case may be, at such times and in such offices and places as Lender may
deem appropriate, any and all such mortgages, deeds of trust, security
deeds, security agreements, financing statements, continuation statements,
instruments of further assurance, certificates, and other documents as may,
in the sole opinion of Lender, be necessary or desirable in order to
effectuate, complete, perfect, continue, or preserve (i) Grantor's
obligations under the Note, this Deed of Trust, and the Related Documents,
and (2) the liens and security interests created by this Deed of Trust as
first and prior liens on the Property, whether now owned or hereafter
acquired by Grantor. Unless prohibited by law or Lender agrees to the
contrary in writing, Grantor shall reimburse Lender for all costs and
expenses incurred in connection with the matters referred to in this
paragraph.
ATTORNEY-IN-FACT. If Grantor fails to do any of the things referred to in
the preceding paragraph, Lender may do so for and in the name of Grantor
and at Grantor's expense. For such purposes, Grantor hereby irrevocably
appoints Lender as Grantor's attorney-in-fact for the purpose of making,
executing, delivering, filing, recording and doing all other things as may
be necessary or desirable, in Lender's sole opinion, to accomplish the
matters referred to in the preceding paragraph.
FULL PERFORMANCE. Grantor may, upon production of the Note duly cancelled,
release this Deed of Trust, and such release shall constitute a release of the
lien for all such additional sums and expenditures made pursuant to this Deed of
Trust. Lender agrees to cooperate with Grantor in obtaining such release and
releasing the other collateral securing the Indebtedness. Any release fees
required by law shall be paid by Grantor, if permitted by applicable law.
DEED OF TRUST
(Continued) PAGE 4
EVENTS OF DEFAULT. Each of the following, at Lender's option, shall constitute
an Event of Default under this Deed of Trust:
PAYMENT DEFAULT. Grantor fails to make any payment when due under the
Indebtedness.
COMPLIANCE DEFAULT. Failure to comply with any other term, obligation,
covenant or condition contained in this Deed of Trust, the Note or in any
of the Related Documents. If such a failure is curable and if Grantor has
not been given a notice of a breach of the same provision of this Deed of
Trust within the preceding twelve (12) months, it may be cured (and no
Event of Default will have occurred) if Grantor, after Lender sends written
notice demanding cure of such failure: (a) cures the failure within fifteen
(15) days; or (b) if the cure requires more than fifteen (15) days,
immediately initiates steps sufficient to cure the failure and thereafter
continues and completes all reasonable, and necessary steps sufficient to
produce compliance as soon as reasonably practical.
DEFAULT ON OTHER PAYMENTS. Failure of Grantor within the time required by
this Deed of Trust to make any payment for taxes or insurance, or any other
payment necessary to prevent filing of or to effect discharge of any
lien.
FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender by Grantor or on Grantor's behalf under this Deed of
Trust, the Note, or the Related Documents is false or misleading in any
material respect, either now or at the time made or furnished or becomes
false or misleading at any time thereafter.
DEFECTIVE COLLATERALIZATION. This Deed of Trust or any of the Related
Documents ceases to be in full force and effect (including failure of any
collateral document to create a valid and perfected security interest or
lien) at any time and for any reason.
INSOLVENCY. The dissolution or termination of Grantor's existence as a
going business, the insolvency of Grantor, the appointment of a receiver
for any part of Grantor's Property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Grantor.
CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
forfeiture, proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Grantor or by any
governmental agency against any Property securing the Indebtedness. This
includes a garnishment of any of Grantor's accounts, including deposit
accounts, with Lender. However, this Event of Default shall not apply if
there is a good faith dispute by Grantor as to the validity or
reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Grantor gives Lender written notice of the
creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount
determined by Lender, in its sole discretion, as being an adequate reserve
or bond for the dispute.
BREACH OF OTHER AGREEMENT. Any breach by Grantor under the terms of any
other agreement between Grantor and Lender that is not remedied within any
grace period provided therein, including without limitation any agreement
concerning any indebtedness or other obligation of Grantor to Lender,
whether existing now or later.
INSECURITY. Lender in good faith believes itself insecure.
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Deed of Trust, at any time thereafter, Trustee or Lender may exercise any
one or more of the following rights and remedies:
ELECTION OF REMEDIES. Election by Lender to pursue any remedy shall not
exclude pursuit of any other remedy, and an election to make expenditures
or to take action to perform an obligation of Grantor under this Deed of
Trust, after Grantor's failure to perform, shall not affect Lender's right
to declare a default and exercise its remedies.
ACCELERATE INDEBTEDNESS. Lender shall have the right at its option without
notice to Grantor to declare the entire Indebtedness immediately due and
payable, including any prepayment penalty which Grantor would be required
to pay.
FORECLOSURE. Lender shall have the right to cause all or any part of the
Real Property, and Personal Property, if Lender decides to proceed against
it as if it were real property, to be sold by the Trustee according to the
laws of the State of Colorado as respects foreclosures against real
property. The Trustee shall give notice in accordance with the laws of
Colorado. The Trustee shall apply the proceeds of the sale in the following
order: (a) to all costs and expenses of the sale, including but not limited
to Trustee's fees, attorneys' fees, and the cost of title evidence; (b) to
all sums secured by this Deed of Trust; and (c) the excess, if any, to the
person or persons legally entitled to the excess.
UCC REMEDIES. With respect to all or any part of the Personal Property,
Lender shall have all the rights and remedies of a secured party under the
Uniform Commercial Code.
COLLECT RENTS. Lender shall have the right, without notice to Grantor to
take possession of and manage the Property and collect the Rents, including
amounts past due and unpaid, and apply the net proceeds, over and above
Lender's costs, against the Indebtedness. In furtherance of this right,
Lender may require any tenant or other user of the Property to make
payments of rent or use fees directly to Lender. If the Rents are
collected by Lender, then Grantor irrevocably designates Lender as
Grantor's attorney-in-fact to endorse instruments received in payment
thereof in the name of Grantor and to negotiate the same and collect the
proceeds. Payments by tenants or other users to Lender in response to
Lender's demand shall satisfy the obligations for which the payments are
made, whether or not any proper grounds for the demand existed. Lender may
exercise its rights under this subparagraph either in person, by agent, or
through a receiver.
APPOINT RECEIVER. Lender shall have the right to have a receiver appointed
to take possession of all or any part of the Property, with the power to
protect and preserve the Property, to operate the Property preceding
foreclosure or sale and to collect the Rents from the Property and apply
the proceeds, over and above the cost of the receivership, against the
Indebtedness. The receiver may serve without bond if permitted by law.
Lender's right to the appointment of a receiver shall exist whether or not
the apparent value of the Property exceeds the Indebtedness, by a
substantial amount. Employment by Lender shall not disqualify a person from
serving as a receiver. Receiver may be appointed by a court of competent
jurisdiction upon ex parte application and without notice, notice being
expressly waived.
TENANCY AT SUFFERANCE. If Grantor remains in possession of the Property
after the Property is sold as provided above or Lender otherwise becomes
entitled to possession of the Property upon default of Grantor, Grantor
shall become a tenant at sufferance of Lender or the purchaser of the
Property and shall, at Lender's option, either (1) pay a reasonable rental
for the use of the Property, or (2) vacate the Property immediately upon
the demand of Lender.
OTHER REMEDIES. Trustee or Lender shall have any other right or remedy
provided in this Deed of Trust or the Note or by law.
SALE OF THE PROPERTY. In exercising its rights and remedies, Lender shall
be free to designate on or before it files a notice of election and demand
with the Trustee, that the Trustee sell all or any part of the Property
together or separately, in one sale or by separate sales. Lender shall be
entitled to bid at any public sale on all or any portion of the Property.
Upon any sale of the Property, whether made under a power of sale granted
in this Deed of Trust or pursuant to judicial proceedings, if the holder of
the Note is a purchaser at such sale, it shall be entitled to use and apply
all, or any portion of, the Indebtedness for or in settlement or payment of
all, or any portion of, the purchase price of the Property purchased, and,
in such case, this Deed of Trust, the Note, and any documents evidencing
DEED OF TRUST
(Continued) PAGE 5
expenditures secured by this Deed of Trust shall be presented to the person
conducting the sale in order that the amount of Indebtedness so used or
applied may be credited thereon as having been paid.
ATTORNEYS' FEES; EXPENSES. If Lender forecloses or institutes any suit or
action to enforce any of the terms of this Deed of Trust, Lender shall be
entitled to recover such sum as the court may judge reasonable as
attorneys' fees at trial and upon any appeal. Whether or not any court
action is involved, and to the extent not prohibited by law, all reasonable
expenses Lender incurs that in Lender's opinion are necessary at any time
for the protection of its interest or the enforcement of its rights shall
become a part of the Indebtedness payable on demand and shall bear interest
at the Note rate from the date of the expenditure until repaid. Expenses
covered by this paragraph include, without limitation, however subject to
any limits under applicable law, Lender's attorneys' fees whether or not
there is a lawsuit, including attorneys' fees and expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals, and anticipated post-judgment collection services,
the cost of searching records, obtaining title reports (including
foreclosure reports), surveyors' reports, and appraisal fees, title
insurance, and fees for the Trustee, to the extent permitted by applicable
law. Grantor also will pay any court costs, in addition to all other sums
provided by law.
RIGHTS OF TRUSTEE. Trustee shall have all of the rights and duties of
Lender as set forth in this section.
NOTICES. Any notice required to be given under this Deed of Trust, including
without limitation any notice of default and any notice of sale shall be given
in writing, and shall be effective when actually delivered, when actually
received by telefacsimile (unless otherwise required by law), when deposited
with a nationally recognized overnight courier, or, if mailed, when deposited in
the United States mail, as first class, certified or registered mail postage
prepaid, directed to the addresses shown near the beginning of this Deed of
Trust. All copies of notices of foreclosure from the holder of any lien which
has priority over this Deed of Trust shall be sent to Lender's address, as shown
near the beginning of this Deed of Trust. Any party may change its address for
notices under this Deed of Trust by giving formal written notice to the other
parties, specifying that the purpose of the notice is to change the party's
address. For notice purposes, Grantor agrees to keep Lender informed at all
times of Grantor's current address. Unless otherwise provided or required by
law, if there is more than one Grantor, any notice given by Lender to any
Grantor is deemed to be notice given to all Grantors.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Deed of Trust:
AMENDMENTS. This Deed of Trust, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Deed of Trust. No alteration of or amendment to
this Deed of Trust shall be effective unless given in writing and signed by
the party or parties sought to be charged or bound by the alteration or
amendment.
ANNUAL REPORTS. If the Property is used for purposes other than Grantor's
residence, Grantor shall furnish to Lender, upon request, a certified
statement of net operating income received from the Property during
Grantor's previous fiscal year in such form and detail as Lender shall
require. "Net operating income" shall mean all cash receipts from the
Property less all cash expenditures made in connection with the operation
of the Property.
CAPTION HEADINGS. Caption headings in this Deed of Trust are for
convenience purposes only and are not to be used to interpret or define the
provisions of this Deed of Trust.
MERGER. There shall be no merger of the interest or estate created by this
Deed of Trust with any other interest or estate in the Property at any time
held by or for the benefit of Lender in any capacity, without the written
consent of Lender.
GOVERNING LAW. THIS DEED OF TRUST WILL BE GOVERNED BY, CONSTRUED AND
ENFORCED IN ACCORDANCE WITH FEDERAL LAW AND THE LAWS OF THE STATE OF
COLORADO. THIS DEED OF TRUST HAS BEEN ACCEPTED BY LENDER IN THE STATE OF
COLORADO.
NO WAIVER BY LENDER. Lender shall not be deemed to have waived any rights
under this Deed of Trust unless such waiver is given in writing and signed
by Lender. No delay or omission on the part of Lender in exercising any
right shall operate as a waiver of such right or any other right. A waiver
by Lender of a provision of this Deed of Trust shall not prejudice or
constitute a waiver of Lender's right or otherwise to demand strict
compliance with that provision or any other provision of this Deed of
Trust. No prior waiver by Lender, nor any course of dealing between Lender
and Grantor, shall constitute a waiver of any of Lender's rights or of any
of Grantor's obligations as to any future transactions. Whenever the
consent of Lender is required under this Deed of Trust, the granting of
such consent by Lender in any instance shall not constitute continuing
consent to subsequent instances where such consent is required and in all
cases such consent may be granted or withheld in the sole discretion of
Lender.
SEVERABILITY. If a court of competent jurisdiction finds any provision of
this Deed of Trust to be illegal, invalid, or unenforceable as to any
circumstance, that finding shall not make the offending provision illegal,
invalid, or unenforceable as to any other circumstance. If feasible, the
offending provision shall be considered modified so that it becomes legal,
valid and enforceable. If the offending provision cannot be so modified,
it shall be considered deleted from this Deed of Trust. Unless otherwise
required by law, the illegality, invalidity, or unenforceability of any
provision of this Deed of Trust shall not affect the legality, validity or
enforceability of any other provision of this Deed of Trust.
SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Deed of
Trust on transfer of Grantor's interest, this Deed of Trust shall be
binding upon and inure to the benefit of the parties, their successors and
assigns. If ownership of the Property becomes vested in a person other than
Grantor, Lender, without notice to Grantor, may deal with Grantor's
successors with reference to this Deed of Trust and the Indebtedness by way
of forbearance or extension without releasing Grantor from the obligations
of this Deed of Trust or liability under the Indebtedness.
TIME IS OF THE ESSENCE. Time is of the essence in the performance of this
Deed of Trust.
WAIVER OF HOMESTEAD EXEMPTION. Grantor hereby releases and waives all
rights and benefits of the homestead exemption laws of the State of
Colorado as to all Indebtedness secured by this Deed of Trust.
DEFINITIONS. The following capitalized words and terms shall have the following
meanings when used in this Deed of Trust. Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money
of the United States of America. Words and terms used in the singular shall
include the plural, and the plural shall include the singular, as the context
may require. Words and terms not otherwise defined in this Deed of Trust shall
have the meanings attributed to such terms in the Uniform Commercial Code:
BENEFICIARY. The word "Beneficiary" means Citywide Banks, and its
successors and, assigns.
BORROWER. The word "Borrower" means ▇▇▇▇▇'▇ LIQUID GOLD-INC., and all other
persons and entities signing the Note in whatever capacity.
DEED OF TRUST. The words "Deed of Trust" mean this Deed of Trust among
Grantor, Lender, and Trustee, and includes without limitation all
Assignment and security interest provisions relating to the Personal
Property and Rents.
ENVIRONMENTAL LAWS. The words "Environmental Laws" mean any and all state,
federal and local statutes, regulations and ordinances relating to the
protection of human health or the environment, including without,
limitation the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.
("CERCLA"), the Superfund Amendments and o Reauthorization Act of. 1986,
Pub. L. No. 99-499 ("▇▇▇▇"), the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801, et seq; the Resource Conservation and Recovery Act,
42 U.S.C. Section 6901, et seq., or other applicable state or federal laws,
rules, or regulations adopted pursuant thereto.
EVENT OF DEFAULT. The words "Event of Default" mean any of the events of
default set forth in this Deed of Trust in the events of default section of
this Deed of Trust.
GRANTOR. The word "Grantor" means ▇▇▇▇▇'▇ LIQUID GOLD-INC.
DEED OF TRUST
(Continued) PAGE 6
GUARANTY. The word "Guaranty" means the guaranty from guarantor, endorser,
surety, or accommodation party to Lender, including without limitation a
guaranty of all or part of the Note.
HAZARDOUS SUBSTANCES. The words "Hazardous Substances" mean materials that,
because of their quantity, concentration or physical, chemical or
infectious characteristics, may cause or pose a present or potential hazard
to human health or the environment when improperly used, treated, stored,
disposed of, generated, manufactured, transported or otherwise handled. The
words "Hazardous Substances" are used in their very broadest sense and
include without limitation any and all hazardous or toxic substances,
materials or waste as defined by or listed under the Environmental Laws.
The term "Hazardous Substances" also includes, without limitation,
petroleum and petroleum by-products or any fraction thereof and asbestos.
IMPROVEMENTS. The word "Improvements" means all existing and future
improvements, buildings, structures, mobile homes affixed on the Real
Property, facilities, additions, replacements and other construction on the
Real Property.
INDEBTEDNESS. The word "Indebtedness" means all principal, interest, and
other amounts, costs and expenses payable under the Note or Related
Documents, together with all renewals of, extensions of, modifications of,
consolidations of and substitutions for the Note or Related Documents and
any amounts expended or advanced by Lender to discharge Grantor's
obligations or expenses incurred by Trustee or Lender to enforce Grantor's
obligations under this Deed of Trust, together with interest on such
amounts as provided in this Deed of Trust.
LENDER. The word "Lender" means Citywide Banks, its successors and assigns.
NOTE. The word "Note" means the promissory note dated November 21, 2000, in
the original principal amount of $6,000,000.00 from Grantor to Lender,
together with all renewals of, extensions of, modifications of,
refinancings of, consolidations of, and substitutions for the promissory
note or agreement.
PERSONAL PROPERTY. The words "Personal Property" mean all equipment,
fixtures, and other articles of personal property now or hereafter owned by
Grantor, and now or hereafter attached or affixed to the Real Property;
together with all accessions, parts, and additions to, all replacements of,
and all substitutions for, any of such Property; and together with all
proceeds (including without limitation all insurance proceeds and refunds
of premiums) from any sale or other disposition of the Property.
PROPERTY. The word "Property" means collectively the Real Property and
the Personal Property.
REAL PROPERTY. The words "Real Property" mean the real property, interests
and rights, as further described in this Deed of Trust.
RELATED DOCUMENTS. The words "Related Documents" mean all promissory notes,
credit agreements, loan agreements, environmental agreements, guaranties,
security agreements, mortgages, deeds of trust, security deeds, collateral
mortgages, and all other instruments, agreements and documents, whether now
or hereafter existing, executed in connection with the Indebtedness.
RENTS. The word "Rents" means all present and future Rents, revenues,
income, issues, royalties, profits, and other benefits derived from the
Property.
TRUSTEE. The word "Trustee" means the Public Trustee of the City and County
of Denver, Colorado.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS DEED OF TRUST, AND
GRANTOR AGREES TO ITS TERMS.
GRANTOR:
▇▇▇▇▇'▇ LIQUID GOLD-INC.
By:
---------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President of ▇▇▇▇▇'▇ LIQUID GOLD-INC.
CORPORATE ACKNOWLEDGMENT
STATE OF COLORADO )
) SS
COUNTY OF DENVER ) /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
NOTARY PUBLIC
STATE OF COLORADO
On this 21st day of November, 2000, before me, the undersigned Notary Public,
personally appeared ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President of ▇▇▇▇▇'▇ LIQUID. GOLD-INC.
and known to me to be an authorized agent of the corporation that executed the
Deed of Trust and acknowledged the Deed of Trust to be the free and voluntary
act and deed of the corporation, by authority of its Bylaws or by resolution of
its board of directors, for the uses and purposes therein mentioned, and on oath
stated that he or she is authorized to execute this Deed of Trust and in fact
executed the Deed of Trust on behalf of the corporation.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, #▇▇
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Residing at ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
----------------------------------- -----------------------
Notary Public in and for the My Commission expires May 12, 2000
State of Colorado
EXHIBIT "A"
TRANSNATION TITLE INSURANCE COMPANY
Commitment No.: C10285 C-6
SCHEDULE A - Continued
LEGAL DESCRIPTION
PARCEL A:
The North 816.59 feet of the South 1897.58 feet of ▇▇▇ ▇,
▇▇▇▇▇ ▇,
▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇
EXCEPT the Easterly 8.5 feet thereof.
City and County of Denver, State of Colorado.
PARCEL B:
The North 799.9 feet of the South 1080.99 feet of ▇▇▇ ▇, ▇▇▇▇▇ ▇,
▇▇▇▇▇▇ the East 8.5 feet thereof,
Montbello ▇▇. ▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ of Colorado.
PARCEL C:
A parcel of land situated in the Southwest 1/4 of Section 14, Township 3 South,
Range 67 West of the 6th principal Meridian, City and County of Denver, State of
Colorado, being a part of ▇▇▇ ▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇, more particularly
described as follows:
Commencing at the West 1/4 corner of said Section 14; Thence South 89 degrees 14
minutes 55 seconds East along the North line of said Southwest 1/4 a distance of
60.00 feet to a point lying on the East right of way line of Havana Street;
Thence South 00 degrees 00 minutes 00 seconds West along said East right of way
line and parallel with the West line of said Southwest 1/4 a distance of 925.89
feet to the Point of Beginning;
Thence South 89 degrees 35 minutes 01 seconds East a distance of 345.01 feet to
a point on a curve;
Thence along a curve to the right whose chord bears South 10 degrees 59 minutes
06 seconds East a distance of 140.09 feet, said curve having a central angle of
22 degrees 48 minutes 11 seconds, a radius of 354.32 feet, an arc length of
141.01 feet to a point of tangent;
Thence South 00 degrees 24 minutes 59 seconds West along said tangent, a
distance of 183.54 feet; Thence North 89 degrees 35 minutes 01 seconds West a
distance of 370.37 feet to a point lying on said East right of way line;
Thence North 00 degrees 00 minutes 00 seconds East along said East right of way
line parallel with and 60.00 feet Easterly of the West line of said Southwest
1/4 a distance of 320.87 feet to the Point of Beginning. City and County of
Denver, State of Colorado.
NOTE: Said Description was prepared by:
PAGE 2
TRANSNATION TITLE INSURANCE COMPANY
Commitment No.: C10285 C-6
SCHEDULE A - Continued
LEGAL DESCRIPTION
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ for Engineering Service Company
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ #▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Survey No. 94076
PAGE 3
RECORDATION REQUESTED BY:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
WHEN RECORDED MAIL TO:
CITYWIDE BANKS
▇▇▇▇▇ ▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
2000174403
FOR RECORDER'S USE ONLY
ASSIGNMENT OF RENTS
THIS ASSIGNMENT OF RENTS DATED NOVEMBER 21, 2000, IS MADE AND EXECUTED BETWEEN
▇▇▇▇▇'▇ LIQUID GOLD-INC., WHOSE ADDRESS IS ▇▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(REFERRED TO BELOW AS "GRANTOR") AND CITYWIDE BANKS, WHOSE ADDRESS IS P0 ▇▇▇
▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ (REFERRED TO BELOW AS "LENDER").
ASSIGNMENT. FOR VALUABLE CONSIDERATION, GRANTOR HEREBY ASSIGNS, GRANTS A
CONTINUING SECURITY INTEREST IN, AND CONVEYS TO LENDER ALL OF GRANTOR'S RIGHT,
TITLE, AND INTEREST IN AND TO THE RENTS FROM THE FOLLOWING DESCRIBED PROPERTY
LOCATED IN DENVER COUNTY, STATE OF COLORADO:
SEE ATTACHED EXHIBIT "A" FOR LEGAL DESCRIPTION
THE PROPERTY OR ITS ADDRESS IS COMMONLY KNOWN AS ▇▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇.
THIS ASSIGNMENT IS GIVEN TO SECURE (1) PAYMENT OF THE INDEBTEDNESS AND (2)
PERFORMANCE OF ANY AND ALL OBLIGATIONS OF GRANTOR UNDER THE NOTE, THIS
ASSIGNMENT, AND THE RELATED DOCUMENTS. THIS ASSIGNMENT IS GIVEN AND ACCEPTED ON
THE FOLLOWING TERMS:
PAYMENT AND PERFORMANCE. Except as otherwise provided in this Assignment or any
Related Documents, Grantor shall pay to Lender all amounts secured by this
Assignment as they become due, and shall strictly perform all of Grantor's
obligations under this Assignment. Unless and until Lender exercises its right
to collect the Rents as provided below and so long as there is no default under
this Assignment, Grantor may remain in possession and control of and operate and
manage the Property and collect the Rents, provided that the granting of the
right to collect the Rents shall not constitute Lender's consent to the use of
cash collateral in a bankruptcy proceeding.
GRANTOR'S REPRESENTATIONS AND WARRANTIES. Grantor warrants that:
OWNERSHIP. Grantor is entitled to receive the Rents free and clear of all
rights, loans, liens, encumbrances, and claims except as disclosed to and
accepted by Lender in writing.
RIGHT TO ASSIGN. Grantor has the full right, power and authority to enter
into this Assignment and to assign and convey the Rents to Lender.
NO PRIOR ASSIGNMENT. Grantor has not previously assigned or conveyed the
Rents to any other person by any instrument now in force.
NO FURTHER TRANSFER. Grantor will not sell, assign, encumber, or otherwise
dispose of any of Grantor's rights in the Rents except as provided in this
Assignment.
LENDER'S RIGHT TO RECEIVE AND COLLECT RENTS. Lender shall have the right at any
time, and even though no default shall have occurred under this Assignment, to
collect and receive the Rents. For this purpose, Lender is hereby given and
granted the following rights, powers and authority:
NOTICE TO TENANTS. Lender may send notices to any and all tenants of the
Property advising them of this Assignment and directing all Rents to be
paid directly to Lender and Lenders agent.
ENTER THE PROPERTY. Lender may enter upon and take possession of the
Property; demand, collect and receive from the tenants or from any other
persons liable therefor, all of the Rents; institute and carry on all legal
proceedings necessary for the protection of the Property, including such
proceedings as may be necessary to recover possession of the Property;
collect the Rents and remove any tenant or tenants or other persons from
the Property.
MAINTAIN THE PROPERTY. Lender may enter upon the Property to maintain the
Property and keep the same in repair; to pay the costs thereof and of all
services of all employees, including their equipment, and of all continuing
costs and expenses of maintaining the Property in proper repair and
condition, and also to pay all taxes, assessments and water utilities, and
the premiums on fire and other insurance effected by Lender on the
Property.
COMPLIANCE WITH LAWS. Lender may do any and all things to execute and
comply with the laws of the State of Colorado and also all other laws,
rules, orders, ordinances and requirements of all other governmental
agencies affecting the Property.
LEASE THE PROPERTY. Lender may rent or lease the whole or any part of the
Property for such term or terms and on such conditions as Lender may deem
appropriate.
EMPLOY AGENTS. Lender may engage such agent or agents as Lender may deem
appropriate, either in Lender's name or in Grantor's name, to rent and
manage the Property, including the collection and application of Rents.
OTHER ACTS. Lender may do all such other things and acts with respect to
the Property as Lender may deem appropriate and may act exclusively and
solely in the place and stead of Grantor and to have all of the powers of
Grantor for the purposes stated above.
NO REQUIREMENT TO ACT. Lender shall not be required to do any of the
foregoing acts or things, and the fact that Lender shall have performed one
or more of the foregoing acts or things shall not require Lender to do any
other specific act or thing.
APPLICATION OF RENTS. All costs and expenses incurred by Lender in connection
with the Property shall be for Grantor's account and Lender may pay such costs
and expenses from the Rents. Lender, in, its sole discretion, shall determine
the application of any and all Rents received by it; however, any such Rents
received by Lender which are not applied to such costs and expenses shall be
applied to the indebtedness. All expenditures made by Lender under this
Assignment and not reimbursed from the Rents shall become a part of the
indebtedness secured by this Assignment, and shall be payable on demand, with
interest at the note rate from date of expenditure until
ASSIGNMENT OF RENTS
(CONTINUED)
PAGE 2
paid.
FULL PERFORMANCE. If Grantor pays all of the indebtedness when due and otherwise
performs all the obligations imposed upon Grantor under this Assignment, the
Note, and the Related Documents, Lender shall execute and deliver to Grantor a
suitable satisfaction of this Assignment and suitable statements of termination
of any financing statement on file evidencing Lender's security interest in the
Rents and the Property. Any termination fee required by law shall be paid by
Grantor, if permitted by applicable law.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest in the Property or if Grantor fails to
comply with any provision of this Assignment or any Related Documents,
including but not limited to Grantor's failure to discharge or pay when due any
amounts Grantor is required to discharge or pay under this Assignment or any
Related Documents. Lender on Grantor's behalf may (but shall not be obligated
to) take any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interests, encumbrances and
other claims, at any time levied or placed, on the Rents or the Property and
paying all costs for insuring, maintaining and preserving the Property. All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Grantor. All such expenses will become a part
of the indebtedness and, at Lender's option, will (A) be payable on demand; (B)
be added to the balance of the Note and be apportioned among and be payable
with any installment payments to become due during either (1) the term of any
applicable insurance policy; or (2) the remaining term of the Note; or (C) be
treated as a balloon payment which will be due and payable at the Note's
maturity. The Assignment also will secure payment of these amounts. Such right
shall be in addition to all other rights and remedies to which Lender may be
entitled upon default.
DEFAULT. Each of the following, at Lender's option, shall constitute an Event of
Default under this Assignment:
PAYMENT DEFAULT. Grantor fails to make any payment when due under the
indebtedness.
OTHER DEFAULTS. Grantor fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Assignment or in any of
the Related Documents or to comply with or to perform any term, obligation,
covenant or condition contained in any other agreement between Lender and
Grantor.
DEFAULT ON OTHER PAYMENTS. Failure of Grantor within the time required by
this Assignment to make any payment for taxes or insurance, or any other
payment necessary to prevent filing of or to effect discharge of any lien.
FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender by Grantor or on Grantor's behalf under this
Assignment, the Note, or the Related Documents is false or misleading in
any material respect, either now or at the time made or furnished or
becomes false or misleading at any time thereafter.
DEFECTIVE COLLATERALIZATION. This Assignment or any of the Related
documents ceases to be in full force and effect (including failure of any
collateral document to create a valid and perfected security interest or
lien) at anytime and for any reason.
INSOLVENCY. The dissolution or termination of Grantor's existence as a
going business, the insolvency of Grantor, the appointment of a receiver
for any part of Grantor's Property, any Assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Grantor.
CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method by any creditor of Grantor or by any
governmental agency against the Rents or any Property securing the
indebtedness. This includes a garnishment of any of Grantor's accounts,
including deposit accounts, with Lender. However, this Event of Default
shall not apply if there is a good faith dispute by Grantor as to the
validity or reasonableness of the claim which is the basis of the creditor
or forfeiture proceeding and if Grantor gives Lender written notice of the
creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount
determined by Lender, in its sole discretion, as being an adequate reserve
or bond for the dispute.
PROPERTY DAMAGE OR LOSS. The Property is lost, stolen, substantially
damaged, sold, or borrowed against.
ADVERSE CHANGE. A material adverse change occurs in Grantor's financial
condition, or Lender believes the prospect of payment or performance of the
indebtedness is impaired.
INSECURITY. Lender in good faith believes itself insecure.
RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default and
at any time thereafter, Lender may exercise any one or more of the following
rights and remedies, in addition to any other rights or remedies provided by
law:
ACCELERATE INDEBTEDNESS. Lender shall have the right at its option without
notice to Grantor to declare the entire indebtedness immediately due and
payable, including any prepayment penalty which Grantor would be required
to pay.
COLLECT RENTS. Lender shall have the right, without notice to Grantor, to
take possession of the Property and collect the Rents, including amounts
past due and unpaid, and apply the net proceeds, over and above Lender's
costs, against the indebtedness. In furtherance of this right, Lender shall
have all the rights provided for in the Lender's right to receive and
Collect Rents Section, above. If the Rents are collected by Lender, then
Grantor irrevocably designates Lender as Grantor's attorney-in-fact to
endorse instruments received in payment thereof in the name of Grantor and
to negotiate the same and collect the proceeds. Payments by tenants or
other users to Lender in response to Lender's demand shall satisfy the
obligations for which the payments are made, whether or not any proper
grounds for the demand existed. Lender may exercise its rights under this
subparagraph either in person, by agent, or through a receiver.
APPOINT RECEIVER. Lender shall have the right to have receiver appointed
to take possession of all or any part of the Property, with the power to
protect and preserve the Property, to operate the Property preceding
foreclosure, or sale, and to collect the Rents from the Property and apply
the proceeds, over and above the cost of the receivership, against the
indebtedness. The receiver may serve without bond if permitted by law.
Lender's right to the appointment of a receiver shall exist whether or not
the apparent value of the Property exceeds the indebtedness by a
substantial amount. Employment by Lender shall not disqualify a person from
serving as a receiver. Receiver may be appointed by a court of competent
jurisdiction upon ex parte application and without notice, not being
expressly waived.
OTHER REMEDIES. Lender shall have all other rights and remedies provided in
this Assignment or the Note or by law.
ELECTION OF REMEDIES. Election by Lender to pursue any remedy shall not
exclude pursuit of any other remedy, and an election to make expenditures
or to take action to perform an obligation of Grantor under this
Assignment, after Grantor's failure to perform, shall not affect Lender's
right to declare a default and exercise its remedies.
ATTORNEYS' FEES; EXPENSES. If Lender forecloses or institutes any suit or
action to enforce any of the terms of this Assignment, Lender shall be
entitled to recover such sum as the court may adjudge reasonable as
attorneys' fees at trial and upon any appeal. Whether or not any court
action is involved, and to the extent not prohibited by law, all reasonable
expenses Lender incurs that in Lender's opinion are necessary at any time
for the protection of its interest or the enforcement of its rights shall
become a part of the indebtedness payable on demand and shall bear interest
at the Note rate from the date of the expenditure until repaid. Expenses
covered by this paragraph include, without limitation, however subject to
any limits under applicable law, Lender's attorneys' fees whether or not
there is a lawsuit, including attorneys' fees and expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection
services, the cost of searching records, obtaining title reports (including
foreclosure reports), surveyors' reports, and appraisal fees, title
insurance, and fees for the trustee, to the extent permitted by
ASSIGNMENT OF RENTS
(CONTINUED)
PAGE 3
applicable law. Grantor also will pay any court costs, in addition to all
other sums provided by law.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Assignment:
AMENDMENTS. This Assignment, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Assignment. No alteration of or amendment to this
Assignment shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or
amendment.
CAPTION HEADINGS. Caption headings in this Assignment are for convenience
purposes only and are not to be used to interpret or define the provisions
of this Assignment.
GOVERNING LAW. THIS ASSIGNMENT WILL BE GOVERNED BY, CONSTRUED AND ENFORCED
IN ACCORDANCE WITH FEDERAL LAW AND THE LAWS OF THE STATE OF COLORADO. THIS
ASSIGNMENT HAS BEEN ACCEPTED BY LENDER IN THE STATE OF COLORADO.
MERGER. There shall be no merger of the interest or estate created by this
Assignment with any other interest or estate in the Property at any time
held by or for the benefit of Lender in any capacity, without the written
consent of Lender.
INTERPRETATION. The names given to paragraphs or sections in
this Assignment are for convenience purposes only. They are not to be used
to interpret or define the provisions of this Assignment. This Assignment
is the best evidence of my agreements with Lender.
NO WAIVER BY LENDER. Lender shall not be deemed to have waived any rights
under this Assignment unless such waiver is given in writing and signed by
Lender. No delay or omission on the part of Lender in exercising any right
shall operate as a waiver of such right or any other right. A waiver by
Lender of a provision of this Assignment shall not prejudice or constitute
a waiver of Lender's right otherwise to demand strict compliance with that
provision or any other provision of this Assignment. No prior waiver by
Lender, nor any course of dealing between Lender and Grantor, shall
constitute a waiver of any of Lender's rights or of any of Grantor's
obligations as to any future transactions. Whenever the consent of Lender
is required under this Assignment, the granting of such consent by Lender
in any instance shall not constitute continuing consent to subsequent
instances where such consent is required and in all cases such consent
may be granted or withheld in the sole discretion of Lender.
NOTICES. Any notice required to be given under this Assignment shall be
given in writing, and shall be effective when actually delivered, when
actually received by telefacsimile (unless otherwise required by law), when
deposited with a nationally recognized overnight courier, or, if mailed,
when deposited in the United States mail, as first class, certified or
registered mail postage prepaid, directed to the addresses shown near the
beginning of this Assignment. Any party may change its address for notices
under this Assignment by giving formal written notice to the other parties,
specifying that the purpose of the notice is to change the party's address.
For notice purposes, Grantor agrees to keep Lender informed at all times of
Grantor's current address. Unless otherwise provided or required by law, if
there is more than one Grantor, any notice given by Lender to any Grantor
is deemed to be notice given to all Grantors.
POWERS OF ATTORNEY. The various agencies and powers of attorney conveyed
on Lender under this Assignment are granted for purposes of security and
may not be revoked by Grantor until such time as the same are renounced by
Lender.
SEVERABILITY. If a court of competent jurisdiction finds any provision of
this Assignment to be illegal, invalid, or unenforceable as to any
circumstance, that finding shall not make the offending provision illegal,
invalid, or unenforceable as to any other circumstance. If feasible, the
offending provision shall be considered modified so that it becomes legal,
valid and enforceable. If the offending provision cannot be so modified, it
shall be considered deleted from this Assignment. Unless otherwise required
by law, the illegality, invalidity, or unenforceability of any provision of
this Assignment shall not affect the legality, validity or enforceability
of any other provision of this Assignment.
SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this
Assignment on transfer of Grantor's interest, this Assignment shall be
binding upon and inure to the benefit of the parties, their successors and
assigns. If ownership of the Property becomes vested in a person other than
Grantor, Lender, without notice to Grantor, may deal with Grantor's
successors with reference to this Assignment and the indebtedness by way of
forbearance or extension without releasing Grantor from the obligations of
this Assignment or liability under the indebtedness.
TIME IS OF THE ESSENCE. Time is of the essence in the performance of this
Assignment.
WAIVER OF HOMESTEAD EXEMPTION. Grantor hereby releases and waives all rights and
benefits of the homestead exemption laws of the state of colorado as to all
indebtedness secured by this Assignment.
WAIVER OF RIGHT OF REDEMPTION. NOTWITHSTANDING ANY OF THE PROVISIONS TO THE
CONTRARY CONTAINED IN THIS ASSIGNMENT, GRANTOR HEREBY WAIVES ANY AND ALL RIGHTS
OF REDEMPTION FROM SALE UNDER ANY ORDER OR JUDGMENT OF FORECLOSURE ON GRANTOR'S
BEHALF AND ON BEHALF OF EACH AND EVERY PERSON, EXCEPT JUDGMENT CREDITORS OF
GRANTOR, ACQUIRING ANY INTEREST IN OR TITLE TO THE PROPERTY SUBSEQUENT TO THE
DATE OF THIS ASSIGNMENT.
DEFINITIONS. The following capitalized words and terms shall have the following
meanings when used in this Assignment. Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money of
the United States of America. Words and terms used in the singular shall include
the plural, and the plural shall include the singular, as the context may
require. Words and terms not otherwise defined in this Assignment shall have the
meanings attributed to such terms in the uniform commercial code:
ASSIGNMENT. The word "Assignment" means this Assignment of Rents, as this
Assignment of Rents may be amended or modified from time to time, together
with all exhibits and schedules attached to this Assignment of Rents from
time to time.
BORROWER. The word "Borrower" means ▇▇▇▇▇'▇ LIQUID GOLD-INC.
DEFAULT. The word "Default" means the Default set forth in this Assignment
in the section titled "Default".
EVENT OF DEFAULT. The words "Event of Default" mean any of the events of
default set forth in this Assignment in the default section of this
Assignment.
GRANTOR. The word "Grantor" means ▇▇▇▇▇'▇ LIQUID GOLD-INC.
GUARANTY. The word "Guaranty" means the guaranty from guarantor, endorser,
surety, or accommodation party to Lender, including without limitation a
guaranty of all or part of the Note.
INDEBTEDNESS. The word "Indebtedness" means all principal, interest and
other amounts, costs and expenses payable under the Note or Related
Documents, together with all renewals of, extensions of, modifications of,
consolidations of and substitutions for the Note, or Related Documents and
any amounts expended or advanced by Lender to discharge Grantor's
obligations or expenses incurred by Lender to enforce Grantor's obligations
under this Assignment, together with interest on such amounts as provided
in this Assignment.
LENDER. The word "Lender" means Citywide Banks, its successors and assigns.
NOTE. The word "Note" means the promissory note dated November 21, 2000, IN
THE ORIGINAL PRINCIPAL AMOUNT OF $6,000,000.00 from Grantor to Lender,
together with all renewals of, extensions of, modifications of,
refinancings of, consolidations of, and substitutions for the promissory
note or agreement.
PROPERTY. The word "Property" means all of Grantor's right, title and
interest in and to all the Property as described in the "Assignment"
section of this Assignment.
ASSIGNMENT OF RENTS
(CONTINUED)
PAGE 4
RELATED DOCUMENTS. The words "Related Documents" mean all promissory notes,
credit agreements, loan agreements, environmental agreements, guaranties,
security agreements, mortgages, deeds of trust, security deeds, collateral
mortgages, and all other instruments, agreements and documents, whether now
or hereafter existing, executed in connection with the Indebtedness.
RENTS. The word "Rents" means all of Grantor's present and future rights,
title and interest in, to and under any and all present and future lease,
including, without limitation, all Rents, revenue, income, issues,
royalties, bonuses, accounts receivable, cash or security deposits, advance
rentals, profits, and proceeds from the Property, and other payments and
benefits derived or to be derived from such leases of every kind and
nature, whether due now or later, including without limitation Grantor's
right to enforce such leases and to receive and collect payment and
proceeds thereunder.
THE UNDERSIGNED ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS ASSIGNMENT,
AND NOT PERSONALLY BUT AS AN AUTHORIZED SIGNER, HAS CAUSED THIS ASSIGNMENT TO BE
SIGNED AND EXECUTED ON BEHALF OF GRANTOR ON NOVEMBER 21, 2000.
GRANTOR:
▇▇▇▇▇'▇ LIQUID GOLD-INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President of ▇▇▇▇▇'▇ LIQUID GOLD-INC.
CORPORATE ACKNOWLEDGEMENT
STATE OF COLORADO )
) SS
COUNTY OF DENVER )
[SEAL OF ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, NOTARY PUBLIC]
On this 21st day of November, 2000, before me, the undersigned Notary Public,
personally appeared ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, PRESIDENT OF ▇▇▇▇▇'▇ LIQUID GOLD-INC.
and known to me to be an authorized agent of the corporation that executed the
Assignment of Rents and acknowledged the Assignment to be the free and voluntary
act and deed of the corporation, by authority of its Bylaws or by resolution
of its board of directors, for the uses and purposes therein mentioned, and on
oath stated that he or she is authorized to execute this Assignment and in
fact executed the Assignment on behalf of the corporation.
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Residing at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, #▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
NOTARY PUBLIC IN AND My Commission expires May 12, 2002
FOR THE STATE OF COLORADO
EXHIBIT "A"
TRANSNATION TITLE INSURANCE COMPANY
Commitment No.: C10285 C-6
SCHEDULE A - Continued
LEGAL DESCRIPTION
PARCEL A:
The North 816.59 feet of the South 1897.58 feet of ▇▇▇ ▇,
▇▇▇▇▇ ▇,
▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇
EXCEPT the Easterly 8.5 feet thereof.
City and County of Denver, State of Colorado.
PARCEL B:
The North 799.9 feet of the South 1080.99 feet of ▇▇▇ ▇, ▇▇▇▇▇ ▇,
▇▇▇▇▇▇ the East 8.5 feet thereof,
Montbello ▇▇. ▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ of Colorado.
PARCEL C:
A parcel of land situated in the Southwest 1/4 of Section 14, Township 3 South,
Range 67 West of the 6th principal Meridian, City and County of Denver, State of
Colorado, being a part of ▇▇▇ ▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇, more particularly
described as follows:
Commencing at the West 1/4 corner of said Section 14; Thence South 89 degrees 14
minutes 55 seconds East along the North line of said Southwest 1/4 a distance of
60.00 feet to a point lying on the East right of way line of Havana Street;
Thence South 00 degrees 00 minutes 00 seconds West along said East right of way
line and parallel with the West line of said Southwest 1/4 a distance of 925.89
feet to the Point of Beginning;
Thence South 89 degrees 35 minutes 01 seconds East a distance of 345.01 feet to
a point on a curve;
Thence along a curve to the right whose chord bears South 10 degrees 59 minutes
06 seconds East a distance of 140.09 feet, said curve having a central angle of
22 degrees 48 minutes 11 seconds, a radius of 354.32 feet, an arc length of
141.01 feet to a point of tangent;
Thence South 00 degrees 24 minutes 59 seconds West along said tangent, a
distance of 183.54 feet; Thence North 89 degrees 35 minutes 01 seconds West a
distance of 370.37 feet to a point lying on said East right of way line;
Thence North 00 degrees 00 minutes 00 seconds East along said East right of way
line parallel with and 60.00 feet Easterly of the West line of said Southwest
1/4 a distance of 320.87 feet to the Point of Beginning. City and County of
Denver, State of Colorado.
NOTE: Said Description was prepared by:
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TRANSNATION TITLE INSURANCE COMPANY
Commitment No.: C10285 C-6
SCHEDULE A - Continued
LEGAL DESCRIPTION
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ for Engineering Service Company
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ #▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Survey No. 94076
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