EXHIBIT 10.23.5.
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DEED OF TRUST
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(Security Agreement, Assignment of Leases, Assignment of Rents, and Financing
Statement)
This combined Deed of Trust, Security Agreement, Assignment of Leases,
Assignment of Rents, and Financing Statement (hereafter "Instrument") is made on
the date acknowledged below by Wedgwood Partners, Ltd., Limited Partnership, a
Nevada limited partnership. By signing this instrument, Borrower agrees to the
terms and conditions and makes the covenants stated in this instrument.
DATE: July 12, 2001
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BORROWER/GRANTOR: Wedgwood Partners, Ltd., Limited Partnership, a
----------------- Nevada limited partnership
BORROWER'S/GRANTOR'S
ADDRESS FOR NOTICE: 650 Centura Tower One
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LENDER: Vestin Mortgage, Inc., a Nevada corporation
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LENDER'S ADDRESS: ▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
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TRUSTEE: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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TRUSTEE'S ADDRESS: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
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NOTE: $12,000,000.00 promissory note (the "Note") dated herewith,
----- executed by Borrower and payable to Lender as stated in the Note.
LAND: The land is located in Harlingen, Cameron County, Texas, and is
----- more particularly described in EXHIBIT "A", attached hereto and
incorporated herein for all purposes.
ARTICLE I - SECURITY
1.01 CONVEYANCE IN TRUST. For value received, the receipt and sufficiency of
which Borrower acknowledges, and to secure the payment of the Indebtedness
described in Section 2.01 and performance of the covenants and agreements of
Borrower stated in this Instrument, the Note, and in the Loan Documents (as
defined below), Borrower conveys the Property described in Section 1.02
including, without limitation, the Land to the Trustee in trust with power of
sale, TO HAVE AND TO HOLD the Property, together with the rights, privileges,
and appurtenances thereto belonging unto the Trustee and the Trustee's
substitutes or successors forever. Borrower binds itself and its successors and
assigns to WARRANT AND FOREVER DEFEND the Property unto the Trustee, and the
Trustee's substitutes or successors and assigns, against the claim or claims of
all persons claiming or to claim the same or any part thereof.
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1.02 PROPERTY. The Property covered by this Instrument includes the Land and
the following items described in this Section 1.02, whether now owned or
hereafter acquired, all of which, including replacements and additions thereto,
shall be deemed to be and remain a part of the Property covered by this
Instrument, and all rights, hereditaments and appurtenances pertaining thereto,
all of which are referred to as the "Property": (a) any and all building,
improvements, and tenements now or hereafter attached to or placed, erected,
constructed, or developed on the Land (the "Improvements"); (b) all equipment,
fixtures, furnishing, inventory, and articles of personal property (the
"Personal Property") now or hereafter attached to or used in or about the
Improvements or that are necessary or useful for the complete and comfortable
use and occupancy of the Improvements for the purposes for which they were or
are to be attached, placed, erected, constructed or developed, or which Personal
Property is or may be used in or related to the planning, development, financing
or operation of the Improvements, and all renewals of or replacements or
substitutions for any of the foregoing, whether or not the same are or shall be
attached to the Land or Improvements; (c) all water and water rights, timber,
crops, and mineral interests pertaining to the Land; (d) all building materials
and equipment now or hereafter delivered to and intended to be installed in or
on the Land or the Improvements; (e) all plans and specifications for the
Improvements; (f) all Borrower's rights (but not Borrower's obligations) under
any contracts relating to the Land, the Improvements or the Personal Property;
(g) all deposits (including tenant security deposits), bank accounts, funds,
Instruments, notes, or chattel paper arising from or by virtue of any
transactions related to the Land, the Improvements or the Personal Property; (h)
all Borrower's rights (but not Borrower's obligations) under any documents,
contracts rights, accounts, commitments, construction contracts, architectural
contracts, engineering contracts, and general intangibles (including without
limitation trademarks, trade name, and symbols) arising from or by virtue of any
transactions related to the Land, the Improvements, or the Personal Property
including, but not limited to, all of Borrower's rights arising under letters of
intent to purchase and contracts to sell or purchase all or any portion of the
Property, whether heretofore or hereafter executed ("Contract of Sale"); (i) all
permits, licenses, franchises, certificates, and other rights and privileges
obtained in connection with the Land, the Improvements, or the Personal
Property; (j) all proceeds arising from or by virtue of the sale, lease or other
disposition of the Land, the Improvements, or the Personal Property; (k) all
proceeds (including premium refunds) of each policy of insurance relating to the
Land, the Improvements, or the Personal Property; (l) all proceeds from the
taking of any of the Land, the Improvements, the Personal Property or any rights
appurtenant thereto by right of eminent domain or by private or other purchase
in lieu thereof, including change of grade of streets, curb cuts or other rights
of access, for any public or quasi-public use under any law; (m) all right,
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title, and interest of Borrower in and to all streets, road, public places,
easements, and rights-of-way, existing or proposed, public or private, adjacent
to or used in connection with, belonging or pertaining to the Land; (n) all of
the Leases (as hereafter defined), rents, royalties, bonuses, issues, profits,
revenues, or other benefits of the Land, the Improvements, or the Personal
Property, including without limitation cash or securities deposited pursuant to
leases to secure performance by the tenants of their obligations thereunder
(subject to the Assignment of Rents made in Article V below); (o) all consumer
goods located in, on, or about the Land or the Improvements or used in
connection with the use or operation thereof; however, neither the term
"consumer goods" nor the term "Personal Property" includes clothing, furniture,
appliances, linens, china, crockery, kitchenware, or personal effects used
primarily for personal, family, or household purposes; (p) other interests of
every kind and character that Borrower now has or at any time hereafter acquires
in and to the Land, Improvements, and Personal Property and all property that is
used or useful in connection therewith, including rights of ingress and egress
and all reversionary rights or interests of Borrower with respect to such
property; and (q) all products and proceeds of the Personal Property described
in this Section 1.02.
1.03 SUBROGATION. Any of the proceeds of the Note utilized to take up any
outstanding liens or other contract rights against all or any part of the
Property have been advanced by Lender at Borrower's request and upon Borrower's
representation that such amounts are due and are secured by valid liens against
the Property. Lender shall be subrogated to any and all rights, powers, superior
titles, liens, and equities owned or claimed by any owner or holder of any
outstanding liens, contract rights and debts, however remote, regardless of
whether said liens, contract rights or debts are acquired by Lender by
assignment or are released by the holder thereof upon payment.
ARTICLE II - INDEBTEDNESS AND PAYMENTS
2.01 INDEBTEDNESS. The indebtedness secured by this Instrument (the
"Indebtedness") shall mean and include the following: (a) any and all sums
becoming due and payable pursuant to the Note; (b) any and all other sums
becoming due and payable by Borrower (or any one or more of them, if more than
one) to Lender as a result of advances made by Lender pursuant to the terms and
conditions of this Instrument, or any other Loan Document securing or executed
in connection with or otherwise relating to the Note, including without
limitation the repayment of any future advances made by Lender to Borrower as
provided in paragraph (c) below and the repayment of any sums advanced for the
protection of Lender's security pursuant to Section 6.20; and (c) any and all
renewals, extensions, replacements, substitutions, rearrangements, or
modifications of the Indebtedness, or any part of the Indebtedness.
2.02 OTHER LOAN DOCUMENTS. In addition to this Instrument, and the Note,
Borrower and Lender may execute various other documents and agreements relating
to the Indebtedness secured by this Instrument, all of which documents and
agreements, are referred to herein as the "Loan Documents". This Instrument
shall also secure the performance of all obligations and covenants of Borrower
under this Instrument and the other Loan Documents.
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2.03 PAYMENT OF PRINCIPAL AND INTEREST. Borrower shall promptly pay when due
the principal and interest on the Indebtedness evidenced by the Note, prepayment
and late charges as provided in the Note, and all other sums secured by this
Instrument.
2.04 APPLICATION OF PAYMENT. Unless applicable law provides otherwise, all
payments received by Lender from Borrower under the Note or this Instrument
shall be applied by Lender as it determines in its sole and absolute discretion.
ARTICLE III - SECURITY AGREEMENT
3.01 UNIFORM COMMERCIAL CODE SECURITY AGREEMENT. This Instrument is also
intended to be a security agreement between Borrower, as debtor, and Lender, as
secured party, pursuant to the Texas Business and Commerce Code 1.01 et seq.
("Texas UCC") for any of the items specified above as part of the Property
which, under applicable law, may be subject to a security interest pursuant to
the Texas UCC, and Borrower hereby grants Lender a security interest in all such
items. Borrower agrees that Lender may file this Instrument or a reproduction
thereof in the real estate records or other appropriate index as a financing
statement for any of the items specified above as part of the Property. Any
reproduction of this Instrument or of any other security agreement or financing
statement shall be sufficient as a financing statement. In addition, Borrower
agrees to execute and deliver to Lender, upon Lender's request, any financing
statement, as well as extensions, renewals, and amendments thereof, and
reproduction of this Instrument in such form as Lender may require to perfect a
security interest with respect to said items. Borrower shall pay all costs of
filing such financing statement and any extensions, renewals, amendments, and
releases thereof and shall pay all reasonable costs and expenses of any record
searches for financing statements Lender may reasonably require. Without the
prior written consent of Lender, which consent may be withheld for any reason
whatsoever or no reason, as Lender may determine in its sole and absolute
discretion, Borrower shall not create or suffer to be created pursuant to the
Texas UCC any other security interest in said items, including replacements and
additions thereto. Upon the occurrence of an Event of Default (as that term is
defined in Article VII below), including the covenants to pay when due all sums
secured by this Instrument, Lender shall have the remedies of a secured party
under the Texas UCC and, at Lender's option, may also invoke the remedies
provided in Article VIII of this Instrument as to such items. In exercising any
remedies, Lender may proceed against the items of real property and any items of
personal property specified above as part of the Property separately or together
and in any order whatsoever, without in any way affecting the availability of
Lender's remedies under the Texas UCC or of the remedies provided in Article
VIII of this Instrument.
3.02 NOTICE OF CHANGES. Borrower shall give advance notice in writing to
Lender of any proposed change in Borrower's name, identity, or structure and
shall execute and deliver to Lender, prior to or concurrently with the
occurrence of any such change, all additional financing statements that Lender
may require to establish and maintain the validity and priority of Lender's
security interest with respect to any of the Property.
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3.03 FIXTURES. Some of the items of the Property are goods that are or are to
become fixtures related to the Land. Borrower and Lender intend that, as to
those goods, this Instrument shall be effective as a financing statement filed
as a fixture filing from the date of its filing for record in the real estate
records of the county in which the Property is situated. Information concerning
the security interest created by this Instrument may be obtained from Lender, as
secured party, at the address of Lender stated above. The mailing address of the
Borrower, as debtor, is as stated above.
ARTICLE IV - ASSIGNMENT OF LEASES
4.01 ASSIGNMENT OF LEASES. Borrower assigns to Lender and grants to Lender a
security interest in all of Borrower's rights, but not Borrower's obligations,
under existing and future leases, including subleases, and any and all
extensions, renewals, modifications, and replacements of such leases, upon any
part of the Property (the "Leases"). Borrower also assigns to Lender all
guaranties of tenant's performance under the Leases. Prior to the occurrence of
an Event of Default (as defined below), Borrower shall have the right, without
joinder of Lender, to enforce the Leases, unless Lender directs otherwise.
4.02 WARRANTIES CONCERNING LEASES AND RENTS. Borrower represents and warrants
that: (a) Borrower has good title to the Leases hereby assigned and authority to
assign them, and no other person or entity has any right, title or interest
therein; (b) all existing Leases are valid, unmodified and in full force and
effect, except as indicated herein, and no default exists thereunder; (c) unless
otherwise provided herein, no Rents (as hereafter defined) or other sums owing
under the Leases have been or will be assigned, mortgaged or pledged; (d) no
Rents have been or will be anticipated, waived, released, discounted, set off or
compromised; and (e) except as indicated in the Leases, Borrower has not
received any funds or deposits from any tenant that has not already been applied
to the payment of accrued Rents.
4.03 BORROWER'S COVENANTS OF PERFORMANCE. Borrower covenants to: (a) perform
all of its obligations under the Leases and give prompt written notice to Lender
of any failure to do so; (b) give immediate written notice to Lender of any
notice Borrower receives from any tenant or subtenant under any Leases
specifying any claimed default by any party under such Leases, excluding,
however, notice of defaults under residential Leases; (c) enforce the tenant's
obligations under the Leases; (d) defend, at Borrower's expense, any proceeding
pertaining to the Leases, including, if Lender so requests, any such proceeding
to which Lender is a party; and (e) neither create nor permit any encumbrance
upon Borrower's interest as landlord of the leases, except this Instrument and
any other encumbrances permitted by this Instrument.
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4.04 PRIOR APPROVAL FOR ACTIONS AFFECTING LEASES. Borrower shall not, without
the prior written consent of Lender, which consent may be withheld for any
reason whatsoever or no reason, as Lender may determine in its sole and absolute
discretion: (a) receive or collect rents under any of the Leases more than one
month in advance; (b) encumber or assign future Rents; (c) waive or release any
obligation of any tenant under the Leases; (d) cancel, terminate or modify any
of the Leases, cause, permit or accept any cancellation, termination or
surrender of any of the Leases, or commence any proceedings for dispossession of
any tenant under any of the Leases, except upon default by the tenant
thereunder; (e) renew or extend any of the Leases, except pursuant to terms in
existing Leases; (f) permit any assignment of the Leases; or (g) enter into any
Leases after the date hereof. Notwithstanding anything contained in this Section
4.04 to the contrary, Borrower may enter into leases covering the Property with
terms of one year or less.
4.05 ATTORNMENT OF TENANTS. All leases of the Property shall specifically
provide that: (a) such Leases are subordinate to this Instrument; (b) that the
tenant attorns to Lender, such attornment to be effective upon Lender's
acquisition of title to the Property; (c) that the tenant agrees to execute such
further evidences of attornment as Lender may from time to time request; (d)
that the attornment of the tenant shall not be terminated by foreclosure; and
(e) that Lender may, at Lender's option, accept or reject such attornments.
4.06 SETTLEMENT FOR TERMINATION. Borrower agrees that no settlement for
damages, for termination of any of the Leases under the Federal Bankruptcy Code,
or under any other federal, state, or local statute, shall be made without the
prior written consent of Lender, which consent may be withheld for any reason
whatsoever or no reason, as Lender may determine in its sole and absolute
discretion, and any check in payment of such damages shall be made payable to
both Borrower and Lender. Borrower hereby assigns any such payment to Lender, to
be applied to the Indebtedness as Lender may elect, and Borrower agrees to
endorse any check for such payment to the order of Lender.
4.07 LENDER IN POSSESSION. Lender's acceptance of this assignment shall not,
prior to entry upon and taking possession of the Property by Lender, be deemed
to constitute Lender a "mortgagee in possession," shall not obligate Lender to
appear in or defend any proceeding relating to any of the Leases or to the
Property, take any action hereunder, expend any money, incur any expenses, or
perform any obligation or liability under the Leases, or assume any obligation
for any deposits delivered to Borrower by any tenant and not delivered to
Lender. Lender shall not be liable for any injury to damage to person or
property in or about the Property.
4.08 APPOINTMENT OF ATTORNEY. Borrower hereby appoints Lender its
attorney-in-fact, coupled with an interest, empowering Lender to subordinate any
Leases to this Instrument, which shall only be effective during a period of any
uncured event of default.
4.09 INDEMNIFICATION; HOLD HARMLESS. Borrower hereby indemnifies and holds
Lender harmless from all liability, damage, or expense incurred by Lender from
any claims under the Leases, including without limitation any claims by Borrower
with respect to Rents paid directly to Lender after an event of Default and
claims by tenants for security deposits or for rental payments made more than
one (1) month in advance and not delivered to Lender. All amounts indemnified
against hereunder, including reasonable attorneys' fees, if paid by Lender,
shall bear interest at the maximum lawful rate, shall be payable by Borrower
immediately without demand, and shall be secured by this Instrument.
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4.10 RECORDS. Upon the request by Lender, Borrower shall deliver to Lender
true and correct legible copies of all Leases and copies of all records relating
thereto.
4.11 MERGER. There shall be no merger of the leasehold estates, created by the
Leases, with the fee estate of the Land without the prior written consent of
Lender, which consent may be withheld for any reason whatsoever or no reason, as
Lender may determine in its sole and absolute discretion.
4.12 RIGHT TO RELY. Borrower authorizes and directs the tenants under the
Leases to pay rents to Lender upon written demand by Lender, provided that
Borrower is in default after the expiration of any applicable cure period,
without further consent of Borrower and regardless of whether Lender has taken
possession of any other portion of the Property, and tenants may rely upon any
written statement delivered by Lender to the tenants. Any such payment to Lender
shall constitute payment to Borrower under the Leases, and Borrower appoints
Lender as Borrower's lawful attorney-in-fact for giving, and is hereby empowered
to give, acquittance to any tenants for such payments to Lender after an event
of Default.
ARTICLE V - ASSIGNMENT OF RENTS
5.01 ABSOLUTE ASSIGNMENT OF RENTS. As part of the consideration for the
Indebtedness evidenced by the Note, and for other valuable consideration, the
receipt and sufficiency of which Borrower acknowledges, Borrower hereby
absolutely and unconditionally assigns and transfers to Lender all rents,
insurance, income, receipts, and profits from the Property, and all security
deposits and other security therefore (the "Rents"), including those now due, or
to become due by virtue of any Lease or other agreement for the occupancy or use
of all or any part of the Property, regardless of to whom the Rents are payable.
Borrower authorizes Lender or Lender's agents to collect the rents and directs
each tenant on the Property to pay such Rents to Lender or Lender's agents;
provided, however, that prior to the occurrence of an Event of Default (as
defined below), Borrower shall collect and receive all Rents as trustee for the
benefit of Lender and Borrower, to apply the Rents so collected to the sums
secured by this Instrument in the order provided in this Instrument with the
balance, so long as no such Event of Default has occurred, to the account of
Borrower. Borrower and Lender intend that this Assignment of Rents constitutes
an absolute and present assignment and not an assignment for additional security
only. Borrower and Lender intend that Lender shall have absolute right, power,
and authority to collect the Rents.
5.02 EVENT OF DEFAULT. Subject to any notice and cure rights expressly granted
to Borrower in this Deed of Trust or any other Loan Documents, if any, upon the
occurrence of an Event of Default, and without the necessity of Lender entering
upon and taking and maintaining full control of the Property in person, by agent
or by a court-appointed receiver, Lender shall immediately be entitled to
possession of all the rents specified in this Article V as the same become due
and payable, including without limitation Rents then due and unpaid, and all
such Rents shall immediately upon delivery of such notice be held by Borrower as
trustee for the benefit of Lender only; provided, however, that the written
notice by Lender to Borrower of the breach by Borrower shall contain a statement
that Lender exercises its rights to such Rents. Borrower agrees that commencing
upon delivery of such written notice of an Event of Default by Lender to
Borrower, each tenant of the Property shall make such Rents payable to and pay
such Rents to Lender or Lender's agents on Lender's written demand to each
tenant therefore, delivered to each tenant personally, by mail or delivering
such demand to each rental unit, without any liability on the part of any tenant
to inquire further as to the existence of an Event of Default.
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5.03 BORROWER'S COVENANTS. Borrower covenants that Borrower has not executed
any prior assignment of the rents or any portion thereof, that Borrower has not
performed, and will not perform, any acts and has not executed, and will not
execute, any instrument which would prevent Lender from exercising its rights
under this Article V and that at the time of execution of this Instrument there
has been anticipation or prepayment of any Rents more than thirty (30) days
prior to the due dates of such rents. Borrower covenants that Borrower will not
hereafter collect or accept payment of any Rents more than thirty (30) days
prior to the due dates of such Rents without prior written consent of Lender,
which consent may be withheld for any reason whatsoever or no reason, as Lender
may determine in its sole and absolute discretion. Borrower further covenants
that Borrower will execute and deliver to Lender such further assignments of
rents as Lender may from time to time request.
5.04 APPOINTMENT OF RECEIVER; POSSESSION OF THE PROPERTY. After any applicable
notice and opportunity to cure expressly granted Borrower pursuant to any Loan
Documents, if any, upon the occurrence of an Event of Default, Lender may in
person, by agent or by a court-appointed receiver, regardless of the adequacy of
lender's security, enter upon and take full control of the Property in order to
perform all acts necessary and appropriate for the operation and maintenance
thereof, including without limitation the execution, cancellation or
modification of Leases, collection of Rents, the making of repairs to the
Property, and the execution or termination of contracts providing for the
management or maintenance of Property, all on such terms as are deemed best to
protect the security of this Instrument. In the event Lender elects to seek the
appointment of a receiver for the Property upon the occurrence of an Event of
Default, Borrower consents to the appointment of such receiver. Lender or the
receiver shall be entitled to receive a reasonable fee for managing the
Property.
5.05 APPLICATION OF RENTS. All Rents collected subsequent to the occurrence of
an Event of Default shall be applied first to the costs, if any, of taking
control of and managing the Property and collecting the rents, including,
without limitation, reasonable attorney's fees, receiver's fees, premiums on
receiver's bonds, costs of repairs to the Property, premiums on insurance
policies, taxes assessments, and other charges on the Property, and the costs of
discharging any obligation or liability of Borrower as landlord of the Property,
and then to the sums secured by this Instrument. Lender or the receiver shall
have access to the books and records used in the operation and maintenance of
the Property and shall be liable to account only for those Rents actually
received. Lender shall not be liable to Borrower for anyone claiming under or
through Borrower or anyone having an interest in the Property by reason of
anything done or left undone by Lender under this Article V.
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5.06 INSUFFICIENT RENTS. If the Rents are not sufficient to meet the costs, if
any, of taking control of and managing the Property and collecting the Rents,
any funds expended by Lender for such purposes shall become an indebtedness of
Borrower to Lender secured by this Instrument. Unless Lender and Borrower agree
in writing to other terms of payment, such amount shall be payable upon notice
from Lender to Borrower requesting payment thereof and shall bear interest from
the date of disbursement at the rate stated in the Note, unless payment of such
interest at such rate would be contrary to applicable law, in which event such
amounts shall bear interest at the highest non-usurious rate which may collected
from Borrower under applicable law.
5.07 NO WAIVER; TERM. Any entering upon and taking and maintaining of control
of the Property by Lender or the receiver and any application of Rents as
provided herein shall not cure or waive any default hereunder or invalidate any
other right or remedy of Lender under applicable law or provided herein. This
assignment of the Rents shall terminate at such time as this Instrument ceases
to secure the Indebtedness held by Lender.
ARTICLE VI - BORROWER'S REPRESENTATIONS, WARRANTIES,
COVENANTS, AND AGREEMENTS
Borrower covenants, warrants, and represents to and agrees with Lender as
of the date of execution and continuing until this Instrument is released as
follows:
6.01 PAYMENT AND PERFORMANCE. Borrower shall promptly make all payments on the
Indebtedness when due and shall punctually and properly perform all of
Borrower's covenants, obligations and liabilities under this Instrument and the
other Loan Documents.
6.02 TITLE TO PROPERTY AND LIEN OF THIS INSTRUMENT. Borrower has good and
indefeasible title to the Land and to the Improvements, and good and marketable
title to the Personal Property, free and clear of any liens, charges,
encumbrances, security interest, and adverse claims whatsoever, except as
otherwise provided herein. If the interest of Lender in the Property or any part
thereof shall be endangered or shall be attached, directly or indirectly,
Borrower authorizes Lender, at Borrower's expense, to take all necessary and
proper steps for the defense of such interest, including the employment of
attorneys, the prosecution or defense of litigation, and the compromise or
discharge of claims made against such interest.
6.03 EXISTENCE OF BORROWER. Borrower shall preserve and keep in full force and
effect its existence, rights, franchises, and trade names. Borrower shall
promptly pay any and all taxes to preserve its existence in Nevada, Texas, and
New Mexico, and shall comply with all of the foregoing state requirements to
maintain its authority to transact business in Nevada, Texas, and New Mexico.
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6.04 TITLE INSURANCE. Borrower shall, at its sole cost and expense, obtain and
maintain mortgagee title insurance (in the form of a policy as Lender may
require) in a form acceptable to Lender in an amount equal to the amount of the
Note.
6.05 HAZARD INSURANCE.
(a) Borrower shall, at its sole cost and expense, obtain and maintain
insurance upon and relating to all insurable Property by all-risk insurance
policies and, if requested by Lender, shall include perils of collapse, flood,
as well as other insurance coverages, in amounts equal to one hundred percent
(100%) of the replacement cost of the Improvements during the construction
thereof and at least one hundred percent (100%) of the replacement cost of the
Improvements not under construction, or in such additional amounts as Lender may
reasonably require, with loss made payable to Lender and with a standard form
mortgage clause. Borrower shall deliver the policies of insurance to Lender
promptly as issued; and, if Borrower fails to do so, and such failure continues
beyond any applicable cure period, Lender, at its option, may procure such
insurance at Borrower's expense. Lender shall have the right to hold the
policies, and Borrower shall promptly furnish to Lender all renewal notices and
all receipts of paid premiums. All renewal and substitute policies of insurance
shall be delivered at the office of Lender, premiums paid, at least ten (10)
days before termination of policies previously delivered to Lender.
(b) In the event of loss, Borrower shall give immediate written notice
to the Insurance carrier and to Lender. Borrower hereby authorizes and empowers
Lender as attorney-in-fact for Borrower to make proof of loss, to adjust and
compromise any claim under insurance policies, to appear in and prosecute any
action arising from such, insurance policies, to collect and receive insurance
proceeds, and to deduct there from Lender's expenses incurred in the collection
of such proceeds; provided, however, that nothing contained in this Section 6.05
shall require Lender to incur any expense or take any action under this
Instrument. Borrower further authorizes Lender, at Lender's option, (i) to hold
the balance of such proceeds to be used to reimburse Borrower for the cost of
reconstruction or repair of the Property, or (ii) to apply the balance of such
proceeds to the payment of the sums secured by this Instrument, whether or not
then due, in the order of application set forth herein.
(c) If the insurance proceeds are held by Lender to reimburse Borrower
for the cost of restoration and repair of the Property, the Property shall be
restored to the equivalent of its original condition or such other condition as
Lender may approve in writing. Lender may, at Lender's option, condition
disbursement of any proceeds on Lender's approval of such plans and
specifications of an architect satisfactory to Lender, contractor's cost
estimates, architect's certificates, waivers of liens, sworn statements of
mechanics and materialman and such other evidence of costs, percentage
completion of construction, application of payments and satisfaction of liens as
Lender may require. If the insurance proceeds are applied to the payment of sums
secured by this instrument, any such application of proceeds to principal shall
not extend or postpone the due date of the installments referred to in Sections
2.03 and 6.07 or change the amounts of such installments. If the Property is
sold pursuant to Section 8.03 or if Lender acquires title to the Property,
Lender shall have all rights, title, and interest of Borrower in and to any
insurance policies and unearned premiums thereon and in and to the proceeds
resulting from any damage to the Property prior to such sale or acquisition.
Page 71 of 200
(d) In case of loss, Lender, as it determines in its sole and absolute
discretion, shall be entitled to receive and retain the proceeds of the
insurance policies, applying the same to payment of the Indebtedness in such
order and manner as Lender, in its sole and absolute discretion, may elect. If
any loss shall occur at any time when an Event of Default exists, Lender shall
be entitled to the benefit of all insurance held by or for any Borrower, to the
same extent as if it had been made payable to Lender, and upon foreclosure under
this Instrument. Lender shall become the owner of all insurance policies.
6.06 TAXES AND ASSESSMENTS. Borrower shall pay all taxes, levies, charges and
assessments against or affecting the Property including, but not limited, to
assessments on appurtenant water stock, imposed by any public or quasi-public
authority or utility company which are (or if not paid, may become) a lien on
all or part of the Property or any interest in it, or which may cause any
decrease in the value of the Property or any part of it, as the same become due
and payable, and, upon request by Lender, Borrower shall deliver to Lender such
evidence of the payment thereof as Lender may require. If Borrower fails to do
so, Lender may pay them, together with all costs and penalties thereon, at
Borrower's expense; provided however, that Borrower may in good faith, in lieu
of paying such taxes and assessments as they become due and payable, by
appropriate proceedings, contest their validity. Pending such contest, Borrower
shall not be deemed in default under this Instrument because of such nonpayment
if: (a) prior to delinquency of the asserted tax or assessment, Borrower
furnishes Lender an indemnity bond secured by a deposit in cash or other
security acceptable to Lender, or with a surety acceptable to Lender, in the
amount of the tax or assessment being contested by Borrower plus a reasonable
additional sum to pay all costs, interest, and penalties that may be imposed or
incurred in connection therewith, conditioned that such tax or assessment, with
interest, cost and penalties, be paid as herein stipulated; and (b) Borrower
promptly pays an amount adjudged by a court of competent jurisdiction to be due,
with all costs, penalties and interest thereon, before the judgment becomes
final. In any event, the tax, assessment, penalties, interest, and costs shall
be paid prior to the date on which any writ or order is issued under which the
Property or any part of the Property may be sold in satisfaction thereof.
6.07 CONDEMNATION.
(a) Borrower assigns to Lender all judgments, decrees, and awards for
injury or damage, direct or consequential, to the Property, and all awards
pursuant to any proceeding for condemnation or other taking, whether direct or
indirect, of the Property or any part of the Property. Lender may apply any
condemnation proceeds to the Indebtedness in such manner as Lender may elect in
its sole and absolute discretion. Borrower shall promptly notify Lender of any
action or proceeding (or threatened action or proceeding) relating to any
condemnation or other taking, whether direct or indirect, of all or any part of
the Property. Borrower shall, unless otherwise directed by Lender in writing,
file or defend its claim under any such action and prosecute same with due
diligence to its final disposition and shall cause any awards or settlements to
be paid over to Lender for disposition pursuant to the terms of this Instrument.
Borrower authorizes Lender, at Lender's option, as attorney-in-fact for
Borrower, to commence, appear in, and prosecute, in Lender's or Borrower's name,
any action or proceeding relating to any proceeding relating to any condemnation
or other taking of the Property, whether direct or indirect, and to settle or
compromise any claim in connection with such condemnation or other taking. The
proceeds of any award, payment, or claim for damages, direct or consequential,
in connection with any condemnation or other taking, whether direct or indirect,
of the Property, or part thereof, or for conveyances, in lieu of condemnation,
are hereby assigned to and shall be paid to Lender. Lender shall be entitled to
participate in, control, and be represented by attorneys of Lender's own choice
in any such action. Borrower shall deliver to Lender such Instruments as may be
requested by it from time to time to permit such participation.
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(b) Borrower authorizes Lender to apply such awards, payments,
proceeds, or damages, after the deduction of Lender's expenses incurred in the
collection of such amounts, at Lender's option, to restoration or repair of the
Property, or to payment of the sums secured by this Instrument, whether or not
then due, in the order of application set forth in Section 2.04 and the balance,
if any, to Borrower. Unless Borrower and Lender otherwise agree in writing, any
application of proceeds to principal shall not extend or postpone the due date
of the installments referred to in Section 2.03 and 6.07 or change the amount of
such installments. Borrower agrees to execute such further evidence of
assignment of any awards, proceeds, damages, or claims arising in connection
with such condemnation or taking as Lender may require.
(c) In the event Lender, as the result of any such judgment, decree,
or award, believes that the payment or performance of any obligation secured by
this Instrument is impaired, Lender may, upon Borrower's failure to provide
adequate assurances to Lender as Lender determines in its sole and absolute
discretion, and within thirty (30) days of Borrower's receipt of written notice
describing such impairment, declare all of the Indebtedness immediately due and
payable.
6.08 TAXES ON NOTE OR INSTRUMENT. If at any time, any law shall be enacted
imposing or authorizing the imposition of any tax upon this Instrument, or upon
any rights, titles, liens or security interest created by this Instrument or
upon the Note, or any part of the Indebtedness, Borrower shall immediately pay
all such taxes; provided that, if it is unlawful for Borrower to pay such taxes,
Borrower shall prepay the Note in full without penalty within thirty (30) days
after demand therefore by Lender.
6.09 STATEMENTS BY BORROWER. At the request of Lender, Borrower shall furnish
promptly a written statement or affidavit, in such form as may be required by
Lender, stating the unpaid balance of the Note, the date to which interest has
been paid and that there are no offsets or defenses against full payment of the
Note in full without penalty within ten (10) days after demand therefore by
Lender.
6.10 REPAIR, WASTE, ALTERATIONS, ETC. Borrower shall keep every part of the
Property in good operating order, repair, and condition and shall not commit or
permit any waste thereof. Borrower shall make promptly all repairs, renewals,
and replacements necessary to such end. Borrower shall discharge all claims from
labor performed and material furnished thereof, and shall not suffer any lien of
mechanics or materialmen to attach to any part of the Property. Borrower shall
have the right to contest in good faith the validity of any such mechanic's or
materialman's lien, provided Borrower shall first furnish Lender a bond or other
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security satisfactory to Lender in such amount as Lender shall reasonably
require, but not more than one hundred fifty percent (150%) of the amount of the
claim, and provided further that Borrower shall thereafter diligently proceed to
cause such lien to be removed and discharged. If Borrower shall fail to
discharge any such lien, then, in addition to any other right or remedy of
Lender, Lender may, but shall not be obligated to, discharge the lien, either by
paying the amount claimed to be due, or by procuring the discharge of such lien
by disposition in court a bond for the amount claimed, or otherwise giving
security for such claim, or by taking such action as may be prescribed by law.
Borrower shall guard every part of the Property from removal, destruction, and
damage, and shall not do or suffer to be done any act whereby the value of any
part of the Property may be lessened. Borrower or any tenant or other person
shall not materially alter the Property without the prior written consent of
Lender, which consent may be withheld for any reason whatsoever as Lender
determines in its sole and absolute discretion.
6.11 NO DRILLING EXPLORATION. Without the prior written consent of Lender,
which consent may be withheld for any reason whatsoever or no reason, as Lender
may determine in its sole and absolute discretion, there shall be no drilling or
exploring for or extraction, removal, or production of minerals from the surface
or subsurface of the Land. The term "minerals" as used in this Instrument shall
include, without limitation, oil, gas, casinghead gas, coal, lignite,
hydrocarbons, methane, carbon dioxide, helium uranium and all other natural
elements, compounds and substances, including sand and gravel.
6.12 COMPLIANCE WITH LAWS. Borrower and Borrower's use of the Property shall
comply with all laws, rules, ordinances, regulations, covenants, conditions,
restrictions, orders and decrees of any governmental authority or court
applicable to Borrower or the Property and its use, and Borrower shall pay all
fees or charges of any kind in connection therewith. Borrower shall not
initiate, participate in, or acquiesce in a change in the zoning classification
of the Property without Lender's prior written consent, which consent may be
withheld for any reason whatsoever, as Lender may determine in its sole and
absolute discretion.
6.13 INCOME, EXPENSE AND FINANCIAL STATEMENTS. Borrower shall keep and
maintain at all times at Borrower's address stated in this Instrument or such
other place as Lender may approve in writing, complete and accurate books of
accounts and records adequate to reflect correctly the results of the operation
of the Property and copies of all written contracts, leases, and other
instruments which affect the Property. Such books, records, contracts, leases,
and other instruments shall be subject to examination and inspection at any
reasonable time by Lender, and upon reasonable notice to Borrower. Borrower, as
well as any Guarantor of this Note, within thirty (30) days of written request
from Lender, agree to supply financial information, or other documentation
relating to Borrower's financial condition and business operations, including
but not limited to financial statements, tax returns, insurance policies and
reports, lists of assets and liabilities, and inventory schedules. Failure to
timely provide any such information or documentation will be treated as a
default under the Note resulting in Borrower being obligated to pay a late fee
of $30.00 a day for each day that the information or documentation is late. All
financial statements shall be certified as true and correct by the party
submitting such. Borrower shall furnish, together with the foregoing financial
statements and at any other time upon Lender's request, a rent schedule for the
Property, certified by Borrower, showing the name of each tenant, and for each
tenant, the space occupied, the Lease expiration date, the Rent payable and the
Rent paid.
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6.14 HOLD HARMLESS. Borrower shall defend, at Borrower's own cost and expense,
and hold Lender harmless from, any proceeding or claim in any way relating to
the Property or the Loan Documents. All costs and expenses incurred by Lender in
protecting its interest under the Instrument, including all court costs and
reasonable attorneys' fees and expenses, shall be borne by Borrower. The
provisions of this Section shall survive the payment in full of the Indebtedness
and the release of this Instrument as to events occurring and causes of action
arising before such payment and release.
6.15 TRADE NAMES. At the request of Lender, Borrower shall execute a
certificate in form satisfactory to Lender listing the trade names under which
Borrower intends to operate the Property and representing and warranting that
Borrower does business under no other trade name with respect to the Property.
Borrower shall immediately notify Lender in writing of any change in any trade
name, and shall, upon request of Lender, execute any additional financing
statements and other certificates required to reflect the change in trade names
and shall execute and file any assumed name certificate required by applicable
laws.
6.16 FURTHER ASSURANCE. Borrower, upon request of Lender, shall execute,
acknowledge, deliver, and record such further instruments and do such further
acts as may be necessary, desirable, or proper to carry out the purposes of this
Instrument or the other Loan Documents and to subject to the liens and security
interests created by this Instrument or the other Loan Document any property
intended to be covered by this Instrument and the other Loan Documents pursuant
to their terms, including without limitation any renewals, substitutions,
replacements, improvements, or appurtenances to the Property.
6.17 RECORDING AND FILING. Borrower shall cause this Instrument and the other
recordable Legal Documents and all amendments, supplements, extensions, and
substitutions thereof to be recorded, filed, re-recorded, and refiled in such
manner and in such places as Lender shall reasonably request. Borrower shall pay
all such recording, filing, re-recording, and refiling fees, title insurance
premiums, and other charges.
6.18 PAYMENT AND DEBTS. Borrower shall promptly pay when due all obligations
regarding the ownership and operations of the Property.
6.19 INSPECTION. Lender may make or cause to be made entries upon and
inspections of the Property, upon reasonable notice to Borrower, and at
reasonable times.
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6.20 PROTECTION OF LENDER'S SECURITY.
(a) If Borrower fails to perform the covenants and agreements
contained in this Instrument, or if any action or proceeding commenced which
affects the property or title thereof or the interest of Lender therein,
including without limitation eminent domain, insolvency, code enforcement, or
arrangements or proceedings involving a bankrupt or decedent, the Lender, at
Lender's sole option, may make such appearances, disburse such sums and take
such action as Lender deems necessary, in its sole discretion, to protect
Lender's interest, including without limitation, (i) disbursement of reasonable
attorney's fees, (ii) entry upon the Property to make repair, and (iii)
procurement of satisfactory insurance as provided in Section 6.05.
(b) Any amount disbursed by Lender pursuant to this Section 6.20 shall
become an additional indebtedness of Borrower secured by this Instrument, with
interest accruing thereon. Unless Borrower and Lender agree to other terms of
payment, such amounts shall be immediately due and payable and shall bear
interest from the date of disbursement at the rate stated in the Note unless
collection from Borrower of Interest at such rate would be contrary to
applicable law, in which event such amounts shall bear interest at the highest
non-usurious rate which may be collected from Borrower under applicable law.
Borrower covenants and agrees that Lender shall be subrogated to the lien of any
mortgage or other lien discharged, in whole or in part, by the Indebtedness.
Nothing contained in this Section 6.20 shall require Lender to incur any expense
or take any action under this Instrument.
6.21 SUBORDINATE DEED OF TRUST. Borrower shall not, without the prior written
consent of Lender, which consent may be withheld for any reason whatsoever or no
reason, as Lender may determine in its sole and absolute discretion, grant any
lien, security interest, or other encumbrance (a "Subordinate Instrument")
covering any of the Property. If Lender consents to a Subordinate Instrument or
if the foregoing prohibition is determined by a court of competent jurisdiction
to be unenforceable, any such Subordinate Instrument shall contain express
covenants to the effect that: (a) the Subordinate Instrument is unconditionally
subordinate to this Instrument; (b) if any action (whether judicial or pursuant
to a power of sale) shall be instituted to foreclose or otherwise enforce the
Subordinate Instrument, no tenant of any of the leases shall be named as party
defendants and no action shall be taken that would terminate any occupancy or
tenancy without the prior written consent of Lender, which consent may be
withheld for any reason whatsoever as Lender may determine in its sole and
absolute discretion; (c) rents, if collected by or for the holder of the
Subordinate Instrument, shall be applied first to the payment of the
Indebtedness then due and expenses incurred in the ownership, operation, and
maintenance of the Property in such order as Lender may determine, prior to
being applied to any indebtedness secured by the Subordinate Instrument; and (d)
written notice of default under the Subordinate Instrument and written notice of
the commencement of any action (whether judicial or pursuant to a power of sale)
to foreclose or otherwise enforce the Subordinate Instrument shall be given to
Lender with or immediately after the occurrence of any such default or
commencement.
6.22 LIENS. Borrower shall promptly discharge any lien which has, or may have,
priority over or equality with, the lien of this Instrument, and Borrower shall
pay, when due, the claims of all persons supplying labor or materials to or in
connection with the Property. Without Lender's prior written consent, which
consent may be withheld for any reason whatsoever or no reason, as Lender may
determine in its sole and absolute discretion, Borrower shall not allow any lien
inferior to this Instrument to be perfected against the Property.
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6.23 BUSINESS USE. Borrower warrants and represents to Lender that the
proceeds of the Note will be used solely for business or commercial purposes,
and in no way will the proceeds be used or personal, family or household
purposes.
6.24 NON-HOMESTEAD. Borrower warrants and represents to Lender that the
Property is not the business or residential homestead of Borrower or any other
person. Borrower has no present intent to occupy the Property in the future, or
to use or claim in the future the Property either as business or residential
homestead.
ARTICLE VII - EVENTS OF DEFAULT
The occurrence of any one of the following after notice and cure as
provided in the Note shall be an Event of Default under this Instrument or any
of the Loan Documents ("Event of Default"):
7.01 FAILURE TO PAY INDEBTEDNESS. Any of the Indebtedness is not paid when
due, whether by acceleration or otherwise, following the expiration of
applicable periods of notice and cure (if any).
7.02 NONPERFORMANCE OF COVENANTS. Any covenant in this Instrument or any of
the other Loan Documents is not fully and timely performed, or the occurrence of
any default or event of default under this Instrument or any other Loan
Document.
7.03 FALSE REPRESENTATION. Any statement, representation or warranty in this
Instrument or any of the other Loan Documents, any financial statement, or any
other writing delivered to Lender in connection with the Indebtedness which
Borrower knew or should have known to be false, misleading, or erroneous in any
material respect.
7.04 BANKRUPTCY OR INSOLVENCY. Borrower: (a) does not pay its debts as they
become due or admits in writing its inability to pay its debts or makes a
general assignment for the benefit of creditors; or (b) commences any case,
proceeding, or other action seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of its debts under any law relating to
bankruptcy, insolvency, reorganization, or relief or debtors; or (c) in any
involuntary case, proceeding, or other action commenced against it which seeks
to have an order for relief entered against it, as debtor, or seeks
reorganization, arrangement, adjustment, liquidation, dissolution, or
composition of it or its debts under any law relating to bankruptcy, insolvency,
reorganization, or relief of debtors, (i) fails to obtain a dismissal of such
cause, proceeding or other action within sixty (60) days of its commencement, or
(ii) converts the case from one chapter of the Federal Bankruptcy Code to
another chapter, or (iii) is the subject of an order for relief; or (d)
conceals, removes, or permits to be concealed or removed, any part of its
property, with intent to hinder, delay, or defraud its creditors or any of them,
or makes or suffers a transfer of any of its property which may be fraudulent
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under any bankruptcy, fraudulent conveyances, or similar law, or makes any
transfer of its property to or for the benefit of a creditor at a time when
other creditors similarly situated have not been paid; or suffers or permits,
while insolvent, any creditor to obtain a lien upon any of its property through
legal proceeding which is not vacated within sixty (60) days from the date
thereof; or (e) has a trustee, receiver, custodian, or other similar official
appointed for or take possession of all or any part of the Property or any of
its property or has any court take jurisdiction of any other of its property
which remains undismissed or a period of sixty (60) days (except where a shorter
period is specified in the immediately following paragraph (f)); or (f) fails to
have discharged within a period of ten (10) days any attachment, sequestration,
or similar writ levied upon any property of such person; or (g) fails to pay
immediately any final money judgment against such person.
7.05 TRANSFER OF THE PROPERTY. Title to all or any part of the Property (other
than obsolete or worn Personal Property replaced by adequate substitutes of
equal or greater value than the replaced items when new) becomes vested in any
party other than Borrower, whether by operation of law or otherwise. Lender may,
in its sole discretion, waive this Event of Default but it shall have no
obligation to do so, and any waiver may be conditioned upon such one or more of
the following which Lender may require: (a) the grantee's integrity, reputation,
character, creditworthiness, and management ability being satisfactory to Lender
in its sole and absolute judgment; and (b) the grantee's executing, prior to
such sale or transfer, a written assumption agreement containing such terms as
Lender may require, such as principal paydown on the Note, an increase in the
rate of interest payable under the Note, a transfer fee, and any other
modification of the Note, this Instrument or any of the other Loan Documents
which Lender may require.
7.06 TRANSFER OF OWNERSHIP OF BORROWER. The sale, pledge, encumbrance,
assignment or transfer, voluntarily or involuntarily, of any interest in
Borrower, except sales or transfers in interests in Borrower, provided that such
sales or transfers, together with any prior sales or transfers of interests in
Borrower, do not result in more than 25% of the total beneficial interests in
Borrower having been sold or transferred since the date of this Instrument.
7.07 GRANT OF EASEMENT, ETC. Without the prior written consent of Lender,
which consent may be withheld for any reason whatsoever as Lender may determine
in its sole and absolute discretion, Borrower grants any easement or dedication,
file any plat, condominium declaration, or restriction, or otherwise encumber
the Property, unless such action is expressly permitted by this Instrument or
any of the other Loan Documents.
7.08 FORECLOSURE OF OTHER LIENS. The holder of any lien, security interest or
assignment on the Property institutes foreclosure or other proceedings for the
enforcement of its remedies thereunder.
7.09 LIQUIDATION, DEATH, ETC. The liquidation, termination, dissolution,
failure to maintain good standing in the State of Texas, death, or legal
incapacity of Borrower or any Guarantor.
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7.10 The levy of any attachment, execution or other process against maker or
any of the collateral.
ARTICLE VIII - DEFAULT AND REMEDIES
8.01 ACCELERATION AND WAIVER OF NOTICE.
(a) Subject to the notice and cure provisions, if any, expressly
provided in any Loan Document, upon the occurrence of an Event of Default,
Lender, at Lender's option, may declare all of the sums secured by this
Instrument to be immediately due and payable without further demand and may
invoke the power of sale and any other remedies permitted by applicable law, or
provided herein. Borrower acknowledges that the power of sale granted to Lender
may be exercised by Lender without prior judicial hearing. Borrower and
Guarantor, surety, and endorser of all or any part of the indebtedness expressly
waive all presentations for payment, notices of intention to accelerate
maturity, notices of acceleration of maturity, notices of intention to demand
payment, demands for payment, protests, and notices of protest. Borrower and
Guarantor, surety and endorser acknowledge and understand that by these waivers,
they waive any right they may have to receive notices of default under this
Instrument, the Note or any other indebtedness set forth or described herein or
in any other Loan Document, as well as any opportunity to cure any such default.
The right to accelerate maturity of the Note or any other indebtedness set forth
or described herein or in any other Loan Document does not include the right to
accelerate any interest which has not otherwise accrued on the date of such
acceleration, and the holder hereof does not intend to charge or receive any
unearned or unaccrued interest in the event of acceleration.
(b) If any provision of this Deed of Trust or any other Loan Document
provides for Lender to give Borrower any notice regarding a default or imminent
default, then if Lender shall fail to give such notice to Borrower as provided,
the sole and exclusive remedy of Borrower for such failure shall be to seek
appropriate equitable relief to enforce the agreement to give such notice and to
have any acceleration of the maturity of the Note and the secured indebtedness
postponed or revoked, and foreclosure proceedings in connection therewith
delayed or terminated pending or upon the curing of such default in the manner
and during the period of time permitted by such agreement, if any, and Borrower
shall have no right to damages or any other type of relief not herein
specifically set out against Lender, all of which damages or other relief are
hereby waived by Borrower. Nothing herein or in any other Loan Document shall
operate or be construed to add on or make cumulative any cure or grace periods
specified in any of the Loan Documents.
8.02 NOTICE OF SALE. Notice of sale of all or part of the Property by the
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 Property to be sold is in more than one county a notice shall be posted at
the courthouse door (or other area in the courthouse as my be designated for
such public notices) and filed with the county clerk of each county in which the
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Property to be sold is situated. In addition, Lender shall, at least twenty-one
(21) days preceding the date of sale, serve written notice of the proposed sale
by certified mail on Borrower and each debtor obligated to pay the Indebtedness
secured hereby according to the records of Lender. Service of such notice shall
be completed upon deposit of the notice, enclosed in a postpaid wrapper,
properly addressed to such debtor at the most recent address as shown by the
records of Lender, in a post office or official depository under the care and
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 notice that is required or
permitted to be given to Borrower may be addressed to Borrower at Borrower's
address as stated in this Instrument. Any notice that is to be given by
certified mail to any other debtor may, if no address for such other debtor is
shown by the records of Lender, be addressed to such other debtor at the address
of Borrower as is shown by the records of Lender. Notwithstanding the foregoing
provisions of this Section, notice of such sale given in accordance with the
requirements of the applicable laws of the State of Texas in effect at the time
of such sale shall constitute sufficient notice of such sale.
8.03 TRUSTEE'S SALE. Lender may require the Trustee to sell all, or part, of
the Property at public auction to the highest bidder, for cash, at the county
courthouse of the county in Texas in which the Property or any part thereof is
situated, or if the Property is located in more than one county, such sale or
sales may be made at the courthouse in any county in which the Property is
situated. All sales 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 such other area in the courthouse as
my be provided in the notice of sale hereinafter described) of the specified
county, between the hours of 10:00 o'clock a.m. and 4:00 o'clock p.m. (the
commencement of such sale to occur within three hours following the time
designated in the above described notice of sale as the earliest time at which
such sale shall occur, if required by applicable law) on the first Tuesday of
any month, after giving notice of the time, place and terms of said sale
(including the earliest time at which such sale shall occur) and of the Property
to be sold in the manner hereinafter described. Trustee may sell all or any
portion of the Property, together or in lots or parcels. In no event shall
Trustee be required to exhibit, present or display at any such sale any of the
Personal Property described herein to be sold at such sale. Lender may bid and
become the purchaser of all or any part of the Property at any trustee's or
foreclosure sale hereunder, and the amount of Lender's successful bid may be
credited on the Indebtedness.
8.04 PARTIAL SALES. The sale by Trustee of less than the whole of the Property
shall not exhaust the power of sale herein granted and Trustee is specifically
empowered to name successive sales under such power until the whole of the
Property shall be sold, and if the proceeds of such sale of less that the whole
of the Property shall be less than the aggregate of the Indebtedness and the
expenses thereof, this Instrument and the lien, security interest and assignment
hereof shall remain in full force and effect as to the unsold portion of the
Property as though no sale had been made; provided, however, that Borrower shall
not have any right to require the sale of less than the whole of the Property,
but Lender shall have the right, at its sole election, to request Trustee to
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sell less than the whole of the Property. If there is default on the payment of
any installment on the Note or any portion of the Indebtedness, and Lender
elects not to accelerate the unpaid balance of the Note or Indebtedness, Lender
shall have the option to proceed with foreclosure in satisfaction of such unpaid
installment or other amount either through judicial proceedings or by directing
Trustee to proceed as if under a full foreclosure, conducting the sale as herein
provided without declaring the entire Indebtedness due, it is agreed that such
sale, if so made, shall not in any manner affect the unmatured part of the
Indebtedness, but as to such unmatured part this Instrument shall remain in full
force and effect as though no sale had been made under the provisions of this
Section. Several sales may be made hereunder without exhausting the right of
sale for any unmatured part of the Indebtedness.
8.05 FORECLOSURE OF ALL PROPERTY. The Land, Improvements, and Personal
Property may be sold in one or more public sales pursuant to Texas Property Code
ss.51.002 and Texas UCC ss.9.504(d). Borrower shall assemble the Personal
Property and make it available to Lender upon Lender's written request. Borrower
and all persons obligated to pay the Indebtedness agree that notice of sale of
the Property provided pursuant to Section 8.02 above and pursuant to Texas
Property Code ss.51.002 is and shall constitute commercially reasonable notice
of the sale of the Property or any part of the Property. Lender shall also be
entitled to foreclose its security interests against the Personal Property in
accordance with any other rights and remedies Lender may have as a secured party
under, the Texas UCC.
8.06 TRUSTEE'S DEED. Trustee shall deliver to the purchaser a Trustee's deed
and such other assignments and documents of transfer and sale as Trustee may
deem necessary conveying the Property so sold in fee simple with covenants of
general warranty. Borrower covenants and agrees to defend generally the
purchaser's title to the Property against all claims and demands. At any such
sale: (a) Borrower hereby agrees, in its behalf of Borrower's heirs, executors,
administrators, successors, personal representatives and assigns, that any and
all recitals made in any deed of conveyance given by Trustee with respect to the
Identity of Lender, the occurrence or existence of any default, the acceleration
of the maturity of any of the Indebtedness, the request to sell, the notice of
sale, the giving of notice to all debtors legally entitled thereto, the time,
place, terms and manner of sale, and receipt, distribution and application of
the money realized therefrom, or the due and proper appointment of a Substitute
Trustee, and without being limited by the foregoing with respect to any other
act or thing having been duly done by Lender or by Trustee hereunder, shall be
taken by all courts of law and equity as prima facie evidence that the
statements or recitals state facts and are without further question to be so
accepted, and Borrower hereby ratifies and confirms every act that Trustee or
any Substitute Trustee hereunder may lawfully do in the premises by virtue
hereof, and (b) the purchaser may disaffirm any easement granted, subdivision
plat filed, or rental, lease or other contract made in violation of any
provision of this Instrument, and may take immediate possession of the Property
free from, and despite the terms of, such grant of easement, subdivision plat,
or rental, lease or other contract.
Page 81 of 200
8.07 PROCEEDS OF SALE. Trustee shall apply the proceeds of the sale in the
following order: (a) to all reasonable costs and expenses of the sale, including
but not limited to, reasonable Trustee's fees and attorney's fees and costs of
title evidence; (b) to all sums secured by this Instrument in such order as
Lender, in Lender's sole and absolute discretion may determine, and (c) to the
successors, if any, to the person or persons legally entitled thereto.
8.08 POSSESSION AFTER SALE. If the Property is sold pursuant to Section 8.03,
Borrower or any person holding possession of the Property through Borrower shall
immediately surrender possession of the Property to the purchaser at such sale
upon the purchaser's written demand. If possession is not surrendered upon the
purchaser's written demand, Borrower or such person shall be a tenant at
sufferance and may removed by writ of possession or by an action for forcible
entry and detainer.
8.09 COSTS AND EXPENSES. Lender shall be entitled to collect all reasonable
costs and expenses incurred in pursuing such remedies, including but not limited
to, attorney's fees and costs of documentary evidence, abstracts, and title
reports.
8.10 SUBSTITUTE TRUSTEE. Lender, at Lender's option, with or without cause,
may from time to time remove Trustee and appoint a successor trustee to any
Trustee appointed hereunder by an instrument recorded in the county in which
this Instrument is recorded. Without conveyance of the Property, the successor
trustee shall succeed to all title, power, and duties conferred upon the Trustee
by this Instrument and by applicable law.
8.11 REMEDIES CUMULATIVE. Each remedy provided in this Instrument is distinct
and cumulative to all other rights or remedies under this Instrument or afforded
by law or equity, and may be exercised concurrently, independently, or
successively, in any order whatsoever.
8.12 FORBEARANCE BY LENDER NOT A WAIVER.Any forbearance by Lender in
exercising any right or remedy hereunder, or otherwise afforded by applicable
law, shall not be a waiver of or preclude the exercise of any right or remedy.
The acceptance by Lender of payment of any sum secured by this Instrument after
the due date of such payment shall not have a waiver of Lender's right to either
require prompt payment when due of all other sums so secured or to declare a
default for failure to make prompt payment. The procurement of Insurance, of the
payment of taxes or other liens or charges by Lender shall not be a waiver of
Lender's right to accelerate the maturity of the Indebtedness, nor shall
Lender's receipts of any awards, proceeds or damages under Section 6.05 or 6.08
operate to cure or to waive Borrower's default in payment of sums secured by
this Instrument.
8.13 WAIVER OF MARSHALLING. Notwithstanding the existence of any other
security interests in the Property held by Lender or by any other party, Lender
shall have the right to determine the order in which any or all portions of the
Indebtedness are satisfied from the proceeds realized upon the exercise of the
remedies provided in this Article VIII. Borrower, any party who consents to this
Instrument, and any party who now or hereafter acquires a security Interest in
the Property and who has actual or constructive notice of this Instrument and
Lender's rights and interests under this Instrument, hereby waive any and all
right to require the marshalling of assets in connection with exercise of any of
the remedies permitted by applicable law or provided by this Instrument.
Page 82 of 200
8.14 NO LIABILITY OF TRUSTEE. The 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 Trustee's negligence),
except for Trustee's willful misconduct. The 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 hereby ratifies and
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. Grantor will reimburse Trustee for, and save him harmless against, any
and all liability and expenses that may be incurred by him in the performance of
his duties. The foregoing indemnity shall not terminate upon discharge of the
secured indebtedness or foreclosure or release or other termination of this Deed
of Trust.
ARTICLE IX - HAZARDOUS MATERIALS
9.01 HAZARDOUS MATERIALS. For the purposes of this Instrument, Borrower,
Lender and Trustee agree that, unless the context otherwise specifies or
requires, the following terms shall have the following meanings: (a) "Hazardous
Materials" shall mean (i) any "hazardous waste" as defined by the Resource
Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.), as
amended from time to time, and regulations promulgated thereunder; (ii) any
"hazardous substance" as defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.)
("CERCLA") as amended from time to time, and regulations promulgated thereunder;
(iii) asbestos; (iv) polychlorinated biphenyls; (v) underground storage tanks,
whether empty, filled or partially filled with any substance; (vi) any substance
the presence of which on the Property is prohibited by any applicable
governmental requirements and regulations ("Governmental Requirements"); and
(vii) any other substance which by any Governmental Requirements requires
special handling or notification of any federal, state, or local governmental
entity in its collection, storage, treatment, or disposal; (b) "Hazardous
Materials Contamination" shall mean the contamination (whether presently
existing or hereafter occurring) of any improvements, facilities, soil,
groundwater, air, or other elements on any other property as a result of
Hazardous Materials at any time (whether before after the date of this
Instrument) emanating from the Property.
Page 83 of 200
9.02 REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants as of
the date of execution hereof and continuing until this Instrument is released as
follows: (a) no Hazardous Materials are now located on the Property and neither
Borrower nor any other person has ever caused or permitted any Hazardous
Materials to be placed, held, located, or disposed of on, under or at the
Property or any part thereof; (b) no part of the Property is being used or, has
been used at any previous time for the disposal, storage, treatment, processing,
or other handling of Hazardous Materials, nor is any part of the Property
affected by any Hazardous Materials Contamination; (c) no property adjoining the
Property is being used, or has ever been used at any previous time, for the
disposal, storage, treatment, processing or other handling of Hazardous
Materials, nor is any other property adjoining the Property affected by
Hazardous Materials Contamination; and (d) no investigation, administrative
order, consent order and agreement, litigation or settlement with respect to
Hazardous Materials Contamination is proposed, threatened, anticipated or in
existence with respect to the Property. The Property is not currently on, after
diligent investigation and inquiry, and has never been on any federal or state
"Superfund" list.
9.03 BORROWER'S COVENANTS. Borrower agrees to: (a) give written notice to
Lender immediately upon Borrower's acquiring knowledge of the presence of any
Hazardous Materials on the Property or of any Hazardous Materials Contamination
with a full description thereof, other than as disclosed in the Environmental
Reports; (b) promptly comply with any Governmental Requirements requiring the
removal, treatment or disposal of such Hazardous Materials or Hazardous
Materials Contamination and provide Lender with satisfactory evidence of such
compliance; and provide Lender, within ten (10) days after demand by Lender,
with a bond, letter of credit or similar financial assurance evidencing to
Lender's satisfaction that the necessary funds are available to pay the cost of
removing, treating and disposing of such Hazardous Materials or Hazardous
Materials Contamination and discharging any assessments which may be established
on the Property as result thereof.
9.04 SITE ASSESSMENTS. Upon reasonable information indicating that the
Property is affected by Hazardous Substances, and upon reasonable notice during
regular business hours, Lender, by or through its officers, employees and
agents, may contract for the services of a person (the "Site Reviewers") to
perform environmental site assessments ("Site Assessments") on the Property for
the purpose of determining whether there exists on the Property any
environmental condition which could reasonably be expected to result in any
liability, cost, or expense to the owner, occupier or operator of such Property
arising under any state, federal or local law, rule or regulation relating to
Hazardous Materials. The Site Assessment may be performed at any time, upon
reasonable notice, and under reasonable conditions established by Borrower which
do not impede the performance of the Site Assessments. The Site Reviewers are
authorized to enter upon the Property for such purposes. The Site Reviewers are
further authorized to perform both above and below the ground testing for
environmental damage or the presence of Hazardous Materials on the Property and
such other tests on the Property as may be necessary to conduct the Site
Assessments in the reasonable opinion of the Site Reviewers. Borrower will
supply to the Site Reviewers such historical and operational information
regarding the Property as may be reasonably requested by the Site Reviewers to
facilitate the Site Assessments and will make available for meetings with the
Site Reviewers appropriate personnel having knowledge of such matters. On
request, Lender shall make the results of such Site Assessments fully available
to Borrower, which may, at Borrower's election, participate under reasonable
procedures in the direction of such Site Assessments and the description of
tasks of the Site reviews. The cost of performing such Site Assessments shall be
reasonable and shall be paid by Borrower upon demand of Lender and any such
obligations shall be part of the Indebtedness secured by this Instrument.
Page 84 of 200
9.05 INDEMNIFICATION. Borrower shall defend, indemnify, and hold harmless
Lender and Trustee from any and all liabilities (including strict liability),
actions, demands, penalties, losses, costs, or expenses (including without
limitation attorney's fees and expenses, and remedial costs), suits, costs of
any settlement or judgment and claims of any and every kind whatsoever which may
now or in the future (whether before or after the release of this Instrument) be
paid, incurred or suffered by or asserted against Lender or Trustee by any
person or entity or governmental agency for with respect to, or as a direct or
indirect result of, the presence or under, or the escape, seepage, leakage,
spillage, discharge, emission or release from the Property of any Hazardous
Materials or any Hazardous Materials Contamination or arise out of or result
from the environmental condition of the Property or the applicability of any
Governmental Requirements relating to Hazardous Materials (including without
limitation of CERCLA or any federal, state, or local so-called "Superfund" or
"Superlien" laws, statute, law, ordinance, code, rule, regulation, order or
decree), regardless of whether or not caused by or within the control of
Borrower, Lender or Trustee. The representations, covenants, warranties, and
indemnifications contained in this Article IX shall survive the release of this
Instrument.
9.06 RIGHTS OF LENDER. Lender shall have the right, but not the obligation,
without in any way limiting Lender's other rights and remedies under this
Instrument, to enter onto the Property or to take such other actions as it deems
necessary or advisable to clean up, remove, resolve, or minimize the impact of,
or otherwise deal with, any Hazardous Materials or Hazardous Materials
Contamination on the Property that could result in an order, suit, imposition of
a lien on the Property, or other action and/or which, in Lender's sole opinion,
could jeopardize Lender's security under this Instrument. All reasonable costs
and expenses paid or incurred by Lender in the exercise of any such rights shall
be Indebtedness secured by this Instrument and shall be payable by Borrower upon
demand.
ARTICLE X - MISCELLANEOUS PROVISIONS
10.01 RELEASE. Upon payment of all sums under the Note, the performance of all
obligations secured by this Instrument, and performance of all covenants under
the Loan Documents, Lender will release this Instrument. Grantor shall pay
Lender's costs incurred in releasing this Instrument.
10.02 PARTIAL RELEASE. Lender will release the lien created hereby as it
relates to the Property described herein upon Borrower's compliance with the
following: (i) delivery to Lender of written notice from Borrower of Borrower's
desire to release the Property; (ii) payment of $7,060,000.00 to Lender; (iii)
payment of Lender's reasonable legal fees and costs incurred in releasing the
lien created hereby.
Page 85 of 200
10.03 BORROWER AND LIEN NOT RELEASED. From time to time, Lender may, at
Lender's option, without giving notice to or obtaining the consent of Borrower,
Borrower's successors or assigns or any junior lienholder or Guarantor, without
liability on Lender's part and notwithstanding the existence of any Event of
Default, extend the time for payment of the Indebtedness or any part thereof,
reduce the payments thereon, release anyone liable on any of the Indebtedness,
accept a renewal note or notes therefore, modify the terms and time of payment
of the Indebtedness, release from the liens of this Instrument any part of the
Property, take or release other or additional security, reconvey any part of the
Property, consent to the granting of any easement, join in any extension or
subordination agreement, and agree in writing with Borrower to modify the rate
of interest or period of amortization of the Note or change the amount of the
installments payable thereunder. Any actions taken by Lender pursuant to the
terms of this Section 10.03 shall not affect the obligation of Borrower or
Borrower's successors or assigns to pay the sums secured by this Instrument and
to observe the covenants of Borrower contained herein, shall not affect the
guaranty of any person, corporation, partnership, or other entity for payment of
the Indebtedness or any part thereof, and shall not affect the lien or priority
of liens of this Instrument on the Property. Borrower shall pay Lender a
reasonable charge, together with such title insurance premiums and reasonable
attorney's fees as may be incurred at Lender's option, for any such action if
taken at Borrower's request.
10.04 NOTICE. Except for any notice required under applicable law to be given
in another manner, any notice to Borrower provided for in this Instrument or in
the Note shall be given by mailing such notice by United States mail, postage
prepaid, certified mail, return receipt requested, or by Federal Express,
addressed to Borrower's address stated in this Instrument or at such other
address as Borrower may designate by notice addressed to Lender at Lender's
address stated in this Instrument or to such other address as Lender may
designate by notice to Borrower as provided herein. Any notice provided for in
this Instrument or in the Note shall be deemed to have been given to Borrower or
Lender when given in the manner designated herein, but actual notice, however
given or received, shall always be effective.
10.05 SUCCESSORS AND ASSIGNS BOUND. The covenants and agreements herein
contained shall bind, and the rights hereunder shall inure to, the respective
successors and assigns of Lender and Borrower, subject to the provisions of
Section 7.05 and 7.06.
10.06 JOINT AND SEVERAL LIABILITY. All covenants and agreements of Borrower
shall be joint and several.
10.07 AGENTS. In exercising any right hereunder or taking any actions provided
for herein, Lender may act through its employees, agents or independent
contractors as authorized by Lender.
10.08 GOVERNING LAW. THIS DEED OF TRUST, WHICH, TOGETHER WITH THE LOAN
DOCUMENTS, SETS FORTH THE ENTIRE UNDERSTANDING OF BORROWER AND BENEFICIARY WITH
RESPECT TO THE SUBJECT MATTER HEREOF, AND SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS (WITHOUT GIVING EFFECT TO THE CONFLICT OF
LAW PRINCIPLES THEREOF) OF THE STATE OF NEVADA, EXCEPT THAT TO THE EXTENT OF THE
TRANSFER OR CREATION OF AN INTEREST IN THE PROPERTY, THE METHOD FOR FORECLOSURE,
THE NATURE OF THE INTEREST IN THE PROPERTY RESULTING FROM FORECLOSURE, THE
MANNER AND EFFECT OF RECORDING OR FAILING TO RECORD THIS DEED OF TRUST, AND ANY
ACTION OR PROCEEDING AGAINST THE PROPERTY, INCLUDING, BUT NOT LIMITED TO,
Page 86 of 200
FORECLOSURE PROCEEDINGS AND ATTACHMENT OF RENTALS, THE SUBSTANTIVE LAWS OF THE
STATE OF TEXAS SHALL GOVERN AND CONTROL THE CONSTRUCTION AND ENFORCEMENT OF THE
LOAN DOCUMENTS. IT IS THE EXPRESS INTENTION OF BORROWER AND BENEFICIARY THAT, TO
THE EXTENT THE TERMS OF THIS DEED OF TRUST OR ANY OF THE OTHER LOAN DOCUMENTS
ENTITLE BENEFICIARY OR ANY OTHER HOLDER OF ANY PORTION OF THE INDEBTEDNESS
EVIDENCED BY THE NOTE TO PROCEED DIRECTLY AGAINST THE PROPERTY IN THE STATE OF
TEXAS, BENEFICIARY SHALL BE ENTITLED TO PROCEED AGAINST THE SAME IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO WHETHER OR NOT BENEFICIARY
OR SUCH OTHER HOLDER THERETOFORE SHALL HAVE COMPLIED WITH ANY PROCEDURAL OR
SUBSTANTIVE PREREQUISITES OR REQUIREMENTS FOR FORECLOSURE AS SET FORTH UNDER THE
LAWS OF ANY OTHER STATE, INCLUDING, WITHOUT LIMITATION, ANY LAWS RELATING TO
DEFICIENCY JUDGMENTS, RIGHTS OF REDEMPTION, OR ANY SO-CALLED "ONE-ACTION RULES"
OR "SECURITY FIRST" PRINCIPLES.
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE NOTE MAY BE BROUGHT IN THE
COURTS OF THE STATE OF NEVADA OR, IF THE REQUISITES OF JURISDICTION OBTAIN, OF
THE UNITED STATES OF AMERICA SITTING IN ▇▇▇▇▇ COUNTY, STATE OF NEVADA (EXCEPT
FOR FORECLOSURE PROCEEDINGS AND OTHER PROCEEDINGS AGAINST THE PROPERTY WHICH
PROCEEDINGS SHALL BE GOVERNED BY TEXAS LAW; PROVIDED THAT UNDER ALL
CIRCUMSTANCES ANY ISSUE OR ISSUES RELATING TO THE AMOUNT OR RATE OF INTEREST
THAT MAY BE LAWFULLY CONTRACTED FOR, CHARGED, TAKEN, RESERVED OR RECEIVED
HEREUNDER OR UNDER ANY OF THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA). UPON EXECUTION
AND DELIVERY HEREOF, BORROWER ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. NOTHING
HEREIN, HOWEVER, SHALL AFFECT THE RIGHT OF BENEFICIARY TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST BORROWER IN ANY OTHER JURISDICTION.
10.09 SEVERABILITY. In the event that any provisions of this Instrument or the
Note conflict with applicable law, such conflict shall not affect other
provisions of this Instrument or the Note which can be given effect without the
conflicting provisions, and to this end the provisions of this Instrument and
the Note are declared to be severable.
Page 87 of 200
10.10 [RESERVED].
10.11 PARTIAL INVALIDITY. In the event any portion of the sums intended to be
secured by this Instrument cannot be lawfully secured hereby, payments in
reduction of such sums shall be applied first to those portions not secured
hereby.
10.12 CAPTIONS. The captions and headings of the Articles and Sections of this
Instrument are for convenience only and are not to be used to interpret or
define the terms and provisions of this Instrument.
10.13 NO PARTNERSHIP, ETC. The relationship between Lender and Borrower is
solely that of Lender and Borrower. Lender has no fiduciary or other special
relationship with Borrower. Nothing contained in the Loan Documents is intended
to create any partnership, joint venture or association between Borrower and
Lender or in any way make Lender a co-principal with Borrower with reference to
the Property. Any inferences to the contrary of the foregoing are hereby
expressly negated.
10.14 ENTIRE AGREEMENT. The Loan Documents constitute the entire understanding
and agreement between Borrower and Lender with respect to the transactions
arising in connection with the indebtedness secured hereby and supersede all
prior written or oral understanding and agreements between Borrower and Lender
with respect to the matters addressed in the Loan Documents. Borrower hereby
acknowledges that, except as incorporated in writing in the Loan Documents,
there are not and were not and no persons are or were authorized by Holder to
make any representations, understanding, stipulations, agreements or promises,
oral or written, with respect to the matters addressed in the Loan Documents.
10.15 TIME OF ESSENCE. Time shall be of the essence in this Deed of Trust with
respect to all of Borrower's obligations hereunder.
ARTICLE XI - ADDITIONAL PROVISIONS
11.01 FLOOD PLAIN. Borrower represents and warrants that none of the Land, or
any part thereof, is situated within a floodplain, floodway, flood prone area,
special flood hazard area or the like, as so designated by the applicable Flood
Insurance Study or Flood Insurance Rate Map or other such similar study, map or
plat issued or controlled by the Federal Emergency Management Agency, and/or any
other federal agency appointed to regulate such matters under the Federal Flood
Disaster Protection Act, as amended, or the Federal Flood Insurance Act, as
amended. Borrower indemnifies and holds Lender harmless, from any claims and/or
costs caused by the Land being located within a flood prone area.
Page 88 of 200
11.02 OTHER LOAN DOCUMENTS. All agreements, security agreements and other loan
documents which are mentioned in or executed in accordance with the Note, this
Instrument are incorporated herein for all purposes as if fully set forth
herein. Any default of any term or condition in any of the Loan Documents shall
be and is a default under the terms of this Deed of Trust.
11.03 NO OBLIGATION TO REFINANCE. Borrower understands and agrees that the
Indebtedness represented by the Note secured hereby is due and payable in full
on the maturity date specified in the Note, and Borrower understands that Lender
shall not be obligated or required to refinance the accrue and unpaid balance of
the Note, and Lender shall be under no obligation to extend the maturity date
past the specified date in the Note. No extension of said maturity date shall be
of any force or effect unless set forth in a written modification or extension
agreement signed by Lender and Borrower, and in no event shall the granting of
one or more extension or modification of the Loan by Lender be construed as an
(i) agreement for, (ii) requirement for, or (iii) waiver of any right to refuse
any future modification or extension of the indebtedness represented by said
Note thereafter by Lender.
NOTICE
THIS WRITTEN LOAN AGREEMENT REPRESENTS 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 ORAL AGREEMENTS
BETWEEN THE PARTIES.
[SIGNATURE FOLLOWS ON NEXT PAGE]
Page 89 of 200
Grantor:
--------
Wedgwood Partners, Ltd., Limited Partnership, a
Nevada limited partnership
By: GBR, LLC, a
Nevada limited liability company, general partner
By: Greenbriar Acquisition Corporation, a
Nevada corporation, manager
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------
Title: Executive Vice President
------------------------
ACKNOWLEDGMENT
--------------
THE STATE OF TEXAS ss.
ss.
COUNTY OF DALLAS ss.
"Before me, the undersigned notary public, on this 12th day of July,
2001, personally appeared ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive Vice President of
Greenbriar Acquisition Corporation, a Nevada corporation, manager of GBR, LLC, a
Nevada limited liability company, the general partner of Wedgwood Partners,
Ltd., Limited Partnership, a Nevada limited partnership, known to me to be the
person whose name is subscribed to the foregoing instrument and acknowledged to
me that he/she executed the same for the purposes and consideration therein
expressed, and in the capacity stated therein."
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Notary Public - State of Texas
AFTER RECORDING, RETURN TO :
----------------------------
The ▇▇▇▇▇ Law Firm, L.L.P.
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Page 90 of 200
