Exhibit 10.1
RECORD AND RETURN TO: THIS DOCUMENT WAS ELECTRONICALLY RECORDED BY
CommonWealth Loan No. 6517807
XXXXXX X. XXXXX, ESQUIRE RECORDED IN OFFICIAL RECORDS, COUNTY OF ORANGE
HOLLAND & KNIGHT LLP XXXXXXX XXXXX, INTERIM CLERK-CONTROLLER
0000 XXXXXX XXXXXXXXX
XXXXX 000
XXXXXX, XXXXXXXX 00000-0000
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SPACE ABOVE LINE FOR RECORDER'S USE
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
Dated as of August 5, 2002
(the "Closing Date")
WCRI, LLC
(Trustor)
TO
COMMONWEALTH LAND TITLE INSURANCE COMPANY
(Trustee)
FOR THE BENEFIT OF
XXXX XXXXXXX LIFE INSURANCE COMPANY
(Beneficiary)
LOCATION OF PROPERTY:
000 Xxxx Xxxxxx Xxxx
Xxxxxx, XX
THIS DOCUMENT SECURES A DEED OF TRUST NOTE WHICH MAY CONTAIN
PROVISIONS FOR ADJUSTMENTS IN THE INTEREST RATE AND PAYMENT
AMOUNTS AND/OR A BALLOON PAYMENT
WEST COAST REALTY
(FOLSOM)
LOAN NO. 6517804
TABLE OF CONTENTS
SECTION HEADING
1. Payment of Indebtedness and Incorporation of Covenants, Conditions and
Agreements
2. Warranty of Title
3. Insurance; Casualty
4. Payment of Taxes, Etc.
5. Reserve Fund
6. Condemnation
7. Leases and Rents
8. Maintenance and Use of Folsom Trust Property
9. Transfer or Encumbrance of the Folsom Trust Property or Interests in the
Trustor; Other Indebtedness
10. Estoppel Certificates
11. No Cooperative or Condominium
12. Changes in the Laws Regarding Taxation
13. No Credits on Account of the Indebtedness
14. Documentary Stamps
15. Right of Entry
16. Books and Records
17. Performance of Other Agreements
18. Representations and Covenants Concerning Loan
19. Single Purpose Entity
20. Events of Default; Remedies
21. Additional Remedies
22. Right to Cure Defaults
23. Late Payment Charge
24. Prepayment
25. Prepayment After Event of Default
26. Appointment of Receiver
27. Security Agreement
28. Authority
29. Actions and Proceedings
30. Further Acts, Etc.
31. Recording of Deed of Trust, Etc.
32. Usury Laws
33. Sole Discretion of Beneficiary
34. Recovery of Sums Required To Be Paid
35. Marshalling and Other Matters
36. Waiver of Notice
37. Remedies of Trustor
38. Reporting Requirements
39. Hazardous Materials
40. Asbestos
41. Bankruptcy or Insolvency
42. Compliance with ERISA and State Statutes on Governmental Plans
43. Assignments
44. Cooperation
45. Indemnification for Non-Recourse Carveout Obligations
46. Exculpation
47. Notices
48. Non-Waiver
49. Joint and Several Liability
50. Severability
51. Duplicate Originals
52. Indemnity and Beneficiary's Costs
53. [Open]
54. No Oral Change
55. No Foreign Person
56. Separate Tax Lot
57. Right to Release Any Portion of the Folsom Trust Property
58. Subrogation
59. Administrative Fees
60. Disclosure
61. Headings, Etc.
62. Address of Real Property
63. Method of Payment
64. Publicity
65. Relationship
66. Homestead
67. No Third Party Beneficiaries
68. Compliance with Regulation U
69. Entire Agreement
70. Servicer
71. Governing Law; Consent to Jurisdiction
72. Title Acts by Trustee
73. Successor Trustee
74. Authorization Regarding Trustee
75. Waiver of Jury Trial
ii
THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT
AND FIXTURE FILING (this "Deed of Trust"), dated as of the Closing Date, by
WCRI, LLC, a California limited liability company, having its principal place of
business at 0000 Xxxx Xxxx Xxxx, Xxxxxxxx 0 Xxxxx 000, Xxxxx Xxxx, XX, 00000
("Trustor") to COMMONWEALTH LAND TITLE INSURANCE COMPANY, having an address of
000 X. 0xx Xxxxxx, 0xx Xxxxx, Xxx Xxxxxxx, XX 00000 ("Trustee"), for the benefit
of XXXX XXXXXXX LIFE INSURANCE COMPANY, a Massachusetts corporation, having its
principal place of business at Xxxx Xxxxxxx Tower, T-00, 000 Xxxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 ("Beneficiary").
WITNESSETH:
A. Beneficiary has made a loan (the "Folsom Loan") to Trustor in the
original principal sum of Four Million Nine Hundred Ten Thousand and 00/100
Dollars ($4,910,000.00) evidenced by that certain Folsom Deed of Trust Note,
dated as of the Closing Date, made by Trustor and payable and delivered to
Beneficiary (as it may be modified, amended, supplemented, extended or
consolidated in writing and any note(s) issued in exchange therefor or
replacement thereof, the "Folsom Note").
B. Beneficiary has made a loan (the "Irvine Loan") to Trustor in the
original principal sum of Three Million Seven Hundred Eighty-Five Thousand and
00/100 Dollars ($3,785,000.00) evidenced by that certain Xxxxxx Xxxx of Trust
Note, dated as of the Closing Date, made by Trustor and payable and delivered to
Beneficiary (as it may be modified, amended, supplemented, extended or
consolidated in writing and any note(s) issued in exchange therefor or
replacement thereof, the "Irvine Note").
C. Beneficiary has made a loan (the "Tustin Loan") to Trustor in the
original principal sum of Four Million Six Hundred Twenty-Five Thousand and
00/100 Dollars ($4,625,000.00) evidenced by that certain Xxxxxx Xxxx of Trust
Note, dated as of the Closing Date, made by Trustor and payable and delivered to
Beneficiary (as it may be modified, amended, supplemented, extended or
consolidated in writing and any note(s) issued in exchange therefor or
replacement thereof, the "Tustin Note").
D. Beneficiary has made a loan (the "Sacramento Loan") to Trustor in the
original principal sum of One Million Seven Hundred Thousand and 00/100 Dollars
($1,700,000.00) evidenced by that certain Sacramento Deed of Trust Note, dated
as of the Closing Date, made by Trustor and payable and delivered to Beneficiary
(as it may be modified, amended, supplemented, extended or consolidated in
writing and any note(s) issued in exchange therefor or replacement thereof, the
"Sacramento Note").
E. To secure payment of (a) the Folsom Loan and all indebtedness,
obligations, liabilities and expenses due hereunder and under the Folsom Note
and any other Folsom Loan Document (as hereinafter defined), (b) the Irvine Loan
and all indebtedness, obligations, liabilities and expenses due under the Irvine
Note and any other Irvine Loan Document (as hereinafter defined), (c) the Tustin
Loan and all indebtedness, obligations,
liabilities and expenses due under the Tustin Note and any other Tustin Loan
Document (as hereinafter defined) and (d) the Sacramento Loan and all
indebtedness, obligations, liabilities and expenses due under the Sacramento
Note and any other Sacramento Loan Document (as hereinafter defined) (the
indebtedness, interest, other sums, fees, obligations and all other sums due
under the Folsom Loan and the Folsom Loan Documents, the Irvine Loan and the
Irvine Loan Documents, the Tustin Loan and the Tustin Loan Documents and the
Sacramento Loan and the Sacramento Loan Documents being herein, collectively,
called the "Indebtedness"), Trustor hereby irrevocably grants, bargains, sells
and conveys to Trustee IN TRUST, WITH POWER OF SALE, the following property and
rights, whether now owned or held or hereafter acquired (collectively, the
"Folsom Trust Property") and Trustor further grants to Trustee a security
interest in the Folsom Trust Property.
GRANTING CLAUSE ONE
All right, title and interest in and to the real property or properties
described on Exhibit A hereto (collectively, the "Land").
GRANTING CLAUSE TWO
All right, title and interest in and to additional lands, estates and
development rights hereafter acquired by Trustor for use in connection with the
Land and the development of the Land and all additional lands and estates
therein which may, from time to time, by supplemental Deed of Trust or
otherwise, be expressly made subject to the lien thereof (collectively, the
"Additional Land").
GRANTING CLAUSE THREE
All right, title and interest in and to buildings, structures, fixtures,
additions, enlargements, extensions, modifications, repairs, replacements and
improvements now or hereafter located on the Land or any part thereof
(collectively, the "Improvements"; the Land, the Additional Land and the
Improvements hereinafter collectively referred to as the "Real Property").
GRANTING CLAUSE FOUR
All right, title and interest in and to easements, rights-of-way, strips
and gores of land, streets, ways, alleys, passages, sewer rights, water, water
courses, water rights and powers, oil, gas and mineral rights, air rights and
development rights, zoning rights, tax credits or benefits and all estates,
rights, titles, interests, privileges, liberties, tenements, hereditaments and
appurtenances of any nature whatsoever in any way now or hereafter belonging,
relating or pertaining to the Real Property or any part thereof and the
reversion and reversions, remainder and remainders and all land lying in the bed
of any street, road or avenue, opened or proposed, in front of or adjoining the
Land or any part thereof to the center line thereof and all the estates, rights,
titles, interests, dower and rights of dower, curtesy and rights of curtesy,
property,
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possession, claim and demand whatsoever, both in law and in equity, of Trustor
in, of and to the Real Property and every part and parcel thereof, with the
appurtenances thereto.
GRANTING CLAUSE FIVE
All right, title and interest in and to machinery, equipment, fixtures
and other property of every kind and nature whatsoever owned by Trustor or in
which Trustor has or shall have an interest (to the extent of such interest) now
or hereafter located upon the Real Property or appurtenant thereto and usable in
connection with the present or future operation and occupancy of the Real
Property and all building equipment, materials and supplies of any nature
whatsoever owned by Trustor or in which Trustor has or shall have an interest
(to the extent of such interest) now or hereafter located upon the Real Property
or appurtenant thereto or usable in connection with the present or future
operation and occupancy of the Real Property, including but not limited to all
heating, ventilating, air conditioning, plumbing, lighting, communications and
elevator machinery, equipment and fixtures (hereinafter collectively called the
"Equipment") and the right, title and interest of Trustor in and to any of the
Equipment which may be subject to any security agreements (as defined in the
Uniform Commercial Code of the State of California (the "Uniform Commercial
Code")) superior, inferior or pari passu in lien to the lien of this Deed of
Trust. In connection with Equipment which is leased to Trustor or which is
subject to a lien or security interest which is superior to the lien of this
Deed of Trust, this Deed of Trust shall also cover all right, title and interest
of each Trustor in and to all deposits and the benefit of all payments now or
hereafter made with respect to such Equipment.
GRANTING CLAUSE SIX
All right, title and interest in and to awards or payments, including
interest thereon, which may heretofore and hereafter be made with respect to the
Real Property or any part thereof, whether from the exercise of the right of
eminent domain (including but not limited to any transfer made in lieu of or in
anticipation of the exercise of said right), or for a change of grade or for any
other injury to or decrease in the value of the Real Property.
GRANTING CLAUSE SEVEN
All right, title and interest in and to leases and subleases (including,
without limitation, all guarantees thereof) and other agreements affecting the
use, enjoyment and/or occupancy of the Real Property or any part thereof, now or
hereafter entered into (including any use or occupancy arrangements created
pursuant to Section 365(h) of Title 11 of the United States Code (the
"Bankruptcy Code") or otherwise in connection with the commencement or
continuance of any bankruptcy, reorganization, arrangement, insolvency,
dissolution, receivership or similar proceedings or any assignment for the
benefit of creditors in respect of any tenant or occupant of any portion of the
Real Property), together with any extension or renewal of the same (the
"Leases") and all income, rents, issues, profits, revenues and proceeds
including, but not limited to, all oil and gas or other mineral royalties and
bonuses from the Real Property (including any payments received pursuant to
Section 502(b) of the Bankruptcy Code or otherwise in connection with the
commencement or continuance of any bankruptcy,
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reorganization, arrangement, insolvency, dissolution, receivership or similar
proceedings or any assignment for the benefit of creditors in respect of any
tenant or occupant of any portion of the Real Property and all claims as a
creditor in connection with any of the foregoing) (the "Rents") and all proceeds
from the sale, cancellation, surrender or other disposition of the Leases and
the right to receive and apply the Rents to the payment of the Indebtedness.
GRANTING CLAUSE EIGHT
All right, title and interest in and to proceeds of and any unearned
premiums on any insurance policies covering the Real Property or any part
thereof including, without limitation, the right to receive and apply the
proceeds of any insurance, judgments or settlements made in lieu thereof, for
damage to the Real Property or any part thereof.
GRANTING CLAUSE NINE
All right, title and interest in and to tax refunds, including interest
thereon, tax credits and tax abatements and the right to receive or benefit from
the same, which may be payable or available with respect to the Real Property.
GRANTING CLAUSE TEN
The right, in the name and on behalf of Trustor, to appear in and defend
any action or proceeding brought with respect to the Real Property or any part
thereof and to commence any action or proceeding to protect the interest of
Beneficiary in the Real Property or any part thereof.
GRANTING CLAUSE ELEVEN
All right, title and interest in and to accounts receivable, utility or
other deposits, intangibles, contract rights, interests, estates or other
claims, both in law and in equity, which Trustor now has or may hereafter
acquire in the Real Property or any part thereof.
GRANTING CLAUSE TWELVE
All right, title and interest in and to rights which Trustor now has or
may hereafter acquire to be indemnified and/or held harmless from any liability,
loss, damage, cost or expense (including, without limitation, reasonable
attorneys' fees and disbursements) relating to the Real Property or any part
thereof.
GRANTING CLAUSE THIRTEEN
All right, title and interest of Trustor in and to plans and
specifications, maps, surveys, studies, reports, contracts, subcontracts,
service contracts, management contracts, franchise agreements and other
agreements, franchises, trade names, trademarks, symbols, service marks,
approvals, consents, permits, special permits, licenses and rights, whether
governmental or otherwise, respecting the use, occupation, development,
construction and/or
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operation of the Real Property or any part thereof or the activities conducted
thereon or therein, or otherwise pertaining to the Real Property or any part
thereof.
GRANTING CLAUSE FOURTEEN
All right, title and interest in and to proceeds, products, offspring,
rents and profits from any of the foregoing, including without limitation, those
from sale, exchange, transfer, collection, loss, damage, disposition,
substitution or replacement of any of the foregoing.
WITH RESPECT to any portion of the Folsom Trust Property which is not
real estate under the laws of the State of California, Trustor hereby grants,
bargains, sells and conveys the same to Beneficiary for the purposes set forth
hereunder and the references above to Trustee shall be deemed to be to
Beneficiary with respect to such portion of the Folsom Trust Property and
Beneficiary shall be vested with all rights, power and authority granted
hereunder or by law to Trustee with respect thereto.
TO HAVE AND TO HOLD the above granted and described Folsom Trust
Property unto and to the use and benefit of Trustee and its successors and
assigns for the benefit of Beneficiary and the successors and assigns of
Beneficiary forever.
IN TRUST, WITH POWER OF SALE, to secure the payment to Beneficiary of
the Indebtedness at the time and in the manner provided for its payment in the
Note and in this Deed of Trust;
PROVIDED, HOWEVER, these presents are upon the express condition, if
Trustor shall well and truly pay to Beneficiary the Indebtedness at the time and
in the manner provided in the Note and this Deed of Trust and shall well and
truly abide by and comply with each and every covenant and condition set forth
herein, in the Note (hereinafter defined) and in the other Loan Documents
(hereinafter defined), these presents and the estate hereby granted shall cease,
terminate and be void;
PART I - GENERAL PROVISIONS
AND Trustor represents to, covenants with and warrants to Trustee and
Beneficiary that:
1. PAYMENT OF INDEBTEDNESS AND INCORPORATION OF COVENANTS, CONDITIONS
AND AGREEMENTS. Trustor shall pay the Indebtedness at the time and in the manner
provided in the Note, this Deed of Trust and the other Loan Documents. All the
covenants, conditions and agreements contained in the Note and the other Loan
Documents are hereby made a part of this Deed of Trust to the same extent and
with the same force as if fully set forth herein.
2. WARRANTY OF TITLE. Trustor has good and marketable title to the
Folsom Trust Property; Trustor has the right to deed, give, grant, bargain,
sell, alienate, enfeoff, convey,
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confirm, pledge, lease, assign, hypothecate and grant a security interest in the
Folsom Trust Property; Trustor possesses an indefeasible fee estate in the Real
Property; and Trustor owns the Folsom Trust Property free and clear of all
liens, encumbrances and charges whatsoever except those exceptions shown in the
title insurance policy insuring the lien of this Deed of Trust (this Deed of
Trust and the liens, encumbrances and charges shown as exceptions in such title
policy, hereinafter collectively referred to as the "Permitted Encumbrances").
Trustor shall forever warrant, defend and preserve such title and the validity
and priority of the lien of this Deed of Trust and shall forever warrant and
defend the same to Beneficiary and Trustee against the claims of all persons
whomsoever.
3. INSURANCE; CASUALTY.
(a) Trustor, at its sole cost and expense, shall keep the Folsom
Trust Property insured during the term of this Deed of Trust for the mutual
benefit of each Trustor, Trustee and Beneficiary against loss or damage by any
peril covered by a standard "special perils" or "all risk of physical loss"
insurance policy including, without limitation, riot and civil commotion, acts
of terrorism, vandalism, malicious mischief, burglary, theft and mysterious
disappearance in an amount (i) equal to at least one hundred percent (100%) of
the then "full replacement cost" of the Improvements and Equipment, without
deduction for physical depreciation and (ii) such that the insurer would not
deem Trustor a coinsurer under such policies. The policies of insurance carried
in accordance with this Paragraph 3 shall be paid annually in advance and shall
contain the "Replacement Cost Endorsement" with a waiver of depreciation, and
shall have a deductible no greater than $10,000 unless so agreed by Beneficiary.
(b) Trustor, at its sole cost and expense, for the mutual
benefit of each Trustor, Trustee and Beneficiary, shall also obtain and maintain
during the term of this Deed of Trust the following policies of insurance:
(i) Flood insurance if any part of the Real Property is located
in an area identified by the Secretary of Housing and Urban Development
as an area having special flood hazards and in which flood insurance has
been made available under the National Flood Insurance Act of 1968 (and
any successor act thereto) in an amount at least equal to the
outstanding principal amount of the Folsom Note or the maximum limit of
coverage available with respect to the Improvements and Equipment under
said Act, whichever is less.
(ii) Comprehensive public liability insurance, including broad
form property damage, blanket contractual and personal injuries
(including death resulting therefrom) coverages.
(iii) Rental loss insurance in an amount equal to at least one
hundred percent (100%)of the aggregate annual amount of all rents and
additional rents payable by all of the tenants under the Leases (whether
or not such Leases are terminable in the event of a fire or casualty),
such rental loss insurance to cover rental losses for a period of at
least one (1) year after the date of the fire or casualty in question.
The amount of such
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rental loss insurance shall be increased from time to time during the
term of this Deed of Trust as and when new Leases and renewal Leases are
entered into in accordance with the terms of this Deed of Trust, to
reflect all increased rent and increased additional rent payable by all
of the tenants under such renewal Leases and all rent and additional
rent payable by all of the tenants under such new Leases.
(iv) Insurance against loss or damage from explosion of steam
boilers, air conditioning equipment, high pressure piping, machinery and
equipment, pressure vessels or similar apparatus now or hereafter
installed in the Improvements.
(v) Such other insurance (including, without limitation,
earthquake insurance)as may from time to time be reasonably required by
Beneficiary in order to protect its interests or, in the event of a
Secondary Market Transaction (as hereinafter defined), as required by
the Rating Agencies (as such terms are hereinafter defined) provided,
however, that (a) earthquake insurance coverage shall only be required
if such insurance is available at a Commercially Reasonable Cost
(hereinafter defined), and (b) in any event, the requirement for
earthquake insurance coverage shall be suspended if, and for so long as,
the following conditions are satisfied: (1) there are no defaults under
the Loan Documents, (2) the Seismic Risk Assessment report has been
reviewed and approved by Beneficiary, (3) the Probable Maximum Loss
("PML") of the Real Property on a 475-year recurrence interval and 90th
percentile damage estimate is less than 20%, and (4) there have been no
material adverse changes in the seismicity of the Real Property.
The term "Commercially Reasonable Cost" shall mean that the cost
of earthquake insurance coverage does not increase the premium for the
Trustor's existing property insurance coverage applicable to the Folsom
Trust Property by more than one hundred (100%).
(c) All policies of insurance (the "Policies") required pursuant
to this Paragraph 3 (i) shall be issued by an insurer satisfactory to
Beneficiary (and, in the event of a Secondary Market Transaction, to the Rating
Agencies), (ii) shall contain the standard New York mortgagee non-contribution
clause naming Beneficiary as the person to which all payments made by such
insurance company shall be paid, (iii) shall be maintained throughout the term
of this Deed of Trust without cost to Beneficiary, (iv) shall be delivered to
Beneficiary, (v) shall contain such provisions as Beneficiary deems reasonably
necessary or desirable to protect its interest including, without limitation,
endorsements providing that neither Trustor, Trustee, Beneficiary nor any other
party shall be a co-insurer under such Policies and that Beneficiary shall
receive at least thirty (30) days prior written notice of any modification or
cancellation and (vi) shall be satisfactory in form and substance to Beneficiary
(and, in the event of a Secondary Market Transaction, to the Rating Agencies)
and shall be approved by Beneficiary (and, in the event of a Secondary Market
Transaction, by the Rating Agencies) as to amounts, form, risk coverage,
deductibles, loss payees and insureds. All amounts recoverable thereunder are
hereby assigned to the Beneficiary. Not later than thirty (30) days prior to the
expiration date of each of the Policies, Trustor will deliver to Beneficiary
satisfactory evidence of the renewal of each of the Policies.
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(d) If the Improvements shall be damaged or destroyed, in whole
or in part, by fire or other casualty, Trustor shall give prompt notice thereof
to Beneficiary and prior to the making of any repairs thereto. Following the
occurrence of fire or other casualty, Trustor, regardless of whether insurance
proceeds are payable under the Policies or, if paid, are made available to
Trustor by Beneficiary, shall promptly proceed with the repair, alteration,
restoration, replacement or rebuilding of the Improvements as near as possible
to their value, utility, condition and character prior to such damage or
destruction. Such repairs, alterations, restoration, replacement and rebuilding
are herein collectively referred to as the "Restoration". The Restoration shall
be performed in accordance with the following provisions:
(i) Trustor shall procure, pay for and furnish to Beneficiary
true copies of all required governmental permits, certificates and
approvals with respect to the Restoration.
(ii) Trustor shall furnish Beneficiary, within thirty (30) days
of the casualty, evidence reasonably satisfactory to Beneficiary of the
cost to complete the Restoration.
(iii) If the Restoration involves structural work or the
estimated cost to complete the Restoration exceeds five percent (5%) of
the original principal amount of the Folsom Note, the Restoration shall
be conducted under the supervision of an architect (the "Architect")
selected by Trustor and approved by Beneficiary (which approval shall
not be unreasonably withheld), and no such Restoration shall be made
except in accordance with detailed plans and specifications, detailed
cost estimates and detailed work schedules approved by Beneficiary
(which approval shall not be unreasonably withheld).
(iv) If the estimated cost of the Restoration shall exceed ten
percent (10%) of the original principal amount of the Folsom Note in the
aggregate, at the request of Beneficiary, Trustor, before commencing any
work, shall cause to be furnished to Beneficiary a surety bond or bonds,
in form and substance reasonably satisfactory to Beneficiary, naming
Trustor and Beneficiary as co-obligees, in an amount that is not less
than the estimated cost of the Restoration, issued by a surety company
or companies reasonably satisfactory to Beneficiary.
(v) The Restoration shall be prosecuted to completion with all
due diligence and in an expeditious and first class workmanlike manner
and in compliance with all laws and other governmental requirements, all
permits, certificates and approvals, all requirements or fire
underwriters and all insurance policies then in force with respect to
the Real Property.
(vi) At all times when any work is in progress, Trustor shall
maintain all insurance then required by law or customary with respect to
such work, and, prior to the commencement of any work, shall furnish to
Beneficiary duplicate originals or certificates of the policies
therefor.
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(vii) Upon completion of the Restoration, Trustor shall obtain
(A) any occupancy permit which may be required for the Improvements and
(B) all other governmental permits, certificates and approvals and all
permits, certificates and approvals of fire underwriters which are
required for or with respect to the Restoration, and shall furnish true
copies thereof to Beneficiary.
(viii) An Event of Default (as hereinafter defined) shall be
deemed to have occurred under this Deed of Trust if Trustor, after
having commenced demolition or construction of any Improvements, shall
abandon such demolition or the construction work or shall fail to
complete such demolition and construction within a reasonable time after
the commencement thereof.
(e) Trustor and Beneficiary shall jointly adjust and settle all
insurance claims, provided, however, if an Event of Default shall have occurred
and be continuing, Beneficiary shall have the right to adjust and settle such
claims without the prior consent of Trustor. In the event of any insured loss,
the payment for such loss shall be made directly to Beneficiary. Any insurance
proceeds payable under any of the Policies may, at the option of Beneficiary, be
used in one or more of the following ways: (w) applied to the Indebtedness,
whether such Indebtedness then be matured or unmatured (such application to be
without prepayment fee or premium, except that if an Event of Default, or an
event which with notice and/or the passage of time, or both, would constitute an
Event of Default, has occurred and remains uncured, then such application shall
be subject to the applicable premium computed in accordance with the Note), (x)
used to fulfill any of the covenants contained herein as the Beneficiary may
determine, (y) used to replace or restore the property to a condition
satisfactory to the Beneficiary, or (z) released to the Trustor. Notwithstanding
the foregoing, provided (i) not more than ten percent (10%) of the gross area of
the Improvements is directly affected by such damage, destruction or loss and
the amount of the loss does not exceed ten percent (10%) of the original
principal amount of the Folsom Note, (ii) no Event of Default or event that with
the passage of time or giving of notice or both would constitute a default has
occurred hereunder, under the Note or under any of the other Loan Documents and
remains uncured at the time of such application, (iii) the insurer does not deny
liability to any named insured, (iv) each major and/or anchor tenant (as
determined by Beneficiary) whose Lease permits termination thereof as a result
of such insured loss, agrees in writing to continue its Lease, (v) rental loss
insurance is available and in force and effect to offset in full any abatement
of rent to which any tenant may be entitled as a result of such damage,
destruction or loss, (vi) the remaining Improvements continue at all times to
comply with all applicable building, zoning and other land use laws and
regulations, (vii) in Beneficiary's judgment, the Restoration is practicable and
can be completed within one (1) year after the damage, destruction or loss and
at least one (1) year prior to the Maturity Date (as such term is defined in the
Note) and (viii) rebuilding of the Improvements to substantially identical size,
condition and use as existed prior to the casualty is permitted by all
applicable laws and ordinances, then all of such proceeds shall be used for
Restoration. Any application of insurance proceeds to the Indebtedness shall be
to the unpaid installments of principal due under the Note in the inverse order
of their maturity, such that the regular payments under the Note shall not be
reduced or altered in any manner. In the event the above criteria are satisfied
(including that no Event of Default or event that, with the passage of time or
giving of notice or both, would constitute a default has occurred hereunder,
under the Note or other Loan
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Documents) or Beneficiary otherwise elects to allow the use of such proceeds for
the Restoration, such proceeds shall be disbursed in accordance with the
following provisions:
(i) Each request for an advance of insurance proceeds shall be
made on seven (7) days' prior notice to Beneficiary and shall be
accompanied by a certificate of the Architect, if one be required under
Paragraph 3(d)(iii) above, otherwise by an executive officer or managing
general partner or managing member of Trustor, stating (A) that all work
completed to date has been performed in compliance with the approved
plans and specifications and in accordance with all provisions of law,
(B) the sum requested is properly required to reimburse Trustor for
payments by Trustor to, or is properly due to, the contractor,
subcontractors, materialmen, laborers, engineers, architects or other
persons rendering services or materials for the Restoration (giving a
brief description of such services and materials), and that when added
to all sums, if any, previously disbursed by Beneficiary, does not
exceed the value of the work done to the date of such certificate and
(C) that the amount of such proceeds remaining in the hands of
Beneficiary will be sufficient on completion of the work to pay the same
in full (giving, in such reasonable detail as Beneficiary may require,
an estimate of the cost of such completion).
(ii) Each request for an advance of insurance proceeds shall, to
the extent permitted under applicable law, be accompanied by waivers of
liens satisfactory to Beneficiary covering that part of the Restoration
previously paid for, if any, and by a search prepared by a title company
or by other evidence reasonably satisfactory to Beneficiary including
without limitation a title endorsement satisfactory to Beneficiary if
available in the state where the Real Property is located, that there
has not been filed with respect to the Real Property any mechanic's lien
or other lien or instrument and that there exist no encumbrances on or
affecting the Real Property other than the Permitted Encumbrances or
otherwise approved by Beneficiary. In addition to the foregoing, the
request for the final advance shall be accompanied by (A) any final
occupancy permit which may be required for the Improvements, (B) all
other governmental permits, certificates and approvals and all other
permits necessary for the occupancy and operation of the Real Property,
(C) Tenant estoppels from tenants whose space was affected and (D) final
lien waivers from all contractors, subcontractors and materialmen.
(iii) No advance of insurance proceeds shall be made if there
exists an Event of Default or event which with the passage of time or
the giving of notice or both would constitute a default on the part of
Trustor under this Deed of Trust, the Note or any other Loan Document.
(iv) If the cost of the Restoration (as reasonably estimated by
Beneficiary) at any time shall exceed the amount of the insurance
proceeds available therefor, insurance proceeds shall not be advanced
until Trustor, before commencing the Restoration or continuing the
Restoration, as the case may be, shall deposit the full amount of the
deficiency (or other assurances reasonably satisfactory to Beneficiary)
with Beneficiary and the amount so deposited shall first be applied
toward the cost of the Restoration before any portion of the insurance
proceeds is disbursed for such purpose.
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Upon completion of the Restoration and payment in full therefor, or upon
failure on the part of Trustor promptly to commence or diligently to continue
the Restoration, or at any time upon request by Trustor, Beneficiary may apply
the amount of any such proceeds then or thereafter in the hands of Beneficiary
to the payment of the Indebtedness; provided, however, that nothing herein
contained shall prevent Beneficiary from applying at any time the whole or any
part of such proceeds to the curing of any default that has not been cured
within the applicable cure period under this Deed of Trust, the Note or any
other Loan Document.
(f) Insurance proceeds and any additional funds deposited by
Trustor with Beneficiary shall constitute additional security for the
Indebtedness. Trustor shall execute, deliver, file and/or record, at its
expense, such documents and instruments as Beneficiary deems necessary or
advisable to grant to Beneficiary a perfected, first priority security interest
in the insurance proceeds and such additional funds. If Beneficiary elects to
have the insurance proceeds applied to Restoration, (i) the insurance proceeds
shall be, at Beneficiary's election, disbursed in installments by Beneficiary or
by a disbursing agent ("Depository") selected by Beneficiary and whose fees and
expenses shall be paid by Trustor in the manner provided in Paragraph 3(e) above
and (ii) all costs and expenses incurred by Beneficiary in connection with the
Restoration, including, without limitation, reasonable counsel fees and costs,
shall be paid by Trustor.
4. PAYMENT OF TAXES, ETC.
(a) Trustor shall pay all taxes, assessments, water rates and
sewer rates and assessments, now or hereafter levied or assessed or imposed
against the Folsom Trust Property or any part thereof (the "Taxes") and all
ground rents, maintenance charges, other governmental impositions, and other
charges, including, without limitation, vault charges and license fees
(collectively, "Other Charges") for the use of vaults, chutes and similar areas
adjoining the Real Property, as same become due and payable. Trustor will
deliver to Beneficiary, promptly upon Beneficiary's request, evidence
satisfactory to Beneficiary that the Taxes and Other Charges have been so paid
and are not then delinquent. Trustor shall not suffer or permit any lien or
charge (including, without limitation, any mechanic's lien) against all or any
part of the Folsom Trust Property and Trustor shall promptly cause to be paid
and discharged any lien or charge whatsoever which may be or become a lien or
charge against the Folsom Trust Property. Trustor shall promptly pay for all
utility services provided to the Folsom Trust Property. In addition, Beneficiary
may, at its option, retain the services of a firm to monitor the payment of
Taxes, the cost of which shall be borne by Trustor.
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 4, Trustor shall have the right to contest in good faith the amount or
validity of any such Taxes, liens or Other Charges (including, without
limitation, tax liens and mechanics' liens) referred to in subparagraph (a)
above by appropriate legal proceedings and in accordance with all applicable
law, after notice to, but without cost or expense to, Beneficiary, provided that
(i) no Event of Default or event that, with the passage of time or giving of
notice or both, would constitute a default hereunder, under the Note or other
Loan Documents has occurred and is continuing, (ii) Trustor pays such Taxes,
liens or Other Charges as same become due and payable, unless Trustor delivers
evidence satisfactory to Beneficiary that, as a result of Trustor's
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contest, Trustor's obligation to pay such Taxes, liens or Other Charges has been
deferred by the appropriate governmental authority, in which event, Trustor may
defer such payment of such Taxes, liens or Other Charges until the date
specified by such governmental authority, (iii) such contest shall be promptly
and diligently prosecuted by and at the expense of Trustor, (iv) Beneficiary
shall not thereby suffer any civil penalty, or be subjected to any criminal
penalties or sanctions, (v) such contest shall be discontinued and such Taxes,
liens or Other Charges promptly paid if at any time all or any part of the
Folsom Trust Property shall be in imminent danger of being foreclosed, sold,
forfeited or otherwise lost or if the title, lien and security interest created
by this Deed of Trust or the priority thereof shall be in imminent danger of
being impaired, (vi) Trustor shall have set aside adequate reserves (in
Beneficiary's judgment) for the payment of such Taxes, liens or Other Charges,
together with all interest and penalties thereon and (vii) Trustor shall have
furnished such security as may be required in the proceeding or as may be
requested by Beneficiary, to insure the payment of any such Taxes, liens or
Other Charges, together with all interest and penalties thereon.
5. RESERVE FUND.
(a) Tax and Insurance Fund. Trustor shall pay to Beneficiary on
the first day of each calendar month such amounts as Beneficiary from time to
time estimates to be sufficient to create and maintain a reserve fund from which
(i) to pay the Taxes and Other Charges, at least thirty (30) days prior to the
date they are due without the payment of any penalties or interest, and (ii) to
pay, at least thirty (30) days prior to their due date for the renewal of the
coverage afforded by the Policies upon the expiration thereof, the insurance
premiums for the Policies estimated by Beneficiary to be payable on such due
date (said amounts in (i) and (ii) above hereafter called the "Tax and Insurance
Fund"). The foregoing provisions of this subparagraph (a) to the contrary
notwithstanding, Beneficiary shall suspend the requirement that the Trustor fund
and maintain a reserve fund for insurance premiums for the Policies as long as
all of the following conditions remain satisfied: (i) no Event of Default shall
have occurred and remain uncured, (ii) the original Trustor named in this Deed
of Trust (the "Original Trustor") is and remains at all times the owner of the
Folsom Trust Property, (iii) the Original Trustor complies with all obligations
in this Deed of Trust and the other Loan Documents regarding insurance,
including without limitation providing Beneficiary with timely evidence (1) that
the required insurance coverage is in place and in full force and effect for the
Folsom Trust Property and is never suspended nor are payments for insurance
premiums ever delinquent, and (2) that all insurance premiums are paid in full
and (iv) the Lease and subleases (collectively, the "CISOC Leases") with
California Independent System Operator Corporation ("CISOC") demising
approximately 52,186 square feet of the rentable space in the Improvements are
and remain in full force and effect, and CISOC is and remains in actual
occupancy of its demised premises and is paying rents according to the
respective terms of the CISOC Leases, and there is no default at any time under
the CISOC Leases. Provided that there are no defaults under the Loan Documents,
the funds on deposit in the Tax and Insurance Fund shall only be used for the
purpose for which such reserve is created and for no other purposes.
(b) Replacement Reserve Fund. If required by Beneficiary,
Trustor shall enter into a Replacement Reserve Agreement which shall require
Trustor to pay to Beneficiary on the first day of each calendar month one
twelfth (1/12) of the amount reasonably
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estimated by Beneficiary to be due for the replacements and capital repairs
required to be made to the Folsom Trust Property during each calendar year (the
"Replacement Reserve Fund"). Beneficiary shall make disbursements from the
Replacement Reserve Fund for items specified in the Replacement Reserve
Agreement as set forth in such Agreement. Beneficiary may require an inspection
of the Folsom Trust Property prior to making a disbursement in order to verify
completion of replacements and repairs. Beneficiary reserves the right to make
any disbursement from the Replacement Reserve Fund directly to the party
furnishing materials and/or services. The foregoing provisions of this
subparagraph (b) to the contrary notwithstanding, Beneficiary shall suspend the
requirement that Trustor fund and maintain a reserve fund for capital repairs
and replacements to the Folsom Trust Property as long as all as all of the
following conditions remain satisfied: (i) no Event of Default shall have
occurred and remain uncured, (ii) Original Trustor named in this Deed of Trust
is and remains at all times the owner of the Folsom Trust Property, (iii)
Original Trustor complies with all obligations in this Deed of Trust and the
other Loan Documents regarding maintaining the Folsom Trust Property, including
without limitation maintaining the Folsom Trust Property in good order and
repair and (iv) inspections of the Folsom Trust Property do not uncover the
necessity of reinstating such reserve, in Beneficiary's sole discretion.
(c) Tenant Improvement and Leasing Commission Reserve. Trustor
and Beneficiary have entered into that certain Tenant Improvement and Leasing
Commission Agreement which requires Trustor to pay to Beneficiary on the first
day of each calendar month deposits for tenant improvements and leasing
commissions in amounts set forth therein for payment of costs and expenses
incurred by Trustor in connection with the performance of work to refit and
release rentable space in the improvements constituting a part of any of the
Collateral Properties (hereinafter defined) that is currently vacant or
anticipated to be vacated during the term of the Crossed Loans (hereinafter
defined), and for payment of leasing commissions incurred by Trustor in
connection with the releasing of space in any such improvements that is
currently vacant or anticipated to be vacated during the term of the Crossed
Loans (the "Tenant Improvement and Leasing Commission Reserve Fund"), all
according to the Tenant Improvement and Leasing Commission Agreement.
(d) [Intentionally Deleted].
The amounts in (a), (b), (c) and (d) above shall hereinafter be
collectively called the "Reserve Fund". Trustor hereby pledges to Beneficiary
any and all monies now or hereafter deposited as the Reserve Fund as additional
security for the payment of the Indebtedness. Beneficiary may apply the Reserve
Fund to payments of Taxes, Other Charges, insurance premiums and, as applicable,
payments for replacements and capital repairs, tenant improvements and leasing
commissions and repairs and remediations required to be made by Trustor pursuant
to the terms hereof or pursuant to the terms of any other Loan Documents (even
though subsequent owners of the Folsom Trust Property may benefit thereby);
provided, however, if there is an Event of Default which is continuing, then
Beneficiary may credit such Reserve Fund against the Indebtedness in such
priority and proportions as Beneficiary in its discretion shall deem proper. If
the Reserve Fund is not sufficient to fully pay for the Taxes, Other Charges
and/or the insurance premiums or, as applicable, amounts for replacements and
capital repairs, tenant improvements and leasing commissions and repairs and
remediation when
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due, Trustor shall promptly pay to Beneficiary, upon demand, an amount which
Beneficiary shall estimate as sufficient to make up the deficiency. The Reserve
Fund shall not constitute a trust fund and may be commingled with other monies
held by Beneficiary. No earnings or interest on the Reserve Fund shall be
payable to Trustor unless otherwise agreed to by Beneficiary pursuant to the
terms and provisions of a specific reserve agreement and subject to the payment
by Trustor of any fees required to set up and/or maintain such interest-bearing
account.
6. CONDEMNATION. Trustor shall promptly give Beneficiary and Trustee
written notice of the actual or threatened commencement of any condemnation or
eminent domain proceeding and shall deliver to Beneficiary and Trustee copies of
any and all papers served in connection with such proceedings. Following the
occurrence of a condemnation, Trustor, regardless of whether an award is
available, shall promptly proceed to restore, repair, replace or rebuild the
Improvements to the extent practicable to be of at least equal value and of
substantially the same character as prior to such condemnation, all to be
effected in accordance with applicable law. Notwithstanding any taking by any
public or quasi-public authority through eminent domain or otherwise (including
but not limited to any transfer made in lieu of or in anticipation of the
exercise of such taking), Trustor shall continue to pay the Indebtedness at the
time and in the manner provided for its payment in the Note, in this Deed of
Trust and the other Loan Documents and the Indebtedness shall not be reduced
until any award or payment therefor shall have been actually received after
expenses of collection and applied by Beneficiary to the discharge of the
Indebtedness. Trustor shall cause the award or payment made in any condemnation
or eminent domain proceeding, which is payable to Trustor, to be paid directly
to Beneficiary. Beneficiary may, at Beneficiary's election, use the award in any
one or more of the following ways: (a) apply any such award or payment (for
purposes of this Paragraph 6, the award or payment that may be made in any
condemnation or eminent domain proceeding shall mean the entire award allocated
to Trustor in any capacity) to the discharge of the Indebtedness whether or not
then due and payable (such application to be without prepayment fee or premium,
except that if an Event of Default, or an event which with notice and/or the
passage of time, or both, would constitute an Event of Default, has occurred,
then such application shall be subject to the applicable premium computed in
accordance with the Note), (b) use the same or any part thereof to fulfill any
of the covenants contained herein as the Beneficiary may determine, (c) use the
same or any part thereof to replace or restore the Folsom Trust Property to a
condition satisfactory to the Beneficiary, or (d) release the same to the
Trustor. If the Folsom Trust Property is sold, through foreclosure or otherwise,
prior to the receipt by Beneficiary of such award or payment, Beneficiary shall
have the right, whether or not a deficiency judgment on the Note shall have been
sought, recovered or denied, to receive said award or payment or a portion
thereof sufficient to pay the Indebtedness.
7. LEASES AND RENTS.
(a) Trustor does hereby absolutely and unconditionally assign to
Beneficiary its right, title and interest in all current and future Leases and
Rents and all proceeds from the sale, cancellation, surrender or other
disposition of the Leases, it being intended by Trustor that this assignment
constitutes a present, absolute assignment and not an assignment for additional
security only. Such assignment to Beneficiary shall not be construed to bind
Beneficiary to the performance of any of the covenants, conditions or provisions
contained in
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any such Lease or otherwise to impose any obligation upon Beneficiary. Trustor
agrees to execute and deliver to Beneficiary such additional instruments in form
and substance satisfactory to Beneficiary, as may hereafter be requested by
Beneficiary to further evidence and confirm such assignment. Nevertheless,
subject to the terms of this Paragraph 7, Beneficiary grants to Trustor a
revocable license to operate and manage the Folsom Trust Property and to collect
the Rents. Trustor shall hold the Rents, or a portion thereof sufficient to
discharge all current sums due on the Indebtedness, in trust for the benefit of
Beneficiary for use in the payment of such sums. The grant of the foregoing
license is subject to the provisions of Paragraph 1 of the separate Assignment
of Leases and Rents of even date herewith granted by the Trustor as "Assignor"
to the Beneficiary as "Assignee" with respect to the Folsom Trust Property
("Assignment of Leases and Rents"). Upon the occurrence of an Event of Default,
the license granted to Trustor herein shall be automatically revoked and
Beneficiary shall immediately be entitled to possession of all Rents, whether or
not Beneficiary enters upon or takes control of the Folsom Trust Property.
Beneficiary is hereby granted and assigned by Trustor the right, at its option,
upon the revocation of the license granted herein to enter upon the Folsom Trust
Property in person, by agent or by court-appointed receiver to collect the
Rents. Any Rents collected after the revocation of the license herein granted
may be applied toward payment of the Indebtedness in such priority and
proportion as Beneficiary in its discretion shall deem proper. It is further the
intent of Trustor and Beneficiary that the Rents hereby absolutely assigned are
no longer, during the term of this Deed of Trust, property of Trustor or
property of any estate of Trustor as defined in Section 541 of the Bankruptcy
Code and shall not constitute collateral, cash or otherwise, of Trustor. The
term "Rents" as used herein shall mean the gross rents without deduction or
offsets of any kind.
(b) All Leases executed after the date of this Deed of Trust
shall provide that they are subordinate to this Deed of Trust and that the
lessee agrees to attorn to Beneficiary; provided, however, that nothing herein
shall affect Beneficiary's right to designate from time to time any one or more
Leases as being superior to this Deed of Trust and Trustor shall execute and
deliver to Beneficiary and shall cause to be executed and delivered to
Beneficiary from each tenant under such Lease any instrument or agreement as
Beneficiary may deem necessary to make such Lease superior to this Deed of
Trust. Upon request, Trustor shall promptly furnish Beneficiary with executed
copies of all Leases.
(c) Trustor shall not, without the prior consent of Beneficiary,
which consent shall not be unreasonably withheld (i) lease all or any part of
the Folsom Trust Property, (ii) alter or change the terms of any Lease or cancel
or terminate, abridge or otherwise modify the terms of any Lease, (iii) consent
to any assignment of or subletting under any Lease not in accordance with its
terms, (iv) cancel, terminate, abridge or otherwise modify any guaranty of any
Lease or the terms thereof, (v) collect or accept prepayments of installments of
Rents for a period of more than one (1) month in advance or (vi) further assign
the whole or any part of the Leases or the Rents (the actions described in the
foregoing clauses (i) through (vi) are hereinafter, collectively, referred to as
the "Leasing Actions" and individually as a "Leasing Action").
(d) With respect to each Lease, Trustor shall (i) observe and
perform each and every provision thereof on the lessor's part to be fulfilled or
performed under each
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Lease and not do or permit to be done anything to impair the value of the Leases
as security for the Crossed Loans, including surrender or voluntary termination
of any Lease, (ii) promptly send to Beneficiary copies of all notices of default
which Trustor shall send or receive thereunder, (iii) enforce all of the terms,
covenants and conditions contained in such Lease upon the lessee's part to be
performed, short of termination thereof, (iv) execute and deliver, at the
request of Beneficiary, all such further assurances, confirmations and
assignments in connection with the Folsom Trust Property as Beneficiary shall,
from time to time, require and (v) upon request, furnish Beneficiary with
executed copies of all Leases. Upon the occurrence of any Event of Default under
this Deed of Trust, Trustor shall pay monthly in advance to Beneficiary, or any
receiver appointed to collect the Rents, the fair and reasonable rental value
for the use and occupation of the Folsom Trust Property or part of the Folsom
Trust Property as may be occupied by Trustor or any one Trustor and upon default
in any such payment Trustor shall vacate and surrender possession of the Folsom
Trust Property to Beneficiary or to such receiver and, in default thereof,
Trustor may be evicted by summary proceedings or otherwise.
(e) If required by the terms of the applicable Leases, all
security deposits of tenants occupying the Folsom Trust Property or any of the
other Collateral Properties, whether held in cash or any other form, shall not
be commingled with any other funds of Trustor and, if cash, shall be deposited
by Trustor at such commercial or savings bank or banks as may be reasonably
satisfactory to Beneficiary. Following the occurrence and during the continuance
of any Event of Default, Trustor shall, upon Beneficiary's request, if permitted
by any applicable legal requirements, turn over to Beneficiary the security
deposits with respect to all or any portion of the Folsom Trust Property, to be
held by Beneficiary subject to the terms of the Leases.
8. MAINTENANCE AND USE OF FOLSOM TRUST PROPERTY. Trustor shall, at its
sole cost and expense, keep and maintain the Folsom Trust Property, including,
without limitation, parking lots and recreational and landscaped portions
thereof, if any, in good order and condition. The Improvements and the Equipment
shall not be diminished, removed, demolished or materially altered (except for
normal replacement of Equipment) and Trustor shall not erect any new buildings,
structures or building additions on the Folsom Trust Property without the prior
consent of Beneficiary. So long as no Event of Default shall have occurred and
be continuing, Trustor shall have the right at any time and from time to time
after providing Beneficiary with written notice to make or cause to be made
reasonable alterations of and additions to the Folsom Trust Property or any part
thereof, provided that any alteration or addition (i) shall not change the
general character of the Folsom Trust Property or reduce the fair market value
thereof below its value immediately before such alteration or addition, or
impair the usefulness of the Folsom Trust Property, (ii) is effected with due
diligence, in a good and workmanlike manner and in compliance with all
applicable laws and with all provisions of any insurance policy covering or
applicable to the Folsom Trust Property and all requirements of the issuers
thereof, (iii) is promptly and fully paid for, or caused to be paid for, by
Trustor, (iv) the estimated cost of such alteration or addition does not exceed
five percent (5%) of the original principal amount of the Folsom Note, (v) is
made under the supervision of a qualified architect or engineer, (vi) shall not
violate the terms of any Leases, and (vii) upon completion, Trustor shall
provide Beneficiary with (aa) a satisfactory final improvement survey if the
footprint of the building has been altered, (bb), any final occupancy permit
which may be required for the
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Improvements, (cc) all other governmental permits, certificates and approvals
and all other permits, certificates and approvals of fire underwriters which are
required with respect to the alterations and additions and the use and occupancy
thereof, and shall furnish true copies thereof to Beneficiary, and (dd) final
lien waivers from all contractors, subcontractors and materialmen. Trustor shall
promptly comply with all laws, orders and ordinances affecting the Folsom Trust
Property, or the use thereof, provided, however, that nothing in the foregoing
clause shall require Trustor to comply with any such law, order or ordinance so
long as Trustor shall in good faith, after notice to, but without cost or
expense to, Beneficiary, contest the validity of such law, order or ordinance by
appropriate legal proceedings and in accordance with all applicable law, which
proceedings must operate to prevent (i) the enforcement thereof, (ii) the
payment of any fine, charge or penalty, (iii) the sale or forfeiture of the
Folsom Trust Property or any part thereof, (iv) the lien of this Deed of Trust
and the priority thereof from being impaired, (v) the imposition of criminal
liability on Beneficiary and (vi) the imposition, unless stayed, of civil
liability on Beneficiary; provided that during such contest Trustor shall, at
the option of Beneficiary, provide cash, bonds or other security reasonably
satisfactory to Beneficiary, indemnifying and protecting Beneficiary against any
liability, loss or injury by reason of such non-compliance or contest, and
provided further, that such contest shall be promptly and diligently prosecuted
by and at the expense of Trustor. Trustor shall promptly, at its sole cost and
expense, repair, replace or rebuild any part of the Folsom Trust Property which
may be destroyed by any casualty, or become damaged, worn or dilapidated.
Trustor shall not commit any waste at the Folsom Trust Property. Trustor shall
not initiate, join in, acquiesce in or consent to any change in any private
restrictive covenant, zoning law or other public or private restriction,
limiting or defining the uses which may be made of the Folsom Trust Property or
any part thereof without the express prior written consent of Beneficiary which
consent may be withheld by Beneficiary in its sole and absolute discretion. If
under applicable zoning provisions the use of all or any portion of the Folsom
Trust Property is or shall become a nonconforming use, Trustor will not cause or
permit such nonconforming use to be discontinued or abandoned without the
express consent of Beneficiary. Trustor covenants and agrees that it shall
operate the Folsom Trust Property at all times as a first-class
office/industrial building.
9. TRANSFER OR ENCUMBRANCE OF THE FOLSOM TRUST PROPERTY OR INTERESTS IN
THE TRUSTOR; OTHER INDEBTEDNESS.
(a) Trustor acknowledges that Beneficiary has examined and
relied on the creditworthiness and experience of Trustor in owning and operating
properties such as the Folsom Trust Property in agreeing to make the Folsom Loan
and the other Crossed Loans, and that Beneficiary will continue to rely on
Trustor's ownership of the Folsom Trust Property as a means of maintaining the
value of the Folsom Trust Property as security for repayment of the
Indebtedness. Trustor acknowledges that Beneficiary has a valid interest in
maintaining the value of the Folsom Trust Property so as to ensure that, should
Trustor default in the repayment of the Indebtedness, Beneficiary can recover
the Indebtedness by a sale of the Folsom Trust Property. Trustor shall not,
without the prior written consent of Beneficiary, sell, convey, alienate,
mortgage, encumber, pledge or otherwise transfer in trust or otherwise the
Folsom Trust Property or any part thereof or interest therein, or permit the
Folsom Trust Property or any part thereof to be sold, conveyed, alienated,
deeded, encumbered, pledged or otherwise transferred.
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(b) Except as expressly permitted below in this Paragraph 9(b),
a sale, conveyance, alienation, deed, encumbrance, pledge or transfer within the
meaning of this Paragraph 9 shall be deemed to include (i) an installment sales
agreement wherein Trustor agrees to sell the Folsom Trust Property or any part
thereof for a price to be paid in installments, (ii) an agreement by Trustor
leasing all or a substantial part of the Folsom Trust Property for other than
actual occupancy by a space tenant thereunder or a sale, assignment or other
transfer of, or the grant of a security interest in, Trustor's right, title and
interest in and to any Leases or any Rents, (iii) if Trustor, any guarantor of
Non-Recourse Carveout Obligations (as hereinafter defined), any other guarantor,
any indemnitor of environmental liabilities or any general partner or managing
member of Trustor or of any such guarantor or indemnitor is a corporation, the
voluntary or involuntary sale, assignment, conveyance or transfer of such
corporation's stock (or the stock of any corporation directly or indirectly
controlling such corporation by operation of law or otherwise) or the creation
or issuance of new stock in one or a series of transactions by which an
aggregate of more than ten percent (10%) of such corporation's stock shall be
vested in a party or parties who are not now stockholders or any change in the
control of such corporation, (iv) if Trustor, any guarantor of Non-Recourse
Carveout Obligations, any other guarantor, any indemnitor of environmental
liabilities or any general partner or managing member of Trustor or any such
guarantor or indemnitor is a limited or general partnership, joint venture or
limited liability company, the change, removal, resignation or addition of a
general partner, managing partner, limited partner, joint venturer or member or
the transfer of the partnership interest of any general partner, managing
partner or limited partner or the transfer of the interest of any joint venturer
or member, and (v) if Trustor, any guarantor of Non-Recourse Carveout
Obligations or any other guarantor or any indemnitor of environmental
liabilities, is an entity, whether one of the above-mentioned entities or not,
any change in the ownership or control of such entity, any merger, consolidation
or dissolution or syndication affecting such entity, or the transfer, sale,
assignment or pledge of any interest in such entity or in any person, directly
or indirectly, controlling such entity or in any general partner or managing
member thereof, whether at one time or in a series of related transactions.
PERMITTED TRANSFERS
Notwithstanding the foregoing provisions of Paragraph 9(b)
above, provided that all applicable West Coast Transfer Conditions (hereinafter
defined) are satisfied, the following transfers (each a "West Coast Transfer,"
collectively, the "West Coast Transfers") shall be permitted without the consent
of Beneficiary and shall not constitute a sale, conveyance, alienation, deed,
encumbrance, pledge or transfer in violation of the provisions of Paragraph 9(b)
above: (a) any Non-Merger Public Trade (hereinafter defined), (b) any Small
Private Transfer (hereinafter defined), (c) any Large Private Transfer
(hereinafter defined) and (d) any Merger (hereinafter defined).
As used herein, the term West Coast Transfer Conditions shall
mean the following conditions to the extent made applicable to a West
Coast Transfer by the terms set forth in each condition:
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(i) with respect to all West Coast Transfers, the Original
Trustor is and remains the owner of the Folsom Trust Property and the
other Collateral Properties then-subject to the CC/CD Provisions
(hereinafter defined);
(ii) with respect to Large Private Transfers and Mergers, there
shall be no default under the Loan Documents;
(iii) with respect to a Large Private Transfer or a Merger that
either (1) generates proceeds of One Million Dollars ($1,000,000.00) or
more or (2) involves the transfer of shares greater than 5% of the
then-outstanding shares of West Coast (hereinafter defined), Beneficiary
shall be provided with prior written notice of such transfer, together
with a diagram showing the structure of the Original Trustor and all
constituent entities after the contemplated transfer and a list of the
names, types of interests and percentages of ownership of all owners
owning more than 5% of the shares of West Coast after the contemplated
transfer, and an administrative fee of $1,000.00, which shall be deemed
fully earned upon receipt;
(iv) with respect to a Merger, (1) the surviving entity is and
remains a real estate investment trust organized and domiciled in the
United States of America or is a real estate operating company (whose
primary purpose is owning, developing, leasing and managing commercial
real estate in the United States of America) which is organized and
domiciled in the United States of America, (2) Xxxxx X. Xxxxxxxx is and
remains the CEO of the surviving entity, and (3) the net worth of said
surviving entity is equal to or greater than that of West Coast
immediately prior to the Merger; and
(v) with respect to a Small Private Transfer, a Large Private
Transfer and a Merger, all fees (in addition to the $1,000.00
administrative fee payable under West Coast Transfer Condition (iii), if
applicable) and costs incurred by Beneficiary in connection with the
transaction, including without limitation, Beneficiary's reasonable
attorneys' fees, shall be paid by the Original Trustor.
As long as the Original Trustor is and remains the owner of the
Folsom Trust Property and the other Collateral Properties then subject
to the CC/CD Provisions, and West Coast or any entity into which West
Coast merges or is consolidated in compliance with, and after
satisfying, the conditions set forth in West Coast Transfer Condition
(iv), the other provisions of this Paragraph 9 shall not apply to
transfers of interests in entities that own the stock of West Coast or
such successor by merger or consolidation as aforesaid.
As used in this Deed of Trust, the following terms shall have
the meanings set forth below:
Non-Merger Public Trade shall mean a publicly-traded transfer of
shares of West Coast that does not constitute a Merger.
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Small Private Transfer shall mean a private transfer of shares
of West Coast to persons who, after such transfer occurs, shall own less than
10% of the outstanding shares of West Coast.
Large Private Transfer shall mean a private transfer of shares
of West Coast, including the sale by West Coast of its securities, but excluding
a Small Private Transfer and a Merger.
Merger shall mean a publicly-traded transfer of shares of West
Coast, a private transfer of shares of West Coast or the sale by West Coast of
its securities that results in the merger or consolidation of West Coast with or
into another entity or the tender offer for all or substantially all of the
outstanding shares of West Coast.
West Coast shall mean West Coast Realty Investors, Inc., a
Delaware corporation.
(c) Beneficiary shall not be required to demonstrate any actual
impairment of its security or any increased risk of default hereunder in order
to declare the Indebtedness immediately due and payable upon Trustor's sale,
conveyance, alienation, deed, encumbrance, pledge or transfer of the Folsom
Trust Property without Beneficiary's consent. This provision shall apply to
every sale, conveyance, alienation, deed, encumbrance, pledge or transfer in
trust or otherwise of the Folsom Trust Property regardless of whether voluntary
or not, or whether or not Beneficiary has consented to any previous sale,
conveyance, alienation, deed, encumbrance, pledge or transfer of the Folsom
Trust Property.
(d) Beneficiary's consent to a sale, conveyance, alienation,
deed, encumbrance, pledge or transfer in trust or otherwise of the Folsom Trust
Property shall not be deemed to be a waiver of Beneficiary's right to require
such consent to any future occurrence of same. Any sale, conveyance, alienation,
deed, encumbrance, pledge or transfer in trust or otherwise of the Folsom Trust
Property made in contravention of this Paragraph 9 shall be null and void and of
no force and effect.
(e) Trustor agrees to bear and shall pay or reimburse
Beneficiary on demand for all reasonable expenses (including, without
limitation, reasonable attorneys' fees and disbursements, title search costs and
title insurance endorsement premiums) incurred by Beneficiary in connection with
the review, approval and documentation of any such sale, conveyance, alienation,
deed, encumbrance, pledge or transfer in trust or otherwise.
(f) Notwithstanding the foregoing, Beneficiary shall permit a
one-time sale or transfer of the Folsom Trust Property, provided that:
(i) no Event of Default or event which with the giving of notice
or passage of time would constitute an Event of Default shall have
occurred and remain uncured;
(ii) the proposed transferee ("Transferee"), the guarantors of
Non-Recourse Carveout Obligations, any other guarantors, and the
indemnitors of
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environmental liabilities shall be reputable entities or persons of good
character, creditworthy, with sufficient financial worth considering the
obligations assumed and undertaken, as evidenced by financial statements
and other information reasonably requested by Beneficiary;
(iii) the Transferee and its property manager shall have
sufficient experience in the ownership and management of properties
similar to the Folsom Trust Property, and Beneficiary shall be provided
with reasonable evidence thereof (and Beneficiary reserves the right to
approve the Transferee without approving the substitution of the
property manager);
(iv) Beneficiary has received a written request for approval
from the Trustor at least forty-five (45) days prior to the proposed
transfer (including a description of the proposed terms of the
transfer), together with a diagram showing the legal structure of the
Transferee, the proposed guarantors of Non-Recourse Carveout
Obligations, any other proposed guarantors, and the proposed indemnitors
of environmental liabilities and all of the constituent entities of
each, after the contemplated transfer, and a list of the names, types of
interests and ownership percentages of all persons to have ownership
interests in any of the foregoing or any constituent entity thereof,
financial statements for all such entities and an administrative fee of
$5,000, which shall be deemed fully earned on the date of receipt and
shall be retained by Beneficiary regardless of whether or not the
transfer occurs and whether or not approval is given;
(v) Beneficiary and its counsel have received (aa) certification
from Trustor and the Transferee that the proposed terms of the transfer
described in subparagraph 9(f)(iv) are the actual terms of the transfer,
(bb) evidence of casualty insurance and other applicable insurance, (cc)
all corporate, partnership or other entity documents and (dd) all other
certificates, legal opinions, title materials and other documents which
Beneficiary may require, all in form and substance satisfactory to
Beneficiary, at least thirty (30) days prior to the proposed transfer;
(vi) Beneficiary shall be provided with satisfactory evidence
concerning the effect of any change in the real estate taxes to result
from the sale and the effect of such change on the ability of the Folsom
Trust Property to generate a cash flow sufficient to pay the debt
service on the Folsom Loan and to maintain a debt service coverage ratio
satisfactory to Beneficiary;
(vii) to the extent applicable, Beneficiary shall have received
in writing evidence from the Rating Agencies to the effect that such
transfer will not result in a re-qualification, reduction or withdrawal
of any rating initially assigned or to be assigned in a Secondary Market
Transaction together with such legal opinions as may be requested by the
Rating Agencies. The term "Rating Agencies" as used herein shall mean
each of Standard & Poor's Ratings Group, Xxxxx'x Investors Service,
Inc., Duff & Xxxxxx Credit Rating Co., Fitch Investors Service, Inc. or
any other nationally-recognized statistical rating agency who shall then
be rating the certificates or securities issued in connection with the
Secondary Market Transaction;
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(viii) except as otherwise provided in Part III of this Deed of
Trust, concurrently with transfer of the Folsom Trust Property to the
Transferee, the other Collateral Properties must be conveyed to the
Transferee pursuant to and in accordance with the provisions of
Paragraph 9(f) of the respective deed of trust encumbering each of the
Collateral Properties;
(ix) the Transferee shall have executed and delivered to
Beneficiary an assumption agreement in form and substance acceptable to
Beneficiary, evidencing such Transferee's agreement to abide and be
bound by the terms of the Note, this Deed of Trust and the other Loan
Documents, together with an executed guaranty of Non-Recourse Carveout
Obligations and any other guaranty from an approved guarantor and an
executed separate environmental indemnity agreement from an approved
indemnitor, both in form and substance acceptable to Beneficiary, other
documentation as Beneficiary may reasonably require, and such legal
opinions and title insurance endorsements as may be reasonably requested
by Beneficiary; and
(x) Beneficiary shall have received an assumption fee equal to
one percent (1%) of the then unpaid principal balance of the Folsom Note
(against which the administrative fee shall be credited) in addition to
the payment of all costs and expenses incurred by Beneficiary in
connection with such assumption (including reasonable attorney's fees
and costs).
In the event all of the foregoing conditions are satisfied and
Beneficiary consents to the sale or transfer, Beneficiary agrees to release (aa)
the transferor Trustor and the prior guarantors of Non-Recourse Carveout
Obligations with respect to matters first arising solely after the transfer, and
(bb) the prior indemnitors of environmental liabilities with respect to a
presence and/or release which first occurs solely after the transfer; provided,
however, the transferor Trustor, the prior guarantors and the prior indemnitors,
respectively, shall have the burden of proving that all the conditions in this
Paragraph 9 (including, without limitation, the time as to which matters
described herein arose) were satisfied by clear and convincing evidence and
shall continue to defend with counsel satisfactory to Beneficiary and shall
indemnify and hold Beneficiary harmless for all matters set forth in Paragraph
39 and in the Non-Recourse Carveout Obligations unless and until Beneficiary
acknowledges in writing that Trustor has met such burden or a court of competent
jurisdiction finds that such transferor Trustor, prior guarantors or prior
indemnitors, respectively, met such burden.
(g) Trustor has not incurred and will not incur any
indebtedness, secured or unsecured, other than the Crossed Loans and (i) debt
incurred in the ordinary course of business to vendors and suppliers of services
to the Collateral Properties, (ii) debt not secured by any of the Collateral
Properties, or any portion thereof, and (iii) debt not accompanied by any rights
to control or to obtain control of the Trustor. No indebtedness other than the
Crossed Loans may be secured (subordinate or pari passu) by any of the
Collateral Properties, or any portion thereof.
10. ESTOPPEL CERTIFICATES.
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(a) Trustor, within ten (10) business days after request by
Beneficiary, shall furnish Beneficiary from time to time with a statement, duly
acknowledged and certified, setting forth (i) the amount of the original
principal amount of the Folsom Note, (ii) the unpaid principal amount of the
Folsom Note, (iii) the rate of interest in the Folsom Note, (iv) the date
through which all installments of interest, commitment fees and/or principal
have been paid, (v) any offsets or defenses to the payment of the Indebtedness,
if any, (vi) that the Folsom Note and this Deed of Trust have not been modified
or if modified, giving particulars of such modification and (vii) such other
information as shall be reasonably requested by Beneficiary.
(b) Trustor, after request by Beneficiary, will use commercially
reasonable efforts to obtain and furnish (within the time periods, if any,
provided in the applicable Leases or if no time period is so specified, within
ten (10) business days after request) Beneficiary from time to time with
estoppel certificates from any tenants under then existing Leases, which
certificates shall be in form and substance as required by such Leases, or if
not required, then in form and substance reasonably satisfactory to Beneficiary.
11. NO COOPERATIVE OR CONDOMINIUM. Trustor represents and warrants that
the Folsom Trust Property has not been subjected to a cooperative or condominium
form of ownership. Trustor hereby covenants and agrees that it will not file a
declaration of condominium, map or any other document having the effect of
subjecting the Folsom Trust Property to a condominium or cooperative form of
ownership.
12. CHANGES IN THE LAWS REGARDING TAXATION. If any law is enacted or
adopted or amended after the date of this Deed of Trust which deducts the
Indebtedness or any portion thereof from the value of the Folsom Trust Property
for the purpose of taxation or which imposes a tax, either directly or
indirectly, on the principal amount of the Note or Beneficiary's interest in the
Folsom Trust Property, Trustor will pay such tax, with interest and penalties
thereon, if any. In the event Beneficiary is advised by counsel chosen by it
that the payment of such tax or interest and penalties by Trustor would be
unlawful or taxable to Beneficiary or unenforceable or provide the basis for a
defense of usury, then in any such event, Beneficiary shall have the option, by
notice of not less than ninety (90) days, to declare the Indebtedness
immediately due and payable without prepayment fee or premium, except that if an
Event of Default, or an event which with notice and/or the passage of time, or
both, would constitute an Event of Default, has occurred, the applicable premium
computed in accordance with the Note shall apply.
13. NO CREDITS ON ACCOUNT OF THE INDEBTEDNESS. Trustor will not claim or
demand or be entitled to any credit or credits on account of the Indebtedness
for any part of the Taxes assessed against the Folsom Trust Property or any part
thereof and no deduction shall otherwise be made or claimed from the taxable
value of the Folsom Trust Property, or any part thereof, by reason of this Deed
of Trust or the Indebtedness. In the event such claim, credit or deduction shall
be required by law, Beneficiary shall have the option, by notice of not less
than ninety (90) days, to declare the Indebtedness immediately due and payable
without prepayment fee or premium, except that if an Event of Default, or an
event which with notice and/or the passage of time, or both, would constitute an
Event of Default, has occurred, the applicable premium computed in accordance
with the Note shall apply.
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14. DOCUMENTARY STAMPS. If at any time the United States of America, any
State thereof or any subdivision of any such State shall require revenue or
other stamps to be affixed to the Note or this Deed of Trust, or impose any
other tax or charge on the same, Trustor will pay for the same, with interest
and penalties thereon, if any.
15. RIGHT OF ENTRY. Beneficiary and its agents shall have the right,
subject to the rights of tenants under Leases, to enter and inspect the Folsom
Trust Property at any time during reasonable business hours upon at least
forty-eight (48) hour notice to Trustor, except in the case of an emergency, in
which event Beneficiary and its agents may enter and inspect the Folsom Trust
Property at any time.
16. BOOKS AND RECORDS.
(a) Trustor will maintain full, accurate and complete books of
accounts and other records reflecting the results of the operations of the
Folsom Trust Property as well as its other operations and will furnish, or cause
to be furnished, to Beneficiary the following:
(i) within ninety (90) days after the end of each fiscal year,
the Trustor will furnish to Beneficiary, a statement of Trustor's
financial condition, including a balance sheet and profit and loss
statement, and a statement of annual income and expenses satisfactory in
form and substance to Beneficiary in connection with the operation of
the Folsom Trust Property, in detail satisfactory to Beneficiary,
prepared by, audited and certified by a certified public accountant who
is a member of the American Institute of Certified Public Accountants
and, in addition, within forty-five (45) days after the end of each
fiscal quarter of Trustor, Trustor shall provide the above information
except that in each case it may be prepared and certified by the
financial officer of Trustor who is responsible for the preparation of
such annual financial statements.
(ii) accompanying the submission of the certified statements of
annual and quarterly income and expenses, shall be a certified current
rent roll for the Folsom Trust Property (broken out from the other
Collateral Properties), which shall include among other things tenant
names, lease commencement and expiration dates, square footage, annual
rent, annual operating expense and real estate tax contributions, a
statement as to whether or not there are any purchase options and/or
co-tenancy requirements, and any and all other fees paid by tenants and
security deposits currently held.
(iii) accompanying the submission of the certified statements of
annual and quarterly income and expenses shall be such additional
financial information as Beneficiary shall reasonably require.
The foregoing provisions of this subparagraph (a) to the
contrary notwithstanding, Beneficiary shall accept financial statements of
Trustor, including annual income and expenses, certified by the Trustor, the
Trustor's accountant or a financial officer of the Trustor, provided that the
such statements certified by a certified public accountant are not available and
there are no defaults under the Loan Documents.
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(b) Beneficiary shall have the right, upon five (5) days' prior
notice to Trustor, to inspect and make copies of Trustor's books and records and
income tax returns and notices.
(c) In the event of a Secondary Market Transaction, Trustor
shall furnish from time to time such information relating to Trustor and the
Folsom Trust Property as shall be requested by the Rating Agencies.
17. PERFORMANCE OF OTHER AGREEMENTS. Trustor shall observe and perform
each and every term to be observed or performed by such Trustor pursuant to the
terms of any agreement or recorded instrument affecting or pertaining to the
Folsom Trust Property.
18. REPRESENTATIONS AND COVENANTS CONCERNING LOAN. Trustor represents,
warrants and covenants as follows:
(a) The Note, this Deed of Trust and the other Loan Documents
are not subject to any right of rescission, set-off, counterclaim or defense,
including the defense of usury, nor would the operation of any of the terms of
the Note, this Deed of Trust and the other Loan Documents, or the exercise of
any right thereunder in compliance with and subject to the effect of applicable
law, render this Deed of Trust unenforceable, in whole or in part, or subject to
any right of rescission, set-off, counterclaim or defense, including the defense
of usury.
(b) All certifications, permits, licenses and approvals,
including, without limitation, certificates of completion and occupancy permits
required for the legal use, occupancy of the Folsom Trust Property, have been
obtained and are in full force and effect. The Folsom Trust Property is free of
material damage and is in good repair, and there is no proceeding pending of
which the Trustor has received notice or is otherwise aware for the total or
partial condemnation of, or affecting, the Folsom Trust Property.
(c) All of the Improvements which were included in determining
the appraised value of the Folsom Trust Property lie wholly within the
boundaries and building restriction lines of the Folsom Trust Property, and no
improvements on adjoining properties encroach upon the Folsom Trust Property,
and no easements or other encumbrances upon the Land encroach upon any of the
Improvements, so as to affect the value or marketability of the Folsom Trust
Property except those which are insured against by title insurance. All of the
Improvements comply with all requirements of applicable zoning and subdivision
laws and ordinances in all material respects.
(d) The Folsom Trust Property is not subject to any Leases other
than the Leases described in the rent roll delivered to Beneficiary in
connection with this Deed of Trust. No person has any possessory interest in the
Folsom Trust Property or right to occupy the same except under and pursuant to
the provisions of the Leases. Except as otherwise disclosed in writing to
Beneficiary, the current Leases are in full force and effect and there are no
defaults thereunder by either party and there are no conditions that, with the
passage of time or the giving of notice, or both, would constitute defaults
thereunder. Except as otherwise disclosed in writing to Beneficiary, all
presently existing Leases are subordinate to this Deed of Trust.
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(e) The Folsom Trust Property and the Leases are in compliance
in all material respects with all statutes, ordinances, regulations and other
governmental or quasi-governmental requirements and private covenants now or
hereafter relating to the ownership, construction, use or operation of the
Folsom Trust Property.
(f) There has not been committed by Trustor, or to Trustor's
knowledge, any other person in occupancy of or involved with the operation or
use of the Folsom Trust Property any act or omission affording the federal
government or any state or local government the right of forfeiture as against
the Folsom Trust Property or any part thereof or any monies paid in performance
of Trustor's obligations under any of the Loan Documents. Trustor hereby
covenants and agrees not to commit, permit or suffer to exist any act or
omission affording such right of forfeiture.
(g) Trustor operates the Folsom Trust Property and has not
entered into any agreement (oral, written or otherwise) with any third party
relating to the operation and management of the Folsom Trust Property, and no
third party is entitled to any management fee or has any interest in or right to
receive any portion of the income derived from owning, operating or managing the
Folsom Trust Property. In the event Trustor desires to have a third party
operate the Folsom Trust Property, it shall enter into a management agreement
(the "Management Agreement") with such party, provided that Beneficiary approves
such party (the "Manager"), and Manager and Trustor shall execute an assignment
and subordination of such Management Agreement in form satisfactory to
Beneficiary, in its sole discretion, assigning and subordinating the Manager's
interest in the Folsom Trust Property and all fees and other right of the
manager pursuant to such Management Agreement to the rights of the Beneficiary.
Such Management Agreement, if any, shall remain in full force and effect and
there shall be no default, breach or violation existing thereunder by any party
thereto and no event shall occur (other than payments due but not yet
delinquent) that, with the passage of time or the giving of notice, or both,
would constitute a default, breach or violation by any party thereunder. Trustor
shall not terminate, cancel, modify, renew or extend the Management Agreement,
or enter into any agreement relating to the management or operation of the
Folsom Trust Property with Manager or any other party without the express
written consent of Beneficiary, which consent shall not be unreasonably
withheld. If at any time Beneficiary consents to the appointment of a new
manager, such new manager and Trustor shall, as a condition of Beneficiary's
consent, execute a Manager's Consent and Subordination of Management Agreement
in the form then used by Beneficiary.
19. SINGLE PURPOSE ENTITY. Trustor represents, warrants and covenants
that the purpose for which the Trustor is organized shall be limited solely to
(A) owning, holding, selling, leasing, transferring, exchanging, operating and
managing one or more of the Collateral Properties, (B) entering into the Crossed
Loans with the Beneficiary, (C) refinancing the Collateral Properties in
connection with a permitted repayment of one or all of the Crossed Loans in
accordance with and subject to the terms and provisions thereof, and (D)
transacting any and all lawful business for which a Trustor may be organized
under applicable law that is incident, necessary or appropriate to accomplish
the foregoing.
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20. EVENTS OF DEFAULT; REMEDIES. Each of the following events shall
constitute an "Event of Default" hereunder:
(a) if (i) any installment of interest or principal is not paid
within five (5) days after the same is due, (ii) the entire Indebtedness is not
paid on or before the Maturity Date (or if the Maturity Date has been
accelerated, upon such acceleration), or (iii) any other payment or charge due
under the Note, this Deed of Trust or any other Loan Documents is not paid
within five (5) days after the same is due;
(b) if any Taxes payable directly to the billing authority by
Trustor are not paid before interest becomes payable on the amount due or a
penalty is assessed (provided that the foregoing provisions of this clause (b)
shall be subject to the right to contest Taxes granted to Trustor in Paragraph
4(b) of this Deed of Trust, but only for so long as the conditions in Paragraph
4(b) of this Deed of Trust remain satisfied);
(c) if the Policies are not kept in full force and effect and
are not delivered to Beneficiary when required hereunder, or if the Policies are
not delivered to Beneficiary within ten (10) days after request by Beneficiary;
(d) if any of the provisions of Paragraphs 7, 9, 19 or 39 herein
are violated or not complied with;
(e) if any of the events described in Paragraph 41 shall occur;
(f) if at any time any representation or warranty of Trustor or
any Guarantor made herein or in any guaranty, agreement, certificate, report,
affidavit, owner's affidavit, financial statement or other instrument furnished
to Beneficiary shall be false or misleading in any material respect;
(g) if any beneficiary under a deed of trust on the Folsom Trust
Property, whether superior or subordinate to this Deed of Trust (i) demands
payment in full or otherwise accelerates any indebtedness of Trustor or (ii)
otherwise commences the exercise of any remedy available to such party under
such deed of trust or any other loan document related to such deed of trust;
(h) if Trustor fails to cure promptly any violation of any law
or ordinance affecting the Folsom Trust Property (provided that the foregoing
provisions of this clause (h) shall be subject to any right to contest such
violation specifically granted to Trustor in Paragraph 8 of this Deed of Trust);
(i) if any Guaranty (as hereinafter defined) is terminated or
any event or condition occurs which, in the sole judgment of Beneficiary, may
impair the ability of any Guarantor to perform its obligations under any
Guaranty or any Guarantor attempts to withdraw, cancel or disclaim any Guaranty;
(j) if a default by Trustor under any of the other terms,
covenants or conditions of the Note, this Deed of Trust or any other Loan
Document shall occur and such
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default shall not have been cured within thirty (30) days after notice from
Beneficiary, provided that if such default is not susceptible of being cured
within such thirty (30) day period and Trustor shall have commenced the cure of
such default within such thirty (30) day period and thereafter diligently
pursues such cure to completion, then such thirty (30) day period shall be
extended for a period of ninety (90) days from the occurrence of the default,
provided, further, that the notice and grace period set forth in this
subparagraph (j) shall not apply to any other Event of Default expressly set
forth in this Paragraph 20 or to any other Event of Default defined as such in
any other Loan Document or to any other covenant or condition with respect to
which a grace period is expressly provided elsewhere; or
(k) if any of the provisions of Paragraphs 42(d) and/or
Paragraph 42(f) are violated or not complied with, and/or if any representation
or warranty in Paragraph 42(b) and/or 42(c) shall prove false or misleading in
any respect and/or if any of the events described in Paragraph 42(e) shall
occur.
Upon the occurrence of any Event of Default, the Indebtedness shall
immediately become due at the option of Beneficiary.
Upon the occurrence of any Event of Default, Trustor shall be obligated
to pay interest on the entire unpaid principal balance of the Note in accordance
with the terms and provisions of the Note.
Upon the occurrence of any Event of Default, Beneficiary may, to the
extent permitted under applicable law, elect to treat the fixtures included in
the Folsom Trust Property either as real property or as personal property, or
both, and proceed to exercise such rights as apply thereto. With respect to any
sale of real property included in the Folsom Trust Property made under the
powers of sale herein granted and conferred, Beneficiary may, to the extent
permitted by applicable law, include in such sale any fixtures included in the
Folsom Trust Property and relating to such real property.
21. ADDITIONAL REMEDIES.
(a) Upon the occurrence of any Event of Default, Beneficiary may
take such action, without notice or demand, as it shall deem advisable to
protect and enforce its rights against Trustor and in and to the Folsom Trust
Property or any part thereof or interest therein, including, but not limited to,
the following actions, each of which may be pursued concurrently or otherwise,
at such time and in such order as Beneficiary may determine, in its sole
discretion, without impairing or otherwise affecting the other rights and
remedies of Beneficiary (i) enter into or upon the Real Property, either
personally or by its agents, nominees or attorneys and dispossess Trustor and
its agents and servants therefrom, and thereupon Beneficiary may (A) use,
operate, manage, control, insure, maintain, repair, restore and otherwise deal
with all and every part of the Folsom Trust Property and conduct the business
thereat, (B) complete any construction on the Folsom Trust Property in such
manner and form as Beneficiary deems advisable, (C) make alterations, additions,
renewals, replacements and improvements to or on the Folsom Trust Property, (D)
exercise all rights and powers of Trustor with respect to the Folsom Trust
Property, whether in the name of Trustor or otherwise,
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including, without limitation, the right to make, cancel, enforce or modify
leases, obtain and evict tenants and demand, sue for, collect and receive all
earnings, revenues, rents, issues, profits and other income of the Folsom Trust
Property and every part thereof and (E) apply the receipts from the Folsom Trust
Property to the payment of the Indebtedness, after deducting therefrom all
expenses (including reasonable attorneys' fees and expenses) incurred in
connection with the aforesaid operations and all amounts necessary to pay the
taxes, assessments, insurance and other charges in connection with the Folsom
Trust Property, as well as just and reasonable compensation for the services of
Beneficiary and its counsel, agents and employees, or (ii) institute proceedings
for the complete foreclosure of this Deed of Trust in which case the Folsom
Trust Property may be sold for cash or upon credit in one or more parcels, or
(iii) with or without entry, to the extent permitted and pursuant to the
procedures provided by applicable law, institute proceedings for the partial
foreclosure of this Deed of Trust for the portion of the Indebtedness then due
and payable, subject to the continuing lien of this Deed of Trust for the
balance of the Indebtedness not then due, or (iv) sell or cause Trustee to sell
for cash or upon credit the Folsom Trust Property or any part thereof and all or
any part of any estate, claim, demand, right, title and interest of Trustor
therein and rights of redemption thereof, pursuant to power of sale or
otherwise, at one or more sales, as an entirety or in parcels, at such time and
place, upon such terms and after such notice thereof as may be required or
permitted by law, and in the event of a sale, by foreclosure or otherwise, of
less than all of the Folsom Trust Property, this Deed of Trust shall continue as
a lien on the remaining portion of or estate in the Folsom Trust Property, or
(v) institute an action, suit or proceeding in equity for the specific
performance of any covenant, condition or agreement contained herein or in the
Note or any other Loan Document, or (vi) recover judgment on the Note or any
Guaranty either before, during or after any proceedings for the enforcement of
this Deed of Trust or (vii) pursue such other remedies as Beneficiary may have
under applicable law.
(b) The purchase money proceeds or avails of any sale made under
or by virtue of this Paragraph 21, together with any other sums which then may
be held by Beneficiary under this Deed of Trust, whether under the provisions of
this Paragraph 21 or otherwise, shall be applied as follows:
First: To the payment of the costs and expenses of any such sale,
including reasonable compensation to Beneficiary and Trustee, their agents and
counsel, and of any judicial proceedings wherein the same may be made, and of
all expenses, liabilities and advances made or incurred by Beneficiary or
Trustee under this Deed of Trust, together with interest as provided herein on
all advances made by Beneficiary or Trustee and all taxes or assessments, except
any taxes, assessments or other charges subject to which the Folsom Trust
Property shall have been sold.
Second: To the payment of the whole amount then due, owing or unpaid
upon the Note for principal, together with any and all applicable interest, fees
and late charges.
Third: To the payment of any other sums required to be paid by Trustor
pursuant to any provision of this Deed of Trust or of the Note or of the
Guaranty.
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Fourth: To the payment of the surplus, if any, to whomsoever may be
lawfully entitled to receive the same.
Beneficiary and any receiver of the Folsom Trust Property, or any part
thereof, shall be liable to account for only those rents, issues and profits
actually received by it.
(c) Beneficiary may adjourn from time to time any sale by
Trustee to be made under or by virtue of this Deed of Trust by announcement at
the time and place appointed for such sale or for such adjourned sale or sales;
and, except as otherwise provided by any applicable provision of law,
Beneficiary, without further notice or publication, may make such sale at the
time and place to which the same shall be so adjourned.
(d) Upon the completion of any sale or sales made by Beneficiary
or Trustee under or by virtue of this Paragraph 21, Beneficiary, Trustee, or an
officer of any court empowered to do so, as the case may be, shall execute and
deliver to the accepted purchaser or purchasers a good and sufficient
instrument, or good and sufficient instruments, conveying, assigning and
transferring all estate, right, title and interest in and to the property and
rights sold. Beneficiary or Trustee, as the case may be, is hereby irrevocably
appointed the true and lawful attorney of Trustor, in its name and stead, to
make all necessary conveyances, assignments, transfers and deliveries of the
Folsom Trust Property and rights so sold and for that purpose Beneficiary or
Trustee, as the case may be, may execute all necessary instruments of
conveyance, assignment and transfer, and may substitute one or more persons with
like power, Trustor hereby ratifying and confirming all that its said attorney
or such substitute or substitutes shall lawfully do by virtue hereof. Any such
sale or sales made under or by virtue of this Paragraph 21, whether made under
the power of sale herein granted or under or by virtue of judicial proceedings
or of a judgment or decree of foreclosure and sale, shall operate to divest all
the estate, right, title, interest, claim and demand whatsoever, whether at law
or in equity, of Trustor in and to the properties and rights so sold, and shall
be a perpetual bar both at law and in equity against Trustor and against any and
all persons claiming or who may claim the same, or any part thereof from,
through or under Trustor.
(e) In the event of any sale made under or by virtue of this
Paragraph 21 (whether made under the power of sale herein granted or under or by
virtue of judicial proceedings or of a judgment or decree of foreclosure and
sale) the entire Indebtedness, if not previously due and payable, immediately
thereupon shall, anything in the Note, this Deed of Trust, any Guaranty or any
other Loan Document to the contrary notwithstanding, become due and payable.
(f) Upon any sale made under or by virtue of this Paragraph 21
(whether made under the power of sale herein granted or under or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale),
Beneficiary may bid for and acquire the Folsom Trust Property or any part
thereof and in lieu of paying cash therefor may make settlement for the purchase
price by crediting upon the Indebtedness (including any prepayment premium due
thereon) the net sales price after deducting therefrom the expenses of the sale
and the costs of the action and any other sums which Beneficiary is authorized
to deduct or receive under this Deed of Trust.
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(g) No recovery of any judgment by Beneficiary and no levy of an
execution under any judgment upon the Folsom Trust Property or upon any other
property of Trustor shall affect in any manner or to any extent, the lien of
this Deed of Trust upon the Folsom Trust Property or any part thereof, or any
liens, rights, powers or remedies of Beneficiary hereunder, but such liens,
rights, powers and remedies of Beneficiary shall continue unimpaired as before.
22. RIGHT TO CURE DEFAULTS. Upon the occurrence of any Event of Default
or if Trustor fails to make any payment or to do any act as herein provided,
Beneficiary may, but without any obligation to do so and without notice to or
demand on Trustor and without releasing Trustor from any obligation hereunder,
make or do the same in such manner and to such extent as Beneficiary may deem
necessary to protect the security hereof. Without limiting the foregoing,
Beneficiary may enter upon the Folsom Trust Property for such purposes or appear
in, defend, or bring any action or proceeding to protect its interest in the
Folsom Trust Property, and the cost and expense thereof (including, without
limitation, reasonable attorneys' fees and disbursements to the extent permitted
by law), with interest as provided in this Paragraph 22, shall be immediately
due and payable to Beneficiary upon demand by Beneficiary therefor. All such
costs and expenses incurred by Beneficiary in remedying such Event of Default or
in appearing in, defending, or bringing any such action or proceeding shall bear
interest at the Default Rate (as such term is defined in the Note), for the
period from the date that such cost or expense was incurred to the date of
payment to Beneficiary. All such costs and expenses, together with interest
thereon at the Default Rate, shall be added to the Indebtedness and shall be
secured by this Deed of Trust. If the principal sum of the Note or any other
amount required to be paid on the Maturity Date under the Note shall not be paid
on the Maturity Date, interest shall thereafter be computed and paid at the
Default Rate.
23. LATE PAYMENT CHARGE. If any monthly principal and interest payment
is not paid in accordance with the Note, a late charge (the "Late Charge") shall
be due as provided in the Note.
24. PREPAYMENT. The Indebtedness may be prepaid only in accordance with
the terms of the Note. Trustor hereby expressly (a) waives any right it may have
under California Civil Code Section 2954.10 to prepay the Note in whole or in
part, without premium, prior to the time allowed under the Note or upon
acceleration of the Maturity Date of the Note; and (b) agrees that if a
prepayment of any or all of the Note is made, prior to the time allowed under
the Note or following any acceleration of the Maturity Date of the Note by
Beneficiary on account of any transfer or disposition prohibited or restricted
by the Note or by this Deed of Trust, Trustor shall be obligated to pay,
concurrently therewith, the prepayment amount, if any that would be required
under the Note. By initialing this provision in the space provided below,
Trustor hereby declares that Beneficiary's agreement to make the subject loan at
the interest rate and for the term set forth in the Note constitutes adequate
consideration, given individual weight by the undersigned, for this waiver and
agreement.
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/s/ AKM /s/ CPW
----------------------------- ---------------------------
Initials of Xxxxx X. Xxxxxxxx Initials Xxxxxxx X. Xxxxxxx
25. PREPAYMENT AFTER EVENT OF DEFAULT. A tender of the amount necessary
to satisfy the entire indebtedness, paid at any time following an Event of
Default or acceleration (which acceleration shall be at Beneficiary's sole
option), including at a foreclosure sale or during any subsequent redemption
period, if any, shall be deemed a voluntary prepayment, which payment shall
include a premium, the calculation of which shall be in accordance with the
terms of the Note and shall depend upon whether the Event of Default or
acceleration first occurred (i) prior to the time, if any, the prepayment of the
principal balance is permitted pursuant to the terms of the Note and prior to
the date on which the full amount of the balance of principal and interest then
remaining unpaid shall be due or (ii) on or after the date on which prepayment
of the principal balance is permitted pursuant to the terms of the Note.
26. APPOINTMENT OF RECEIVER. Beneficiary, upon the occurrence of an
Event of Default or in any action to foreclose this Deed of Trust or upon the
actual or threatened waste to any part of the Folsom Trust Property, shall be
entitled to the appointment of a receiver without notice and without regard to
the value or condition of the Folsom Trust Property as security for the
Indebtedness or the solvency or insolvency of any person liable for the payment
of the Indebtedness.
27. SECURITY AGREEMENT.
(a) This Deed of Trust is both a real property Deed of Trust and
a "security agreement" within the meaning of the Uniform Commercial Code. The
Folsom Trust Property includes both real and personal property and all other
rights and interests, whether tangible or intangible in nature, of Trustor in
the Folsom Trust Property. Trustor, by executing and delivering this Deed of
Trust grants to Beneficiary and Trustee (to the extent provided herein), as
security for the Indebtedness, a security interest in the Folsom Trust Property
to the full extent that the Folsom Trust Property may be subject to the Uniform
Commercial Code (such portion of the Folsom Trust Property so subject to the
Uniform Commercial Code being called in this Paragraph 27 the "Collateral").
Trustor hereby authorizes Beneficiary to file financing statements in order to
create, perfect, preserve and continue the security interest(s) herein granted.
This Deed of Trust shall also constitute a "fixture filing" for the purposes of
the Uniform Commercial Code and shall cover all items of the Collateral that are
or are to become fixtures. Information concerning the security interest(s)
herein granted may be obtained from Beneficiary upon request.
If an Event of Default shall occur, Beneficiary and/or Trustee,
in addition to any other rights and remedies which it may have, shall have and
may exercise immediately and without demand, any and all rights and remedies
granted to a secured party upon default under the Uniform Commercial Code,
including, without limiting the generality of the foregoing, the right to take
possession of the Collateral or any part thereof, and to take such other
measures as Beneficiary and/or Trustee may deem necessary for the care,
protection and preservation of
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the Collateral. Upon request or demand of Beneficiary and/or Trustee, Trustor
shall at its expense assemble the Collateral and make it available to
Beneficiary and/or Trustee at a convenient place acceptable to Beneficiary
and/or Trustee. Trustor shall pay to Beneficiary and Trustee on demand any and
all expenses, including legal expenses and reasonable attorneys' fees and
disbursements, incurred or paid by Beneficiary and Trustee in protecting its
interest in the Collateral and in enforcing its rights hereunder with respect to
the Collateral. Any notice of sale, disposition or other intended action by
Beneficiary and/or Trustee with respect to the Collateral sent to Trustor in
accordance with the provisions hereof at least five (5) days prior to such sale,
disposition or action shall constitute reasonable notice to Trustor. The
proceeds of any disposition of the Collateral, or any part thereof, may be
applied by Beneficiary to the payment of the Indebtedness in such priority and
proportions as Beneficiary in its discretion shall deem proper.
Trustor shall notify Beneficiary and Trustee of any change in
name, identity, structure or state of formation of Trustor and shall promptly
execute, file and record, at its sole cost and expense, such Uniform Commercial
Code forms as are necessary to maintain the priority of the lien of Beneficiary
upon and security interest in the Collateral. In addition, Trustor shall
promptly execute, file and record such additional Uniform Commercial Code forms
or continuation statements as Beneficiary shall deem necessary and shall pay all
expenses and fees in connection with the filing and recording thereof, provided
that no such additional documents shall increase the obligations of Trustor
under the Note, this Deed of Trust or the other Loan Documents. Trustor hereby
grants to Beneficiary an irrevocable power of attorney, coupled with an
interest, to file with the appropriate public office on its behalf any financing
or other statements signed only by Beneficiary, as secured party, in connection
with the Collateral covered by this Deed of Trust.
(b) That portion of the Folsom Trust Property consisting of
personal property and equipment, shall be owned by Trustor and shall not be the
subject matter of any lease or other transaction whereby the ownership or any
beneficial interest in any of such property is held by any person or entity
other than Trustor nor shall Trustor create or suffer to be created any security
interest covering any such property as it may from time to time be replaced,
other than the security interest created herein.
28. AUTHORITY.
(a) Trustor has full power, authority and legal right to execute
this Deed of Trust, and to deed, give, grant, bargain, sell, alien, enfeoff,
convey, confirm, pledge, hypothecate and assign and grant a security interest in
the Folsom Trust Property pursuant to the terms hereof and to keep and observe
all of the terms of this Deed of Trust on Trustor's part to be performed.
(b) Trustor represents and warrants to Beneficiary that Trustor
is not a "foreign person" and covenants with Beneficiary that Trustor will not,
throughout the term of the Note, become a "foreign person" within the meaning of
Section 1445 and Section 7701 of the Internal Revenue Code of 1986, (26 USC
Sections 1445, 7701) and the related Treasury Department regulations, including,
without limitation, temporary regulations (hereinafter collectively the
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"Code"); that is, such Trustor is not a non-resident alien, foreign corporation,
foreign partnership, foreign trust or foreign estate as those terms are defined
in the Code.
(c) Trustor represents and warrants to Beneficiary that Trustor
is a limited liability company organized and existing under the laws of the
State of California.
29. ACTIONS AND PROCEEDINGS. Beneficiary and Trustee shall have the
right to appear in and defend any action or proceeding brought with respect to
the Folsom Trust Property and to bring any action or proceeding, in the name and
on behalf of Trustor, which Beneficiary and/or Trustee, in their discretion,
shall decide should be brought to protect their respective interests in the
Folsom Trust Property.
30. FURTHER ACTS, ETC. Trustor will, at the sole cost of Trustor, and
without expense to Beneficiary or Trustee, do, execute, acknowledge and deliver
all and every such further acts, deeds, conveyances, deeds of trust,
assignments, notices of assignments, transfers and assurances as Beneficiary or
Trustee shall, from time to time, reasonably require, for the better assuring,
conveying, assigning, transferring and confirming unto Beneficiary and/or
Trustee the property and rights hereby given, granted, bargained, sold,
enfeoffed, conveyed, confirmed, pledged, assigned and hypothecated or intended
now or hereafter so to be, or which Trustor may be or may hereafter become bound
to convey or assign to Beneficiary and/or Trustee, or for carrying out the
intention or facilitating the performance of the terms of this Deed of Trust or
for filing, registering or recording this Deed of Trust and, on demand, will
execute and deliver within five (5) business days after request of Beneficiary
or Trustee, and if Trustor fails to so deliver, hereby authorizes Beneficiary or
Trustee thereafter to execute in the name of Trustor without the signature of
Trustor to the extent Beneficiary and/or Trustee may lawfully do so, one or more
financing statements, chattel mortgages or comparable security instruments, to
evidence more effectively the lien hereof upon the Folsom Trust Property.
Trustor grants to Beneficiary and Trustee an irrevocable power of attorney
coupled with an interest for the purpose of exercising and perfecting any and
all rights and remedies available to Beneficiary and Trustee at law and in
equity, including without limitation such rights and remedies available to
Beneficiary and Trustee pursuant to this Paragraph 30.
31. RECORDING OF DEED OF TRUST, ETC. Trustor forthwith upon the
execution and delivery of this Deed of Trust, will cause this Deed of Trust, and
any security instrument creating a lien or security interest or evidencing the
lien hereof upon the Folsom Trust Property, to be filed, registered or recorded
and, thereafter, from time to time, each such other instrument of further
assurance to be filed, registered or recorded, all in such manner and in such
places as may be required by any present or future law in order to publish
notice of and fully to protect the lien or security interest hereof upon, and
the interests of Beneficiary and Trustee in, the Folsom Trust Property. Trustor
will pay all filing, registration or recording fees, and all expenses incident
to the preparation, execution and acknowledgment of this Deed of Trust, any deed
of trust supplemental hereto, any security instrument with respect to the Folsom
Trust Property and any instrument of further assurance, and all federal, state,
county and municipal, taxes, duties, imposts, assessments and charges arising
out of or in connection with the making, execution, delivery and/or recording of
this Deed of Trust, any deed of trust supplemental hereto, any security
instrument with respect to the Folsom Trust Property or any instrument of
further
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assurance, except where prohibited by law so to do. Trustor shall hold harmless
and indemnify Beneficiary, its successors and assigns, against any liability
incurred by reason of the imposition of any tax on the making, execution,
delivery and/or recording of this Deed of Trust, any deed of trust supplemental
hereto, any security instrument with respect to the Folsom Trust Property or any
instrument of further assurance.
32. USURY LAWS. This Deed of Trust and the Note are subject to the
express condition that at no time shall Trustor be obligated or required to pay
interest on the principal balance due under the Note at a rate which could
subject the holder of the Note to either civil or criminal liability as a result
of being in excess of the maximum interest rate which Trustor is permitted by
law to contract or agree to pay. If by the terms of this Deed of Trust or the
Note, Trustor is at any time required or obligated to pay interest on the
principal balance due under the Note at a rate in excess of such maximum rate,
the rate of interest under the Note shall be deemed to be immediately reduced to
such maximum rate and the interest payable shall be computed at such maximum
rate and all prior interest payments in excess of such maximum rate shall be
applied and shall be deemed to have been payments in reduction of the principal
balance of the Note and the principal balance of the Note shall be reduced by
such amount in the inverse order of maturity.
33. SOLE DISCRETION OF BENEFICIARY. Wherever pursuant to this Deed of
Trust, Beneficiary exercises any right given to it to approve or disapprove, or
any arrangement or term is to be satisfactory to Beneficiary, the decision of
Beneficiary to approve or disapprove or to decide that arrangements or terms are
satisfactory or not satisfactory shall be in the sole discretion of Beneficiary
and shall be final and conclusive, except as may be otherwise specifically
provided herein.
34. RECOVERY OF SUMS REQUIRED TO BE PAID. Beneficiary shall have the
right from time to time to take action to recover any sum or sums which
constitute a part of the Indebtedness as the same become due, without regard to
whether or not the balance of the Indebtedness shall be due, and without
prejudice to the right of Beneficiary thereafter to bring an action of
foreclosure, or any other action, for a default or defaults by Trustor existing
at the time such earlier action was commenced.
35. MARSHALLING AND OTHER MATTERS. Trustor waives, to the extent
permitted by law, the benefit of all appraisement, valuation, stay, extension,
reinstatement and redemption laws now or hereafter in force and all rights of
marshalling in the event of any sale hereunder of the Folsom Trust Property or
any part thereof or any interest therein. Further, Trustor expressly waives any
and all rights of redemption from sale under any order or decree of foreclosure
of this Deed of Trust on behalf of Trustor, and on behalf of each and every
person acquiring any interest in or title to the Folsom Trust Property
subsequent to the date of this Deed of Trust and on behalf of all persons to the
extent permitted by applicable law.
36. WAIVER OF NOTICE. Trustor shall not be entitled to any notices of
any nature whatsoever from Beneficiary or Trustee except with respect to matters
for which this Deed of Trust specifically and expressly provides for the giving
of notice by Beneficiary or Trustee to Trustor and except with respect to
matters for which Beneficiary or Trustee is
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required by applicable law to give notice, and Trustor hereby expressly waives
the right to receive any notice from Beneficiary or Trustee with respect to any
matter for which this Deed of Trust does not specifically and expressly provide
for the giving of notice by Beneficiary or Trustee to Trustor.
37. REMEDIES OF TRUSTOR. In the event that a claim or adjudication is
made that Beneficiary or Trustee has acted unreasonably or unreasonably delayed
acting in any case where by law or under the Note, this Deed of Trust or the
other Loan Documents, it has an obligation to act reasonably or promptly,
Beneficiary or Trustee shall not be liable for any monetary damages, and
Trustor's remedies shall be limited to injunctive relief or declaratory
judgment; provided, however, in the event that Trustor alleges that Beneficiary
has acted in bad faith with regard to an action or inaction by Beneficiary under
the Note, this Deed of Trust or the other Loan Documents, Trustor shall be
entitled to bring an action against Beneficiary to recover its alleged actual
damages incurred as a result of such alleged bad faith and Trustor's remedies
shall not be limited to injunctive relief or declaratory judgment.
38. REPORTING REQUIREMENTS. At the request of Beneficiary or Trustee,
Trustor shall supply or cause to be supplied to Beneficiary either (a) a copy of
a completed Form 1099-B, Statement for Recipients of Proceeds from Real Estate,
Broker and Barter Exchange Proceeds prepared by Trustor's attorney or other
person responsible for the preparation of such form, together with a certificate
from the person who prepared such form to the effect that such form has, to the
best of such person's knowledge, been accurately prepared and that such person
will timely file such form or (b) a certification from Trustor that the Folsom
Loan is a refinancing of the Folsom Trust Property or is otherwise not required
to be reported to the Internal Revenue Service pursuant to Section 6045(e) of
the Code. Trustor hereby indemnifies, defends and holds Beneficiary and Trustee
harmless from and against all loss, cost, damage and expense (including without
limitation, reasonable attorneys' fees and disbursements and costs incurred in
the investigation, defense and settlement of claims) that Beneficiary or Trustee
may incur, directly or indirectly, as a result of or in connection with the
assertion against Beneficiary or Trustee of any claim relating to the failure of
Beneficiary or Trustee to comply with this Paragraph 38.
39. HAZARDOUS MATERIALS.
(a) Trustor represents and warrants that, to the best of
Trustor's knowledge, and except as otherwise disclosed in the environmental
audit report delivered to Beneficiary prior to the Closing Date, (i) the Folsom
Trust Property is now and at all times during Trustor's ownership thereof has
been free of contamination from any petroleum product and all hazardous or toxic
substances, wastes or substances, any substances which because of their
quantitative concentration, chemical, radioactive, flammable, explosive,
infectious or other characteristics, constitute or may reasonably be expected to
constitute or contribute to a danger or hazard to public health, safety or
welfare or to the environment, including, without limitation, any asbestos
(whether or not friable) and any asbestos-containing materials, waste oils,
solvents and chlorinated oils, polychlorinated biphenyls (PCBs), toxic metals,
etchants, pickling and plating wastes, explosives, reactive metals and
compounds, pesticides, herbicides, radon gas, lead (whether in water, paint or
soil), urea formaldehyde foam insulation and chemical,
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biological and radioactive wastes, or any other similar materials or any
hazardous or toxic wastes or substances which are included under or regulated by
any federal, state or local law, rule or regulation (whether now existing or
hereafter enacted or promulgated, as they may be amended from time to time)
pertaining to environmental regulations, contamination, clean-up or disclosures,
and any judicial or administrative interpretation thereof, including any
judicial or administrative orders or judgments ("Hazardous Materials"),
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. section 9601 et seq.
("CERCLA"); The Federal Resource Conservation and Recovery Act, 42 U.S.C.
section 6901 et seq. ("RCRA"); Superfund Amendments and Reauthorization Act of
1986, Public Law No. 99-499 ("XXXX"); Toxic Substances Control Act, 15 U.S.C.
section 2601 et seq. ("TSCA"); the Hazardous Materials Transportation Act, 49
U.S.C. section 1801 et seq.; and any other state superlien or environmental
clean-up or disclosure statutes (all such laws, rules and regulations being
referred to collectively as "Environmental Laws"), (ii) Trustor has not caused
or suffered to occur any discharge, spill, uncontrolled loss or seepage of any
Hazardous Materials onto any property adjoining the Folsom Trust Property and
(iii) neither the Trustor nor any tenant or occupant of all or part of the
Folsom Trust Property is now or has been involved in operations at the Folsom
Trust Property which could lead to liability for Trustor or any other owner of
the Folsom Trust Property or the imposition of a lien on the Folsom Trust
Property under any Environmental Law.
(b) At its sole cost and expense, Trustor shall comply with and
shall cause all tenants and other occupants of the Folsom Trust Property to
comply with all Environmental Laws now in effect or hereafter enacted with
respect to the discharge, generation, removal, transportation, storage and
handling of Hazardous Materials. Trustor shall promptly notify Beneficiary if
Trustor shall become aware of any Hazardous Materials on or near the Folsom
Trust Property (except materials (the "Permitted Hazardous Materials") which (i)
are ordinarily and customarily used in the regular operation of the Folsom Trust
Property as a[n] office/industrial building facility by the Trustor or any
current tenant or any future tenant, which tenant and its Lease have been
approved by the Beneficiary, and (ii) are used, stored, disposed of and handled
in compliance with and in quantities permitted by all applicable Environmental
Laws) and/or if Trustor shall become aware that the Folsom Trust Property is in
direct or indirect violation of any Environmental Laws and/or if Trustor shall
become aware of any condition on or near the Folsom Trust Property which shall
pose a threat to the health, safety or welfare of humans. Trustor shall promptly
remove, or cause to be removed, all Hazardous Materials from the Folsom Trust
Property (other than the Permitted Hazardous Materials), such removal to be
performed in accordance with all applicable federal, state and local laws,
statutes, rules and regulations. Trustor shall pay immediately when due the cost
of removal of any Hazardous Materials and shall keep the Folsom Trust Property
free of any lien imposed pursuant to any Environmental Laws now in effect or
hereinafter enacted.
(c) Trustor grants Beneficiary and its employees and agents an
irrevocable and non-exclusive license, subject to the rights of tenants, to
enter the Folsom Trust Property to conduct testing and to remove any Hazardous
Materials. Except in emergency situations, Beneficiary will provide Trustor with
reasonable notice prior to entering the Folsom Trust Property to conduct such
testing and removing any Hazardous Materials. The costs of such testing and
removal shall immediately become due to Beneficiary and shall be secured by this
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Deed of Trust. Trustor, promptly upon the request of Beneficiary, from time to
time, shall provide Beneficiary with an environmental site assessment or
environmental audit report, or an update of such an assessment or report, all in
scope, form and content satisfactory to Beneficiary. Trustor shall maintain the
integrity of all storage tanks and drums on or under the Folsom Trust Property
during the term of the Folsom Loan in compliance with all Environmental Laws now
in effect or hereinafter enacted. Trustor shall follow an operation and
maintenance program with respect to all storage tanks and drums on or under the
Folsom Trust Property, which program has been approved in writing by
Beneficiary. Notwithstanding the foregoing provisions of this subparagraph (c),
provided that no Event of Default has occurred, such inspections and tests shall
only be made, and such site assessment or audit reports or updates shall only be
required, if Beneficiary has a reasonable basis, as determined in its sole
judgment, to be concerned that a presence or release of Hazardous Substances may
have occurred at or in the vicinity of the Folsom Trust Property.
(d) TRUSTOR SHALL INDEMNIFY BENEFICIARY AND TRUSTEE AND HOLD
BENEFICIARY AND TRUSTEE HARMLESS FROM AND AGAINST ALL LIABILITY, LOSS, COST,
DAMAGE AND EXPENSE (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES
AND COSTS INCURRED IN THE INVESTIGATION, DEFENSE AND SETTLEMENT OF CLAIMS) THAT
BENEFICIARY OR TRUSTEE MAY INCUR AS A RESULT OF OR IN CONNECTION WITH THE
ASSERTION AGAINST BENEFICIARY OR TRUSTEE (WHETHER AS PAST OR PRESENT BENEFICIARY
OR TRUSTEE OF THIS DEED OF TRUST, AS MORTGAGEE IN POSSESSION OR AS PAST OR
PRESENT OWNER OF THE TRUST PROPERTY BY VIRTUE OF A FORECLOSURE OR ACCEPTANCE OF
A DEED IN LIEU OF FORECLOSURE OR THE EXERCISE OF A POWER OF SALE) OF ANY CLAIM
RELATING TO THE PRESENCE AND/OR RELEASE, THREATENED RELEASE, STORAGE, DISPOSAL,
GENERATING OR REMOVAL OF ANY HAZARDOUS MATERIALS OR COMPLIANCE WITH ANY
ENVIRONMENTAL LAWS NOW IN EFFECT OR HEREINAFTER ENACTED. THE OBLIGATIONS AND
LIABILITIES OF TRUSTOR UNDER THIS PARAGRAPH 39 SHALL SURVIVE FULL PAYMENT OF THE
LOAN, ENTRY OF A JUDGMENT OF FORECLOSURE OR ACCEPTANCE OF A DEED IN LIEU OF
FORECLOSURE OR ANY SUBSEQUENT TRANSFER TO A THIRD PARTY. IT IS UNDERSTOOD THAT
THE PRESENCE AND/OR RELEASE OF SUBSTANCES REFERRED TO IN THIS SECTION HEREOF
DOES NOT PERTAIN TO A PRESENCE AND/OR RELEASE WHICH FIRST OCCURS SOLELY AFTER
(A) REPAYMENT OF THE LOAN IN FULL IN ACCORDANCE WITH THE LOAN DOCUMENTS OR (B)
ACQUISITION OF TITLE TO THE TRUST PROPERTY BY BENEFICIARY UPON A FORECLOSURE OR
ACCEPTANCE OF A DEED IN LIEU OF FORECLOSURE OR THE EXERCISE OF A POWER OF SALE
AND SURRENDER OF POSSESSION AND OCCUPANCY OF THE TRUST PROPERTY BY TRUSTOR, ITS
AGENTS, AFFILIATES, EMPLOYEES AND INDEPENDENT CONTRACTORS. TRUSTOR SHALL HAVE
THE BURDEN OF PROVING THAT THE CONDITIONS IN THIS SUBPARAGRAPH (D) WERE
SATISFIED BY CLEAR AND CONVINCING EVIDENCE AND SHALL CONTINUE TO DEFEND WITH
COUNSEL SATISFACTORY TO BENEFICIARY AND SHALL INDEMNIFY AND HOLD BENEFICIARY
HARMLESS FOR ALL MATTERS SET FORTH IN THIS PARAGRAPH 39, UNLESS AND UNTIL
BENEFICIARY ACKNOWLEDGES IN
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WRITING THAT TRUSTOR HAS MET SUCH BURDEN OR A COURT OF COMPETENT JURISDICTION
FINDS THAT TRUSTOR HAS MET SUCH BURDEN.
(e) Nothing contained herein shall constitute or be construed as
a waiver of any statutory or judicial federal, state or local law which may
provide rights or remedies to Beneficiary against Trustor or others in
connection with any claim relating to the Folsom Trust Property and pertaining
to the presence and/or release, threatened release, storage, disposal,
generating or removal of any Hazardous Materials or to the failure to comply
with any Environmental Laws now or hereafter enacted.
40. ASBESTOS. Trustor shall not install or permit to be installed in the
Folsom Trust Property, friable asbestos or any substance containing asbestos.
With respect to any such material currently present in the Folsom Trust
Property, Trustor, at Trustor's expense, shall promptly comply with and shall
cause all occupants of the Folsom Trust Property to comply with all present and
future applicable federal, state or local laws, rules, regulations or orders
relating to asbestos, friable asbestos and asbestos containing materials. In the
event any asbestos, friable asbestos or asbestos containing material is
discovered at the Folsom Trust Property, Trustor shall obtain a comprehensive
asbestos report prepared by a licensed engineer or asbestos consultant
acceptable to Beneficiary describing the form, extent, location and condition of
such asbestos and recommending methods of removal or abatement. Trustor shall
promptly comply at its sole cost and expense with the recommendations contained
in such report, such compliance to be performed in accordance with all
applicable federal, state and local laws, statutes, rules and regulations.
Trustor shall indemnify Beneficiary and Trustee and hold Beneficiary and Trustee
harmless from and against all loss, cost, damage and expense (including, without
limitation, reasonable attorneys' fees and costs incurred in the investigation,
defense and settlement of claims) that Beneficiary or Trustee may incur as a
result of or in connection with the assertion against Beneficiary or Trustee
(whether as past or present beneficiary or trustee of this Deed of Trust, as
mortgagee in possession, or as past or present owner of the Folsom Trust
Property by virtue of a foreclosure or acceptance of a deed in lieu of
foreclosure or the exercise of a power of sale) of any claim relating to the
presence or removal of any asbestos substance referred to in this Paragraph 40,
or compliance with any federal, state or local laws, rules, regulations or
orders relating thereto. The obligations and liabilities of Trustor under this
Paragraph 40 shall survive full payment of the Crossed Loans, foreclosure or the
acceptance of a deed in lieu of foreclosure.
41. BANKRUPTCY OR INSOLVENCY. In the event that Trustor or any Guarantor
or, if Trustor or any Guarantor is a general or limited partnership, any general
partner of any such entity (a) admits in writing its inability to pay its debts
generally as they become due, or does not pay its debts generally as they become
due, (b) commences as debtor any case or proceeding under any bankruptcy,
insolvency, reorganization, liquidation, dissolution or similar law, or seeks or
consents to the appointment of a receiver, conservator, trustee, custodian,
manager, liquidator or similar official for it or the whole or any substantial
part of its property, (c) has a receiver, conservator, trustee, custodian,
manager, liquidator, or similar official appointed for it or the whole or any
substantial part of its property, by any governmental authority with
jurisdiction to do so, (d) makes a proposal or any assignment for the benefit of
its creditors, or enters into an arrangement or composition or similar plan or
scheme with or for the benefit of creditors generally occurring in circumstances
in which such entity is unable to meet its
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obligations as they become due or (e) has filed against it any case or
proceeding under any bankruptcy, insolvency, reorganization, liquidation,
dissolution or similar law which (i) is consented to or not timely contested by
such entity, (ii) results in the entry of an order for relief, appointment of a
receiver, conservator, trustee, custodian, manager, liquidator or similar
official for such entity or the whole or any substantial part of its property or
(iii) is not dismissed within sixty (60) days, an Event of Default shall have
occurred and as a result, the entire principal balance of the Note and all
obligations under any Guaranty shall become immediately due and payable at the
option of Beneficiary without notice to Trustor or any Guarantor and Beneficiary
may exercise any remedies available to it hereunder, under any other Loan
Document, at law or in equity.
42. COMPLIANCE WITH ERISA AND STATE STATUTES ON GOVERNMENTAL PLANS.
(a) Beneficiary represents and warrants to Trustor that, as of
the date of this Deed of Trust and throughout the term of this Deed of Trust,
the source of funds from which Beneficiary extends this Deed of Trust is its
general account, which is subject to the claims of its general creditors under
state law.
(b) Trustor represents and warrants that, as of the date of this
Deed of Trust and throughout the term of this Deed of Trust, (i) Trustor is not
an "employee benefit plan" as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), which is subject to Title I
of ERISA and (ii) the assets of such Trustor do not constitute "plan assets" of
one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101.
(c) Trustor represents and warrants to Beneficiary that, as of
the date of this Deed of Trust and throughout the term of this Deed of Trust (i)
Trustor is not a "governmental plan" within the meaning of Section 3(32) of
ERISA and (ii) transactions by or with Trustor or any Trustor are not subject to
state statues regulating investments of and fiduciary obligations with respect
to governmental plans.
(d) Trustor covenants and agrees to deliver to Beneficiary such
certifications or other evidence from time to time throughout the term of this
Deed of Trust, as requested by Beneficiary in its sole discretion, that (i)
Trustor is not an "employee benefit plan" or a "governmental plan", (ii) Trustor
is not subject to state statutes regulating investments and fiduciary
obligations with respect to governmental plans, and (iii) one or more of the
following circumstances is true:
(A) Equity interests in Trustor are publicly offered
securities, within the meaning of 29 C.F.R. Section
2510.3-101(b)(2);
(B) Less than 25 percent of all equity interests in such
Trustor are held by "benefit plan investors" within the
meaning of 29 C.F.R. Section 2510.3-101(f)(2); or
(C) Trustor qualifies as an "operating company" or a "real
estate operating company" within the meaning of 29
C.F.R. Section 2510.3.-101(c) or (e).
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(e) Any of the following shall constitute an Event of Default
under this Deed of Trust, entitling Beneficiary to exercise any and all remedies
to which it may be entitled under this Deed of Trust and any other Loan
Documents: (i) the failure of any representation or warranty made by any Trustor
under this Paragraph 42 to be true and correct in all respects, (ii) the failure
of any Trustor to provide Beneficiary with the written certifications and
evidence referred to in this Paragraph 42 or (iii) the consummation by Trustor
or any one Trustor of a transaction which would cause this Deed of Trust or any
exercise of Beneficiary's rights under this Deed of Trust or the other Loan
Documents to constitute a non-exempt prohibited transaction under ERISA or a
violation of a state statute regulating governmental plans, or otherwise
subjecting Beneficiary to liability for violation of ERISA or such state
statute.
(f) Trustor shall indemnify Beneficiary and defend and hold
Beneficiary harmless from and against all civil penalties, excise taxes, or
other loss, cost, damage and expense (including, without limitation, reasonable
attorneys' fees and disbursements and costs incurred in the investigation,
defense and settlement of claims and losses incurred in correcting any
prohibited transaction or in the sale of a prohibited loan, and in obtaining any
individual prohibited transaction exemption under ERISA that may be required, in
Beneficiary's sole discretion) that Beneficiary may incur, directly or
indirectly, as a result of a default under this Paragraph 42. This indemnity
shall survive any termination, satisfaction, foreclosure of or exercise of power
of sale under this Deed of Trust.
43. ASSIGNMENTS. Beneficiary shall have the right to assign or transfer
its rights under this Deed of Trust without limitation. Any assignee or
transferee shall be entitled to all the benefits afforded Beneficiary under this
Deed of Trust. Notwithstanding anything to the contrary in the Loan Documents,
Beneficiary shall assign or transfer all of the Crossed Loans to one assignee or
transferee.
44. COOPERATION. Trustor acknowledges that Beneficiary and its
successors and assigns may (a) sell the Crossed Loans (as whole loans),
including this Deed of Trust, the Note and other Loan Documents to one investor,
(b) participate any of the Crossed Loans to one or more investors, (c) deposit
this Deed of Trust, the Note and other Loan Documents with a trust, which trust
may sell certificates to investors evidencing an ownership interest in the trust
assets or (d) otherwise, subject to the provisions of Paragraph 43 hereof, sell
any of the Crossed Loans or interest therein to investors (the transactions
referred to in clauses (a) through (d) are hereinafter referred to as "Secondary
Market Transactions"). Trustor shall, at its expense, cooperate in good faith
with Beneficiary (aa) in effecting any such Secondary Market Transaction and
(bb) to implement all requirements imposed by the Rating Agency involved in any
Secondary Market Transaction including, without limitation, all structural or
other changes to any of the Crossed Loans, modifications to any of the Loan
Documents, delivery of opinions of counsel acceptable to the Rating Agency and
addressing such matters as the Rating Agency may require; provided, however,
that Trustor shall not be required to modify any Loan Documents which would
modify (i) the interest rate payable under the Note, (ii) the stated maturity of
the Note, (iii) the amortization of principal of the Note, (iv) any other
material economic term of the Loan Documents, (v) the West Coast Transfers
provided for in Paragraph 9(b) of this Deed of Trust, or (vi) the release
provisions set forth in Part III hereof or any
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prepayment provision under the Loan Documents. Notwithstanding the foregoing,
Trustor shall not be liable for more than $5,000.00 in expenses in the aggregate
under this Paragraph 44 relating to the Folsom Loan during the term of the
Folsom Loan. The Trustor shall provide such information and documents relating
to Trustor, Guarantor, if any, the Collateral Properties, the Leases and the
tenants thereunder as Beneficiary may reasonably request in connection with a
Secondary Market Transaction. Beneficiary shall have the right to provide to
prospective investors any information in its possession, including, without
limitation, financial statements relating to Trustor, the Guarantor, the Folsom
Trust Property and the tenants under the Leases. Trustor acknowledges that
certain information regarding the Crossed Loans and the parties thereto and the
Collateral Properties may be included in a private placement memorandum,
prospectus or other disclosure documents.
45. INDEMNIFICATION FOR NON-RECOURSE CARVEOUT OBLIGATIONS. Trustor
hereby covenants and agrees unconditionally and absolutely to indemnify and save
harmless Beneficiary, its officers, directors, shareholders, employees, agents
and attorneys against all damages, losses, liabilities, obligation, claims,
litigation, demands or defenses, judgments, suits, proceedings, fines,
penalties, costs, disbursements and expenses of any kind or nature whatsoever
(including without limitation reasonable attorneys' fees reasonably incurred),
which may at any time be imposed upon, incurred by or asserted or awarded
against Beneficiary and arising from the Non-Recourse Carveout Obligations.
This indemnity shall survive any foreclosure of this Deed of Trust, the
taking of a deed in lieu thereof, the exercise of any power of sale, or any
other discharge of the obligations of the Trustor hereunder or a transfer of the
Folsom Trust Property, even if the indebtedness secured hereby is satisfied in
full. Trustor agrees that the indemnification granted herein may be enforced by
Beneficiary without resorting to or exhausting any other security or collateral
or without first having recourse to the Note or the Folsom Trust Property
covered by this Deed of Trust through foreclosure proceedings or otherwise;
provided, however, that, subject to Paragraph 46 of this Deed of Trust, nothing
herein contained shall prevent Beneficiary from suing on the Note or foreclosing
this Deed of Trust or exercising any power of sale or from exercising any other
rights under the Loan Documents.
46. EXCULPATION. Notwithstanding anything to the contrary contained
herein, but subject to Paragraph 45 hereof, any claim based on or in respect of
any liability of Trustor under the Note or under this Deed of Trust or any other
Loan Document shall be enforced only against the Collateral Properties and any
other collateral now or hereafter given to secure the Crossed Loans and not
against any other assets, properties or funds of Trustor; provided, however,
that the liability of Trustor for loss, costs or damage arising out of the
matters described below (collectively, "Non-Recourse Carveout Obligations")
shall not be limited solely to the Collateral Properties and other collateral
now or hereafter given to secure any of the Crossed Loans but shall include all
of the assets, properties and funds of Trustor: (i) fraud, material
misrepresentation and waste, (ii) any rents, issues or profits collected more
than one (1) month in advance of their due dates, (iii) any misapplication of
rents, issues or profits, security deposits and any other payments from tenants
or occupants (including, without limitation, lease termination fees) insurance
proceeds, condemnation awards, or other sums of a similar nature, (iv) liability
under environmental covenants, conditions and indemnities contained in the Loan
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Documents and in any separate environmental indemnity agreements, (v) personalty
or fixtures attached to or used in the operations of any of the Collateral
Properties removed or allowed to be removed by or on behalf of Trustor and not
replaced by items of equal or greater value or functionality than the personalty
or fixtures so removed, (vi) failure to pay taxes, assessments or ground rents
prior to delinquency, or to pay charges for labor, materials or other charges
which can create liens on any portion of any of the Collateral Properties and
any sums expended by Beneficiary in the performance of or compliance with the
obligations of Trustor under the Loan Documents, including, without limitation,
sums expended to pay taxes or assessments or hazard insurance premiums or bills
for utilities or other services or products for the benefit of the Folsom Trust
Property, (vii) the sale, conveyance or transfer of title to the Folsom Trust
Property or encumbrance of the Folsom Trust Property, except as specifically
provided pursuant to the terms and conditions set forth in the Loan Documents,
(viii) [Intentionally Deleted], and (ix) attorney's fees, court costs and other
expenses incurred by Beneficiary in connection with enforcement of Trustor's
personal liability as set forth herein. Nothing herein shall be deemed (w) to be
a waiver of any right which Beneficiary may have under any bankruptcy law of the
United States or the State of California, including, but not limited to, Section
506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy Code, to
file a claim for the full amount of the indebtedness secured by this Deed of
Trust or to require that all of the collateral securing the indebtedness secured
hereby shall continue to secure all of the indebtedness owing to Beneficiary
under the Note, this Deed of Trust and the other Loan Documents; (x) to impair
the validity of the indebtedness secured by this Deed of Trust; (y) to impair
the right of Beneficiary as Beneficiary or secured party or the Trustee to
commence an action to foreclose any lien or security interest; or (z) to modify,
diminish or discharge the liability of any Guarantor under any Guaranty.
47. NOTICES. Any notice, demand, statement, request or consent made
hereunder shall be effective and valid only if in writing, referring to this
Deed of Trust, signed by the party giving such notice, and delivered either
personally to such other party, or sent by nationally recognized overnight
courier delivery service or by certified mail of the United States Postal
Service, postage prepaid, return receipt requested, addressed to the other party
as follows (or to such other address or person as either party or person
entitled to notice may by notice to the other party specify):
To Beneficiary:
Xxxx Xxxxxxx Life Insurance Company
Xxxx Xxxxxxx Tower, T-56
Real Estate Investment Group
Boston, MA 02116
Re: Loan No. 6517804
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and with a copy concurrently to:
Xxxx Xxxxxxx Life Insurance Company
Xxxx Xxxxxxx Tower, T-00
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxxx, Esquire
To Trustor:
WCRI, LLC
c/o West Coast Realty Investors, Inc.
0000 Xxxx Xxxx Xxxx
Building 0 Xxxxx 000
Xxxxx Xxxx, XX 00000
and with a copy concurrently to:
Xxxxx X. Xxxxxxxxx, Esquire
Carlsmith Ball LLP
000 Xxxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, XX 00000
To Trustee:
Commonwealth Land Title Insurance Company
000 X. 0xx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Unless otherwise specified, notices shall be deemed given as follows:
(i) if delivered personally, when delivered, (ii) if delivered by nationally
recognized overnight courier delivery service, on the day following the day such
material is sent, or (iii) if delivered by certified mail, on the third day
after the same is deposited with the United States Postal Service as provided
above. Either party may change their address for notice purposes upon giving
fifteen (15) days prior notice thereof in accordance with this paragraph.
48. NON-WAIVER. The failure of Beneficiary to insist upon strict
performance of any term hereof shall not be deemed to be a waiver of any term of
this Deed of Trust. Trustor shall not be relieved of Trustor's obligations
hereunder by reason of (a) failure of Beneficiary to comply with any request of
Trustor or any Guarantor to take any action to foreclose this Deed of Trust or
otherwise enforce any of the provisions hereof or of the Note, any Guaranty or
the other Loan Documents, (b) the release, regardless of consideration, of the
whole or any part of the Folsom Trust Property, or of any person liable for the
Indebtedness or portion thereof or (c) any agreement or stipulation by
Beneficiary extending the time of payment or otherwise modifying or
supplementing the terms of the Note, any Guaranty, this Deed of Trust or the
other Loan Documents. Beneficiary may resort for the payment of the Indebtedness
to any other security
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held by Beneficiary in such order and manner as Beneficiary, in its discretion,
may elect. Beneficiary may take action to recover the Indebtedness, or any
portion thereof, or to enforce any covenant hereof without prejudice to the
right of Beneficiary thereafter to foreclose this Deed of Trust. The rights of
Beneficiary under this Deed of Trust shall be separate, distinct and cumulative
and none shall be given effect to the exclusion of the others. No act of
Beneficiary shall be construed as an election to proceed under any one provision
herein to the exclusion of any other provision. Beneficiary shall not be limited
exclusively to the rights and remedies herein stated but shall be entitled to
every right and remedy now or hereafter afforded by law.
49. JOINT AND SEVERAL LIABILITY. If there is more than one party
comprising Trustor, then the obligations and liabilities of each party under
this Deed of Trust shall be joint and several.
50. SEVERABILITY. If any term, covenant or condition of the Note, any
Guaranty or this Deed of Trust is held to be invalid, illegal or unenforceable
in any respect, the Note, any Guaranty and this Deed of Trust shall be construed
without such provision.
51. DUPLICATE ORIGINALS. This Deed of Trust may be executed in any
number of duplicate originals and each such duplicate original shall be deemed
to constitute but one and the same instrument.
52. INDEMNITY AND BENEFICIARY'S COSTS. TRUSTOR AGREES TO PAY ALL COSTS,
INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES AND EXPENSES, INCURRED
BY BENEFICIARY OR TRUSTEE IN ENFORCING THE TERMS HEREOF AND/OR THE TERMS OF ANY
OF THE OTHER LOAN DOCUMENTS OR THE NOTE OR ANY GUARANTY, WHETHER OR NOT SUIT IS
FILED AND WAIVES TO THE FULL EXTENT PERMITTED BY LAW ALL RIGHT TO PLEAD ANY
STATUTE OF LIMITATIONS AS A DEFENSE TO ANY ACTION HEREUNDER. TRUSTOR AGREES TO
INDEMNIFY AND HOLD BENEFICIARY AND TRUSTEE HARMLESS FROM ANY AND ALL LIABILITY,
LOSS, DAMAGE OR EXPENSE (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS'
FEES AND DISBURSEMENTS) THAT BENEFICIARY OR TRUSTEE MAY OR MIGHT INCUR HEREUNDER
OR IN CONNECTION WITH THE ENFORCEMENT OF ANY OF THEIR RIGHTS OR REMEDIES
HEREUNDER, ANY ACTION TAKEN BY BENEFICIARY OR TRUSTEE HEREUNDER, OR BY REASON OR
IN DEFENSE OF ANY AND ALL CLAIMS AND DEMANDS WHATSOEVER THAT MAY BE ASSERTED
AGAINST BENEFICIARY OR TRUSTEE ARISING OUT OF THE TRUST PROPERTY, EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN THE LOAN DOCUMENTS; AND SHOULD BENEFICIARY OR
TRUSTEE INCUR ANY SUCH LIABILITY, LOSS, DAMAGE OR EXPENSE, THE AMOUNT THEREOF
WITH INTEREST THEREON AT THE DEFAULT RATE SHALL BE PAYABLE BY TRUSTOR
IMMEDIATELY WITHOUT DEMAND, SHALL BE SECURED BY THIS DEED OF TRUST, AND SHALL BE
A PART OF THE INDEBTEDNESS.
53. [INTENTIONALLY DELETED].
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54. NO ORAL CHANGE. This Deed of Trust, and any provisions hereof, may
not be modified, amended, waived, extended, changed, discharged or terminated
orally or by any act or failure to act on the part of Trustor or any one Trustor
or Beneficiary or Trustee, but only by an agreement in writing signed by the
party against whom enforcement of any modification, amendment, waiver,
extension, change, discharge or termination is sought.
55. NO FOREIGN PERSON. Trustor is not a "foreign person" within the
meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended
and the related Treasury Department Regulations, including temporary
regulations.
56. SEPARATE TAX LOT. The Folsom Trust Property is assessed for real
estate tax purposes as one or more wholly independent tax lot or lots, separate
from any adjoining land or improvements not constituting a part of such lot or
lots, and no other land or improvements is assessed and taxed together with the
Folsom Trust Property or any portion thereof.
57. RIGHT TO RELEASE ANY PORTION OF THE FOLSOM TRUST PROPERTY.
Beneficiary or Trustee may release or reconvey any portion of the Folsom Trust
Property for such consideration as Beneficiary may require without, as to the
remainder of the Folsom Trust Property, in any way impairing or affecting the
lien or priority of this Deed of Trust, or improving the position of any
subordinate lienholder with respect thereto, except to the extent that the
obligations hereunder shall have been reduced by the actual monetary
consideration, if any, received by Beneficiary for such release, and may accept
by assignment, pledge or otherwise any other property in place thereof as
Beneficiary may require without being accountable for so doing to any other
lienholder. This Deed of Trust shall continue as a lien and security interest in
the remaining portion of the Folsom Trust Property.
58. SUBROGATION. The Beneficiary shall be subrogated for further
security to the lien, although released of record, of any and all encumbrances
paid out of the proceeds of the Indebtedness secured by this Deed of Trust.
59. ADMINISTRATIVE FEES. Beneficiary may charge its standard
administrative fees and be reimbursed for all costs and expenses, including
reasonable attorneys' fees and disbursements, associated with reviewing and
processing post-closing requests of Trustor.
60. DISCLOSURE. Trustor represents and warrants that (a) it has fully
disclosed to Beneficiary all facts material to the Folsom Trust Property and the
operation and tenants thereof, the Trustor, the Trustor's business operations,
any guarantor of Non-Recourse Carveout Obligations, any indemnitor of
environmental liabilities and any other Guarantor and any principal of any of
them and the background, creditworthiness, financial condition and business
operations of each, (b) all material information submitted in connection with
this Loan is true, correct and complete, (c) the financial and operating
statements and other accounting information submitted in connection with the
Crossed Loans are true, correct, complete, and fairly present the financial
condition of the Trustor, Guarantors and indemnitors and their respective
principals and have been prepared consistent with proper accounting standards;
and (d) there is no litigation, action, claim, or other proceeding, pending or
threatened which might, in any way, materially and/or adversely affect the
Trustor, any Guarantor, any indemnitor or the
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principals of any of them, or the Folsom Trust Property, Beneficiary's lien
thereon, or the financial condition of the Folsom Trust Property or any of the
aforementioned persons, and a misrepresentation or breach of any material
representation, warranty or covenant shall be an Event of Default under the Loan
Documents.
61. HEADINGS, ETC. The headings and captions of various paragraphs of
this Deed of Trust are for convenience of reference only and are not to be
construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
62. ADDRESS OF REAL PROPERTY. The street address of the Real Property is
as follows: 000 Xxxx Xxxxxx Xxxx, Xxxxxx, XX.
63. METHOD OF PAYMENT. All payments of principal and interest and other
amounts due under this Deed of Trust shall be paid to Beneficiary by Automated
Clearing House debit against Trustor's account.
64. PUBLICITY. Trustor agrees that Beneficiary, at its expense, may
publicize the financing of the Folsom Trust Property in trade and similar
publications.
65. RELATIONSHIP. The relationship of Beneficiary to Trustor under this
Deed of Trust is strictly and solely that of lender and borrower and nothing
contained in this Deed of Trust or any other Loan Document is intended to
create, or shall in any event or under any circumstance be construed to create,
a partnership, joint venture, tenancy-in-common, joint tenancy or other
relationship of any nature whatsoever between Beneficiary and Trustor other than
that of lender and borrower.
66. HOMESTEAD. Trustor hereby waives and renounces all homestead and
exemption rights provided by the constitution and the laws of the United States
and of any state, in and to the Land as against the collection of the
Indebtedness, or any part hereof.
67. NO THIRD PARTY BENEFICIARIES. Nothing contained herein is intended
or shall be deemed to create or confer any rights upon any third person not a
party hereto, whether as a third-party beneficiary or otherwise, except as
expressly provided herein.
68. COMPLIANCE WITH REGULATION U. Trustor represents, warrants and
covenants that no part of the proceeds of the Crossed Loans will be used for the
purpose (whether immediate, incidental or ultimate) of buying or carrying any
margin stock within the meaning of Regulation U (12 CFR part 221) of the Board
of Governors of the Federal Reserve System of the United States or for the
purpose of reducing or retiring any indebtedness which was originally incurred
for any such purpose, or for any other purpose which might constitute this Loan
a "purpose credit" within the meaning of such Regulation U.
69. ENTIRE AGREEMENT. This Deed of Trust, the Note and the other Loan
Documents constitute the entire agreement among Trustor and Beneficiary with
respect to the subject matter hereof and all understandings, oral
representations and agreements heretofore or simultaneously had among the
parties are merged in, and are contained in, such documents and instruments.
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70. SERVICER. Beneficiary may from time to time appoint a servicer (the
"Servicer") to administer the Crossed Loans, which Servicer shall have the power
and authority to exercise all of the rights and remedies of Beneficiary and to
act as agent of Beneficiary hereunder.
71. GOVERNING LAW; CONSENT TO JURISDICTION. THIS DEED OF TRUST SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF CALIFORNIA
WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF. EACH TRUSTOR, ENDORSER AND
GUARANTOR HEREBY SUBMITS TO PERSONAL JURISDICTION IN SAID STATE AND THE FEDERAL
COURTS OF THE UNITED STATES OF AMERICA LOCATED IN SAID STATE (AND ANY APPELLATE
COURTS TAKING APPEALS THEREFROM) FOR THE ENFORCEMENT OF SUCH TRUSTOR'S,
ENDORSER'S OR GUARANTOR'S OBLIGATIONS HEREUNDER, UNDER THE NOTE, THE GUARANTY
AND THE OTHER LOAN DOCUMENTS, AND WAIVES ANY AND ALL PERSONAL RIGHTS UNDER THE
LAW OF ANY OTHER STATE TO OBJECT TO JURISDICTION WITHIN SUCH STATE FOR THE
PURPOSES OF SUCH ACTION, SUIT, PROCEEDING OR LITIGATION TO ENFORCE SUCH
OBLIGATIONS OF SUCH TRUSTOR, ENDORSER OR GUARANTOR. EACH TRUSTOR, ENDORSER AND
GUARANTOR HEREBY WAIVES AND AGREES NOT TO ASSERT, AS A DEFENSE IN ANY ACTION,
SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS DEED OF TRUST, THE NOTE,
ANY GUARANTY OR ANY OTHER LOAN DOCUMENT, (A) THAT IT IS NOT SUBJECT TO SUCH
JURISDICTION OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS
NOT MAINTAINABLE IN THOSE COURTS OR THAT THIS DEED OF TRUST, THE NOTE, THE
GUARANTY AND/OR ANY OF THE OTHER LOAN DOCUMENTS MAY NOT BE ENFORCED IN OR BY
THOSE COURTS OR THAT IT IS EXEMPT OR IMMUNE FROM EXECUTION, (B) THAT THE ACTION,
SUIT OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR (C) THAT THE VENUE OF
THE ACTION, SUIT OR PROCEEDING IS IMPROPER. IN THE EVENT ANY SUCH ACTION, SUIT,
PROCEEDING OR LITIGATION IS COMMENCED, TRUSTOR, ENDORSER AND GUARANTOR AGREE
THAT SERVICE OF PROCESS MAY BE MADE, AND PERSONAL JURISDICTION OVER SUCH
TRUSTOR, ENDORSER OR GUARANTOR OBTAINED, BY SERVICE OF A COPY OF THE SUMMONS,
COMPLAINT AND OTHER PLEADINGS REQUIRED TO COMMENCE SUCH LITIGATION UPON SUCH
TRUSTOR, ENDORSER OR GUARANTOR AT 0000 XXXX XXXX XXXX, BUILDING 0 XXXXX 000,
XXXXX XXXX, XX, 00000.
72. TITLE ACTS BY TRUSTEE. At any time upon written request of
Beneficiary, payment of its fees and presentation of this Deed of Trust and the
Note for endorsement (in case of full reconveyance, for cancellation and
retention), without affecting the liability of any person for the payment of the
Indebtedness, Trustee shall (a) consent to the making of any map or plat of the
Folsom Trust Property, (b) join in granting any easement or creating any
restriction thereon, (c) join in any subordination or other agreement affecting
this Deed of Trust or the lien or charge thereof or (d) reconvey, without
warranty, all or any part of the Folsom Trust Property. The Trustee in any
reconveyance may be described as the "person or persons legally entitled
thereto," and the recitals therein of any matters or facts shall be conclusive
proof of the
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truthfulness thereof. Trustor agrees to pay a reasonable Trustee's fee for full
or partial reconveyance, together with a recording fee if Trustee, at its
option, elects to record said reconveyance.
73. SUCCESSOR TRUSTEE. At the option of Beneficiary, with or without any
reason, a successor or substitute trustee may be appointed by Beneficiary
without any formality other than a designation in writing of a successor or
substitute trustee and recording a substitution in accordance with Section 2934a
of the California Civil Code, whereupon such successor or substitute trustee
shall become vested with and succeed to all the powers and duties given to
Trustee herein named, the same as if the successor or substitute trustee had
been named original Trustee herein; and such right to appoint a successor or
substitute trustee shall exist as often and whenever Beneficiary desires.
74. AUTHORIZATION REGARDING TRUSTEE. Trustee (and any successor or
substitute trustee) may act hereunder and may sell and convey the Folsom Trust
Property, or any part thereof, although the Trustee (or successor or substitute
trustee) has been, may now be, or is hereafter the attorney or agent of
Beneficiary with respect to any of the Crossed Loans, or with respect to any
other matter or business whatsoever.
75. WAIVER OF JURY TRIAL. TRUSTOR AND BENEFICIARY DO HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THEIR RIGHT TO A TRIAL BY JURY WITH RESPECT
TO ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS DEED OF TRUST, THE NOTE SECURED HEREBY, ANY OF THE OTHER LOAN DOCUMENTS, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR
ANY ACTION OF EITHER PARTY ARISING OUT OF OR RELATED IN ANY MANNER TO THIS DEED
OF TRUST, THE NOTE SECURED HEREBY, THE LOAN SECURED HEREBY, THE OTHER LOAN
DOCUMENTS OR THE COLLATERAL PROPERTIES (INCLUDING WITHOUT LIMITATION, ANY ACTION
TO RESCIND OR CANCEL THIS DEED OF TRUST AND ANY CLAIMS OR DEFENSES ASSERTING
THAT THIS DEED OF TRUST WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR
VOIDABLE). THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE DELIVERY AND ACCEPTANCE
OF THIS DEED OF TRUST AND SHALL SURVIVE THE CLOSING OR ANY TERMINATION OF THIS
DEED OF TRUST OR THE OTHER LOAN DOCUMENTS.
PART II - CALIFORNIA STATE PROVISIONS
76. In the event of any inconsistencies between the terms and conditions
of Part I and Part II of this Deed of Trust, the terms of Part II shall control
and be binding.
77. The following provision is hereby added at the end of Paragraph 6 of
this Deed of Trust:
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"Trustor hereby specifically, unconditionally and irrevocably waives all
rights of a property owner granted under California Code of Civil Procedure
Section 1265.225(a), which provides for allocation of condemnation proceeds
between a property owner and a lienholder, and any other law, including case
law, or successor statute of similar import."
78. The following provision is hereby added to Paragraph 3 of this Deed
of Trust as subparagraph (g):
"(g) Trustor hereby specifically, unconditionally and irrevocably waives
all rights it may have under any California case and/or statutory law,
heretofore or hereafter in effect, which provides that a lender on a debt
secured by improved real property must demonstrate that its security has
impaired as a result of a casualty before requiring that any or all insurance
proceeds be used to reduce the debt."
79. The following provision is hereby added to Paragraph 7 of this Deed
of Trust as subparagraph (f):
"(f) Upon the foreclosure of the lien created by this Deed of Trust on
the Folsom Trust Property pursuant to the provisions hereof, any Lease then
existing and affecting all or any portion of the Folsom Trust Property shall not
be destroyed or terminated by application of the law of merger or as a matter of
law or as a result of such foreclosure unless Beneficiary or any purchaser at
such foreclosure sale shall so elect. No act by or on behalf of Beneficiary or
any such purchaser shall constitute a termination of any Lease unless
Beneficiary or such purchaser shall give written notice of such termination to
such tenant or subtenant. If both the lessor's and xxxxxx's estate under any
Lease or any portion thereof which constitute a part of the Folsom Trust
Property shall at any time become vested in one owner, this Deed of Trust and
the lien created hereby shall not be destroyed or terminated by application of
the doctrine of merger unless Beneficiary so elects as evidenced by recording a
written declaration so stating, and, unless and until Beneficiary so elects,
Beneficiary shall continue to have and enjoy all of the rights and privileges of
Beneficiary hereunder as to the separate estates."
80. The following provision is hereby added to Paragraph 21 of this Deed
of Trust as subparagraph (h):
"(h) Foreclosure By Power of Sale Pursuant to California Civil Code
Sections 2924-2924l.
(i) Should Beneficiary elect to foreclose by exercise of the
power of sale herein contained, Beneficiary shall notify Trustee and
shall deposit with Trustee this Deed of Trust and the Note and such
receipts and evidence of expenditures made and secured hereby as Trustee
may require.
(ii) Upon receipt of such notice from Beneficiary, Trustee shall
cause to be recorded, published and delivered to Trustor such Notice of
Default and Election to Sell as is then required by law and by this Deed
of Trust. Trustee shall, without demand on Trustor, after lapse of such
time as may then be required by law and after recordation
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of such Notice of Default and after Notice of Sale having been given as
required by law, sell the Folsom Trust Property at the time and place of
sale fixed by Trustee in said Notice of Sale, either as a whole, or in
separate lots or parcels or items, and in such order as Beneficiary may
direct Trustee so to do, at public auction to the highest bidder for
cash in lawful money of the United States payable at the time of sale.
Trustee shall deliver to such purchaser or purchasers thereof its good
and sufficient deed or deeds conveying the property so sold, but without
any covenant or warranty, express or implied. The recitals in such deed
of any matter or fact shall be conclusive proof of the truthfulness
thereof. Any person including, without limitation, Trustor, Trustee or
Beneficiary may purchase at such sale, and Trustor hereby covenants to
warrant and defend the title of such purchaser or purchasers.
(iii) Upon nonjudicial foreclosure of this Deed of Trust,
Beneficiary shall be entitled to credit bid up to and including the
entire amount of the obligations and indebtedness secured hereby. If
Beneficiary makes a combined credit and cash bid and is the successful
bidder, Trustee shall apply the cash bid first to pay the holders of
liens subordinate hereto and encumbering the premises hereby conveyed,
in their respective order of priority; then to pay delinquent taxes, if
any; and shall pay any remaining balance to Trustor; or, if such order
of payment shall be prohibited by law, then in such other order or
priority as is required by law. If a third party is the successful
bidder at such public auction, upon receipt of cash from such bidder:
Trustee shall apply the cash bid received from the third party, after
deducting all costs, fees and expenses of Beneficiary and of the
Trustee, including costs of evidence of title in connection with the
sale, (i) first to pay all sums due and owing by Trustor, with accrued
interest at the Default Rate, under this Deed of Trust and the other
Loan Documents and to the satisfaction of all of Trustor's other
obligations under this Deed of Trust and the other Loan Documents, and
(ii) the remainder, if any, to the person or persons legally entitled
thereto.
(iv) Subject to California Civil Code Section 2924g, Trustee may
postpone sale of all or any portion of the Folsom Trust Property by
public announcement at such time and place of sale, and from time to
time thereafter may postpone such sale by public announcement or
subsequently noticed sale, and without further notice make such sale at
the time fixed by the last postponement, or may, in its discretion, give
a new notice of sale.
(v) A sale of less than the whole of the Folsom Trust Property
or any defective or irregular sale made hereunder shall not exhaust the
power of sale provided for herein; and subsequent sales may be made
hereunder until all obligations secured hereby have been satisfied, or
the entire Folsom Trust Property sold, without defect or irregularity."
81. The following clause is hereby added to the end of Paragraph 25 of
this Deed of Trust:
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Trustor hereby expressly (a) waives any right it may have under
California Civil Code Section 2954.10 to prepay the Note in whole or in part,
without premium (i) prior to the time allowed under the Note or (ii) upon
acceleration of the Maturity Date of the Note; and (b) agrees that if a
prepayment of any or all of the Note is made (i) prior to the time allowed under
the Note or (ii) following any acceleration of the Maturity Date of the Note by
Beneficiary on account of any transfer or disposition prohibited or restricted
by the Note or by this Deed of Trust or for any other reason, Trustor shall be
obligated to pay, concurrently therewith, the prepayment amount, if any, that
would be required under the Note. By initialing this provision in the space
provided below, Trustor hereby declares that Beneficiary's agreement to make the
subject loan at the interest rate and for the term set forth in the Note
constitutes adequate consideration, given individual weight by the undersigned,
for this waiver and agreement.
/s/ AKM /s/ CPW
----------------------------- ---------------------------
Initials of Xxxxx X. Xxxxxxxx Initials Xxxxxxx X. Xxxxxxx
82. The following provision is hereby added to the end of Paragraph 26
of this Deed of Trust:
"Trustor hereby irrevocably consents to such appointment and waives
notice of any application therefor. Any such receiver or receivers shall have
all the usual powers and duties of receivers in like or similar cases and all
the powers and duties of Beneficiary in case of entry as provided herein and
shall continue as such and exercise all such powers until the date of
confirmation of sale of the Folsom Trust Property or a sale of the Folsom Trust
Property under the power of sale herein contained, unless such receivership is
sooner terminated."
83. The following three paragraphs are hereby added to the end of
Paragraph 27 of this Deed of Trust:
"With respect to fixtures, Beneficiary or Trustee may elect to treat
same as either real property or personal property and proceed to exercise such
rights and remedies applicable to the categorization so chosen. Beneficiary may
proceed against the items of real property and any items of Collateral
separately or together in any order whatsoever, without in any way affecting or
waiving Beneficiary's rights and remedies under the California Uniform
Commercial Code, this Deed of Trust or the Note. Trustor acknowledges and agrees
that Beneficiary's rights and remedies under this Deed of Trust and the Note
shall be cumulative and shall be in addition to every other right and remedy now
or hereafter existing at law, in equity, by statute or by agreement of parties.
Trustor agrees that this Deed of Trust constitutes a financing statement
filed as a fixture filing in the Official Records of jurisdiction in which the
Real Property is located, with respect to any and all fixtures included within
the term "FOLSOM TRUST PROPERTY" or "COLLATERAL" as used herein and with respect
to any goods and other personal property that may now be or hereafter become
fixtures. The names and mailing addresses of the debtor (Trustor)
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and the secured party (Beneficiary) are set forth on the first page of this Deed
of Trust. Trustor is the record owner of the Folsom Trust Property. The personal
Property described above is the collateral covered by this financing statement.
Any reproduction of this Deed of Trust or any other security agreement or
financing statement shall be sufficient as a financing statement."
It is the express understanding and intent of the parties hereto that
upon the occurrence of an Event of Default hereunder, Beneficiary or Trustee, as
appropriate and in their sole discretion, may proceed in any sequence under
Article 9 of the California Uniform Commercial Code (the "Code") in accordance
with the Code as to any personal property or fixtures and separately as to its
remedies with respect to real property and fixtures, or may proceed in any
sequence as to some or all of the real property and some or all of the personal
property and fixtures in accordance with its rights and remedies in respect of
the real property, as specifically permitted under Section 9604 of the Code, and
treat both the real property and the personal property or fixtures as one parcel
of security. Beneficiary and Trustee may aggregate their rights in any real
property, fixtures and/or personal to create such parcels of security to be sold
pursuant to the power of sale herein or by judicial foreclosure. A sale of a
parcel of security including real and personal property may be conducted by the
Trustee.
84. The following clause is hereby added after the words "section 1801
et seq.;" in Paragraph 39 of this Deed of Trust:
"the Xxxxxx-Cologne Water Control Act; the Waste Management Act of 1980;
the Toxic Pit Cleanup Act; the Underground Tank Act of 1984; the California
Water Quality Improvement Act; California Health and Safety Codes Sections 25117
and 25316 and other laws and statutes that could cause the Folsom Trust Property
or any part thereof to be classified as "border zone property" thereunder;"
85. The following paragraph is hereby added to the end of Paragraph 40
of this Deed of Trust:
"Without limiting any of the remedies provided in the Loan Documents,
Trustor acknowledges and agrees that the provisions of Paragraph 39 and 40 of
this Deed of Trust are environmental provisions (as defined in Section 736(f)(2)
of the California Code of Civil Procedure) made by the Trustor relating to the
real property security (the "ENVIRONMENTAL PROVISIONS"). Trustor's breach or a
failure to comply with the Environmental Provisions shall constitute a breach of
contract entitling Beneficiary to all remedies provided under Section 736 of the
California Code of Civil Procedure ("SECTION 736") for the recovery of damages
and for the enforcement of the Environmental Provisions. Pursuant to Section
736, Beneficiary's action for recovery of damages or enforcement of the
Environmental Provisions shall not constitute an action within the meaning of
Section 726(a) of the California Code of Civil Procedure or constitute a money
judgment for a deficiency or a deficiency judgment within the meaning of Section
580a, 580b, 580d, or 726(b) of the California Code of Civil Procedure. Other
than the remedy provided under Section 736, all remedies provided for by the
Loan Documents are separate and distinct causes of action that are not
abrogated, modified, limited or otherwise affected by the remedies provided
under Section 736(a) of the California Code of Civil Procedure."
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86. The following four paragraphs are hereby added to the end of
Paragraph 48 of this Deed of Trust:
"Trustor has read and hereby approves the Note, this Deed of Trust, the
other Loan Documents and all other agreements and documents relating thereto.
Trustor acknowledges that it has been represented by counsel of its choice to
review this Deed of Trust, the Note, the other Loan Documents and all other
documents relating thereto and said counsel has explained and Trustor
understands the provisions thereof, or that Trustor has voluntarily declined to
retain such counsel.
Trustor hereby expressly waives diligence, demand, presentment, protest
and notice of every kind and nature whatsoever (unless as otherwise required
under this Deed of Trust) and waives any right to require Beneficiary to enforce
any remedy against any guarantor, endorser or other person whatsoever prior to
the exercise of its rights and remedies hereunder or otherwise. Trustor waives
any right to require Beneficiary to: (i) proceed or exhaust any collateral
security given or held by Beneficiary in connection with the Indebtedness; (ii)
give notice of the terms, time and place of any public or private sale of any
real or personal property security for the Indebtedness or other guaranty of the
Indebtedness; or (iii) pursue any other remedy in Beneficiary's power
whatsoever.
Until all Indebtedness shall have been paid in full, Trustor: (i) shall
not have any right of subrogation to any of the rights of Beneficiary against
any guarantor, maker or endorser; (ii) waives any right to enforce any remedy
which Beneficiary now has or may hereafter have against any other guarantor,
maker or endorser; (iii) waives any benefit of, and any other right to
participate in, any collateral security for the Indebtedness or any guaranty of
the Indebtedness now or hereafter held by Beneficiary.
Trustor hereby authorizes and empowers Beneficiary in its sole
discretion, without any notice or demand and without affecting the lien and
charge of this Deed of Trust, to exercise any right or remedy which Beneficiary
may have available to it, including, but not limited to, judicial foreclosure,
exercise of rights of power of sale without judicial action as to any collateral
security for the Indebtedness, whether real, personal or intangible property.
Trustor expressly waives suretyship defenses that Trustor may have under
California law and the laws of any other state. Without limiting the foregoing,
Trustor specifically agrees that any action maintained by Beneficiary for the
appointment of any receiver, trustee or custodian to collect rents, issues or
profits or to obtain possession of the Folsom Trust Property shall not
constitute an "action" within the meaning of Section 726 of the California Code
of Civil Procedure."
87. The following paragraph is hereby added to this Deed of Trust:
"Notwithstanding anything to the contrary set forth herein, this Deed of
Trust shall not be deemed to secure the obligations of Trustor under that
certain Indemnification Agreement dated as of the date hereof."
PART III - RELEASE AND PARTIAL PREPAYMENT PROVISIONS
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Original Trustor acknowledges, covenants and agrees that the Beneficiary
has agreed (A) to consent to the release of the Folsom Loan and the Folsom Trust
Property from the CC/CD Provisions (hereinafter defined) upon a Transfer and
Assumption (hereinafter defined) or (B) that the lien of the Loan Documents and
CC/CD Provisions may be released from the Folsom Trust Property upon a Third
Party Sale and Payoff (hereinafter defined); provided, that, in either case, the
Original Trustor strictly complies with all of the applicable terms, conditions
and provisions set forth in this Part III. The rights set forth in this Part III
shall be for the exclusive benefit of Original Trustor and may not be
transferred or assigned to any other party, including without limitation the
Transferee, if any, of the Folsom Trust Property under Paragraph 9(f) hereof.
The transfer and release rights described in this Part III are in addition to
the one-time transfer and assumption rights set forth in Paragraph 9(f) hereof.
88. TRANSFER AND ASSUMPTION. Beneficiary shall consent to the Transfer
and Assumption, as long as all of the Transfer and Assumption Conditions
(hereinafter defined) are satisfied.
89. THIRD PARTY SALE AND PAYOFF. Beneficiary shall consent to the Third
Party Sale and Payoff as long as all of the Third Party Sale and Payoff
Conditions (hereinafter defined) are satisfied.
PART IV - CERTAIN DEFINITIONS
90. CERTAIN DEFINITIONS. As used in this Deed of Trust, the following
terms shall have the meanings set forth below:
(a) Beneficiary shall mean Beneficiary or any subsequent holder of the
Folsom Note.
(b) Bona Fide Sale shall mean a bona fide, arms-length sale of the
entire Folsom Trust Property by the Original Trustor to a Third Party Transferee
pursuant to a written purchase and sale agreement.
(c) Collateral Properties shall mean, collectively, the Folsom Trust
Property, the Irvine Trust Property, the Tustin Trust Property and the
Sacramento Trust Property to the extent such properties remain subject to the
CC/CD Provisions.
(d) CC/CD Provisions shall mean the cross-collateralization and
cross-default provisions of the Loan Documents.
(e) Crossed Loans shall mean, collectively, the Folsom Loan, the Irvine
Loan, the Tustin Loan and the Sacramento Loan to the extent such loans are still
subject to the CC/CD Provisions.
(f) Folsom Trust Property shall include any portion of the Folsom Trust
Property or interest therein.
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(g) Guarantor shall mean any person giving or making any Guaranty.
(h) Guaranty shall mean any guaranty of payment, guaranty of completion,
guaranty of collection, environmental indemnity or any other guaranty or
indemnity given at any time to or for the benefit of Beneficiary in connection
with any of the Crossed Loans.
(i) Irvine Deed of Trust shall mean that certain Deed of Trust,
Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated as
of the Closing Date, made by Original Trustor to Commonwealth Land Title
Insurance Company, as trustee in favor of Xxxx Xxxxxxx Life Insurance Company
encumbering the Irvine Trust Property.
(j) Irvine Trust Property shall mean that certain improved real property
commonly known by street address as 00000 Xxxxx Xxxxxx, Xxxxxx, XX 00000, as
more particularly described and defined in the Irvine Deed of Trust.
(k) Loan Documents shall mean, jointly and severally, the Folsom Loan
Documents, the Irvine Loan Documents, the Tustin Loan Documents and/or the
Sacramento Loan Documents.
(l) Loan Year shall have the meaning assigned to such term in the Note.
(m) Note shall mean, jointly and severally, the Folsom Note, the Irvine
Note, the Tustin Note and/or the Sacramento Note.
(n) Person or persons shall include an individual, corporation,
partnership, trust, unincorporated association, government, governmental
authority or other entity.
(o) Remaining Loans shall mean the Crossed Loans less and except the
Folsom Loan.
(p) Remaining Properties shall mean the Collateral Properties less and
except the Folsom Trust Property.
(q) Sacramento Trust Property shall mean that certain improved real
property commonly known by street address as 0000 Xxxx Xxxx, Xxxxxxxxxx, XX
00000 as more particularly described and defined in the Sacramento Deed of
Trust.
(r) Sacramento Deed of Trust shall mean that certain Deed of Trust,
Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated as
of the Closing Date, made by Original Trustor to Commonwealth Land Title
Insurance Company, as trustee in favor of Xxxx Xxxxxxx Life Insurance Company
encumbering the Sacramento Trust Property.
(s) Third Party Sale and Payoff shall mean the sale of the Folsom Trust
Property to a Third Party Transferee and repayment of all amounts due and owing
under the Loan Documents for the Folsom Loan.
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(t) Third Party Sale and Payoff Conditions shall mean that all of the
following conditions are satisfied:
(i) Original Trustor is not in default of any of the provisions
of the Crossed Loans or any Loan Document, including without limitation
any CC/CD Provisions, nor shall there exist any event or condition that,
with the passage of time or the giving of notice, or both, could
constitute a default;
(ii) the proposed Third Party Sale and Payoff shall occur after
the end of the third Loan Year.
(iii) Original Trustor shall have paid to Beneficiary all
outstanding amounts due under the Folsom Loan Documents, including
without limitation outstanding principal, accrued but unpaid interest
and the prepayment premium payable under the Folsom Note;
(iv) Beneficiary, in its sole discretion, has determined that
the debt service coverage ratio (calculated as annual cash flow
available for debt service, divided by the annual debt service), is at
least 1.30:1, and the loan to value is no greater than 75% for the
Remaining Loans, individually and in the aggregate;
(v) the then-remaining lease terms (excluding extension and
option periods) for all Leases demising the Remaining Properties shall
not be less than two (2) years;
(vi) the Original Trustor shall provide Beneficiary with any
title endorsements Beneficiary shall require with respect to the
Remaining Loans;
(vii) any Guarantor shall execute a ratification of such
Guarantor's Guaranty, which ratification agreement shall be in form and
substance satisfactory to Beneficiary in its sole and absolute
discretion;
(viii) the Original Trustor shall pay all of Beneficiary's
costs, fees and expenses in connection with any requested release,
including, but not limited to, Beneficiary's attorney's fees, and
furthermore shall pay to Beneficiary an administrative fee equal to
$2,500; and
(ix) In no event shall Original Trustor request a release of
more than two (2) of the Crossed Loans from the CC/CD Provisions.
(u) Third Party Transferee shall mean a person or entity unaffiliated in
any way with the Original Trustor or any constituent entity in the Original
Trustor.
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(v) Transfer and Assumption shall mean a Bona Fide Sale of the Folsom
Trust Property to a Third Party Transferee and the assumption of the Folsom Loan
by the Third Party Transferee pursuant to and in accordance with the Transfer
and Assumption Conditions.
(w) Transfer and Assumption Conditions shall mean that all of the
following conditions are satisfied:
(i) Original Trustor is not in default of any of the provisions
of the Crossed Loans or any Loan Document, including without limitation
any CC/CD Provisions, nor shall there exist any event or condition that,
with the passage of time or the giving of notice, or both, could
constitute a default;
(ii) Original Trustor, the Folsom Trust Property and the Third
Party Transferee shall have complied with the conditions set forth in
Paragraphs 9(f)(i) through (vii) and (ix) of this Deed of Trust;
(iii) the Bona Fide Sale of the Folsom Trust Property shall not
involve any secondary financing;
(iv) the proposed Transfer and Assumption shall not occur until
after the end of the first Loan Year;
(v) Beneficiary, in its sole discretion, has determined that the
debt service coverage ratio (calculated as annual cash flow available
for debt service, divided by the annual debt service), is at least
1.30:1, and the loan to value is no greater than 75% for the Remaining
Loans, individually and in the aggregate, and the Folsom Loan
individually;
(vi) the then-remaining lease terms (excluding extension and
option periods) for all Leases demising the Remaining Properties and the
Folsom Trust Property shall not be less than two (2) years;
(vii) any Guarantor shall execute a ratification of such
Guarantor's Guaranty, which ratification agreement shall be in form and
substance satisfactory to Beneficiary in its sole and absolute
discretion;
(viii) the Original Trustor shall provide Beneficiary with any
title endorsements Beneficiary shall require with respect to the
Remaining Loans and the Folsom Loan;
(ix) the Original Trustor shall pay all of Beneficiary's costs,
fees and expenses in connection with any requested release, including,
but not limited to, Beneficiary's attorney's fees, and furthermore shall
pay to Beneficiary an administrative fee equal to $2,500; and
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(x) in no event shall Original Trustor request a release of more
than two (2) of the Crossed Loans from the CC/CD Provisions.
(x) Trustee shall mean Trustee and any successor or substitute Trustee.
(y) Trustor shall mean Trustor and/or any subsequent owner or owners of
the Folsom Trust Property or any part thereof or interest therein.
(z) Tustin Trust Property shall mean that certain improved real property
commonly known by street address as 00000 Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000, as
more particularly described and defined in the Tustin Deed of Trust.
(aa) Xxxxxx Xxxx of Trust shall mean that certain Deed of Trust,
Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated as
of the Closing Date, made by Original Trustor to Commonwealth Land Title
Insurance Company, as trustee in favor of Xxxx Xxxxxxx Life Insurance Company
encumbering the Tustin Trust Property.
91. RULES OF CONSTRUCTION.
(a) Whenever the context may require, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns and pronouns shall include the plural and vice versa.
(b) Unless the context clearly indicates a contrary intent or unless
otherwise specifically provided herein, words used in this Deed of Trust shall
be used interchangeably in singular or plural form.
(c) To facilitate execution, this Deed of Trust may be executed in as
many counterparts as may be convenient or required. It shall not be necessary
that the signature of, or on behalf of, each party, or that the signature of all
persons required to bind any party, appear on each counterpart. All counterparts
shall collectively constitute a single instrument. It shall not be necessary in
making proof of this Deed of Trust to produce or account for more than a single
counterpart containing the respective signatures of, or on behalf of, each of
the parties hereto. Any signature page to any counterpart may be detached from
such counterpart without impairing the legal effect of the signatures thereon
and thereafter attached to another counterpart identical thereto except having
attached to it additional signature pages.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE APPEARS ON NEXT PAGE]
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IN WITNESS WHEREOF, Xxxxxxx has duly executed and delivered this Deed of
Trust.
WCRI, LLC
By: WEST COAST REALTY INVESTORS, INC.,
a Delaware corporation, its Manager
By /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Xxxxx X. Xxxxxxxx
President
By /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxxx
Secretary/Treasurer
Organizational ID Number: 2002 2031 0066
Federal Taxpayer ID Number: 00-0000000
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STATE OF NEW YORK, COUNTY OF NEW YORK ss:
On the 30 day of July, 2002, before me, the undersigned, a notary public in and
for said state, personally appeared Xxxxx X. Xxxxxxxx, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his authorized capacity, and that by his signature on the
instrument, the individual, or the person upon behalf of which the individual
acted, executed the instrument.
(Notary stamp/Seal) /s/ Xxxxxxx Xxxx Xxxxx
----------------------------------------
Xxxxxx Xxxx Xxxxx
Notary Public, State of New York
No. 01KA6047092
Qualified in New York County
Commission Expires August 28, 2002
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STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
On July 31, 2002, before me, Xxxxxxx X. Xxxxx Public in and for said state,
personally appeared Xxxxxxx X. Xxxxxxx, proved to me on the basis of
satisfactory evidence to be the person whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Xxxxxxx X. Xxxxx
Comm. # 1247122
NOTARY PUBLIC-CALIFORNIA
Los Angeles County
My Comm. Expires Dec. 26, 2003 /s/ Xxxxxxx X. Xxxxx
----------------------------------------
(SIGNATURE OF NOTARY)
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EXHIBIT A
(City of Folsom)
Parcel C as said Parcel is shown on that certain map entitled "Lots 28 thru 38
Lake Forest Technical Center (147 B.M. 19)" filed for recorded in the office of
the County Recorder of Sacramento, on April 17, 1984 in Book 80 of Parcel Maps,
Map No. 29.
Apn Map: 000-0000-000
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