This instrument was prepared by
and upon recordation should be
returned to:
XX. XXXXXX X. XXXX
XXXXXXXXX & XXXXXXXX LLP
LINCOLN PLAZA, SUITE 4000
000 X. XXXXX XXXXXX
XXXXXX, XXXXX 00000
Exhibit 99.4
DEED OF TRUST AND SECURITY AGREEMENT
THIS DEED OF TRUST AND SECURITY AGREEMENT ("DEED OF TRUST") is made and
executed as of the 8th_ day of September, 2005, by BEHRINGER HARVARD LANDMARK
LP, a Texas limited partnership ("GRANTOR"), whose mailing address is 00000
Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 to Xxxxxx X. Xxxx ("TRUSTEE"),
as trustee, for the benefit of STATE FARM BANK, F.S.B., a federal savings bank,
whose MAILING ADDRESS is Xxx Xxxxx Xxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxx 00000
(TOGETHER WITH ITS SUCCESSORS AND ASSIGNS, "STATE FARM"), and encumbers the real
estate ("REAL ESTATE") described on EXHIBIT "A" attached hereto and made a part
hereof.
ARTICLE ONE
RECITALS
1.1 NOTE.
Grantor has executed and delivered to State Farm a Promissory Note (the
"NOTE") of even date herewith. In the Note, Grantor promises to pay to the order
of State Farm the principal sum of TWENTY-TWO MILLION AND NO/100 DOLLARS
($22,000,000.00 ) (the "LOAN"). This Deed of Trust secures the Loan. From date
hereof the Loan shall be repaid with interest thereon, in monthly installments
as set forth in the Note, and the entire unpaid principal balance and all
accrued interest thereon shall be due and payable on OCTOBER 1, 2010 (the
"MATURITY DATE"). The terms and provisions of the Note are by this reference
thereto incorporated herein and made a part hereof.
1.2 INDEBTEDNESS.
The indebtedness evidenced by the Note, including principal, interest
and prepayment premium, if any, together with all other sums which may at any
time be due, owing, or required to be paid under the Note, this Deed of Trust,
and the other Loan Documents (as hereinafter defined) are herein called the
"INDEBTEDNESS".
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1.3 LOAN DOCUMENTS.
In addition to this Deed of Trust and the Note, there have been executed
and delivered by Grantor to and in favor of State Farm, as security for the
payment of the Indebtedness, certain other loan documents more particularly
described on EXHIBIT "C" attached hereto and by this reference thereto made a
part hereof (the Note, this Deed of Trust, and all other documents and
instruments described on said EXHIBIT "C", whether now or hereafter existing,
and as same may be hereafter amended, modified, or supplemented from time to
time, are collectively referred to herein as the "LOAN DOCUMENTS").
ARTICLE TWO
THE GRANT
In order to secure the payment of the sums that are now or may hereafter
become owing from Grantor to State Farm: (I) as the payments required in the
Loan Documents, (II) as a result of the non-performance of any of the terms,
provisions, covenants, agreements, and obligations contained herein or under the
Loan Documents, or (III) as a result of a breach of the terms, provisions,
covenants, agreements, representations, warranties and certifications made in
the Loan Documents (collectively, the "OBLIGATIONS") (whether or not the Grantor
is personally liable for such payment, performance, and observance), and in
consideration of the sum of Ten and No/100 Dollars ($10.00), in hand paid by
State Farm to the Grantor, the Recitals herein above stated in ARTICLE ONE, and
for other good and valuable considerations, the receipt and sufficiency of which
are hereby acknowledged, GRANTOR HEREBY GRANTS, BARGAINS, SELLS, CONVEYS,
TRANSFERS, ASSIGNS, WARRANTS, AND SETS OVER TO TRUSTEE AND TRUSTEE'S SUCCESSORS
OR SUBSTITUTES FOREVER, IN TRUST, WITH POWER OF SALE, however, upon the terms,
provisions and conditions herein set forth (as hereafter defined), all of the
following rights, interests, claims, and property (collectively the "PREMISES"):
(A) all the Real Estate described in EXHIBIT "A" attached
hereto and by this reference incorporated herein and made a part hereof;
(B) all buildings, structures, and other improvements now or
hereafter constructed, erected, installed, placed or situated upon the Real
Estate (collectively the "IMPROVEMENTS");
(C) all estate, claim, demand, right, title, and interest of
Grantor now owned or hereafter acquired, including without limitation, any
after-acquired title, franchise, license, remainder or reversion, in and to (I)
any land or vaults lying within the right-of-way of any street, avenue, way,
passage, highway, or alley, open or proposed, vacated or otherwise, adjoining
the Real Estate; (II) any and all alleys, sidewalks, streets, avenues, strips
and gores of land adjacent, belonging or appertaining to the Real Estate and
Improvements; (III) all rights of ingress and egress to and from the Real Estate
and all adjoining property; (iv) storm and sanitary sewer, water, gas, electric,
railway, telephone, and all other utility services relating to the Real Estate
and Improvements; (V) all land use, zoning, developmental rights and approvals,
all air rights, water, water rights, water stock, gas, oil, minerals, coal, and
other substances of any kind or character underlying or relating to the Real
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Estate or any part thereof; and (VI) each and all of the tenements,
hereditaments, easements, appurtenances, other rights, liberties, reservations,
allowances, and privileges relating to the Real Estate or the Improvements or in
any way now or hereafter appertaining thereto, including homestead and any other
claim at law or in equity (collectively the "APPURTENANCES");
(D) all leasehold estates and the right, title, and interest
of the Grantor in, to and under any and all leases, subleases, management
agreements, arrangements, concessions, or agreements, written or oral, relating
to the use and occupancy of the Real Estate and Improvements or any portion
thereof, now or hereafter existing or entered into, including the Credit Leases
described in SECTION 3.18 (collectively the "LEASES");
(E) all rents, issues, profits, proceeds, income, revenues,
royalties, advantages, avails, claims against guarantors, security and other
deposits (whether in cash or other form), advance rentals, and any and all other
payments or benefits now or hereafter derived, directly or indirectly, from the
Real Estate and Improvements, whether under the Leases or otherwise
(collectively the "RENTS"); subject, however, to the right, power, and authority
(the "LICENSE") granted Grantor in the Assignment of Rents and Leases executed
by Grantor to and in favor of State Farm of even date herewith to collect and
apply the Rents as provided therein;
(F) all right, title, and interest of Grantor in and to any
and all contracts, written or oral, express or implied, now existing or
hereafter entered into or arising, in any manner related to the improvement,
use, operation, sale, conversion or other disposition of any interest in the
Premises, including without limitation all options to purchase or lease the Real
Estate or Improvements or any portion thereof or interest therein, or any other
rights, interests, or greater estates in the rights and properties comprising
the Premises, now owned or hereafter acquired by the Grantor (collectively the
"CONTRACT RIGHTS");
(G) all general intangibles of Grantor, including without
limitation, goodwill, trademarks, trade names, option rights, permits, licenses,
insurance policies and proceeds therefrom, rights of action, and books and
records relating to the Real Estate or Improvements (collectively the
"INTANGIBLE PERSONAL PROPERTY");
(H) all right, title and interest of the Grantor in and to
all fixtures, equipment and tangible personal property of every kind, nature or
description attached or affixed to or situated upon or within the Real Estate or
Improvements, or both, provided the same are used, usable, or intended to be
used for or in connection with any present or future use, occupation, operation,
maintenance, management or enjoyment of the Real Estate or Improvements
(collectively the "TANGIBLE PERSONAL PROPERTY");
(I) all proceeds of the conversion, voluntary or
involuntary, of any of the Premises into cash or other liquidated claims, or
that are otherwise payable for injury to, or the taking or requisitioning of the
Premises, including all insurance and condemnation proceeds as provided in this
Deed of Trust (collectively the "PROCEEDS");
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(J) all Tax and Insurance Deposits (as hereinafter defined);
(K) all of the Grantor's right, power, or privilege to
further hypothecate or encumber all or any portion of the property, rights and
interests described in this Article Two as security for any debt or obligation;
it being intended by this provision to divest the Grantor of the right, power
and privilege to hypothecate or encumber, or to grant a mortgage upon or
security interest in any of the property hypothecated in or encumbered by this
Deed of Trust as security for the payment of any debt or performance of any
obligation without State Farm's prior written consent (the "RIGHT TO ENCUMBER");
and
(L) all other property, rights, interests, estates, or
claims of every name, kind, character or nature, both in law and in equity,
which Grantor now has or may hereafter acquire in the Real Estate and
Improvements and all other property, rights, interests, estates or claims of any
name, kind, character or nature or properties now owned or hereafter acquired in
the other properties and interests comprising the Premises ("OTHER RIGHTS AND
INTERESTS").
Grantor agrees that without the necessity of any further act of the
Grantor or State Farm, the lien of and the security interest created in and by
this Deed of Trust shall automatically extend to and include any and all
renewals, replacements, substitutions, accessions, products or additions to and
proceeds of the Premises and any real property acquired by the Grantor which may
be contiguous or attached to the Premises and may be required by law or by a
tenant of the Premises to be used in or as part of the direct operation of the
Premises.
TO HAVE AND TO HOLD the Premises hereby, together with the rights,
privileges and appurtenances thereto belonging unto the Trustee and Trustee's
successors or substitutes, forever in this trust, and to his or their successors
and assigns forever, IN TRUST, however, upon the terms, provisions and
conditions herein set forth.
THE GRANTOR hereby covenants with and warrants to State Farm and Trustee
and the purchaser at any foreclosure sale that at the execution and delivery
hereof, Grantor is lawfully seized and possessed of and owns the Premises and
every part thereof, and has good and indefeasible title therein, in fee simple;
that the Premises are free from all encumbrances whatsoever (and any claim of
any other person thereto) other than those approved and permitted by State Farm
("PERMITTED EXCEPTIONS") which are listed, described and set forth in EXHIBIT
"B" attached hereto and by this reference incorporated herein and made a part
hereof; that it has good and lawful right to sell, convey, mortgage and encumber
the Premises; and that Grantor and its successors and assigns shall forever
warrant and defend the title and quiet possession to the Premises against all
claims and demands whatsoever, subject, however, to the Permitted Exceptions.
It is the intention of the parties hereto that the Premises shall secure
all Indebtedness presently or hereafter owed State Farm by Grantor, and that the
priority of State Farm's security for all such Indebtedness shall be a first,
sole and exclusive lien and security interest. This paragraph shall serve as
notice to all persons who may seek or obtain a lien on the Premises that until
this Deed of Trust is released, any debt owed State Farm by Grantor, including
advances made subsequent to
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the recording of this Deed of Trust, shall be secured with the first lien
priority afforded this Deed of Trust as recorded.
ARTICLE THREE
GENERAL AGREEMENTS
To protect the security of this Deed of Trust, the Grantor further
covenants and agrees as follows:
3.1 RECITALS.
The recitals set forth above are true and correct and are by reference
incorporated herein.
3.2 OBLIGATIONS.
Grantor shall pay promptly each and every sum due to State Farm under
the Loan Documents either as the payments due under any of the terms thereof, as
sums due as a result of the nonperformance of any of the covenants, agreements,
and obligations thereof, or as amounts due as a result of a breach of any of the
representations, warranties, and certifications contained therein (including
fees and charges), at the times and in the manner provided in the Loan
Documents. All such sums payable by Grantor shall be paid without demand,
counterclaim, offset, deduction, or defense. Grantor hereby waives all rights
now or hereafter conferred by statute or otherwise to any such demand,
counterclaim, offset, deduction, or defense, except as may otherwise be
expressly provided in the Loan Documents.
3.3 OTHER PAYMENTS.
(A) Grantor shall deposit, in addition to the monthly
installments of principal and interest required by the Note, monthly until the
Indebtedness is fully paid the following sums (collectively the "TAX AND
INSURANCE DEPOSITS"):
(I) a sum equal to one-twelfth (1/12th) of the
annual Taxes (as hereinafter defined) next due on the Premises, all as
estimated by State Farm (the "TAX DEPOSITS");
(II) a sum equal to one-twelfth (1/12th) of the
annual premium or premiums next payable for the insurance hereinafter
required to be maintained on or with respect to the Premises (the
"INSURANCE DEPOSITS").
(B) Amounts paid as Tax and Insurance Deposits are herein
called "OTHER PAYMENTS".
(B) Should the total Tax and Insurance Deposits on hand not
be sufficient to pay all of the Taxes and insurance premiums, together with all
penalties and interest thereon, when the
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same become due and payable, then the Grantor shall pay to State Farm promptly
on demand any amount necessary to make up the deficiency. If the total of such
Tax and Insurance Deposits exceeds the amount required to pay the Taxes and
insurance premiums, such excess shall be credited on subsequent payments to be
made for such items.
(C) All such Tax and Insurance Deposits:
(I) shall be held by State Farm or a depository
designated by State Farm, in trust, with no obligation to segregate such
payments and without any obligation arising for the payment of any
interest thereon;
(II) shall be held in trust to be applied by State
Farm for the purposes for which made (as herein above provided) subject,
however, to the security interest granted State Farm therein pursuant to
ARTICLE TWO; and
(III) shall not be subject to the direction or control
of the Grantor.
(D) Provided that no Event of Default (as hereinafter
defined) exists, State Farm agrees to make the payment, to the extent funds are
available, of the Taxes or insurance premiums with reasonable promptness
following its receipt of appropriate tax and/or insurance bills therefor, or
alternatively upon presentation by Grantor of receipted (i.e. paid) tax and/or
insurance bills therefor, State Farm shall reimburse the Grantor for such Taxes
and insurance premium payments made by the Grantor.
(E) Upon the occurrence of an Event of Default (as
hereinafter defined), State Farm may, at its option, without being required to
do so, apply any Tax and Insurance Deposits on hand on account of any of the
Indebtedness, in such order and manner as State Farm may elect. When the
Indebtedness has been fully paid, then any remaining Tax and Insurance Deposits
shall be paid to the Grantor.
3.4 MAINTENANCE, REPAIR, RESTORATION, PRIOR LIENS, PARKING.
The Grantor shall and hereby agrees to:
(A) promptly repair, restore, replace, or rebuild any
portion of the Improvements which may become damaged or destroyed, whether or
not proceeds of insurance are available or sufficient for such purpose, with all
replacements being at least equal in quality and condition as existed prior
thereto, free from any security interest therein, encumbrances thereon, or
reservation of title thereto;
(B) keep the Improvements in good condition and repair,
without waste, and free from mechanics', materialmen's or like liens or claims
or other liens or claims of lien;
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(C) complete, within a reasonable time, any Improvements now
or hereafter in the process of construction or erection upon the Real Estate;
(D) comply with all statutes, rules, regulations, orders,
decrees, and other requirements of any governmental body, whether federal,
state, or local, having jurisdiction over the Premises and the use thereof and
observe and comply with any conditions and requirements necessary to preserve
and extend any and all material rights, licenses, permits (including without
limitation zoning variances, special exceptions, and nonconforming uses),
privileges, franchises, and concessions that are applicable to the Premises or
its use and occupancy;
(E) make no material alterations in or to the Improvements,
except for customary tenant improvements, as required in PARAGRAPH (D) hereof or
otherwise with the written consent of State Farm and in conformity with all
applicable laws;
(F) not suffer nor permit any change in the general nature
of the occupancy of the Improvements without State Farm's prior written consent;
(G) pay when due all operating costs of the Improvements;
(H) not initiate nor acquiesce in any zoning
reclassification with respect to the Premises without State Farm's prior written
consent;
(I) provide, improve, grade, surface and thereafter
maintain, clean, repair, and adequately light all parking areas upon the Real
Estate of sufficient size to accommodate the greater of (a) the amount of
standard-size vehicles required by law, ordinance, regulation, or (b) required
by the terms of any lease which is subject to the Assignment of Rents and Leases
made by Grantor to and in favor of State Farm of even date herewith, together
with any sidewalks, aisles, streets, driveways and sidewalk cuts and sufficient
paved areas for ingress, egress and rights-of-way to and from the adjacent
thoroughfares necessary or desirable for the use thereof; and
(J) forever warrant and defend its title to the Premises and
the validity, enforceability and priority of the lien and security interests
granted in and by this Deed of Trust and the other Loan Documents against the
claims and demands of all persons, subject to the Permitted Exceptions.
3.5 PROPERTY TAXES AND CONTEST OF LIENS.
Notwithstanding the Other Payments required by SECTION 3.3, Grantor
shall be responsible for the payment, when first due and owing and before
delinquency and before any penalty attaches, of all real estate and personal
property taxes and assessments (general or special), water charges, sewer
charges, and any other charges, fees, taxes, claims, levies, charges, expenses,
liens, and assessments, ordinary or extraordinary, governmental or
nongovernmental, statutory or otherwise, that may be asserted against the
Premises or any part thereof or interest therein ("TAXES"). Notwithstanding
anything contained herein to the contrary, Grantor may, in good faith and with
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reasonable diligence, contest the validity or amount of any such Taxes as well
as any mechanics', materialmen's, or other liens or claims of lien upon the
Premises (collectively "CONTESTED LIENS"), provided that:
(A) such contest shall have the effect of preventing the
collection of the Contested Liens and the sale or forfeiture of Premises or any
part thereof or interest therein to satisfy the same; and
(B) Grantor shall first notify State Farm in writing of the
intention of Grantor to contest the same before any Contested Liens have been
increased by any interest, penalties, or costs.
3.6 TAX AND LIEN PAYMENTS BY STATE FARM.
(A) Upon the failure of Grantor to pay the Tax Deposits as
required in SECTION 3.3 or (in the event said payments are waived by State Farm)
to pay the Taxes required to be paid in SECTION 3.5 above, State Farm is
authorized, in its sole discretion, to make any payment of Taxes levied,
assessed or asserted against the Premises, or any part thereof, in accordance
with any tax xxxx or statement from the appropriate public office without
inquiry into the accuracy or validity of any Taxes, sales, forfeiture, or title
or claim relating thereto.
(B) State Farm is also authorized, in the place and stead of
Grantor, to make any payment relating to any apparent or threatened adverse
title, lien, claim of lien, encumbrance, claim, charge, or payment otherwise
relating to any other purpose but not enumerated in this Section, whenever, in
State Farm's judgment and discretion, such advance seems necessary to protect
the full security intended to be created by this Deed of Trust.
(C) All such advances authorized by this SECTION 3.6 shall
constitute additional Indebtedness and shall be repaid by Grantor to State Farm
upon demand with interest at the Default Rate (as defined in the Note) from the
date of such advance.
3.7 INSURANCE.
(A) The Grantor shall insure and keep insured the Premises
and each and every part thereof against such perils and hazards as State Farm
may from time to time require, and in any event including:
(I) Property insurance against loss of and damage to
the Improvements by all risks of physical loss or damage, including by
fire, windstorm, flood, and other risks covered by the so-called
extended endorsement in an amount equal to one hundred percent (100%) of
the then current "full replacement cost" of all Improvements, fixtures
and equipment from time to time on the Improvements without deduction
for physical depreciation, with a deductible amount of not more than
$10,000.00;
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(II) Commercial general liability insurance against
death, bodily injury and property damage in an amount of not less than
the greater of (A) $1,000,000.00, or (B) the highest amount required to
be carried by the landlord for the Improvements under the terms of the
Credit Leases (as hereinafter defined);
(III) Steam boiler, machinery and pressurized vessel
insurance (if applicable to the Improvements);
(IV) Rent loss insurance in an amount sufficient to
cover loss of rents from the Premises for a minimum of twelve (12)
months;
(V) Affirmative coverage for acts of terrorism under
Grantor's property and liability insurance required under clauses (I)
and (II) above or evidence that such coverage is not excluded from such
insurance; and
(VI) The types and amounts of coverage as are
customarily maintained by owners or operators of like properties.
(B) Insurance policies required by this SECTION 3.7 shall:
(I) be in amounts and form and issued by companies
satisfactory to State Farm and shall comply with all provisions of this
Deed of Trust;
(II) contain endorsements naming State Farm as first
mortgagee under a standard mortgagee clause under the required property,
steam boiler and rent loss insurance policies and as an additional
insured for the commercial general liability insurance policy;
(III) contain endorsements providing for not less than
THIRTY (30) DAYS' written notice from the insurance company to State
Farm prior to any cancellation, non-renewal or termination;
(IV) permit State Farm to pay any premium within
FIFTEEN (15) days after its receipt of notice stating that such premium
has not been paid when due;
(V) require that settlement of any claim under any
of the referenced policies shall require State Farm's prior written
approval; and
(VI) contain exclusions to coverage acceptable to
State Farm.
(C) The policy or policies of such insurance or certificates
of insurance evidencing the required coverage shall be delivered to State Farm
within FIFTEEN (15) days prior to the termination of an existing policy.
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(D) Grantor shall not purchase separate insurance policies
concurrent in form or contributing in the event of loss with those policies
required to be maintained under this SECTION 3.7.
3.8 INSURANCE PREMIUM PAYMENT BY STATE FARM.
(A) In the event the Grantor fails to make the Insurance
Deposits as required by SECTION 3.3 or (if those payments have been waived) upon
State Farm's receipt (I) of notice of an unpaid insurance premium, (II) of
notice of a termination or cancellation of any required insurance policy, or
(III) of notice that a required insurance policy is not to be renewed and
Grantor fails to provide replacement coverage at least FIFTEEN (15) DAYS prior
to the termination of existing coverage, State Farm may, at its option, procure
and substitute another policy of insurance in the amount required pursuant to
the foregoing terms of this Deed of Trust with such companies as State Farm may
select, the cost of which shall be paid by Grantor upon demand should the amount
available from the Insurance Deposit be insufficient to pay the premium
therefor. All sums paid by State Farm in procuring said insurance that are not
promptly reimbursed by the Grantor shall be additional Indebtedness and shall be
immediately due and payable with notice, with interest thereon at the Default
Rate as defined in the Note.
(B) In the event of any insured damage to or destruction of
the Improvements or any part thereof, Grantor shall promptly notify State Farm
and take such steps as necessary to preserve the undamaged portion of the
Improvements. In State Farm's sole discretion all insurance proceeds shall be
applied: (I) to the installments of the Indebtedness in the inverse order of its
maturity (provided, however, no premium or penalty shall be payable in
connection with any prepayment of the Indebtedness from the insurance proceeds
as aforesaid), or (II) to the cost of restoring, repairing, replacing, or
rebuilding (herein generally called "RESTORATION") the Improvements or any part
thereof. Notwithstanding the foregoing, State Farm agrees that if (I) the
insurance proceeds from a casualty affecting the Premises are less than or equal
to $500,000.00; and (II) the casualty occurs prior to the last year of the term
of the Note, then the insurance proceeds paid with respect to the Premises (less
expenses of collection and any expenses incurred in protecting the undamaged
portion of the Improvements in the Premises) shall be disbursed by State Farm to
Grantor as set forth in SECTION 3.10 to restore the Premises to its condition
prior to the casualty, subject to satisfaction of the following conditions:
(1) There is no existing Event of Default at the
time of casualty, and if any Event of Default
shall occur and be continuing after the date of
the casualty, State Farm shall have no further
obligation to release insurance loss proceeds
hereunder;
(2) The casualty insurer has not denied liability
for payment of insurance proceeds as a result of
any act, neglect, use or occupancy of the
Premises by Grantor or any tenant of the
Premises, provided that a reservation of rights
by the casualty insurer shall not constitute a
denial of liability if insurance proceeds are
otherwise made available for restoration;
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(3) State Farm shall be satisfied that all insurance
proceeds so held, together with supplemental funds
received from Grantor, shall be sufficient to complete
the restoration or repair of the Improvements. Any
remaining insurance proceeds may, at the option of State
Farm, be applied to the Indebtedness, whether or not
due, or be released to Grantor; and
(4) If required by State Farm, State Farm shall be furnished
with a satisfactory report addressed to State Farm from
an environmental engineer or other qualified
professional satisfactory to State Farm certifying that
no adverse environmental impact to the Premises has
resulted from the casualty.
Additionally and notwithstanding the foregoing, if any Credit Lease, as
described in SECTION 3.18(B), requires the Restoration of the Improvements, then
so long as (I) no Event of Default is in existence on the date of such damage or
destruction of the Improvements and no event has occurred as of such date which
with the passage of time, the giving of notice or both, would constitute an
Event of Default, and (II) no tenant under any Credit Lease is in default
thereof as of such date and no event has occurred which, with the passage of
time or the giving of notice or both, would constitute a default by the tenant
under any Credit Lease, such insurance proceeds, after deducting therefrom any
expenses incurred protecting the undamaged portion of the Improvements and in
the collection of the insurance proceeds, shall be disbursed by State Farm to
Grantor to reimburse Grantor for the cost of Restoration as set forth in SECTION
3.10. If Grantor and/or State Farm elects to have the insurance proceeds applied
to the Indebtedness, such proceeds shall be applied to the installments of the
Indebtedness in the inverse order of maturity (provided, however, no premium or
penalty shall be payable in connection with any prepayment of the Indebtedness
from the insurance proceeds as aforesaid).
3.9 CONDEMNATION.
(A) The Grantor shall give State Farm prompt notice of any
proceedings, instituted or threatened, seeking condemnation or taking by eminent
domain or any like process (a "TAKING") of all or any part of the Real Estate or
Improvements including any easement thereon or appurtenance thereto (including
severance of, consequential damage to, or change in grade of streets), and shall
deliver to State Farm copies of any and all papers served in connection with any
such proceeding.
(B) Grantor hereby assigns, transfers, and sets over unto
State Farm the entire proceeds of any and all awards resulting from any Taking
(the "AWARD"). State Farm is hereby authorized to collect and receive from the
condemnation authorities the entire Award and is further authorized to give
appropriate receipts and acquittances therefor.
(C) In the event of any such Taking, any and all such Award
shall be applied, in State Farm's sole discretion: (I) to the installments of
the Indebtedness in the inverse order of their maturity (provided, however, no
premium or penalty shall be payable in connection with any prepayment of the
Indebtedness made out of such Award as aforesaid); or (II) to the cost of
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Restoration of the Real Estate and Improvements or any part thereof. Provided
however, if any Credit Lease, as described in SECTION 3.18(B), requires the
Restoration of the Improvements, then so long as (I) no Event of Default is in
existence on the date of such Taking and no event has occurred as of such date
which with the passage of time, the giving of notice or both, would constitute
an Event of Default, and (II) no tenant under any Credit Lease is in default
thereof as of such date and no event has occurred which, with the passage of
time or the giving of notice or both, would constitute a default by the tenant
under any Credit Lease, such Award, after deducting therefrom any expenses
incurred in the collection of the Award, shall be used to reimburse Grantor for
the cost of Restoration as set forth in SECTION 3.10.
3.10 RESTORATION USING PROCEEDS.
(A) In the event State Farm elects or is required to make
any Proceeds available for Restoration of the Real Estate and/or Improvements,
Grantor shall complete, in form and with supporting documentation reasonably
required by State Farm, an estimate of the cost to repair or to restore the Real
Estate and Improvements to the condition at least equal to the condition in
which they existed prior to such damage, destruction or Taking, free from any
security interest in, lien or encumbrances on, or reservation of title to such
Real Estate and Improvements.
(B) The Proceeds necessary to complete Restoration shall be
held by State Farm, or if State Farm so desires, a disbursing agent selected by
State Farm. Said Proceeds may be invested using Grantor's taxpayer
identification number in an interest bearing account mutually acceptable to
Grantor and State Farm. The costs and expenses of administering disbursements
shall be paid by Grantor. In the event the amount of the Proceeds are
insufficient to cover the cost of Restoration, Grantor shall pay the cost of
Restoration in excess of the Proceeds before being entitled to any reimbursement
from the Proceeds.
(C) Subject to State Farm's right to limit the number of
disbursements, the Proceeds shall be disbursed from time to time upon State
Farm's being furnished with architect's certificates, waivers of lien,
contractor's sworn statements, and such other evidences as State Farm or any
disbursing agent may reasonably require to verify the cost and fact of the
completion of the Improvements included in said disbursement. Under no
circumstances shall any portion of the Proceeds be released until State Farm has
been reasonably assured that the Proceeds remaining after the requested
disbursement, together with any other funds held by State Farm with respect to
the Restoration, will be sufficient to complete Restoration. No Payment made
prior to the final completion of Restoration shall exceed NINETY PERCENT (90%)
of the value of the work performed from time to time. The amounts of each
Payment retained for construction costs will be disbursed upon satisfactory
completion of one hundred percent (100%) of the work and Lender's receipt of a
final waiver of lien with respect to such completed work or delivered materials.
Any Proceeds remaining after Restoration shall be applied at State Farm's option
against the Indebtedness in the inverse order of its maturity.
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3.11 RESTRICTIONS ON TRANSFER.
(A) Without the prior written consent of State Farm or as
set forth in this Deed of Trust:
(I) Grantor shall not create, effect, contract for,
commit or consent to, nor shall Grantor suffer or permit any sale,
conveyance, transfer, assignment, collateral assignment, lien, other
than Contested Liens as defined and permitted in SECTION 3.5 of this
Deed of Trust, pledge, mortgage, security interest, or other
hypothecation, encumbrance or alienation (or any agreement to do any of
the foregoing) of the Premises, or any interest therein or title
thereto, (excepting, however, the sale or other disposition of
Collateral (as hereinafter defined) no longer useful in connection with
the operation of the Premises ("OBSOLETE COLLATERAL"), provided,
however, that prior to the sale or other disposition of Obsolete
Collateral, such Obsolete Collateral shall have been replaced by
Collateral of at least equal value and utility which is subject to the
first and prior lien of this Deed of Trust; or
(II) Grantor shall not fail to pay when the same
shall become due all lawful claims and demands of mechanics,
materialmen, laborers, and others which, if unpaid, might result in or
permit the creation of a lien on the Real Estate or Improvements, or on
the Rents arising therefrom; or
(III) if the Grantor is a land trustee ("TRUSTEE
GRANTOR"), any beneficiary of the Grantor shall not create, effect,
contract for, commit or consent to, or shall suffer or permit, any sale,
conveyance, transfer, assignment, collateral assignment, lien, pledge,
mortgage, security interest, or other hypothecation, encumbrance or
alienation of such beneficiary's beneficial interest in the Grantor; or
(IV) if the Grantor is a corporation or limited
liability company, or if any corporation or limited liability company is
a beneficiary of a Trustee Grantor, any shareholder of such corporation
or limited liability company shall not create, effect, contract for,
commit or consent to, or shall suffer or permit any sale, conveyance,
transfer, assignment, collateral assignment, lien, pledge, mortgage,
security interest, or other hypothecation, encumbrance or alienation of
any such shareholder's shares of such corporation or limited liability
company (provided, however, that if such corporation or limited
liability company is a corporation or limited liability company whose
stock is publicly traded on a national securities exchange or on the
"Over The Counter" market, then this SUBPARAGRAPH (IV) shall be
inapplicable); or
(V) if the Grantor is a partnership or joint venture
or if any beneficiary of a Trustee Grantor is a partnership or joint
venture, any general partner or joint venturer in such partnership or
joint venture shall not create, effect, contract for, commit or consent
to, suffer, or permit any sale, conveyance, transfer, assignment,
collateral assignment, lien,
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pledge, mortgage, security interest, or other hypothecation, encumbrance
or alienation of any part of the partnership interest or joint venture
interest, as the case may be, of such general partner or joint venturer;
or
(VI) there shall not be any change in control (by way
of transfers of stock ownership, partnership interests, or otherwise) in
any corporation, limited liability company or partnership constituting
or included within the Grantor which directly or indirectly controls any
corporation, limited liability company or partnership constituting or
included within the Grantor that results in a material change in the
identity of the person(s) in control of such entity.
(B) It is expressly provided, however, that the foregoing
provisions of this SECTION 3.11 shall not apply (I) to liens securing the
Indebtedness, (II) to the lien of current Taxes not in default, or (iii) to
leases executed in the prudent management of the Premises. The provisions of
this SECTION 3.11 shall be operative with respect to, and shall be binding upon,
any persons who, in accordance with the terms hereof or otherwise, shall acquire
any part of or interest in or encumbrance upon the Premises, or such beneficial
interest in, share of stock of, or partnership or joint venture interest in the
Grantor or any beneficiary of a Trustee Grantor. Any waiver by State Farm of the
provisions of this SECTION 3.11 shall not be deemed to be a waiver of the right
of State Farm in the future to insist upon strict compliance with the provisions
of this SECTION 3.11.
(C) Upon the sale or transfer of (I) all or any part of the
Premises, or (II) all or any part of the beneficial interest in Grantor (if
Grantor is not a natural person or persons but is a corporation, limited
liability company, partnership, trust or other legal entity) (the person or
entity to whom or which all or any part of the Premises have been so sold or
transferred, being the "TRANSFEREE"), without the prior written consent of State
Farm, State Farm may, at State Farm's option, declare all of the sums secured by
this Deed of Trust to be immediately due and payable.
(D) The Premises includes two (2) buildings (said buildings,
together with the land upon which each is situated, and certain land adjacent to
each building, the boundaries of which land shall have been approved by State
Farm, are herein individually called the "LANDMARK CENTER I BUILDING" and the
"LANDMARK CENTER II BUILDING" and collectively called the "LANDMARK CENTER
BUILDINGS"). Notwithstanding anything herein to the contrary, Grantor shall be
entitled to obtain a release (a "PERMITTED RELEASE") of the lien of this Deed of
Trust from one of Landmark Center Buildings in conjunction with the sale of one
of the Landmark Center Building to a bona fide third party, in accordance with,
and subject to the following terms, conditions and requirements:
(I) Grantor shall furnish at least thirty (30) days
prior written notice (the "RELEASE NOTICE") to State Farm of Grantor's
desire to obtain a Permitted Release which Release Notice shall identify
the Landmark Center Building that Grantor is asking State Farm to
release (the "RELEASE BUILDING") and accompanying said Release Notice
shall be a copy of the purchase and sale agreement for the Release
Building; in addition a non-refundable fee ("ADMINISTRATIVE PROCESSING
FEE") in the amount of Two Thousand Five Hundred Dollars ($2,500.00)
shall accompany the Request Notice;
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(II) The amounts required to be paid to State Farm
for the release of either of the Landmark Center Buildings ("RELEASE
AMOUNTS") are as follows:
(A) Landmark Center I Building -
$11,891,000; and
(B) Landmark Center II Building -
$13,409,000;
(III) As a condition precedent to State Farm's partial
release of the lien of this Deed of Trust for a Release Building,
Grantor shall (A) pay to State Farm the Release Amount indicated above
and (B) pay any costs and expenses of State Farm associated with the
release including, without limitation, the attorneys fees and costs of
State Farm's Selected Counsel and all title insurance costs (a title
endorsement insuring that, following the Permitted Release, the lien of
this Deed of Trust remains as a first and prior lien against the
remaining Premises encumbered by this Deed of Trust, subject to no
exceptions other than the permitted exceptions defined in this Deed of
Trust or otherwise acceptable to State Farm in its sole discretion);
(IV) The Permitted Release shall not be permitted
during the Closed Period (as defined in the Note);
(V) In connection with any request by Grantor for a
Permitted Release, Grantor shall deliver to State Farm such
documentation as State Farm may request to evidence that the conditions
precedent to such Permitted Release have been met;
(VI) As of the date of State Farm's receipt of the
Request Notice and as of the date of the closing of the sale for the
Release Building, there shall be no default or Event of Default under
any of the Loan Documents for the Loan then in existence and no event
shall have occurred as of such date which, with the passage of time, the
giving of notice, or both, would constitute a default or Event of
Default under any of the Loan Documents;
(VII) State Farm shall be satisfied, in its reasonable
discretion, that the release of the Release Building does not negatively
impact the continued use and occupancy of the Landmark Center Building
that would remain subject to this Deed of Trust or otherwise adversely
impact the Premises which will remain securing the Loan ;
(VIII) The Premises (the Landmark Center Building not
released), after the release of the Release Building, must be a
separate, legal and taxable parcel or parcels and in full compliance
with all subdivision, zoning, parking, building code and other
applicable governmental regulations;
(IX) The Premises shall not be in any manner
dependent on the Release Building for access, parking, utility line
connections, drainage or other related purposes, and
15
if any such dependency exists, the Release Building shall not be
released until all necessary easement agreements shall have been
approved by State Farm, executed and recorded;
(X) As of the date of the release of the Release
Building and at any time thereafter during the term of the Loan, Grantor
shall be prohibited from granting any parking or other easements which
benefit the Release Building and burden the remainder of the Premises;
and
(XI) After the application of the Release Amount to
the outstanding principal balance of the Loan, the monthly interest
payments under the Note shall be recalculated to reflect such prepayment
of a portion of the aggregate outstanding principal balance.
Additionally Grantor shall execute and deliver to State Farm any
amendments to the Loan Documents that may be necessary to reflect the
Permitted Release, including UCC-1 releases
3.12 STATE FARM'S DEALINGS WITH TRANSFEREE.
In the event State Farm gives its written consent to a sale or transfer,
whether by operation of law, voluntarily, or otherwise, of all or any part of
the Premises, State Farm shall be authorized and empowered to deal with the
Transferee with regard to the Premises, the Indebtedness, and any of the terms
or conditions of this Deed of Trust as fully and to the same extent as it might
with the original Grantor, without in any way releasing or discharging the
original Grantor from any of its covenants under this Deed of Trust, and without
waiving State Farm's right of acceleration of the maturity of the Indebtedness
as provided in this Deed of Trust or the Note.
3.13 CHANGE IN TAX LAWS.
In the event of the enactment of or change in (including a change in
interpretation) any applicable law, in any manner changing or modifying the laws
governing (I) the taxation of mortgages, deeds of trust or other security
instruments or the debts secured thereby, or (II) the manner of collecting such
taxes, so as to adversely affect State Farm, this Deed of Trust or any other
Loan Document or the Indebtedness, Grantor shall promptly pay any such tax and
otherwise compensate State Farm to the extent of such detriment; provided,
however, that if Grantor fails to make such payment or if any such law prohibits
Grantor from making such payment or would penalize State Farm in the event of
such payment, State Farm may elect, by notice in writing given to the Grantor,
to declare all of the Indebtedness secured hereby to be and become due and
payable, at par, within SIXTY (60) DAYS from the giving of such notice. The
above shall not apply to income tax or other tax based on income, capital or
revenue.
3.14 INSPECTION OF PREMISES.
Subject to the terms of the Leases, Grantor hereby grants to State Farm,
its agents, employees, consultants and contractors the right to enter upon the
Premises for the purpose of making any and all inspections, reports, tests,
inquiries and reviews as State Farm (in its sole and
16
absolute discretion) deems necessary to assess the then current condition of the
Premises, or for the purpose of performing any other acts which State Farm is
authorized to perform under this Deed of Trust or under the Environmental
Indemnification Agreement. Grantor will cooperate with State Farm to facilitate
each such entry and the accomplishment of such purposes.
3.15 CERTIFIED ANNUAL OPERATING STATEMENTS.
Within ONE HUNDRED TWENTY (120) DAYS after the close of each fiscal year
of Grantor, Grantor shall furnish (I) annual operating statements showing all
elements of income and expense of the Premises, and (II) a current rent roll,
showing all items set forth in the rent roll delivered to State Farm in
connection with the closing of the Loan, as well as gross sales of each tenant,
if any, paying percentage rental. Additionally, within SIXTY (60) DAYS after
June 30 and December 31 of each year, Grantor shall deliver or cause to be
delivered financial statements certified to State Farm for the immediately
preceding SIX (6) MONTH period. Grantor shall promptly furnish to State Farm
such other financial information concerning the condition of the Premises, and
all other information concerning the Premises or the performance by Grantor of
the Obligations, that State Farm may reasonably request. All such statements and
information shall be prepared in accordance with generally accepted accounting
principles and shall otherwise be satisfactory to State Farm and shall be
certified by an authorized person, partner or officer of Grantor. State Farm and
its representatives shall have the right, at all reasonable times and upon
reasonable notice, to examine and make copies of Grantor's plans, books,
records, income tax returns and all supporting data concerning the Premises.
Grantor will assist State Farm and its representatives in conducting any such
examination.
3.16 DECLARATION OF SUBORDINATION.
At the option of State Farm, this Deed of Trust shall become subject and
subordinate, in whole or in part (but not with respect to priority of
entitlement to insurance proceeds or any Award) to any and all Leases of all or
any part of the Premises upon the execution by State Farm and recording thereof,
at any time hereafter and in the appropriate official records of the county
wherein the Real Estate is situated, or a unilateral declaration to that effect.
3.17 USURY.
This Deed of Trust has been executed under, and shall be construed and
enforced in accordance with, the laws of the STATE OF TEXAS, except as such laws
are preempted by federal law. This Deed of Trust and all of the other Loan
Documents are intended to be performed in accordance with, and only to the
extent permitted by, all applicable usury laws. If any provision hereof or of
any of the other Loan Documents or the application thereof to any person or
circumstance shall, for any reason and to any extent, be invalid or
unenforceable, neither the application of such provision to any other person or
circumstance nor the remainder of the instrument in which such provision is
contained shall be affected thereby and shall be enforced to the greatest extent
permitted by applicable laws. It is expressly stipulated and agreed to be the
intent of Grantor and State Farm to at all times comply with the usury and other
applicable laws now or hereafter governing the interest payable on the
Indebtedness. If the applicable law is ever revised, repealed or judicially
interpreted
17
so as to render usurious any amount called for under the Note or under any of
the other Loan Documents, or contracted for, charged, taken, reserved or
received with respect to the Indebtedness, or if State Farm's exercise of the
option to accelerate the maturity of the Indebtedness, or if any prepayment of
the Indebtedness results in the payment of any interest in excess of that
permitted by law, then it is the express intent of Grantor and State Farm that
all excess amounts theretofore collected by State Farm be credited on the
principal balance of the Note (or, if the Note and all of such other
Indebtedness have been paid in full, refunded), and the provisions of the Note
and the other Loan Documents immediately be deemed reformed and the amounts
thereafter collectable hereunder and thereunder reduced, without the necessity
of the execution of any new document, so as to comply with the then applicable
laws, but so as to permit the recovery of the fullest amount otherwise called
for hereunder or thereunder. All sums paid, or agreed to be paid, for the use,
forbearance , detention, taking, charging, receiving or reserving on the
Indebtedness shall, to the extent permitted by applicable laws, be amortized,
prorated, allocated and spread throughout the full term of such Indebtedness
until payment in full so that the rate or amount of interest on account of such
Indebtedness does not exceed the usury ceiling from time to time in effect and
applicable thereto for so long as debt is outstanding under the Indebtedness. To
the extent that State Farm is relying on CHAPTER 303 of the TEXAS FINANCE CODE
to determine the maximum rate ("MAXIMUM RATE") payable on the Indebtedness,
State Farm will utilize the weekly ceiling from time to time in effect as
provided in such Chapter 303. To the extent federal law permits State Farm to
contract for, charge or receive a greater amount of interest, State Farm will
rely on federal law instead of such article, as amended, for the purpose of
determining the Maximum Rate. Additionally, to the extent permitted by
applicable law now in effect, State Farm may, at its option and from time to
time, implement any other method of computing the Maximum Rate under such
article, as amended, or under other applicable law by giving notice, if
required, to Grantor as provided by applicable law now or hereafter in effect.
In no event shall the provisions of CHAPTER 346 of the TEXAS FINANCE CODE (which
regulates certain revolving credit loan accounts and revolving triparty
accounts) apply to the Indebtedness. Notwithstanding anything to the contrary
contained herein or in any of the other Loan Documents, it is not the intention
of State Farm to accelerate the maturity of any interest that has not accrued at
the time of such acceleration or to collect unearned interest at the time of
such acceleration.
3.18 LEASE OBLIGATIONS.
(A) Grantor covenants and agrees to keep, observe and
perform and to require all tenants of the Premises to keep, observe and perform
all the covenants, agreements and provisions of any present or future Leases,
including the Credit Leases described herein, of the Premises on their
respective part to be kept, observed and performed. If Grantor shall neglect or
refuse to so perform or fail to require such tenants to so perform, then State
Farm may, at its option, itself perform and comply or require performance or
compliance by such tenants with any such lease covenants, agreements and
provisions. Any sums expended by State Farm in performance or compliance with
such Leases or in enforcing performance or compliance with such Leases by the
tenants, including costs and expenses and attorneys' fees, shall be paid by
Grantor upon demand with interest thereon at the Default Rate as defined in the
Note and in the absence of such payment all such sums shall be deemed to be and
become part of the Indebtedness secured by this Deed of Trust.
18
(B) Grantor, as further security for the payment of the
Indebtedness, has, pursuant to this Deed of Trust and by separate Assignment of
Rents and Leases of even date herewith, sold, transferred and assigned to State
Farm, its successors and assigns, all of Grantor's right, title and interest, as
landlord, in, to and under certain leases demising all or a portion of the
Premises, together with the Rents provided therein, including, without
limitation, those lease or leases (the "CREDIT LEASES") identified as follows:
Termination Date Tenant Sq. Ft.
---------------- ------ -------
June 30, 2008 CompUSA Inc. 122,273 (Landmark I)
Xxxxx 00, 0000 XxxxXXX Inc 135,154 (Landmark II)
Grantor expressly covenants and agrees that if Grantor, as landlord under the
Credit Leases, fails to perform and fulfill any term, covenant, condition or
provision in said Credit Leases on its part to be performed or fulfilled, at the
times and in the manner in the Credit Leases provided, or if Grantor suffers or
permits to occur any breach or default under the provisions of said Credit
Leases, or if Grantor fails to fully protect, insure, preserve and to cause
continued performance or fulfillment of the terms, covenants or provisions in
said Credit Leases required to be performed or fulfilled by any tenant therein
or if Grantor, without State Farm's prior written consent, permits or approves
an assignment by any tenant under the Credit Leases or a subletting of all or
any part of the Premises demised in the Credit Leases, then in any such event,
at the option of State Farm, and without notice to the Grantor, such breach or
default shall constitute an Event of Default hereunder and at the option of
State Farm, all unpaid Indebtedness secured by this Deed of Trust shall,
notwithstanding anything in the Note, this Deed of Trust or the other Loan
Documents to the contrary, become due and payable as in case of other Events of
Default.
(C) At the expiration or earlier termination of either of
the Credit leases, Grantor will incur costs in the construction of tenant
improvements in the leasing of the tenant space vacated because of the
termination of either of the Credit Leases (the "TENANT IMPROVEMENTS"). At the
time of the contemplated construction of the Tenant Improvements, Grantor may,
at its option, provide written notice to State Farm (the "TENANT IMPROVEMENTS
FINANCING REQUEST") of its intention to proceed with the construction of the
Tenant Improvements and formally request that State Farm provide permanent
mortgage financing for the construction of the Tenant Improvement as hereinafter
provided. The Tenant Improvements Financing Request shall be accompanied by a
detailed set of plans and specifications for the Tenant Improvements and shall
include an accurate statement of the aggregate total and a detailed
cost-category line item break-down of all direct out-of-pocket costs and
expenses estimated to be incurred by Grantor in respect of the construction of
the Tenant Improvements (the "CONSTRUCTION COSTS") and shall also include a
statement of the requested amount of and proposed terms for the permanent
mortgage financing of the Tenant Improvements requested to be provided by State
Farm. Also accompanying the Tenant Improvement Financing Request shall be a
non-refundable fee in the amount of $2,500.00. Not later than thirty (30) days
following State Farm's receipt of the Tenant Improvements Financing Request and
any additional
19
information which may subsequently be requested by State Farm, in connection
therewith, State Farm shall provide written notice to Grantor (the "RESPONSE TO
TENANT IMPROVEMENTS FINANCING REQUEST") advising Grantor that State Farm, as
determined in State Farm's sole discretion, will either (a) fund the
Construction Costs through permanent mortgage financing of the Tenant
Improvements as a future advance under this Deed of Trust and the other Loan
Documents at State Farm's then-quoted current interest rate and other terms for
loans with comparable investment and credit characteristics and similar security
or (b) not fund the Construction Costs through permanent mortgage financing of
the Tenant Improvements. If State Farm agrees to fund the Construction Costs of
the Tenant Improvements through permanent mortgage financing as a future
advance, this Deed of Trust, the Note secured thereby and the other Loan
Documents shall be changed, amended and modified to reflect the terms outlined
by State Farm for such permanent mortgage financing in the Response to Tenant
Improvements Financing Request, and the Construction Costs for Tenant
Improvements shall be funded by State Farm to Grantor upon the completion of the
Tenant Improvements and Grantor's satisfaction and fulfillment of all other
conditions, if any, to such funding set forth in the Response to Tenant
Improvements Financing Request.
(D) Not less than six (6) months prior to the earliest
termination of either of the Credit Leases (unless replaced with a Lease
satisfactory to State Farm), the Grantor shall provide State Farm a letter of
credit (the "TENANT IMPROVEMENT LETTER OF CREDIT") issued by an issuer
acceptable to State Farm and in compliance with the Letter of Credit
Requirements Rider attached hereto as EXHIBIT D, modified to provide that the
Tenant Improvement Letter of Credit shall be automatically renewed on an annual
basis. The initial amount of the Tenant Improvement Letter of Credit shall be
Two Million Dollars ($2,000,000.00). Not later than 60 days prior to the
anniversary date of the initial Tenant Improvement Letter of Credit, the Grantor
shall have the right to request State Farm to permit a reduction in the amount
of the initial Tenant Improvement Letter of Credit if the Letter of Credit
Reduction Requirements have been met. As used herein the Letter of Credit
Reduction Requirements shall include the following:
(I) At the expiration or earlier termination of
either of the Credit Leases, the Borrower will incur costs in the
leasing of any vacant space and in the construction of tenant
improvements. Borrower shall enter into "Approved Leases" for the vacant
space, The term "Approved Leases" means lease(s) which have:
(A) a term of at least five (5) years (with
no termination options during the first 5 years);
(B) tenants acceptable to State Farm who are
in full occupancy of their leased premises and who have
commenced paying a rental rate of at least $17.50 net per square
foot (with no rent concessions), or such other terms that are
acceptable to State Farm in its sole discretion;
(C) tenants who have signed State Farm's
form (or other form acceptable to State Farm) of Subordination,
Nondisturbance and Attornment Agreement and Tenant Estoppel
Certificate; and
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(D) terms and conditions which shall
otherwise be satisfactory in form and substance to State Farm.
(II) Grantor shall have delivered to State Farm a
certified statement from Borrower's contractor stating the actual costs
incurred to date with the percentage completion of tenant improvements;
(III) Grantor shall have delivered to State Farm and
the title insurer lien waivers for work performed so that State Farm
shall receive an original endorsement updating the effective date of its
Title Insurance Policy with no exceptions to title on Schedule B, other
than the Permitted Exceptions and any other exceptions acceptable to
State Farm; and
(V) No Event of Default shall be in existence under
any of the Loan Documents as the date that Grantor requests a reduction
in the amount of the Tenant Improvement Letter of Credit and no event
shall have occurred as of said date which, with the passage of time or
the giving of notice or both, would constitute an Event of Default;
If State Farm determines that the Letter of Credit Reduction Requirements have
been met, the Grantor shall be entitled to a reduction in the amount of the
Tenant Improvement Letter of Credit. The amount of the reduction shall be equal
to $10 per rentable square foot of Approved Leases entered into during the
applicable time period. The Grantor shall deliver to State Farm, twenty (20)
days prior to the anniversary date of the Tenant Improvement Letter of Credit, a
replacement Tenant Improvement Letter of Credit satisfactory to State Farm in
the amount of the then existing Tenant Improvement Letter of Credit less the
permitted reduction amount. The Grantor shall have the right to request a
reduction in the Tenant Improvement Letter of Credit, if the Letter of Credit
Reduction Requirements have been met, on an annual basis during the term of the
Loan. If the Grantor fails to maintain the Tenant Improvement Letter of Credit
on the terms contained herein or upon the occurrence of an Event of Default,
State Farm shall be entitled to cash the then existing Tenant Improvement Letter
of Credit with the proceeds therefrom applied to any amounts due State Farm
under the Loan Documents and/or to pay down the outstanding principal due under
the Note in reverse order of maturity. A non-refundable administrative
processing fee in the amount of $500.00 shall be paid by Grantor to State Farm
for the processing of each request by Grantor for a reduction in the Tenant
Improvement Letter of Credit.
3.19 ENVIRONMENTAL COMPLIANCE.
Grantor hereby agrees to comply and cause all tenants of the Premises to
comply with any and all Federal, state or local laws, rules and regulations
relating to environmental protection including, but not limited to, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
("CERCLA"), as amended by the Superfund Amendments and Reauthorization Act of
1986, and such other legislation, rules and regulations as are in, or may
hereafter come into, effect and apply to Grantor, State Farm, the Loan or the
Premises or any occupancy users thereof, whether as lessees, tenants, licensees,
or otherwise. Grantor shall defend, indemnify and save and hold State Farm
harmless from and against any and all claims, costs or
21
expenses relating to such environmental protection provisions notwithstanding
any exculpatory or limitation of liability provisions contained in this Deed of
Trust and the other Loan Documents.
3.20 FURTHER ASSURANCES.
(A) Grantor shall do all acts necessary to keep valid and
effective the lien and security interest created by this Deed of Trust and the
security intended to be afforded by the Loan Documents and to carry into effect
their objectives.
(B) Grantor shall, upon the request of State Farm from time
to time, and in the event all or any portion of the Premises is leased to a
person or entity affiliated with an Exculpated Party (hereinafter defined in
SECTION 8.11), Grantor will cause such person or entity to execute, acknowledge
and deliver all such additional papers and instruments and perform all such
further acts as may be reasonably necessary to perform the Obligations and, as
State Farm deems reasonably necessary, to evidence, perfect or confirm the liens
and security interests, or the priority thereof, created by this Deed of Trust
and the other Loan Documents.
(C) Without limiting the generality of the foregoing, upon
the written request of State Farm, Grantor will promptly and, insofar as not
contrary to applicable law, at Grantor's expense, execute, record, rerecord,
file and refile in such offices, at such times and as often as may be necessary,
this Deed of Trust, additional mortgages, security agreements, and every other
instrument in addition to or supplemental hereto, including applicable financing
statements, continuation statements, affidavits or certificates as may be
necessary to create, perfect, maintain, continue, extend and/or preserve the
liens, encumbrances and security interests intended to be granted and created in
and by the Loan Documents and the rights and remedies of State Farm and Grantor
thereunder. Upon request of State Farm, Grantor shall promptly supply evidence
of fulfillment of the foregoing acts and further assurances.
3.21 CHANGE OF NAME, IDENTITY OR STRUCTURE
Except as may be expressly set forth in this Agreement or permitted by
State Farm in writing, Grantor shall not change its name, identity (including
its trade name or names) or, if not an individual, its corporate, partnership,
limited liability company or other structure without notifying State Farm at
least thirty (30) days prior to the effective date of such change and, in the
case of a change in the Grantor's structure, without first obtaining the prior
written consent of State Farm.
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ARTICLE FOUR
EVENTS OF DEFAULT
4.1 DEFAULTS.
It shall constitute an event of default ("EVENT OF DEFAULT") of and
under this Deed of Trust and, at the option of State Farm under the other Loan
Documents, if any of the following events shall occur:
(A) Grantor shall fail to perform on the dates or within the
times (including any grace period) required any of the Obligations involving the
payment of money, including the payment of principal and/or interest under the
Note;
(B) Grantor shall fail to timely observe, perform or
discharge any of the non-monetary Obligations, other than a non-monetary
obligation described in any other clause in this Article Four, and any such
failure shall remain unremedied for THIRTY (30) DAYS or such lesser period as
may be otherwise specified in the applicable Loan Document (the "GRACE PERIOD")
after notice to Grantor of the occurrence of such failure; provided, however,
that State Farm may extend any applicable Grace Period up to NINETY (90) DAYS if
State Farm determines in good faith that: (i) such default cannot reasonably be
cured within such Grace Period but can be cured within NINETY (90) DAYS; (ii) no
lien or security interest created by the Loan Documents shall be impaired prior
to the anticipated completion of such cure; and (iii) State Farm's immediate
exercise of any remedies provided in this Deed of Trust or by law is not
necessary for the protection or preservation of the Premises or State Farm's
security interest therein or lien thereon, and Grantor shall immediately
commence and diligently pursue the cure of such default;
(C) Grantor, as landlord or sublandlord, as the case may be,
shall assign or otherwise encumber the Rents or any interest therein without
first obtaining the written consent of State Farm;
(D) Grantor shall, after the expiration of all applicable
grace or cure periods, default or be in default under any agreement to which
Grantor is a party, other than the Loan Documents, which agreement relates to
the borrowing of money by Grantor from any natural person, corporation, limited
liability company, partnership, firm, association, government, governmental
agency or any other entity, whether acting in an individual, fiduciary or other
capacity (each a "PERSON"), and such default shall give rise to or result in any
material and adverse change in the financial condition of Grantor or any
Exculpated Party (hereinafter defined in SECTION 8.11), affecting the condition,
use or operation of the Premises or State Farm's security for the Loan
("MATERIAL ADVERSE CHANGE"), including a default by Grantor under any loan
documents evidencing or relating to a lien on the Premises which is junior and
subordinate to this Deed of Trust;
(E) Should any representation or warranty made by Grantor
in, under or pursuant to any of the Loan Documents be false or misleading in any
material respect as of the date on which such representation or warranty was
made or deemed remade;
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(F) Should any of the Loan Documents cease to be in full
force and effect or be declared null and void, or cease to constitute valid and
subsisting liens and/or valid and perfected security interests in, to, or upon
the Premises, or should Grantor contest or deny in writing any of its
liabilities or Obligations under any of the Loan Documents;
(G) Should any violation of SECTION 3.11 (A) occur or should
any other event occur which, under the terms of the Loan Documents, constitutes
an Event of Default that would permit State Farm to accelerate the maturity of
the Indebtedness;
(H) Should Grantor fail at any time to satisfy the
requirements of SECTION 3.7 and such failure shall continue for FIFTEEN (15)
DAYS after written notice thereof;
(I) Should Grantor or any entity comprising Grantor
generally not pay its debts as they become due or admit in writing its inability
to pay its debts, or make a general assignment for the benefit of creditors and
such events cause or result in a Material Adverse Change;
(J) Should any Exculpated Party commence any case,
proceeding or other action seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it and its debts under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors, or
seeking to have an order for relief entered against it as debtor, or seeking
appointment of a Receiver for it or for all or any substantial part of its
property (collectively, a "PROCEEDING") and such events cause or result in a
Material Adverse Change;
(K) Should Exculpated Party take an action to authorize any
of the actions set forth above in PARAGRAPHS (I) OR (J) OF THIS SECTION 4.1;
(L) Should any Proceeding be commenced against any
Exculpated Party, and such Proceeding results in the entry of an order for
relief against it which is not fully stayed within SEVEN (7) BUSINESS DAYS after
the entry thereof or not satisfied for a period of FORTY-FIVE (45) DAYS; or
(M) Should (I) final judgment, other than a final judgment
in connection with any condemnation, and including any judgment or other final
determination of any contest permitted by SECTION 3.5 of this Deed of Trust, be
entered against Grantor that (A) adversely affects the value, use, or operation
of the Premises, or (B) adversely affects, or reasonably may tend to adversely
affect, the validity, enforceability, or priority of the lien or security
interests created in and by this Deed of Trust, or the other Loan Documents, or
both, or (II) execution or other final process issue thereon with respect to the
Premises, and Grantor shall fail to discharge the same, or provide for its
discharge in accordance with its terms, or procure a stay of execution thereon,
in any event within THIRTY (30) DAYS from entry, or shall not within such
period, or such longer period during which execution on such judgment shall have
been stayed, appeal therefrom or from the order, decree, or process upon or
pursuant to which such judgment shall have been entered and cause its execution
to be stayed during such appeal, or if on appeal such order, decree, or process
shall be affirmed and Grantor shall not discharge such judgment or provide for
its discharge in accordance with its terms within THIRTY (30)
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DAYS after the entry of such order or decree of affirmation, or if any stay of
execution on appeal is released or otherwise discharged.
ARTICLE FIVE
REMEDIES
If an Event of Default shall occur, State Farm may exercise any one or
more of the following remedies and shall, in addition to any other rights, have
the following related rights, without notice (unless notice is required by
applicable laws):
5.1 ACCELERATION.
Upon the occurrence of an Event of Default and during the continuation
thereof, State Farm shall have the option of declaring all Indebtedness in its
entirety to be immediately due and payable, and the liens and security interests
evidenced hereby shall be subject to foreclosure in any manner provided for
herein or provided for by applicable law as State Farm may elect.
5.2 POSSESSION.
Upon the occurrence of an Event of Default and during the continuation
thereof, or any event or circumstance which, with the lapse of time or the
giving of notice, or both, would constitute a Default hereunder, State Farm is
authorized prior or subsequent to the institution of any foreclosure proceedings
to enter upon the Premises, or any part thereof, and to take possession of the
Premises and of all books, records and accounts relating thereto and to exercise
without interference from Grantor any and all rights which Grantor has with
respect to the management, possession, operation, protection or preservation of
the Premises, including the right to rent the same for the account of Grantor
and to deduct from such rents all costs, expenses and liabilities of every
character incurred by State Farm in collecting such rents and in managing,
operating, maintaining, protecting or preserving the Premises and to apply the
remainder of such rents to the Indebtedness in such manner as State Farm may
elect in its sole discretion. All such costs, expenses and liabilities incurred
by State Farm in collecting such rents and in managing, operating, maintaining
or preserving the Premises, if not paid out of rents as herein above provided,
shall constitute a demand obligation owing by Grantor and shall be subject to
and covered by SECTION 5.15 hereof. If necessary to obtain the possession
provided for above, State Farm may invoke any and all legal remedies to
dispossess Grantor, including, without limitation, one or more actions for
forcible entry and detainer, trespass to try title and restitution. In
connection with any action taken by State Farm pursuant to this Paragraph, State
Farm shall not be liable for any loss sustained by Grantor resulting from any
failure to rent the Premises, or any part thereof, or from any other act or
omission of State Farm in managing the Premises unless such loss is caused by
the willful misconduct and bad faith of State Farm, nor shall State Farm be
obligated to perform or discharge any obligation, duty or liability under any
Lease covering the Premises or any part thereof or under or by reason of this
instrument or the exercise of rights or remedies hereunder. Grantor shall and
does hereby agree to indemnify State Farm for, and to hold State Farm (which
shall include the directors, officers, partners, employees, representatives,
attorneys, and agents of State Farm and any persons or entities owned or
controlled
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by, owning or controlling or under common control or affiliated with State Farm)
harmless from, any and all liability, loss or damage which may or might be
incurred by State Farm under any Lease or under or by reason of this Deed of
Trust or the exercise of rights or remedies hereunder and from any and all
claims and demands whatsoever which may be asserted against State Farm by reason
of any alleged obligations or undertakings on its part to perform or discharge
any of the terms, covenants or agreements contained in any Lease. Should State
Farm incur any such liability, the amount thereof, including costs, expenses and
reasonable attorneys' fees, shall be subject to and covered by SECTION 5.15
hereof. Nothing in this Section shall impose any duty, obligation or
responsibility upon State Farm for the control, care, management or repair of
the Premises, nor for the carrying out of any of the terms and conditions of any
such Lease; nor shall it operate to make State Farm responsible or liable for
any waste committed on the Premises by the tenants or by any other parties or
for any dangerous or defective condition of the Premises, or for any negligence
in the management, upkeep, repair or control of the Premises resulting in loss
or injury or death to any tenant, licensee, employee or stranger. Grantor hereby
assents to, ratifies and confirms any and all actions of State Farm with respect
to the Premises taken under this Section and agrees that the foregoing indemnity
shall not terminate upon release, foreclosure or other termination of this Deed
of Trust.
5.3 FORECLOSURE.
Upon the occurrence of an Event of Default and during the continuation
thereof, Trustee, his successor or substitute, is authorized and empowered and
it shall be his special duty at the request of State Farm to sell the Premises
or any part thereof situated in the STATE OF TEXAS at the courthouse of any
county in the STATE OF TEXAS in which any part of the Premises is situated, at
public venue to the highest bidder for cash. The sale shall take place at such
area of the courthouse as shall be properly designated from time to time by the
commissioners court (or, if not so designated by the commissioners court, at the
courthouse door) of the specified county, between the hours of 10 o'clock a.m.
and 4 o'clock p.m. (the commencement of such sale to occur within three hours
following the time designated in the hereinafter described notice of sale as the
earliest time at which such sale shall occur, if required by applicable laws) on
the first Tuesday in any month after having given notice of such sale at least
twenty-one (21) days before the day of sale of the time, place and terms of said
sale (including the earliest time at which such sale shall occur) in accordance
with the statutes of the STATE OF TEXAS then in force governing sales of real
estate under powers conferred by deeds of trust. Notice of a sale of all or part
of the Premises by Trustee shall be given by posting written notice thereof at
the courthouse door (or other area in the courthouse as may be designated for
such public notices) of the county in which the sale is to be made, and by
filing a copy of the notice in the office of the county clerk of the county in
which the sale is to be made at least twenty-one (21) days preceding the date of
the sale, and if the Premises to be sold is in more than one county, a notice
shall be posted at the courthouse door and filed with the county clerk of each
county in which the Premises is situated. In addition, State Farm shall, at
least twenty-one (21) days preceding the date of sale, serve written notice of
the proposed sale by certified mail on Grantor and each debtor obligated to pay
the Indebtedness or any portion thereof according to the records of State Farm.
Service of such notice shall be completed upon deposit of the notice, enclosed
in a postpaid certified mail wrapper, properly addressed to Grantor and each
such debtor at the most recent address as shown by the records of State Farm, in
a post office or official depository under the care and
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custody of the United States Postal Service. The affidavit of any person having
knowledge of the facts to the effect that such service was completed shall be
prima facie evidence of the fact of service. Any sale made by Trustee hereunder
may be as an entirety or in such parcels as State Farm may request, and any sale
may be adjourned by announcement at the time and place appointed for such sale
without further notice except as may be required by law. The sale by Trustee of
less than the whole of the Premises shall not exhaust the power of sale herein
granted, and Trustee is specifically empowered to make successive sale or sales
under such power until the whole of the Premises shall be sold; and, if the
proceeds of such sale of less than the whole of the Premises shall be less than
the aggregate of the Indebtedness and the expense of executing this trust as
provided herein, this Deed of Trust and the lien hereof shall remain in full
force and effect as to the unsold portion of the Premises just as though no sale
had been made; provided, however, that Grantor shall never have any right to
require the sale of less than the whole of the Premises but State Farm shall
have the right, at its sole election, to request Trustee to sell less than the
whole of the Premises. After each sale, Trustee shall make to the purchaser or
purchasers at such sale good and sufficient conveyances in the name of Grantor,
conveying the property so sold to the purchaser or purchasers in fee simple with
general warranty of title, and shall receive the proceeds of said sale or sales
and apply the same as herein provided. Payment of the purchase price to Trustee
shall satisfy the obligation of purchaser at such sale therefor, and such
purchaser shall not be responsible for the application thereof. The power of
sale granted herein shall not be exhausted by any sale held hereunder by Trustee
or his substitute or successor, and such power of sale may be exercised from
time to time and as many times as State Farm may deem necessary until all of the
Premises has been duly sold and all Indebtedness has been fully paid. In the
event any sale hereunder is not completed or is defective in the opinion of
State Farm, such sale shall not exhaust the power of sale hereunder and State
Farm shall have the right to cause a subsequent sale or sales to be made
hereunder. Any and all statements of fact or other recitals made in any deed or
deeds given by Trustee or any successor or substitute appointed hereunder as to
nonpayment of the Indebtedness, or as to the occurrence of any Event of Default,
or as to State Farm having declared all of such Indebtedness to be due and
payable, or as to the request to sell, or as to notice of time, place and terms
of sale and of the properties to be sold having been duly given, or as to the
refusal, failure or inability to act of Trustee or any substitute or successor,
or as to the appointment of any substitute or successor Trustee, or as to any
other act or thing having been duly done by State Farm or by Trustee or any
substitute or successor, shall be taken as prima facie evidence of the truth of
the facts so stated and recited. Trustee, his successor or substitute, may
appoint or delegate any one or more persons as agent to perform any act or acts
necessary or incident to any sale held by Trustee, including, without
limitation, the posting of notices and the conducting of sales, but in the name
and on behalf of Trustee, his successor or substitute.
5.4 JUDICIAL FORECLOSURE.
This Deed of Trust shall be effective as a mortgage as well as a deed of
trust and upon the occurrence of an Event of Default may be foreclosed as to any
of the Premises in any manner permitted by the laws of the STATE OF TEXAS or of
any other state in which any part of the Premises is situated, and any
foreclosure suit may be brought by Trustee or by State Farm. In the event a
foreclosure hereunder shall be commenced by Trustee, or his substitute or
successor, State Farm may
27
at any time before the sale of the Premises direct Trustee to abandon the sale,
and may then institute suit for the collection of the Indebtedness, and/or for
the foreclosure of this Deed of Trust. It is agreed that if State Farm should
institute a suit for the collection of the Indebtedness and/or for the
foreclosure of this Deed of Trust, State Farm may at any time before the entry
of a final judgment in said suit dismiss the same, and require Trustee, his
substitute or successor to sell the Premises in accordance with the provisions
of this Deed of Trust.
5.5 RECEIVER.
In addition to all other remedies herein provided for, Grantor agrees
that upon the occurrence of an Event of Default, or any event or circumstance
which, with the lapse of time or the giving of notice, or both, would constitute
an Event of Default, State Farm shall as a matter of right be entitled to the
appointment of a receiver or receivers for all or any part of the Premises,
whether such receivership be incident to a proposed sale of the Premises or
otherwise, and without regard to the value of the Premises or the solvency of
any person or persons liable for the payment of the Indebtedness, and Grantor
does hereby consent to the appointment of such receiver or receivers, waives any
and all defenses to such appointment and agrees not to oppose any application
therefor by State Farm, but nothing herein is to be construed to deprive State
Farm of any other right, remedy or privilege it may now have under the law to
have a receiver appointed; provided, however, that the appointment of such
receiver or other appointee by virtue of any court order, statute or regulation
shall not impair or in any manner prejudice the rights of State Farm to receive
payment of the Rents pursuant to the Assignment of Rents and Leases dated of
even date herewith. Any money advanced by State Farm in connection with any such
receivership shall be subject to and covered by SECTION 5.15 hereof.
5.6 PROCEEDS OF SALE.
The proceeds of any sale held by Trustee or any receiver or public
officer in foreclosure of the liens evidenced hereby shall be applied:
FIRST, to the payment of all necessary costs and expenses
incident to such foreclosure sale, including but not limited to, all
court costs and charges of every character in the event foreclosed by
suit, reasonable attorneys' fees and a reasonable fee to Trustee acting
under the provisions of SECTION 5.3 if foreclosed by power of sale as
provided in said paragraph, not exceeding five percent (5%) of the
proceeds of such sale;
SECOND, to the payment in full of the Indebtedness (including,
without limitation, the principal and interest due and unpaid on the
Note, attorneys' fees and any other amounts due and unpaid and owed to
State Farm under this Deed of Trust) in such order as State Farm may
elect in its sole direction; and
THIRD, the remainder, if any there shall be paid to Grantor or
to such other party or parties as may be entitled thereto by applicable
law.
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5.7 STATE FARM AS PURCHASER.
State Farm shall have the right to become the purchaser at any sale held
by any Trustee or substitute or successor or by any receiver or public officer,
and any State Farm purchasing at any such sale shall have the right to credit
upon the amount of the bid made therefor, to the extent necessary to satisfy
such bid, the Indebtedness owing to such State Farm.
5.8 ADDITIONAL REMEDIES UNDER THE BUSINESS CODE.
Upon the occurrence of an Event of Default, State Farm may exercise its
rights of enforcement with respect to the personal property under the Texas
Business and Commerce Code, as amended, (the "CODE") and in conjunction with, in
addition to or in substitution for those rights and remedies:
(A) State Farm may enter upon the Premises to take
possession of, assemble and collect the Personalty or to render it
unusable; and
(B) State Farm may require Grantor to assemble the
Personalty and make it available at a place State Farm designates which
is mutually convenient to allow State Farm to take possession or dispose
of the Personalty; and
(C) written notice mailed to Grantor as provided herein TEN
(10) days prior to the date of public sale of the Personalty or prior to
the date after which any private sale of the Personalty will be made
shall constitute reasonable notice; and
(D) any sale made pursuant to the provisions of this Section
shall be deemed to have been a public sale conducted in a commercially
reasonable manner if held contemporaneously with the sale of the
Premises under power of sale as provided herein upon giving the same
notice with respect to the sale of the Personalty hereunder as is
required for such sale of the Premises under power of sale; and
(E) in the event of a foreclosure sale, whether made by
Trustee under the terms hereof, or under judgment of a court, the
Personalty and the balance of Premises may, at the option of State Farm,
be sold as a whole; and
(F) it shall not be necessary that State Farm take
possession of the Personalty or any part thereof prior to the time that
any sale pursuant to the provisions of this Section is conducted and it
shall not be necessary that the Personalty or any part thereof be
present at the location of such sale; and
(G) prior to application of proceeds of disposition of the
Personalty to the Indebtedness, such proceeds shall be applied to the
reasonable expenses of retaking, holding, preparing for sale or lease,
selling, leasing and the like and the reasonable attorneys' fees and
legal expenses incurred by State Farm; and
29
(H) any and all statements of fact or other recitals made in
any xxxx of sale or assignment or other instrument evidencing any
foreclosure sale hereunder as to nonpayment of the Indebtedness or as to
the occurrence of any Event of Default, or as to State Farm having
declared all of such Indebtedness to be due and payable, or as to notice
of time, place and terms of sale and of the properties to be sold having
been duly given, or as to any other act or thing having been duly done
by State Farm, shall be taken as prima facie evidence of the truth of
the facts so stated and recited; and
(I) State Farm may appoint or delegate any one or more
persons as agent to perform any act or acts necessary or incident to any
sale held by State Farm, including the sending of notices and the
conduct of the sale, but in the name and on behalf of State Farm.
5.9 PARTIAL FORECLOSURE.
In the event of an Event of Default in the payment of any part of the
Indebtedness, State Farm shall have the right to proceed with foreclosure of the
liens and security interests evidenced hereby without declaring the entire
Indebtedness due, and in such event any such foreclosure sale may be made
subject to the unmatured part of the Indebtedness; and any such sale shall not
in any manner affect the unmatured part of the Indebtedness, but as to such
unmatured part this Deed of Trust shall remain in full force and effect just as
though no sale had been made. The proceeds of any such sale shall be applied as
provided in SECTION 5.6 except that the amount paid under subparagraph SECOND
thereof shall be only the matured portion of the Indebtedness and any proceeds
of such sale in excess of those provided for in subparagraphs FIRST and SECOND
(modified as provided above) shall be applied to installments of principal of
and interest on the Note in the inverse order of maturity. Several sales may be
made hereunder without exhausting the right of sale for any unmatured part of
the Indebtedness.
5.10 REMEDIES CUMULATIVE.
All remedies herein expressly provided for are cumulative of any and all
other remedies existing at law or in equity and are cumulative of any and all
other remedies provided for in any of the other Loan Documents, or any part
thereof, or otherwise benefiting State Farm, and Trustee and State Farm shall,
in addition to the remedies herein provided, be entitled to avail themselves of
all such other remedies as may now or hereafter exist at law or in equity for
the collection of the Indebtedness and the enforcement of the covenants herein
and the foreclosure of the liens and security interests evidenced hereby, and
resort to any remedy provided for hereunder or under any such Loan Documents or
provided for by law shall not prevent the concurrent or subsequent employment of
any other appropriate remedy or remedies.
5.11 RESORT TO ANY SECURITY.
State Farm may resort to any security given by this Deed of Trust or to
any other security now existing or hereafter given to secure the payment of the
Indebtedness, in whole or in part, and in
30
such portions and in such order as may seem best to State Farm in its sole and
absolute discretion, and any such action shall not in any way be considered as a
waiver of any of the rights, benefits, liens or security interests evidenced by
this Deed of Trust.
5.12 WAIVER.
To the full extent Grantor may do so, Grantor agrees that Grantor will
not at any time insist upon, plead, claim or take the benefit or advantage of
any law now or hereafter in force pertaining to the rights and remedies of
sureties or providing for any appraisement, valuation, stay, extension or
redemption, and Grantor, for Grantor and Grantor's heirs, devisees,
representatives, successors and assigns, and for any and all persons ever
claiming any interest in the Premises, to the extent permitted by law, hereby
waives and releases all rights of redemption, valuation, appraisement, stay of
execution, notice of intention to mature or declare due the whole of the
Indebtedness, notice of election to mature or declare due the whole of the
Indebtedness and all rights to a marshaling of the assets of Grantor, including,
without limitation, the Premises, or to a sale in inverse order of alienation in
the event of foreclosure of the liens and security interests hereby created.
Grantor shall not have or assert any right under any statute or rule of law
pertaining to the marshaling of assets, sale in inverse order of alienation, the
exemption of homestead, the administration of estates of decedents or other
matters whatever to defeat, reduce or affect the right of State Farm under the
terms of this Deed of Trust to a sale of the Premises for the collection of the
Indebtedness without any prior or different resort of collection, or the right
of State Farm under the terms of this Deed of Trust to the payment of such
Indebtedness out of the proceeds of sale of the Premises in preference to every
other claimant whatever. If any law referred to in this Section and now in
force, of which Grantor or Grantor's heirs, devisees, representatives,
successors and assigns and such other persons claiming any interest in the
Premises might take advantage despite this Section, shall hereafter be repealed
or cease to be enforced, such law shall not thereafter be deemed to preclude the
application of this Section.
5.13 DELIVERY OF POSSESSION AFTER FORECLOSURE.
In the event there is a foreclosure sale hereunder and at the time of
such sale Grantor or Grantor's heirs, devisees, representatives, successors or
assigns or any other persons claiming any interest in the Premises by, through
or under Grantor are occupying or using the Premises, or any part thereof, each
and all shall immediately become the tenant of the purchaser at such sale, which
tenancy shall be a tenancy from day-to-day, terminable at the will of either
landlord or tenant, at a reasonable rental per day based upon the value of the
property occupied, such rental to be due daily to the purchaser. In the event
the tenant fails to surrender possession of said property upon demand, the
purchaser shall be entitled to institute and maintain an action for forcible
entry and detainer of said property in the appropriate court having
jurisdiction.
5.14 TENDER AFTER ACCELERATION.
If, following the occurrence of an Event of Default and the acceleration
of the Indebtedness but prior to the foreclosure of this Deed of Trust, Grantor
shall tender to State Farm payment of an
31
amount sufficient to pay the entire Indebtedness, such tender shall be deemed to
be a voluntary prepayment under the Note and, consequently, Grantor shall also
pay to State Farm any charge or premium required under the Note or any other
Loan Documents to be paid in order to prepay principal and, if such principal
payment is made during any period when prepayment is prohibited by this Deed of
Trust, the Note or any of the other Loan Documents the applicable charge or
premium shall be the maximum prepayment penalty provided for in the Note;
provided, however, that in the event any amount payable under this Section is
deemed interest, in no event shall such amount when added to the interest
otherwise payable on the Note and the other Indebtedness exceed the maximum
interest permitted under applicable law.
5.15 EXPENSES.
In (I) any action to foreclose the lien of this Deed of Trust or enforce
any other remedy of State Farm under any of the Loan Documents, or (II) any
other proceeding whatsoever in connection with any of the Loan Documents or the
Premises in which State Farm is named as a party, there shall be allowed and
included, as additional indebtedness in the judgment or decree for sale
resulting therefrom, all expenses paid or incurred in connection with such
proceeding by or on behalf of State Farm including, without limitation,
attorneys' and paralegals' fees, appraisers' fees, outlays for documentary and
expert evidence, stenographers' charges, publication costs, land and
environmental survey costs, and costs (which may be estimated as to items to be
expended after entry of such judgment or decree) of procuring all abstracts of
title, title certificates, title searches and examinations, title insurance
policies, and any similar data and assurances with respect to the title to the
Premises as State Farm may deem reasonably necessary either to prosecute or
defend in such proceeding or to evidence to bidders at any sale pursuant to such
decree the true condition of the title to or value of the Premises. All expenses
and fees of the ongoing nature, and such expenses and fees as may be incurred in
the protection of the Premises and the maintenance of the lien of this Deed of
Trust thereon in any litigation affecting the Loan Documents, or the Premises,
including probate and bankruptcy proceedings, or in preparation for the
commencement or defense of any proceeding or threatened suit or proceeding in
connection therewith, shall upon demand of State Farm be immediately due and
payable by Grantor with interest thereon at the Default Rate and shall become a
part of the Indebtedness secured by this Deed of Trust.
5.16 STATE FARM'S RIGHT TO PERFORM.
Unless otherwise provided herein, if Grantor shall at any time fail to
perform or comply with any of the terms, covenants and conditions required on
Grantor's part to be performed and complied with under any of the Loan Documents
or any other agreement that, under the terms of this Deed of Trust, Grantor is
required to perform, then State Farm may, at its option and in its sole
discretion, without waiving or releasing any other right, remedy or recourse:
(I) make any payments hereunder or thereunder
payable by Grantor; and/or
32
(II) after the expiration of any applicable grace
period and subject to State Farm's rights to contest certain obligations
specifically granted in this Deed of Trust, perform any such other acts
thereunder on part of the Grantor to be performed and enter upon the
Premises for such purpose.
5.17 NO WAIVER BY EXERCISE.
The exercise of any right or remedy by State Farm hereunder shall not in
any way constitute a cure or waiver of any default or Event of Default hereunder
or under the Loan Documents, or invalidate any act done pursuant to any notice
of default, or prejudice State Farm in the exercise of any of its rights
hereunder or under the Loan Documents.
ARTICLE SIX
TRUSTEES
6.1 SUCCESSOR TRUSTEE.
Trustee may resign by an instrument in writing addressed to State Farm,
or Trustee may be removed at any time with or without cause by an instrument in
writing executed by State Farm. In case of the death, resignation, removal or
disqualification of Trustee or if for any reason State Farm shall deem it
desirable to appoint a substitute or successor Trustee to act instead of the
herein named Trustee or any substitute or successor Trustee, then State Farm
shall have the right and is hereby authorized and empowered to appoint a
successor Trustee, or a substitute Trustee, without formality other than
appointment and designation in writing executed by State Farm and the authority
hereby conferred shall extend to the appointment of other successor and
substitute Trustees successively until the Indebtedness has been paid in full or
until the Premises is sold hereunder. In the event the Indebtedness is owned by
more than one person or entity, the holders of not less than a majority in the
amount of such Indebtedness shall have the right and authority to make the
appointment of a successor or substitute Trustee provided for in the preceding
sentence. Such appointment and designation by State Farm or by the holder or
holders of not less than a majority of the Indebtedness shall be full evidence
of the right and authority to make the same and of all facts therein recited. If
of State Farm such appointment is executed on behalf of State Farm by an officer
of State Farm, such appointment shall be conclusively presumed to be executed
with authority and shall be valid and sufficient without proof of any action by
the board of directors or any superior officer of the association or
corporation. Upon the making of any such appointment and designation, all of the
estate and title of Trustee in the Premises shall vest in the named successor or
substitute Trustee and he shall thereupon succeed to and shall hold, possess and
execute all the rights, powers, privileges, immunities and duties herein
conferred upon Trustee; but nevertheless, upon the written request of State Farm
or of the successor or substitute Trustee, Trustee ceasing to act shall execute
and deliver an instrument transferring to such successor or substitute Trustee
all of the estate and title in the Premises of Trustee so ceasing to act,
together with all the rights, powers, privileges, immunities and duties herein
conferred upon Trustee, and shall duly assign, transfer and deliver any of the
properties and moneys held by said Trustee hereunder to said successor or
substitute Trustee. All references herein to Trustee shall be deemed to refer to
Trustee (including any successor or substitute appointed and designated as
herein provided) from time to time acting hereunder. Grantor hereby ratifies and
33
confirms any and all acts which the herein named Trustee or his successor or
successors, substitute or substitutes, in this trust, shall do lawfully by
virtue hereof.
6.2 LIABILITY AND INDEMNIFICATION OF TRUSTEE.
TRUSTEE SHALL NOT BE LIABLE FOR ANY ERROR OF JUDGMENT OR ACT DONE BY
TRUSTEE IN GOOD FAITH, OR BE OTHERWISE RESPONSIBLE OR ACCOUNTABLE UNDER ANY
CIRCUMSTANCES WHATSOEVER (INCLUDING, WITHOUT LIMITATION, TRUSTEE'S NEGLIGENCE),
EXCEPT FOR TRUSTEE'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. Trustee shall have
the right to rely on any instrument, document or signature authorizing or
supporting any action taken or proposed to be taken by him hereunder, believed
by him in good faith to be genuine. All moneys received by Trustee shall, until
used or applied as herein provided, be held in trust for the purposes for which
they were received, but need not be segregated in any manner from any other
moneys (except to the extent required by law), and Trustee shall be under no
liability for interest on any moneys received by him hereunder. Grantor will
reimburse Trustee for, and indemnify and save him harmless against, any and all
liability and expenses (including, without limitation, reasonable attorneys'
fees) which may be incurred by him in the performance of his duties hereunder
(Trustee shall include the directors, officers, partners, employees,
representatives and agents of Trustee and any persons or entities owned or
controlled by, owning or controlling or under common control or affiliated with
Trustee). The foregoing indemnity shall not terminate upon release, foreclosure
or other termination of this Deed of Trust.
6.3 EMPLOYMENT OF AGENTS.
The Trustee, or any one acting in his stead, shall have, in his
discretion, authority to employ all proper agents and attorneys in the execution
of this trust and/or in the conducting of any sale made pursuant to the terms
hereof, and to pay for such services rendered out of the proceeds of the sale of
the Premises, should any be realized; and if no sale be made or if the proceeds
of sale be insufficient to pay the same, then Grantor hereby undertakes and
agrees to pay the cost of such services rendered to said Trustee. The Trustee
may rely on any document believed by him in good faith to be genuine. All money
received by Trustee shall, until used or applied as herein provided, be held in
trust, but need not be segregated (except to the extent required by law), and
Trustee shall not be liable for interest thereon.
ARTICLE SEVEN
SECURITY AGREEMENT AND FIXTURE FILING
7.1 SECURITY AGREEMENT.
Grantor hereby assigns and grants to State Farm a first priority present
security interest in and to the Rents, Contract Rights, Intangible Personal
Property, Tangible Personal Property, Proceeds, Right to Encumber and Other
Rights and Interests described in ARTICLE TWO and in and to any other part or
component of the Premises which may not
34
be deemed real property or which may not constitute a "FIXTURE" (within the
meaning of the Code (as hereinafter defined)), and all replacements,
substitutions, and additions of, for and to the same, and the proceeds thereof
(collectively, the "COLLATERAL" or "PERSONALTY") in order to secure payment of
the Indebtedness and performance by the Grantor of the other Obligations. This
Deed of Trust shall constitute a Security Agreement within the meaning of the
Texas Business and Commercial Code (the "CODE").
7.2 NOTIFICATION OF ACCOUNT DEBTORS.
State Farm may at any time after an Event of Default by Grantor notify
the account debtors or obligors of any accounts, chattel paper, negotiable
instruments or other evidences of indebtedness included in the Personalty to pay
State Farm directly.
7.3 REPRODUCTION AS FINANCING STATEMENT.
A carbon, photographic or other reproduction of this Deed of Trust or of
any financing statement relating to this Deed of Trust shall be sufficient as a
financing statement.
7.4 FIXTURE FILING.
This Deed of Trust shall be effective as a financing statement filed as
a fixture filing with respect to all fixtures included within the Premises and
is to be filed for record in the real property records in the Office of the
County Clerk for the county or counties where the Premises (including said
fixtures) is situated. This Deed of Trust shall also be effective as a financing
statement covering minerals or the like (including oil and gas) and accounts
subject to SUBSECTION 9.103(E) of the Code as in effect from time to time in the
State of Texas and is to be filed for record in the real property records of the
county where the Premises is situated. The MAILING ADDRESS of Grantor is set
forth on the FIRST PAGE of this Deed of Trust and the address of State Farm from
which information concerning the security interest may be obtained is the
address of State Farm set forth on the FRONT PAGE of this Deed of Trust.
7.5 WAIVERS.
Grantor waives any right to require State Farm to (I) proceed against
any Person, (II) proceed against or exhaust any Collateral or (III) pursue any
other remedy in its power. Grantor further waives any defense arising by reason
of any power and any defense arising by reason of any disability or other
defense of Grantor or any other Person, or by reason of the cessation from any
cause whatsoever of the liability of Grantor or any other Person. Until the
Indebtedness shall have been paid in full, Grantor shall not have any right to
subrogation, and Grantor waives any right to enforce any remedy which Grantor
now has or may hereafter have against State Farm or against any other Person and
waives any benefit of and any right to participate in any Collateral or security
whatsoever now or hereafter held by State Farm for or with respect to the
Indebtedness and/or the Obligations.
7.6 AUTHORIZATION.
35
Grantor hereby authorizes State Farm at any time and from time to time
during the life of the Loan to file in any filing office in any Code
jurisdiction any financing statements, amendments or addendums thereto and
continuation statements (the "UCC DOCUMENTS") in order to perfect or continue
the perfection of any security interest granted under this Deed of Trust or any
of the other Loan Documents. Grantor agrees to provide any information needed to
complete such UCC Documents to State Farm promptly upon request.
Grantor shall pay to State Farm, within five (5) business days of
written demand, any and all costs and expenses incurred by State Farm in
connection with the preparation, processing and filing of any such UCC
Documents, including reasonable attorneys' fees and all disbursements. Such
costs and expenses shall bear interest at the Default Rate from the date paid by
State Farm until the date repaid by Grantor and such costs and expenses,
together with such interest, shall be part of the Indebtedness and shall be
secured by this Deed of Trust.
7.7 PRESERVATION OF GRANTOR'S EXISTENCE.
Grantor shall do all things necessary to preserve and keep in full force
and effect its existence, franchises, rights and privileges under the laws of
the state of its formation and, if applicable, the State of Texas.
7.8 NOTICE OF CHANGE.
Without giving at least thirty (30) days' prior written notice to State
Farm, Grantor shall not: (i) change its jurisdiction of organization; (ii)
change the location of its place of business (or chief executive office if more
than one place of business); or (iii) add to or change any location at which any
of the Collateral (as defined in SECTION 7.1) is stored, held or located.
ARTICLE EIGHT
MISCELLANEOUS
8.1 NOTICES, CONSENTS, AND APPROVALS.
Any notice, consent, or approval that State Farm or Grantor may desire
or be required to give to the other shall be in writing and shall be mailed or
delivered to the intended recipient thereof at its address set forth below or at
such other address as such intended recipient may, from time to time, by notice
in writing, designate to the sender pursuant hereto. Any such notice, consent,
or approval shall be deemed effective (A) if given by nationally recognized
overnight courier for next day delivery, one (1) business day after delivery to
such courier, or (B) if given by United States mail (registered or certified),
three (3) business days after such communication is deposited in the mails
[unless given under SECTION 5.3 hereunder and in case it shall be deemed given
on the date of deposit] or (C) if given in person, when written acknowledgment
of receipt thereof is given. Except as otherwise specifically required herein,
notice of the exercise of any right or option granted to State Farm by this Deed
of Trust is not required to be given.
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(A) IF TO STATE FARM:
State Farm Bank, F.S.B.
Xxx Xxxxx Xxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
Attn: Corporate Law-Investments E-3
and
Xxxxxxxxx & Xxxxxxxx LLP
000 X. Xxxxx Xx., Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attn: Xxxxxx X. Xxxx, Esq.
(B) IF TO GRANTOR:
Behringer Harvard Landmark LP
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: General Counsel
8.2 TIME OF ESSENCE.
It is specifically agreed that time is of the essence for all of the
terms and provisions contained in this Deed of Trust.
8.3 COVENANTS OF DEED OF TRUST RUN WITH TITLE TO THE REAL ESTATE.
The covenants and obligations set forth in this Deed of Trust are
intended as, shall be deemed and are hereby declared to be covenants running
with the title to the land which constitutes the Real Estate and any and all
portions(s) thereof, and such covenants and obligations shall be binding upon,
and enforceable by the owner and holder of this Deed of Trust personally
against, the Grantor and any successor in title to the Grantor who or which
shall acquire and/or hold title to the Real Estate while the same is subject to
and encumbered by this Deed of Trust. Every person or entity who or which shall
have, claim, own, hold, accept or otherwise acquire title to the Real Estate,
whether or not such title is reflected in the Public Records of the State and
County in which the Real Estate is located, shall be conclusively presumed and
deemed to have consented and agreed to personally perform each and every
covenant and obligation of the Grantor contained in this Deed of Trust to the
same extent as the original Grantor, whether or not any reference to this Deed
of Trust is contained in the document or instrument pursuant to which such
person or entity shall have acquired title to the Real Estate and whether or not
such person or entity shall have expressly agreed in writing to assume or
perform the covenants and obligations of the Grantor contained in this Deed of
Trust.
8.4 GOVERNING LAW.
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THIS DEED OF TRUST SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS. TO THE EXTENT THAT THIS DEED OF TRUST MAY
OPERATE AS A SECURITY AGREEMENT UNDER THE CODE, STATE FARM SHALL HAVE ALL RIGHTS
AND REMEDIES CONFERRED THEREIN FOR THE BENEFIT OF A SECURED PARTY.
8.5 SEVERABILITY.
If any provision of this Deed of Trust, or any paragraph, sentence,
clause, phrase, or word, or the application thereof, in any circumstance, is
held invalid, the validity of the remainder of this Deed of Trust shall be
construed as if such invalid part were never included herein.
8.6 HEADINGS.
The headings of articles, sections, paragraphs, and subparagraphs in
this Deed of Trust are for convenience of reference only and shall not be
construed in any way to limit or define the content, scope, or intent of the
provisions hereof.
8.7 GRAMMAR.
As used in this Deed of Trust, the singular shall include the plural,
and masculine, feminine, and neuter pronouns shall be fully interchangeable,
where the context so requires.
8.8 DEED IN TRUST.
If title to the Premises or any part thereof is now or hereafter becomes
vested in a trustee, any prohibition or restriction contained herein against the
creation of any lien on the Premises shall be construed as a similar prohibition
or restriction against the creation of any lien on or security interest in the
beneficial interest of such trust.
8.9 SUCCESSORS AND ASSIGNS.
This Deed of Trust and all provisions hereof shall be binding upon and
enforceable against Grantor, its successors, assigns, legal representatives, and
all other persons or entities claiming under or through Grantor, and the word
"GRANTOR" when used herein, shall include all such persons and entities and any
others liable for the payment of the Indebtedness or any part thereof, whether
or not they have executed the Note or this Deed of Trust. The word "STATE FARM"
when used herein, shall include State Farm's successors, assigns, and legal
representatives, including all other holders, from time to time, of the Note.
8.10 CONSTRUCTION.
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Grantor acknowledges that Grantor and Grantor's counsel have reviewed
this Deed of Trust and the other Loan Documents and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party will not be employed in the construction or interpretation of
this Deed of Trust or the other Loan Documents or any amendments or schedules to
any of the foregoing.
8.11 LIMITATION OF LIABILITY.
In consideration of the security provided by Grantor to State Farm for
repayment of the Indebtedness, including, without limitation, the liens on and
security interests in the Premises granted pursuant to the Deed of Trust and the
absolute and unconditional assignment of the Rents and Leases made pursuant to
the Assignments of Rents and Leases, upon the occurrence of an Event of Default
hereunder or under any of the other Loan Documents, State Farm agrees that it
shall not, except as otherwise set forth in this Section, seek to enforce, nor
shall State Farm be entitled to enforce, any deficiency or monetary judgment
against Grantor, any Partner of Grantor, any Member of Grantor, or any
beneficiary of Grantor or any Guarantor (individually, an "EXCULPATED PARTY",
and collectively, the "EXCULPATED PARTIES"), personally, and shall not levy or
execute judgment upon any property of the Exculpated Parties, other than the
Premises; it being expressly agreed, acknowledged and understood, however, ,
however, that: (i) the foregoing limitation of the liability of an Exculpated
Party shall not apply to the extent that such Exculpated Party is a Liable Party
(as defined below); and (ii) nothing contained herein shall in any manner or way
release, affect or impair:
(A) The existence of the Indebtedness and Obligations
created in and evidenced by the Loan Documents, as well as the personal
liability of Grantor, General Partner (as defined below) and Guarantor (as
defined below) for payment of such Indebtedness and State Farm's Losses (as
defined below);
(B) The enforceability of the liens, security interests and
assignments created in and granted by the Loan Documents against the Premises;
(C) The enforceability of the Environmental Indemnification
Agreement (as further described as Item 2 on EXHIBIT "C" attached hereto) and
any guaranty of the Indebtedness and Obligations of the Grantor given to State
Farm; or
(D) The right of State Farm to recover from Grantor and
Behringer Harvard Short-Term Opportunity Fund I LP, a Texas limited partnership
("GUARANTOR"), Behringer Harvard Landmark GP, LLC, a Texas limited liability
company ("GENERAL PARTNER") (Grantor, Guarantor and General Partner are
sometimes hereinafter individually referred to as a "LIABLE PARTY" and
collectively, the "LIABLE PARTIES") who shall be jointly and severally liable
for all Losses (as hereinafter defined) incurred by State Farm (whether directly
or indirectly) arising from or related to the following:
(I) The failure to apply any Rents received by any
of the Exculpated Parties or Liable Parties either within ninety (90)
days prior to an Event of Default or any
39
time after an Event of Default (all such Rents received during such
periods being herein called "RECOVERABLE RENTS") to (A) the payment of
any amount due under the Loan Documents, including, without limitation,
the Indebtedness, (B) the payment of all operating expenses of the
Premises, or (C) the performance of any Obligations required under the
Loan Documents; provided, however, the Liable Parties shall not be
liable to State Farm under this subparagraph (I) for any Recoverable
Rents in excess of the Recoverable Rents applied to the payment of the
amounts and the performance of the Obligations set forth in (A), (B) and
(C) above;
(II) The misapplication or misappropriation of any
tenant security deposits, advance or prepaid rents, cancellation or
termination fees or other similar sums paid to or held by Grantor, any
affiliate of Grantor or any other person or entity (other than State
Farm) in connection with the operation of the Premises in violation of
the Loan Documents or any leases affecting the Premises;
(III) Any amount(s) necessary to repair or replace any
damage to or destruction of the Premises which is caused by the willful
or wanton act or omission on the part of any of the Exculpated Parties
or Liable Parties including, without limitation, waste, any act of arson
or malicious destruction by any of the Exculpated Parties or Liable
Parties;
(IV) The failure to maintain insurance as required by
the Loan Documents or any leases affecting the Premises or the failure
to timely pay insurance premiums, real estate taxes, regular or special
assessments or utility charges affecting the Premises;
(V) All outstanding amounts due under the
Indebtedness and Obligations including principal, interest and other
charges, due to a transfer at any interest in the Premises in violation
of SECTION 3.11 of this Deed of Trust;
(VI) Any insurance proceeds or condemnation awards
received by any of the Exculpated Parties or Liable Parties and not
delivered over to State Farm or used for Restoration of the Premises in
accordance with the terms of the Loan Documents;
(VII) Any fraud or willful misrepresentation of a
material fact by any of the Exculpated Parties or Liable Parties in any
document executed or presented to State Farm in connection with the
Loan;
(VIII) Any use, generation, storage, release,
threatened release, discharge, disposal, or presence on, under, or about
the Premises of any materials, substances or wastes defined or
classified as hazardous or toxic under applicable Federal, State or
local laws or regulations or arising out of or from any failure on the
part of any of the Exculpated Parties or Liable Parties to comply with
the provisions of the Environmental Indemnification Agreement and
subject to any limitations contained therein;
(IX) Any landlord default or any act or omission of
the landlord which, but for the giving of notice and/or failure to
complete curative action within an applicable grace
40
or cure period, would constitute a landlord default under any Credit
Lease, as the same may be hereafter amended, occurring prior to the date
State Farm acquires fee title to the Premises, regardless of whether any
such Losses are incurred as a direct liability of State Farm or are as
asserted as an offset of rents; or
(X) Any violation of the reservations, restrictions
or covenants recorded against the Premises and listed as items 1, 10 and
11 in EXHIBIT B to this Deed of Trust.
As used herein, the term "LOSSES" means any and all claims, suits, liabilities
(including, without limitation, strict liabilities), actions, proceedings,
obligations, debts, damages, costs, fines, penalties, charges, fees, expenses
(including, without limitation, reasonable third party legal fees and expenses),
judgments, awards, amounts paid in settlement of whatever kind or nature.
THE LIABLE PARTIES SHALL NOT BE LIABLE TO THE EXTENT ANY OF THE FOREGOING OR ANY
INDEMNIFICATION IN THE LOAN DOCUMENTS IS CAUSED BY STATE FARM'S GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT (IT BEING THE INTENT OF THE PARTIES THAT THE NEGLIGENCE OF
STATE FARM SHALL BE COVERED HEREBY).
8.12 WAIVER OF MARSHALLING AND CERTAIN RIGHTS.
To the extent that Grantor may lawfully do so, Grantor hereby expressly
waives any right pertaining to the marshalling of assets or marshalling of
liens, the equity of redemption, any statutory or common law right of
redemption, homestead, dower, curtesy, marital share, and all other exemptions,
or other matter which might defeat, reduce or affect the right of State Farm to
sell the Premises or the Collateral for the collection of the Obligations, or
the right of State Farm to the payment of the Obligations out of the proceeds of
the Rents and Leases, in preference to every other person and claimant. Any
Grantor herein who has any right or possibility of dower, curtesy or homestead
in or to the Premises described herein, or any part of it, for the consideration
herein set forth, does hereby release and relinquish all of his or her right or
possibility of dower, curtesy and homestead in and to said Premises and all
parts thereof, and all other marital rights.
8.13 WAIVER OF IMPAIRMENT OF RECOURSE DEFENSES.
Without affecting the liability of Grantor or any other person (except
any person expressly released in writing) for the payment or performance of any
of the Obligations, and without affecting the rights of State Farm with respect
to any security not expressly released in writing, State Farm may, at any time,
and from time to time, either before or after the maturity of the Note, and
without notice or consent:
(A) Release any person liable for payment or performance of
all or any part of the Obligations;
(B) Make any agreement extending the time or otherwise
altering the terms of payment of all or any part of the Obligations (without
limit as to the number of such extensions or
41
the period of periods thereof), or modifying or waiving any obligation, or
subordinating, modifying or otherwise dealing with the lien or charge hereof;
(C) Exercise or refrain from exercising any right State Farm
might have;
(D) Accept additional security of any kind;
(E) Release or otherwise deal with any property, real or
personal, securing the Obligations, including all or any part of the Premises
herein described; or
(F) Elect, by instrument duly recorded in the Office of the
Clerk of the County or Counties where the Premises is located, to have and make
the lien hereof prior, paramount and superior to, or, alternatively, junior,
subordinate and inferior to, any lease of all or any part of the Premises and
whether or not such lease is dated, executed or recorded before or after this
Deed of Trust.
Furthermore, the failure of State Farm to perfect any lien granted
herein or in any other Loan Document, to take any action to obtain payment or
performance of the Obligations or to exercise any rights or remedies available
hereunder shall not relieve Grantor or any other person from liability for the
payment or performance of the Obligations nor effect a discharge of the lien,
security interest or assignment herein granted; it being intended that all
"impairment of recourse" and "impairment of collateral" defenses are hereby
waived.
8.14 NO WAIVER.
No waiver by State Farm shall be construed as a waiver of a subsequent
similar default or any other default by the Grantor. No delay by State Farm in
exercising any right or remedy hereunder, or otherwise afforded by law, shall
operate as a waiver thereof or preclude the exercise thereof during the
continuance of any default hereunder. No failure of State Farm to exercise any
option herein given to declare the maturity of the Obligations hereby secured,
nor forbearance by State Farm after the exercise of such option, and no
withdrawal or abandonment of foreclosure proceedings by State Farm after the
exercise of such option, shall be taken or construed as a waiver of its right to
exercise such option or to declare such maturity by reason of any past, present,
or future default on the part of the Grantor. Acceptance by State Farm of
partial payments shall not constitute a waiver of the default by failure to make
full payments.
8.15 EXPENSES.
Grantor acknowledges and agrees that State Farm shall impose certain
reasonable and customary administrative processing fees (the "SERVICING FEES")
in connection with (i) the extension, renewal, modification, amendment and
termination of the Loan Documents; (ii) the release or substitution of
collateral therefor; (iii) the consideration of any consents, waivers and
approvals with respect to the Premises or the Grantor; (iv) the review of any
Lease or proposed Lease or the preparation or review of any tenant estoppel
certificate or any subordination,
42
nondisturbance and attornment agreement; or (v) any other services provided by
State Farm or any of its agents to or on behalf of the Grantor in connection
with the Premises, the Loan Documents or the Indebtedness secured thereby (the
occurrence of any of the foregoing shall hereinafter be referred to as a
"SERVICING ACTION"). Grantor hereby acknowledges and agrees to pay, immediately,
with or without demand, all such Servicing Fees (as the same may be increased or
decreased from time to time), and any additional fees of a similar type or
nature that may be imposed by State Farm from time to time, in connection with a
Servicing Action. Grantor shall also be responsible for the payment of all fees
and expenses of State Farm's outside attorneys in the event that State Farm, in
its sole discretion, shall determine that the assistance of an outside attorney
is necessary to accomplish the Servicing Action.
8.16 MANAGEMENT AGREEMENT.
The Premises shall be managed by either: (i) the Grantor or an entity
affiliated with Grantor and approved by State Farm for so long as the Grantor or
the affiliated entity is managing the Premises in the same manner as of the date
hereof a first-class manner; or (ii) a professional property management company
reasonably approved by State Farm. The management of the Premises by a
Grantor-affiliated entity or a professional property management company (in
either case, the "MANAGER") shall be pursuant to a written agreement reasonably
approved by State Farm (the "MANAGEMENT AGREEMENT"). The Manager may be removed
or replaced and the terms of any Management Agreement modified or amended
without the prior written consent of State Farm so long as such amendments are
on market terms and any such new property manager is not an affiliate of
Grantor. Following an Event of Default, in the event State Farm appoints a
receiver for the Premises, forecloses this Deed of Trust or takes a deed in lieu
of foreclosure, State Farm shall have the right to terminate the Management
Agreement or to direct the Grantor to retain a new management company approved
by State Farm.
8.17 SUBROGATION.
To the extent that proceeds of the Obligations are used to pay any
outstanding lien, charge or encumbrance affecting the Premises (including,
without limiting the generality of the foregoing, any prior lien) State Farm
shall be subrogated to all rights, interests and liens owned or held by any
owner or holder of such outstanding liens, charges and encumbrances,
irrespective of whether such liens, charges or encumbrances are released of
record; provided, however, that the terms and provisions hereof shall govern the
rights and remedies of State Farm and, to the extent permitted by law without
impairing any of State Farm's rights of subrogation, shall supersede the terms,
provisions, rights, and remedies under the lien or liens to which State Farm is
subrogated hereunder.
8.18 GREATER ESTATE.
In the event that Grantor is the owner of a leasehold estate or any
other estate less than a fee simple with respect to any portion of the Premises
and/or Personal Property and, prior to the satisfaction of the Obligation and
the cancellation of this Deed of Trust of record, Grantor obtains a greater
estate or interest in such portion of the Premises and/or Collateral, then, such
greater estate or
43
interest shall automatically and without further action of any kind on the part
of Grantor be and become subject to the lien of this Deed of Trust.
8.19 DEFEASANCE.
If all of the Indebtedness is paid as the same becomes due and payable
and if all of the covenants, warranties, undertakings and agreements made in
this Deed of Trust are kept and performed, then and in that event only, all
rights under this Deed of Trust shall terminate and the Premises shall become
wholly clear of the liens, security interests, conveyances and assignments
evidenced hereby or by any of the other Loan Documents, which shall be released
by State Farm in due form at Grantor's cost.
8.20 MODIFICATIONS AND EXTENSIONS.
Grantor and State Farm may agree to extend the time for payment of all
or any part of the Obligations or reduce, rearrange or otherwise modify the
terms of payment thereof, or accept a renewal note or notes therefor, or
otherwise deal with the Premises or the Loan Documents, all without notice to or
the consent of any junior lienholder or any other person having an interest in
the Premises and/or Collateral subordinate to the lien of this Deed of Trust,
and without the consent of Grantor if Grantor has then parted with title to the
Premises and/or Collateral. No such extension, reduction, modification or
renewal or dealing shall affect the priority of this Deed of Trust, or release
any liability of Grantor or any other person or entity, or impair the security
hereof in any manner whatsoever.
8.21 NO ORAL CHANGE.
This Deed of Trust may only be modified, amended or changed by an
instrument in writing signed by the Grantor and State Farm, and may only be
released, discharged or satisfied of record by an instrument in writing signed
by State Farm. No waiver of any term, covenant, condition, or provision of this
Deed of Trust shall be effective unless given in writing by State Farm and if so
given by State Farm shall only be effective in the specific instance in which
given.
8.22 WAIVER OF TRIAL BY JURY.
GRANTOR HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM FILED
BY ANY PARTY, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR
INDIRECTLY TO THIS DEED OF TRUST OR ANY ACTS OR OMISSIONS OF THE GRANTOR IN
CONNECTION THEREWITH OR CONTEMPLATED THEREBY.
44
8.23 FINAL AGREEMENT.
THIS DEED OF TRUST AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
45
IN WITNESS WHEREOF, Grantor has caused this Deed of Trust to be executed
as of the date herein above first written.
Grantor's Address: GRANTOR:
00000 Xxxxxx Xxxxxxx, Xxxxx 000 BEHRINGER HARVARD LANDMARK LP,
Xxxxxxx, Xxxxx 00000 a Texas limited partnership
By: Behringer Harvard Landmark GP, LLC,
a Texas limited liability company,
its general partner
By: _________________________________
Xxxxxx X. Xxxxxxx, III, Secretary
00
XXX XXXXX XX XXXXX ss.
ss.
COUNTY OF DALLAS ss.
BEFORE ME, the undersigned authority, on this day personally appeared
Xxxxxx X. Xxxxxxx, III, Secretary of Behringer Harvard Landmark GP, LLC, a Texas
limited liability company, general partner of BEHRINGER HARVARD LANDMARK LP, a
Texas limited partnership, known to me to be the person whose name is subscribed
to the foregoing instrument, and acknowledged to me that he executed the same
for the purposes and consideration therein expressed, in the capacity therein
stated, and as the act and deed of said limited partnership.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this _____ day of _____________,
2005.
{ S E A L }
_________________________________________
Notary Public in and for
the State of Texas
My Commission Expires:
47
EXHIBIT A
---------
LEGAL DESCRIPTION
TRACT I:
BEING a 8.625 acre tract of land out of the McJimp Bays Survey, Abstract No. 65,
and being all of Xxx 0, Xxxx Xxxxx X/0000 as recorded in Cabinet J, Slide 500 as
Clerk Document #96-0104853, Plat Records of Collin County, Texas (PRCCT), said
tract being more particularly described as follows:
BEGINNING at a 5/8 inch iron rod found for the intersection of the southeast
corner of a called 25.000 acre tract as conveyed to Xxxx Xxxxx Estates, Inc. and
evidenced in a Special Warranty Deed recorded in Clerk's File Number 00-0000000
ORRPCCT, with the west right-of-way line of the Dallas North Tollway (a variable
width right-of-way), said point being the northeast corner of Xxx 0, Xxxxx
X/0000 and the beginning of a curve to the right having a radius of 1899.86
feet, a delta of 02(degree)14'19" and a chord bearing and distance of South
03(degree)48'04" West, 74.22 feet;
THENCE southwesterly along said curve to the right, and along said west line, an
arc length of 74.23 feet to a 1/2 inch iron rod found for point of tangency;
THENCE South 04(degree)54'59" West, continuing along said West line, for a
distance of 312.11 feet to a 1/2 inch iron rod found for the point of curvature
of a curve to the left having a radius of 5784.58 feet, a delta of
01(degree)42'04" and a chord bearing and distance of South 04(degree)03'57"
West, 171.74 feet;
THENCE southwesterly, continuing along said west line for an arc length of
171.74 feet to a found "X" in concrete for point of tangency;
THENCE South 03(degree)12'55" West, continuing along said west line, for a
distance of 9.09 feet to a found "X" in concrete for corner, said point being
the northeast corner of Xxx 0, xx xxxx Xxxxx X/0000;
XXXXXX Xxxxx 00(xxxxxx)00'00" West, along the north line of said Lot 3, being
also the south line of Lot 4 (common line) for a distance of 636.56 feet to a
found 5/8 inch iron rod for corner in the east line of Country Brook Section 4,
an addition to the City of Dallas according to the map or plat thereof recorded
in Clerk's File Number 96-0001181 L.R.C.C.T.;
48
THENCE North 00(degree)29'43" West, continuing along said east line, for a
distance of 473.88 feet to a 5/8 inch iron rod found corner in the north line of
said Country Brook Section 4;
THENCE South 89(degree)30'17" West, along said north line, for a distance of
26.30 feet to a 5/8 inch iron rod found for corner in the east line of Landmark
Addition, Phase Two, an addition to the City of Dallas according to the Map or
Plat recorded in Clerk's File Number 96-0001184 L.R.C.C.T.;
THENCE North 00(degree)29'43" West, leaving said north line and along said east
line of Landmark Addition, Phase Two, a distance of 91.12 feet to a 5/8 inch
iron rod found for corner in the south line of said Xxxx Xxxxx Estates, (Owner's
Deed C.C.C. File No. 00-0000000);
THENCE North 89(degree)30'17" East, along said south line for a distance of
712.10 feet to the POINT OF BEGINNING and CONTAINING 375,707 square feet or
8.625 acres of land, more or less.
TRACT II:
Being a 11.27 acre tract of land out of the McJimp Bays Survey, Abstract No. 85
and being all of Xxx 0, Xxxx Xxxxx X/0000 as recorded in Cabinet J, Slide 500 as
Clerk Document #96-0104853, Plat Records of Collin County, Texas (PRCCT), said
tract being more particularly described as follows:
BEGINNING at a 5/8 inch iron rod found for the intersection of the northeast
corner of Xxx 0, Xxxx Xxxxx X/0000, as recorded in Collin County, Texas (DRCCT),
with the west right-of-way line of the Dallas North Tollway (a variable width
right-of-way);
THENCE South 89(degree)30'17" West, along the north line of Lot 5, a distance of
656.71 feet to a 5/8 inch iron rod found for corner in the east line of Country
Brook Section 4, an Addition to the City of Dallas according to the Map or Plat
thereof recorded in Clerk's File No. 96-0001181, LRCCT;
THENCE North 45(degree)29'43" West, along said east line, for a distance of
15.41 feet to a 1/2 inch iron found for the point of curvature of a curve to the
right having a radius of 50 feet, a delta of 45(degree)00'00" and a chord
bearing and distance of North 22(degree)59'43" West, 38.27 feet;
THENCE northwesterly, continuing along said east line and along said curve to
the right an arc length of 39.27 feet to a 1/2 inch iron rod found for point of
tangency;
THENCE North 00(degree)29'43" West, continuing along said east line, for a
distance of 540.84 feet to a 1/2 inch iron rod found for the point of curvature
of a curve to the right having a radius of 50.00 feet, a delta of
45(degree)00'00" and a chord bearing and distance of North 22(degree)00'17"
East, 38.27 feet;
THENCE northeasterly, continuing along said east line and along said curve to
the right an arc length of 39.27 feet to a 1/2 inch iron rod found for point of
tangency;
THENCE North 44(degree)30'17" East, continuing along said east line, for a
distance of 71.21 feet to a 1/2 inch iron rod found for corner;
THENCE North 00(degree)29'43" West, continuing along said east line for a
distance of 54.46 feet to a 5/8 inch iron rod found for corner in the north line
of said Lot 3, said line being also the south line of Xxx 0, Xxxx Xxxxx X/0000;
XXXXXX Xxxxx 00(xxxxxx)00'00" East, along said north line, for a distance of
636.56 feet to a chiseled "X" found for corner in said west right-of--way line
of said Dallas Tollway;
49
THENCE South 03(degree)12'55" West, continuing along said west line, for a
distance of 234.96 feet to a 1/2 iron rod found for the point of curvature to
the left having a radius of 5054.07 feet, a delta of 03(degree)45'52" and a
chord bearing and distance of South 01(degree)19'59" West, 332.00 feet;
THENCE Southwesterly, continuing along said west line for an arc length of
332.06 feet to a 1/2 inch iron rod set for point of tangency;
THENCE South 00(degree)32'57" East, continuing along said west line, for a
distance of 5.09 feet to a 1/2 inch iron rod set for the point of curvature of a
curve to the left having a radius of 1919.86 feet, a delta of 04(degree)39'25"
and a chord bearing and distance of 02(degree)52'40" East, 156.00 feet;
THENCE Southwesterly, continuing along said west line and along said curve to
the left an arc length of 156.04 feet to the POINT OF BEGINNING and CONTAINING
491.22 square feet, or 11.27 acres of land, more or less.
TRACT III:
Non-exclusive Easement Estates as created and defined by that certain Easement
and Maintenance Agreement, dated October 28, 1996, filed November 11, 1996,
recorded in Clerk's File No. 96-0097230, Real Property Records, Collin County,
Texas, Clarification Agreement recorded in Clerk's File No. 96-0107158; and by
that certain Declarations of Easements, dated November 11, 1996, filed November
21, 1996, recorded in Clerk's File No. 96-0100329, Real Property Agreements,
Collin County, Texas, First Amendment to Declarations of Easements recorded in
Clerk's File No. 96-0107156, Real Property Records, Collin County, Texas.
50
EXHIBIT B
---------
PERMITTED EXCEPTIONS
1. Restrictive covenants of record recorded in Clerk's File Nos.
00-0000000; 97-0059389; 00-0000000; 96-0100329; and 96-0107156, Real
Property Records; Collin County, Texas; and Volume J, Page 500, Plat
Records, Collin County, Texas.
2. Drainage Easement from Pacific United Development Corporation to the
City of Dallas by instrument dated September 24, 1996, filed October 22,
1996, recorded in Clerk's File No. 96-0091112, Real Property Records,
Collin County, Texas.
3. Easement and Right of Way from Champion/Landmark I, Ltd. to Texas
Utilities Electric Company dated October 14, 1997, filed November 10,
1997, recorded in Volume 4037, Page 1873 (Clerk's File No. 97-0096236),
Real Property Records, Collin County, Texas.
4. Telecommunications Easement Agreement by instrument dated September 7,
2000, filed September 25, 2000, recorded in Volume 4759, Page 308
(Clerk's File No. 00-0103815), Real Property Records, Collin County,
Texas.
5. Water Easement from Pacific United Development Corporation, to the City
of Dallas, dated October 16, 1996, filed October 29, 1996, recorded in
Clerk's File No. 96-0093013, Real Property Records, Collin County,
Texas.
6. Easement and Right of Way from Champion-Boston I Limited Partnership, to
Texas Utilities Electric Company dated October 14, 1997, filed November
10, 1997, recorded in Volume 4037, Page 1867, Real Property Records,
Collin County, Texas.
7. Easements as shown on plat recorded in Volume J, Page 500, Plat Records,
Collin County, Texas.
8. Terms and conditions of Declarations of Easements dated November 11,
1996, filed November 21, 1996, recorded in Clerk's File No. 96-0100329,
First Amendment recorded in Clerk's File No. 96-0107156, Real Property
Records, Collin County, Texas.
9. Terms, conditions, provisions, easements, restrictions, and stipulations
of Easement and Maintenance Agreement, dated October 28, 1996, filed
November 11, 1996, recorded in Clerk's File No. 96-0097230,
Clarification Agreement recorded in Clerk's File No. 96-0107158, Real
Property Records, Collin County, Texas.
10. Landmark Center I Office Lease Agreement dated October 31, 1997,
executed by and between Champion Landmark I, Ltd., a Texas limited
partnership, as Landlord, and CompUSA, Inc, a Delaware corporation, as
Tenant.
51
11. Landmark Center II Office Lease Agreement dated August 28, 1997,
executed by and between Champion Boston I Limited Partnership, a Texas
limited partnership, as Landlord, and CompUSA, Inc, a Delaware
corporation, as Tenant.
12. Terms, conditions, provisions and stipulations of Detached Sign Unity
Agreement, dated August 2, 1999, filed January 11, 2000, recorded in
Volume 4580, Page 462 (Clerk's File No. 00-0003219), Real Property
Records, Collin County, Texas.
52
EXHIBIT C
---------
OTHER LOAN DOCUMENTS
1. Assignment of Rents and Leases executed by Grantor to and in favor of
State Farm of even date with this Deed of Trust.
2. Environmental Indemnification Agreement executed by Grantor and
Guarantor jointly and severally, to and in favor of State Farm of even
date with this Deed of Trust.
3. Limited Guaranty executed by Guarantor, in favor of State Farm of even
date with this Deed of Trust.
4. Borrower's Certificate executed by Grantor to and in favor of State Farm
of even date with this Deed of Trust.
5. Assignment and Subordination of the Management Agreement, executed by
Grantor in favor of State Farm.
6. Uniform Commercial Code Financing Statements.
53
EXHIBIT D
---------
LETTER OF CREDIT REQUIREMENTS
A Letter of Credit that serves as all or any part of a Commitment Fee must be in
compliance with the following terms and conditions:
1. The Letter of Credit must specifically state that it is subject to the
INTERNATIONAL STANDBY PRACTICES 1998. INTERNATIONAL CHAMBER OF COMMERCE
PUBLICATION NO. 590.
2, The Letter of Credit must be addressed to State Farm Bank, F.S.B., as
beneficiary.
3. The Letter of Credit must be irrevocable.
4. The Letter of Credit must be freely transferable.
5. If the Letter of Credit stipulates an expiration date for payment, such
date shall be at least through the maturity date of the Loan and shall
be deemed to be automatically extended without amendment from year to
year, with renewal occurring annually, from the date of its issuance or
any future expiration date unless at least sixty (60) days prior to any
future expiration date the issuing bank notifies State Farm, in writing,
that the issuing bank intends not to renew the Letter of Credit for an
additional year. Unless the face amount of the Letter of Credit has been
reduced to zero in accordance with the terms of the Deed of Trust or
State Farm has otherwise agreed to waive the Tenant Improvement Letter
of Credit in the event that the expiration date of the Letter of Credit
is earlier than the Maturity Date of the Loan, including all renewal
options and extensions, or State Farm receives notice from the issuing
bank that it does not intend to renew the Letter of Credit as provided
herein, Borrower agrees to cause the delivery to State Farm either a new
letter of credit meeting the conditions detailed in this EXHIBIT D or an
amendment to the existing letter of credit which provides that the
expiration date is extended for a period of the lesser of one year or
the Maturity Date.
6. A Letter of Credit that requires the beneficiary to prepare a draft or
drafts in order to draw the funds and/or requires presentation of the
Letter of Credit to the issuing bank is acceptable. However, the draft
must be prepared so that the beneficiary does not certify anything
relative to the loan other than an order or direction to pay.
7. State Farm will accept a Letter of Credit that requires that drafts
drawn under the Letter of Credit identify the Letter of Credit number.
8. Any other condition, qualification, or certification required of the
beneficiary to draw on the Letter of Credit is unacceptable.
Attached is a form of Letter of Credit that would be acceptable to State Farm.
In addition to the Letter of Credit, State Farm must receive a copy of the
resolution of the bank
54
issuing the Letter of Credit that identifies the officer or officers empowered
to execute the Letter of Credit on behalf of the issuing bank and confirms, as
of the date of the Letter of Credit, that the executing party or parties held
such office or offices. The Corporate Secretary of the bank must manually
certify the copy of the resolution and must affirm the continuing applicability
of the resolution.
55
State Farm Bank, F.S.B.
Xxx Xxxxx Xxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx,
Vice President--Mortgages and Real Estate
Re: Irrevocable Letter of Credit Dear Sir or Madam:
By order of our client, ________________________, we hereby establish
our irrevocable Letter of Credit No. in your favor for a sum or sums not to
exceed $_______________ (______________________ U.S. Dollars) in the aggregate,
effective immediately.
This Letter of Credit shall be payable in immediately available funds in
U.S. Dollars. Funds under this Letter of Credit are payable to you upon your
presentation to us of the original of this Letter of Credit and a sight draft
drawn on us in the form annexed hereto. All drafts must be marked: "Drawn under
Letter of Credit No. __ issued by [NAME OF ISSUING BANK],"
This Letter of Credit shall be for a minimum of _____ years and shall be
deemed to be automatically extended without amendment from year to year.
This Letter of Credit is transferable and may be transferred one or more
times. However, no transfer shall be effective unless written notification of
such transfer is given to us.
We hereby agree to honor each draft drawn under and in compliance with
this Letter of Credit, if duly presented at our offices at ____________________
This Letter of Credit is subject to the International Standby Practices
l998, International Chamber of Commerce Publication No. 590.
[NAME OF BANK]____________________
By:_______________________________
Its:______________________________
56
[Annex Bank's Form of Sight Draft]
57