1
Exhibit (b)(5)
RETURN ADDRESS:
KEYBANK NATIONAL
ASSOCIATION
COMMERCIAL LOAN SERVICES
P.O. BOX 5278
BOISE, ID 83705-5278
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DEED OF TRUST
Reference # (if applicable):_________________________ Additional on page ____
Grantor(s):
1. LINDAL CEDAR HOMES, INC.
Grantee(s)/Assignee/Beneficiary:
KEYBANK NATIONAL ASSOCIATION, Beneficiary
FIRST AMERICAN TITLE COMPANY OF SKAGIT COUNTY, Trustee
Legal Description; That portion of the Northeast 1/4 of the Southwest
1/4 and the Northwest 1/4 of the Southeast 1/4 of Section 3,
Township 23 North, Range 4 East Additional on page 2
Assessor's Tax Parcel ID#: 302304 9213
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THIS DEED OF TRUST IS DATED DECEMBER 11, 2000, AMONG LINDAL CEDAR HOMES, INC.,
A DELAWARE CORPORATION, WHOSE MAILING ADDRESS IS 4300 SOUTH 104TH PLACE,
SEATTLE, WA 98124 (REFERRED TO BELOW AS "GRANTOR"); KEYBANK NATIONAL
ASSOCIATION, WHOSE MAILING ADDRESS IS 500 108TH AVENUE NE, SUITE 320, BELLEVUE,
WA 98004 (REFERRED TO BELOW SOMETIMES AS "LENDER" AND SOMETIMES AS
"BENEFICIARY"); AND FIRST AMERICAN TITLE COMPANY OF SKAGIT COUNTY, WHOSE
MAILING ADDRESS IS 1301-B RIVERSIDE DRIVE, MOUNT VERNON, WA 98273 (REFERRED TO
BELOW AS "TRUSTEE").
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CONVEYANCE AND GRANT. FOR VALUABLE CONSIDERATION, GRANTOR CONVEYS TO TRUSTEE IN
TRUST WITH POWER OF SALE, RIGHT OF ENTRY AND POSSESSION AND FOR THE BENEFIT OF
LENDER AS BENEFICIARY, all of Grantor's right, title, and interest in and to
the following described real property, together with all existing or
subsequently erected or affixed buildings, improvements and fixtures; all
easements, rights of way, and appurtenances; all water, water rights and ditch
rights (including stock in utilities with ditch or irrigation rights); and all
other rights, royalties, and profits relating to the real property, including
without limitation all minerals, oil, gas, geothermal and similar matters,
LOCATED IN KING COUNTY, STATE OF WASHINGTON (THE "REAL PROPERTY"):
SEE ATTACHMENT "A"
THE REAL PROPERTY OR ITS ADDRESS IS COMMONLY KNOWN AS 10411 EMPIRE WAY SOUTH,
TUKWILA, WA 98178. The Real Property tax identification number is 302304 9213.
Grantor hereby assigns as security to Lender, all of Grantor's right, title,
and interest in and to all leases, Rents, and profits of the Property. This
assignment is recorded in accordance with RCW 65.08.070; the lien created by
this assignment is intended to be specific, perfected and choate upon the
recording of this Deed of Trust. Lender grants to Grantor a license to collect
the Rents and profits, which license may be revoked at Lender's option and
shall be automatically revoked upon acceleration of all or part of the
Indebtedness.
DEFINITIONS. The following words shall have the following meanings when used in
this Deed of Trust. Terms not otherwise defined in this Deed of Trust shall
have the meanings attributed to such terms in the Uniform Commercial Code. All
references to dollar amounts shall mean amounts in lawful money of the United
States of America.
BENEFICIARY. The word "Beneficiary" means KEYBANK NATIONAL ASSOCIATION,
its successors and assigns. KEYBANK NATIONAL ASSOCIATION also is referred
to as "Lender" in this Deed of Trust.
DEED OF TRUST. The words "Deed of Trust" means this Deed of Trust among
Grantor, Lender, and Trustee, and includes without limitation all
assignment and security interest provisions relating to the Personal
Property and Rents.
GRANTOR. The word "Grantor" means any and all persons and entities
executing this Deed of Trust, including without limitation LINDAL CEDAR
HOMES, INC.
GUARANTOR. The word "Guarantor" means and includes without limitation any
and all guarantors, sureties, and accommodation parties in connection with
the Indebtedness.
IMPROVEMENTS. The word "Improvements" means and includes without
limitation all existing and future improvements, buildings, structures,
mobile homes affixed on the Real Property, facilities, additions,
replacements and other construction on the Real Property.
INDEBTEDNESS. The word "Indebtedness" means all principal and interest
payable under the Note and any amounts expended or advanced by Lender to
discharge obligations of Grantor or expenses incurred by Trustee or Lender
to enforce obligations of Grantor under this Deed of Trust, together with
interest on such amounts as provided in this Deed of Trust. In addition to
the Note, the word "Indebtedness" includes all obligations, debts and
liabilities, plus interest thereon, of Grantor to Lender, or any one or
more of them, as well as all claims by Lender against Grantor, or any one
or more of them, whether now existing or hereafter arising, whether
related or unrelated to the purpose of the Note, whether voluntary or
otherwise, whether due or not due, absolute or contingent, liquidated or
unliquidated and whether Grantor may be liable individually or jointly
with others, whether obligated as guarantor or otherwise, and whether
recovery upon such Indebtedness may be or hereafter may become barred by
any statute of limitations, and whether such Indebtedness may be or
hereafter may become otherwise unenforceable. THE LIEN OF THIS DEED OF
TRUST SHALL NOT EXCEED AT ANY ONE TIME $2,140,000.00.
LENDER. The word "Lender" means KEYBANK NATIONAL ASSOCIATION, its
successors and assigns.
NOTE. THE WORD "NOTE" MEANS THE NOTE DATED DECEMBER 11, 2000, IN THE
ORIGINAL PRINCIPAL AMOUNT OF $2,900,000.00 from Grantor to Lender,
together with all renewals, extensions, modifications, refinancings, and
substitutions for the Note. NOTE TO GRANTOR: THE NOTE CONTAINS A VARIABLE
INTEREST RATE.
PERSONAL PROPERTY. The words "Personal Property" mean all equipment,
fixtures, and other articles of personal property now or hereafter owned
by Grantor, and now or hereafter attached or affixed to the Real Property;
together with all accessions, parts, and additions to, all replacements
of, and all substitutions for, any of such property; and together with all
issues and profits thereon and proceeds (including without limitation all
insurance proceeds and refunds of premiums) from any sale or other
disposition of the Property.
PROPERTY. The word "Property" means collectively the Real Property and the
Personal Property.
REAL PROPERTY. The words "Real Property" mean the property, interests and
rights described above in the "Conveyance and Grant" section.
RELATED DOCUMENTS. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
guaranties, security agreements, mortgages, deeds of trust, and all other
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instruments, agreements and documents, whether now or hereafter existing,
executed in connection with the Indebtedness; provided, that the
environmental indemnity agreements are not "Related Documents" and are not
secured by this Deed of Trust.
RENTS. The word "Rents" means all present and future rents, revenues,
income, issues, royalties, profits, and other benefits derived from the
Property.
TRUSTEE. The word "Trustee" means FIRST AMERICAN TITLE COMPANY OF SKAGIT
COUNTY and any substitute or successor trustees.
THIS DEED OF TRUST, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST
IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (1) PAYMENT OF THE
INDEBTEDNESS AND (2) PERFORMANCE OF ANY AND ALL OBLIGATIONS OF GRANTOR UNDER
THE NOTE, THE RELATED DOCUMENTS, AND THIS DEED OF TRUST. THIS DEED OF TRUST IS
GIVEN AND ACCEPTED ON THE FOLLOWING TERMS.
PAYMENT AND PERFORMANCE. Except as otherwise provided in this Deed of Trust,
Grantor shall pay to Lender all amount secured by this Deed of Trust as they
become due, and shall strictly and in a timely manner perform all of Grantor's
obligations under the Note, this Deed of Trust, and the Related Documents.
POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's
possession and use of the Property shall be governed by the following
provisions:
POSSESSION AND USE. Until the occurrence of an Event of Default, Grantor
may (a) remain in possession and control of the Property, (b) use, operate
or manage the Property, and (c) collect any Rents from the Property (this
privilege is a license from Lender to Grantor automatically revoked upon
default). The following provisions relate to the use of the Property or to
other limitations on the Property. The Real Property is not used
principally for agricultural purposes.
DUTY TO MAINTAIN. Grantor shall maintain the Property in tenantable
condition and promptly perform all repairs, replacements, and maintenance
necessary to preserve its value.
NUISANCE, WASTE. Grantor shall not cause, conduct or permit any nuisance
nor commit, permit, or suffer any stripping of or waste on or to the
Property or any portion of the Property. Without limiting the generality
of the foregoing, Grantor will not remove, or grant to any other party the
right to remove, any timber, minerals (including oil and gas), soil,
gravel or rock products without the prior written consent of Lender.
REMOVAL OF IMPROVEMENTS. Grantor shall not demolish or remove any
Improvements from the Real Property without the prior written consent of
Lender. As a condition to the removal of any Improvements, Lender may
require Grantor to make arrangements satisfactory to Lender to replace
such Improvements with Improvements of at least equal value.
LENDER'S RIGHT TO ENTER. Lender and its agents and representations may
enter upon the Real Property at all reasonable times to attend to Lender's
interests and to inspect the Property for purposes of Grantor's compliance
with the terms and conditions of this Deed of Trust.
COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Grantor shall promptly comply,
and shall promptly cause compliance by all agents, tenants or other
persons or entities of every nature whatsoever who rent, lease or
otherwise use or occupy the Property in any manner, with all laws,
ordinances, and regulations, now or hereafter in effect, of all
governmental authorities applicable to the use or occupancy of the
Property, including without limitation, the Americans With Disabilities
Act. Grantor may contest in good faith any such law, ordinance, or
regulation and withhold compliance during any proceeding, including
appropriate appeals, so long as Grantor has notified Lender in writing
prior to doing so and so long as, in Lender's sole opinion, Lender's
interests in the Property are not jeopardized. Lender may require Grantor
to post adequate security or a surety bond, reasonably satisfactory to
Lender, to protect Lender's interest.
DUTY TO PROTECT. Grantor agrees neither to abandon nor leave unattended
the Property. Grantor shall do all other acts, in addition to those acts
set forth above in this section, which from the character and use of the
Property are reasonably necessary to protect and preserve the Property.
DUE ON SALE -- CONSENT BY LENDER. Lender may, at its option, (a) declare
immediately due and payable all sums secured by this Deed of Trust or (b)
increase the interest rate provided for in the Note or other document
evidencing the Indebtedness and impose such other conditions as Lender deems
appropriate, upon the sale or transfer, without the Lender's prior written
consent, of all or any part of the Real Property, or any interest in the Real
Property. A "sale or transfer" means the conveyance of Real Property or any
right, title or interest therein; whether legal, beneficial or equitable;
whether voluntary or involuntary; whether by outright sale, deed, installment
sale contract, land contract, contract for deed, leasehold interest with a term
greater than three (3) years, lease-option contract, or by sale, assignment, or
transfer of any beneficial interest in or to any land trust holding title to
the Real Property, or by any other method of conveyance of Real Property
interest. If any Grantor is a corporation, partnership or limited liability
company, transfer also includes any change in ownership of more than
twenty-five percent (25%) of the voting stock, partnership interests or limited
liability company interests, as the case may be, of Grantor. However, this
option shall not be exercised by Lender if such exercise is prohibited by
federal law or by Washington law.
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TAX AND LIENS. The following provisions relating to the taxes and liens on the
Property are part of this Deed of Trust.
PAYMENT. Grantor shall pay when due (and in all events prior to
delinquency) all taxes, special taxes, assessments, charges (including
water and sewer), fines and impositions levied against or on account of the
Property, and shall pay when due all claims for work done on or for
services rendered or material furnished to the Property. Grantor shall
maintain the Property free of all liens having priority over or equal to
the interest of Lender under this Deed of Trust, except for the lien of
taxes and assessments not due and except as otherwise provided in this Deed
of Trust.
RIGHT TO CONTEST. Grantor may withhold payment of any tax, assessment, or
claim in connection with a good faith dispute over the obligation to pay,
so long as Lender's interest in the Property is not jeopardized. If a lien
arises or is filled as a result of nonpayment, Grantor shall within fifteen
(15) days after the lien arises or, if a lien is filled, within fifteen
(15) days after Grantor has notice of the filing, secure the discharge of
the lien, or if requested by Lender, deposit with Lender cash or a
sufficient corporate surety bond or other security satisfactory to Lender
in an amount sufficient to discharge the lien plus any costs and attorneys'
fees or other charges that could accrue as a result of a foreclosure or
sale under the lien. In any contest, Grantor shall defend itself and Lender
and shall satisfy any adverse judgment before enforcement against the
Property. Grantor shall name Lender as an additional obligee under any
surety bond furnished in the contest proceedings.
EVIDENCE OF PAYMENT. Grantor shall upon demand furnish to Lender
satisfactory evidence of payment of the taxes or assessments and shall
authorize the appropriate governmental official to deliver to Lender at any
time a written statement of the taxes and assessments against the Property.
NOTICE OF CONSTRUCTION. Grantor shall notify Lender at least fifteen (15)
days before any work is commenced, any services are furnished, or any
materials are supplied to the Property, if any mechanic's lien,
materialmen's lien, or other lien could be asserted on account of the work,
services, or materials and the cost exceeds $5,000.00. Grantor will upon
request of Lender furnish to Lender advance assurances satisfactory to
Lender that Grantor can and will pay the cost of such improvements.
PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring
the Property are a part of this Deed of Trust.
MAINTENANCE OF INSURANCE. Grantor shall procure and maintain policies of
fire insurance with standard extended coverage endorsements on a
replacement basis for the full insurable value covering all improvements on
the Real Property in an amount sufficient to avoid application of any
coinsurance clause, and with a standard mortgagee clause in favor of
Lender. Grantor shall also procure and maintain comprehensive general
liability insurance in such coverage amounts as Lender may request with
trustee and Lender being named as additional insureds in such liability
insurance policies. Additionally, Grantor shall maintain such other
insurance, including but not limited to hazard, business interruption, and
boiler insurance, as Lender may reasonably require. Policies shall be
written in form, amounts, coverages and basis reasonably acceptable to
Lender and issued by a company or companies reasonably acceptable to
Lender. Grantor, upon request of Lender, will deliver to Lender from time
to time the policies or certificates of insurance in form satisfactory to
Lender, including stipulations that coverages will not be cancelled or
diminished without at least ten (10) days' prior written notice to Lender.
Each insurance policy also shall include an endorsement providing that
coverage in favor of Lender will not be impaired in any way by any act,
omission or default of Grantor or any other person. Should the Real
Property at any time become located in an area designated by the Director
of the Federal Emergency Management Agency as a special flood hazard area,
Grantor agrees to obtain and maintain Federal Flood Insurance for the full
unpaid principal balance of the loan and any prior liens on the property
securing the loan, up to the maximum policy limits set under the National
Flood Insurance Program, or as otherwise required by Lender, and to
maintain such insurance for the term of the loan.
APPLICATION OF PROCEEDS. Grantor shall promptly notify Lender of any loss
or damage to the Property if the estimated cost of repair or replacement
exceeds $500.00. Lender may make proof of loss if Grantor fails to do so
within fifteen (15) days of the casualty. Whether or not Lender's security
is impaired, Lender may, at its election, receive and retain the proceeds
of any insurance and apply the proceeds to the reduction of the
Indebtedness, payment of any lien affecting the Property, or the
restoration and repair of the Property. If Lender elects to apply the
proceeds to restoration and repair, Grantor shall repair or replace the
damaged or destroyed improvements in a manner satisfactory to Lender.
Lender shall, upon satisfactory proof of such expenditure, pay or reimburse
Grantor from the proceeds for the reasonable cost of repair or restoration
if Grantor is not in default under this Deed of Trust. Any proceeds which
have not been disbursed within 180 days after their receipt and which
Lender has not committed to the repair or restoration of the Property shall
be used first to pay any amount owing to Lender under this Deed of Trust,
then to pay accrued interest, and the remainder, if any, shall be applied
to the principal balance of the Indebtedness. If Lender holds any proceeds
after payment in full of the Indebtedness, such proceeds shall be paid
without interest to Grantor as Grantor's interests may appear.
UNEXPIRED INSURANCE AT SALE. Any unexpired insurance shall inure to the
benefit of, and pass to, the purchaser of the Property covered by this Deed
of Trust at any trustee's sale or other sale held under the provisions of
this Deed of Trust, or at any foreclosure sale of such Property.
GRANTOR'S REPORT ON INSURANCE. Upon request of Lender, however not more
than once a year, Grantor shall furnish to Lender a report on each existing
policy of insurance showing: (a) the name of the insurer; (b) the risks
insured;
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(c) the amount of the policy; (d) the property insured, the then current
replacement value of such property, and the manner of determining that
value; and (e) the expiration date of the policy. Grantor shall, upon
request of Lender, have an independent appraiser satisfactory to Lender
determine the cash value replacement cost of the Property.
TAX AND INSURANCE RESERVES. Subject to any limitations set by applicable law,
Lender may require Grantor to maintain with Lender reserves for payment of
annual taxes, assessments, and insurance premiums, which reserves shall be
created by advance payment or monthly payments of a sum estimated by Lender to
be sufficient to produce amounts at least equal to the taxes, assessments, and
insurance premiums to be paid. The reserve funds shall be held by Lender as a
general deposit from Grantor, which Lender may satisfy by payment of the taxes,
assessments, and insurance premiums required to be paid by Grantor as they
become due. Lender shall have the right to draw upon the reserve funds to pay
such items, and Lender shall not be required to determine the validity or
accuracy of any item before paying it. Nothing in the Deed of Trust shall be
construed as requiring Lender to advance other monies for such purposes, and
Lender shall not incur any liability for anything it may do or omit to do with
respect to the reserve account. Subject to any limitations set by applicable
law, if the reserve funds disclose a shortage or deficiency, Grantor shall pay
such shortage or deficiency as required by Lender. All amounts in the reserve
account are hereby pledged to further secure the Indebtedness, and Lender is
hereby authorized to withdraw and apply such amounts on the Indebtedness upon
the occurrence of an Event of Default. Lender shall not be required to pay any
interest or earnings on the reserve funds unless required by law or agreed to
by Lender in writing. Lender does not hold the reserve funds in trust for
Grantor, and Lender is not Grantor's agent for payment of the taxes and
assessments required to be paid by Grantor.
EXPENDITURES BY LENDER. If Grantor fails to comply with any provision of this
Deed of Trust, or if any action or proceeding is commenced that would
materially affect Lender's interests in the Property, Lender on Grantor's
behalf may, but shall not be required to, take any action that Lender deems
appropriate. Any amount that Lender expends in so doing will bear interest at
the rate provided for in the Note from the date incurred or paid by Lender to
the date of repayment by Grantor. All such expenses, at Lender's option, will
(a) be payable on demand, (b) be added to the balance of the Note and be
apportioned among and be payable with any installment payments to become due
during either (i) the term of any applicable insurance policy or (ii) the
remaining term of the Note, or (c) be treated as a balloon payment which will
be due and payable at the Note's maturity. This Deed of Trust also will secure
payment of these amounts. The rights provided for in this paragraph shall be in
addition to any other rights or any remedies to which Lender may be entitled on
account of the default. Any such action by Lender shall not be construed as
curing the default so as to bar Lender from any remedy that it otherwise would
have had.
WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of
the Property are a part of this Deed of Trust.
TITLE: Grantor warrants that: (a) Grantor holds good and marketable title
of record to the Property in fee simple, free and clear of all liens and
encumbrances other than those set forth in the Real Property description or
in any title insurance policy, title report, or final title opinion issued
in favor of, and accepted by, Lender in connection with this Deed of Trust,
and (b) Grantor has the full right, power, and authority to execute and
deliver this Deed of Trust to Lender.
DEFENSE OF TITLE. Subject to the exception in the paragraph above, Grantor
warrants and will forever defend the title to the Property against the
lawful claims of all persons. In the event any action or proceeding is
commenced that questions Grantor's title or the interest of Trustee or
Lender under this Deed of Trust, Grantor shall defend the action at
Grantor's expense. Grantor may be the nominal party in such proceeding, but
Lender shall be entitled to participate in the proceeding and to be
represented in the proceeding by counsel of Lender's own choice, and
Grantor will deliver, or cause to be delivered, to Lender such instruments
as Lender may request from time to time to permit such participation.
COMPLIANCE WITH LAWS. Grantor warrants that the Property and Grantor's use
of the Property complies with all existing applicable laws, ordinances, and
regulations of governmental authorities.
CONDEMNATION. The following provisions relating to condemnation proceedings
are a part of this Deed of Trust.
APPLICATION OF NET PROCEEDS. If all or any part of the Property is
condemned by eminent domain proceedings or by any proceeding or purchase in
lieu of condemnation, Lender may at its election require that all or any
portion of the net proceeds of the award be applied to the Indebtedness or
the repair or restoration of the Property. The net proceeds of the award
shall mean the award after payment of all reasonable costs, expenses, and
attorneys' fees incurred by Trustee or Lender in connection with the
condemnation.
PROCEEDINGS. If any proceeding in condemnation is filed, Grantor shall
promptly notify Lender in writing, and Grantor shall promptly take such
steps as may be necessary to defend the action and obtain the award.
Grantor may be the nominal party in such proceeding, but Lender shall be
entitled to participate in the proceeding and to be represented in the
proceeding by counsel of its own choice all at Grantor's expense, and
Grantor will deliver or cause to be delivered to Lender such instruments as
may be requested by it from time to time to permit such participation.
IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The
following provisions relating to governmental taxes, fees and charges are a
part of this Deed of Trust:
CURRENT TAXES, FEES AND CHARGES. Upon request by Lender, Grantor shall
execute such documents in addition to this Deed of Trust and take whatever
other action is requested by Lender to perfect and continue Lender's lien
on the
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REAL PROPERTY. Grantor shall reimburse Lender for all taxes, as described
below, together with all expenses incurred in recording, perfecting or
continuing this Deed of Trust, including without limitation all taxes,
fees, documentary stamps, and other charges for recording or registering
this Deed of Trust.
TAXES. The following shall constitute taxes to which this section applies:
(a) a specific tax upon this type of Deed of Trust or upon all or any part
of the Indebtedness secured by this Deed of Trust; (b) a specific tax on
Grantor which Grantor is authorized or required to deduct from payments on
the Indebtedness secured by this type of Deed of Trust; (c) a tax on this
type of Deed of Trust chargeable against the Lender or the holder of the
Note; and (d) a specific tax on all or any portion of the Indebtedness or
on payments of principal and interest made by Grantor.
SUBSEQUENT TAXES. If any tax to which this section applies is enacted
subsequent to the date of this Deed of Trust, this event shall have the
same effect as an Event of Default (as defined below), and Lender may
exercise any or all of its available remedies for an Event of Default as
provided below unless Grantor either (a) pays the tax before it becomes
delinquent, or (b) contests the tax as provided above in the Taxes and
Liens section and deposits with Lender cash or a sufficient corporate
surety bond or other security satisfactory to Lender.
SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to
this Deed of Trust as a security agreement are a part of this Deed of Trust.
SECURITY AGREEMENT. This instrument shall constitute a security agreement
to the extent any of the Property constitutes fixtures or other personal
property, and Lender shall have all of the rights of a secured party under
the Uniform Commercial Code as amended from time to time.
SECURITY INTEREST. Upon request by Lender, Grantor shall execute financing
statements and take whatever other action is requested by Lender to perfect
and continue Lender's security interest in the Rents and Personal Property.
In addition to recording this Deed of Trust in the real property records,
Lender may, at any time and without further authorization from Grantor,
file executed counterparts, copies or reproductions of this Deed of Trust
as a financing statement. Grantor shall reimburse Lender for all expenses
incurred in perfecting or continuing this security interest. Upon default,
Grantor shall assemble the Personal Property in a manner and at a place
reasonably convenient to Grantor and Lender and make it available to Lender
within three (3) days after receipt of written demand from Lender.
ADDRESSES. The mailing addresses of Grantor (debtor) and Lender (secured
party), from which information concerning the security interest granted by
this Deed of Trust may be obtained (each as required by the Uniform
Commercial Code), are as stated on the first page of this Deed of Trust.
FURTHER ASSURANCE; ATTORNEY-IN-FACT. The following provisions relating to
further assurances and attorney-in-fact are a part of this Deed of Trust.
FURTHER ASSURANCES. At any time, and from time to time, upon request of
Lender, Grantor will make, execute and deliver, or will cause to be made,
executed or delivered, to Lender or to Lender's designee, and when
requested by Lender, cause to be filed, recorded, refiled, or rerecorded,
as the case may be, at such times and in such offices and places as Lender
may deem appropriate, any and all such mortgages, deeds of trust, security
deeds, security agreements, financing statements, continuation statements,
instruments of further assurance, certificates, and other documents as may,
in the sole opinion of Lender, be necessary or desirable in order to
effectuate, complete, perfect, continue, or preserve (a) the obligations of
Grantor under the Note, this Deed of Trust, and the Related Documents, and
(b) the liens and security interests created by this Deed or Trust as first
and prior liens on the Property, whether now owned or hereafter acquired by
Grantor. Unless prohibited by law or agreed to the contrary by Lender in
writing, Grantor shall reimburse Lender for all costs and expenses incurred
in connection with the matters referred to in this paragraph.
ATTORNEY-IN-FACT. If Grantor fails to do any of the things referred to in
the preceding paragraph, Lender may do so for and in the name of Grantor
and at Grantor's expense. For such purposes, Grantor hereby irrevocably
appoints Lender as Grantor's attorney-in-fact for the purpose of making,
executing, delivering, filing, recording, and doing all other things as may
be necessary or desirable, in Lender's sole opinion, to accomplish the
matters referred to in the preceding paragraph.
FULL PERFORMANCE. If Grantor pays all the Indebtedness when due, and otherwise
performs all the obligations imposed upon Grantor under this Deed of Trust,
Lender shall execute and deliver to Trustee a request for full reconveyance and
shall execute and deliver to Grantor suitable statements of termination of any
financing statement on file evidencing Lender's security interest in the Rents
and the Personal Property. Any reconveyance fee shall be paid by Grantor, if
permitted by applicable law. The grantee in any reconveyance may be described as
the "person or persons legally entitled thereto", and the recitals in the
reconveyance of any matters or facts shall be conclusive proof of the
truthfulness of any such matters or facts.
DEFAULT. Each of the following, at the option of Lender, shall constitute an
event of default ("Event of Default") under this Deed of Trust:
DEFAULT ON INDEBTEDNESS. Failure of Grantor to make any payment when due on
the Indebtedness.
DEFAULT ON OTHER PAYMENTS. Failure of Grantor within the time required by
this Deed of Trust to make any payment for taxes or insurance, or any other
payment necessary to prevent filing of or to effect discharge of any lien.
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DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Grantor default
under any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or person
that may materially affect any of Borrower's property or Borrower's or any
Grantor's ability to repay the Loans or perform their respective
obligations under this Deed of Trust or any of the Related Documents.
COMPLIANCE DEFAULT. Failure of Grantor to comply with any other term,
obligation, covenant or condition contained in this Deed of Trust, the Note
or in any of the Related Documents.
FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Grantor under this Deed of Trust,
the Note or the Related Documents is false or misleading in any material
respect, either now or at the time made or furnished.
DEFECTIVE COLLATERALIZATION. This Deed of Trust or any of the Related
Documents ceases to be in full force and effect (including failure of any
collateral documents to create a valid and perfected security interest or
lien) at any time and for any reason.
INSOLVENCY. The dissolution or termination of Grantor's existence as a
going business, the insolvency of Grantor, the appointment of a receiver
for any part of Grantor's property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Grantor.
FORECLOSURE, FORFEITURE, ETC. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Grantor or by any governmental agency
against any of the Property. However, this subsection shall not apply in
the event of a good faith dispute by Grantor as to the validity or
reasonableness of the claim which is the basis of the foreclosure or
forfeiture proceeding, provided that Grantor gives Lender written notice
of such claim and furnishes reserves or a surety bond for the claim
satisfactory to Lender.
BREACH OF OTHER AGREEMENT. Any breach by Grantor under the terms of any
other agreement between Grantor and Lender that is not remedied within any
grace period provided therein, including without limitation any agreement
concerning any indebtedness or other obligation of Grantor to Lender,
whether existing now or later.
EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with respect
to any Guarantor of any of the Indebtedness or any Guarantor dies or
becomes incompetent, or revokes or disputes the validity of, or liability
under, any Guaranty of the Indebtedness. Lender, at its option, may, but
shall not be required to, permit the Guarantor's estate to assume
unconditionally the obligations arising under the guaranty in a manner
satisfactory to Lender, and, in doing so, cure the Event of Default.
ADVERSE CHANGE. A material adverse change occurs in Grantor's financial
condition, or Lender believes the prospect of payment or performance of the
Indebtedness is impaired.
INSECURITY. Lender in good faith deems itself insecure.
RIGHT TO CURE. If such a failure is curable and if Grantor has not been
given a notice of a breach of the same provision of this Deed of Trust
within the preceding twelve (12) months, it may be cured (and no Event of
Default will have occurred) if Grantor, after Lender sends written notice
demanding cure of such failure: (a) cures the failure with fifteen (15)
days; or (b) if the cure requires more than fifteen (15) days, immediately
initiates steps sufficient to cure the failure and thereafter continues and
completes all reasonable and necessary steps sufficient to produce
compliance as soon as reasonably practical.
RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default and
at any time thereafter, Trustee or Lender, at its option, may exercise any one
or more of the following rights and remedies, in addition to any other rights
or remedies provided by law:
ACCELERATE INDEBTEDNESS. Lender shall have the right at its option to
declare the entire Indebtedness immediately due and payable, including any
prepayment penalty which Grantor would be required to pay.
FORECLOSURE. With respect to all or any part of the Real Property, the
Trustee shall have the right to exercise its power of sale and to foreclose
by notice and sale, and Lender shall have the right to foreclose by
judicial foreclosure, in either case in accordance with and to the full
extent provided by applicable law.
UCC REMEDIES. With respect to all or any part of the Personal Property,
Lender shall have all the rights and remedies of a secured party under the
Uniform Commercial Code.
COLLECT RENTS. Lender shall have the right, without notice to Grantor, to
take possession of and manage the Property and collect the Rents, including
amounts past due and unpaid, and apply the net proceeds, over and above
Lender's cost, against the Indebtedness. In furtherance of this right,
Lender may require any tenant or other user of the Property to make
payments of rent or use fees directly to Lender. If the Rents are collected
by Lender, then Grantor irrevocably designates Lender as Grantor's
attorney-in-fact to endorse instruments received in payment thereof in the
name of Grantor and to negotiate the same and collect the proceeds.
Payments by tenants or other users to Lender in response to Lender's demand
shall satisfy the obligations for which the payments are made, whether or
not any proper grounds for the demand existed. Lender may exercise its
rights under this subparagraph either in person, by agent, or through a
receiver.
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APPOINT RECEIVER. Lender shall have the right to have a receiver appointed
to take possession of all or any part of the Property, with the power to
protect and preserve the Property, to operate the Property Preceding or
pending foreclosure or sale, and to collect the Rents from the Property and
apply the proceeds, over and above the cost of the receivership, against
the indebtedness. The receiver may serve without bond if permitted by law.
Lender's right to the appointment of a receiver shall exist whether or not
the apparent value of the Property exceeds the Indebtedness by a
substantial amount. Employment by Lender shall not disqualify a person from
serving as a receiver.
TENANCY AT SUFFERANCE. If Grantor remains in possession of the Property
after the Property is sold as provided above or Lender otherwise becomes
entitled to possession of the Property upon default of Grantor, Grantor
shall become a tenant at sufferance of Lender or the purchaser of the
Property and shall, at Lender's option, either (a) pay a reasonable rental
for the use of the Property, or (b) vacate the Property immediately upon
the demand of Lender.
OTHER REMEDIES. Trustee or Lender shall have any other right or remedy
provided in this Deed of Trust or the Note or by law.
NOTICE OF SALE. Lender shall give Grantor reasonable notice of the time
and place of any public sale of the Personal Property or of the time after
which any private sale or other intended disposition of the Personal
Property is to be made. Reasonable notice shall mean notice given at least
ten (10) days before the time of the sale or disposition. Any sale of
Personal Property may be made in conjunction with any sale of the Real
Property.
SALE OF THE PROPERTY. To the extent permitted by applicable law, Grantor
hereby waives any and all rights to have the Property marshalled. In
exercising its rights and remedies, the Trustee or Lender shall be free to
sell all or any part of the Property together or separately, in one sale or
by separate sales. Lender shall be entitled to bid at any public sale on
all or any portion of the Property.
WAIVER; ELECTION OF REMEDIES. A waiver by any part of a breach of a
provision of this Deed of Trust shall not constitute a waiver of or
prejudice the party's rights otherwise to demand strict compliance with
that provision or any other provision. Election by Lender to pursue any
remedy provided in this Deed of Trust, the Note, in any Related Document,
or provided by law shall not exclude pursuit of any other remedy, and an
election to make expenditures or to take action to perform an obligation
of Grantor under this Deed of Trust after failure of Grantor to perform
shall not affect Lender's right to declare a default and to exercise any
of its remedies.
ATTORNEYS' FEES; EXPENSES. If Lender institutes any suit or action to
enforce any of the terms of this Deed or Trust, Lender shall be entitled
to recover such sum as the court may adjudge reasonable as attorneys' fees
at trial and on any appeal. Whether or not any court action is involved,
all reasonable expenses incurred by Lender which in Lender's opinion are
necessary at any time for the protection of its interest or the
enforcement of its rights shall become a part of the Indebtedness payable
on demand and shall bear interest at the Note rate from the date of
expenditure until repaid. Expenses covered by this paragraph include,
without limitation, however subject to any limits under applicable law,
Lender's attorneys' fees whether or not there is a lawsuit, including
attorneys' fees for bankruptcy proceedings (including efforts to modify or
vacate any automatic stay or injunction), appeals and any anticipated
post-judgment collection services, the cost of searching records,
obtaining title reports (including foreclosure reports), surveyors'
reports, appraisal fees, title insurance, and fees for the Trustee, to the
extent permitted by applicable law. Grantor also will pay any court costs,
in addition to all other sums provided by law.
RIGHTS OF TRUSTEE. Trustee shall have all of the rights and duties of
Lender as set forth in this section.
POWERS AND OBLIGATIONS OF TRUSTEE. The following provisions relating to the
powers and obligations of Trustee (pursuant to Lender's instructions) are part
of this Deed of Trust.
POWERS OF TRUSTEE. In addition to all powers of Trustee arising as a
matter of law, Trustee shall have the power to take the following actions
with respect to the Property upon the written request of Lender and
Grantor: (a) join in preparing and filing a map or plat of the Real
Property, including the dedication of streets or other rights to the
public; (b) join in granting any easement or creating any restriction on
the Real Property; and (c) join in any subordination or other agreement
affecting this Deed of Trust or the interest of Lender under this Deed of
Trust.
OBLIGATIONS TO NOTIFY. Trustee shall not be obligated to notify any other
party of a pending sale under any other trust deed or lien, or of any
action or proceeding in which Grantor, Lender, or Trustee shall be a
party, unless required by applicable law, or unless the action or
proceeding in brought by Trustee.
TRUSTEE. Trustee shall meet all qualifications required for Trustee under
applicable law. In addition to the rights and remedies set forth above,
with respect to all or any part of the Property, the Trustee shall have
the right to foreclose by notice and sale, and Lender shall have the right
to foreclose by judicial foreclosure, in either case in accordance with
and to the full extent provided by applicable law.
SUCCESSOR TRUSTEE. Lender, at Lender's option, may from time to time
appoint a successor Trustee to any Trustee appointed hereunder by an
instrument executed and acknowledged by Lender and record in the office
of the recorder of KING County, Washington. The instrument shall contain,
in addition to all other matters required by state law, the names of the
original Lender, Trustee, and Grantor, the book and page or the Auditor's
File Number where this Deed of Trust is recorded, and the name and address
of the successor trustee, and the instrument shall be executed and
acknowledged by Lender or its successors in interest. The successor
trustee, without conveyance
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the Property, shall succeed to all the title, power, and duties conferred
upon the Trustee in this Deed of Trust and by applicable law. This
procedure for substitution of trustee shall govern to the exclusion of all
other provisions for substitution.
NOTICES TO GRANTOR AND OTHER PARTIES. Subject to applicable law, and except for
notice required or allowed by law to be given in another manner, any notice
under this Deed of Trust shall be in writing, may be sent by telefacsimile
(unless otherwise required by law), and shall be effective when actually
delivered, or when deposited with a nationally recognized overnight courier, or,
if mailed, shall be deemed effective when deposited in the United States mail
first class, certified or registered mail, postage prepaid, directed to the
addresses shown near the beginning of this Deed of Trust. Any party may change
its address for notices under this Deed of Trust by giving formal written notice
to the other parties, specifying that the purpose of the notice is to change the
party's address. All copies of notices of foreclosure from the holder of any
lien which has priority over this Deed of Trust shall be sent to Lender's
address, as shown near the beginning of this Deed of Trust. For notice purposes,
Grantor agrees to keep Lender and Trustee informed at all times of Grantor's
current address.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Deed of Trust.
AMENDMENTS. This Deed of Trust, together with any Related Documents,
constitutes the entire and final understanding and agreement of the
parties as to the matters set forth in this Deed of Trust. No alteration
of or amendment to this Deed of Trust shall be effective unless given in
writing and signed by the party or parties sought to be charged or bound
by the alteration or amendment.
ANNUAL REPORTS. If the Property is used for purposes other than Grantor's
residence, Grantor shall furnish to Lender, upon request, a certified
statement of net operating income received from the Property during
Grantor's previous fiscal year in such form and detail as Lender shall
require. "Net operating income" shall mean all cash receipts from the
Property less all cash expenditures made in connection with the operation
of the Property.
APPLICABLE LAW. THIS DEED OF TRUST HAS BEEN DELIVERED TO LENDER AND
ACCEPTED BY LENDER IN THE STATE OF WASHINGTON. THIS DEED OF TRUST SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
WASHINGTON.
CAPTION HEADINGS. Caption headings in this Deed of Trust are for
convenience purposes only and are not to be used to interpret or define
the provisions of this Deed of Trust.
MERGER. There shall be no merger of the interest or estate created by this
Deed of Trust with any other interest or estate in the Property at any
time held by or for the benefit of Lender in any capacity, without the
written consent of Lender.
SEVERABILITY. If a court of competent jurisdiction finds any provision of
this Deed of Trust to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to be within the
limits of enforceability or validity; however, if the offending provision
cannot be so modified, it shall be stricken and all other provisions of
this Deed of Trust in all other respects shall remain valid and
enforceable.
SUCCESSORS AND ASSIGNS. Subject to the limitations stated in this Deed of
Trust on transfer of Grantor's interest, this Deed of Trust shall be
binding upon and inure to the benefit of the parties, their successors and
assigns. If ownership of the Property becomes vested in a person other
than Grantor, Lender, without notice to Grantor, may deal with Grantor's
successors with reference to this Deed of Trust and the Indebtedness by
way of forbearance or extension without releasing Grantor from the
obligations of this Deed of Trust or liability under the indebtedness.
TIME IS OF THE ESSENCE. Time is of the essence in the performance of this
Deed of Trust.
WAIVERS AND CONSENTS. Lender shall not be deemed to have waived any rights
under this Deed of Trust (or under the Related Documents) unless such
waiver is in writing and signed by Lender. No delay or omission on the
part of Lender in exercising any right shall operate as a waiver of such
right or any other right. A waiver by any part of a provision of this Deed
of Trust shall not constitute a waiver of or prejudice the party's right
otherwise to demand strict compliance with that provision or any other
provision. No prior waiver by Lender, nor any course of dealing between
Lender and Grantor, shall constitute a waiver of any of Lender's rights or
any of Grantor's obligations as to any future transactions. Whenever
consent by Lender is required in this Deed of Trust, the granting of such
consent by Lender in any instance shall not constitute continuing consent
to subsequent instances where such consent is required.
WAIVER OF HOMESTEAD EXEMPTION. Grantor hereby releases and waives all
rights and benefits of the homestead exemption laws of the State of
Washington as to all Indebtedness secured by this Deed of Trust.
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EACH GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS DEED OF TRUST,
AND EACH GRANTOR AGREES TO ITS TERMS.
GRANTOR:
LINDAL CEDAR HOMES, INC.
BY: /s/ ROBERT W. LINDAL
--------------------------
ROBERT W. LINDAL, CEO
- --------------------------------------------------------------------------------
CORPORATE ACKNOWLEDGMENT
STATE OF WASHINGTON )
) ss
COUNTY OF KING )
On the 13th day of December, 2000, before me, the undersigned Notary Public,
personally appeared ROBERT W. LINDAL, CEO of LINDAL CEDAR HOMES, INC., and
personally known to me or proved to me on the basis of satisfactory evidence to
be an authorized agent of the corporation that executed the Deed of Trust and
acknowledged the Deed of Trust to be the free and voluntary act and deed of the
corporation, by authority of the Bylaws or by resolution of its board of
directors, for the uses and purposes therein mentioned, and on oath stated that
he or she is authorized to execute the Deed of Trust and in fact executed the
Deed of Trust on behalf of the corporation.
BY /s/ [Signature Illegible] RESIDING AT Des Moines
---------------------------------- --------------------------------
NOTARY PUBLIC IN AND FOR THE STATE OF WA MY COMMISSION EXPIRES 3/4/03
----- ---------------
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REQUEST FOR FULL RECONVEYANCE
To:___________________________________, Trustee
The undersigned is the legal owner and holder of all indebtedness secured by
the Deed of Trust. You are hereby requested, upon payment of all sums owing to
you, to reconvey without warranty, to the persons entitled thereto, the right,
title and interest now held by you under the Deed of Trust.
DATE:________________________ BENEFICIARY:____________________________________
BY:____________________________________
ITS:____________________________________
================================================================================
11
Loan No. 9001
RIDER TO DEED OF TRUST
THIS RIDER is attached to and modifies that certain Deed of Trust ("DEED
OF TRUST") dated December 11, 2000, executed by LINDAL CEDAR HOMES, INC., a
Washington corporation ("BORROWER") as grantor, for the benefit of KEYBANK
NATIONAL ASSOCIATION, a national banking association ("LENDER") as beneficiary.
1. DUE ON SALE -- CONSENT BY LENDER. Lender acknowledges that Borrower is
as of the date of this Agreement in the process of effecting a tender offer
pursuant to which Borrower will repurchase its shares from current stockholders
in order to become a privately-held corporation, and that subsequent to
completion of such tender offer, Borrower will merge with and into a Washington
corporation, at which time Borrower shall be a privately-held Washington
corporation doing business under the same corporate name it presently uses.
Lender hereby consents to the foregoing tender offer and restructure. Borrower
shall deliver to Lender such information and copies of agreements as Lender
shall request in connection with such restructuring and shall execute any
instruments or agreements that Lender may request in order to maintain and
preserve all of Bank's rights and interests in the Collateral. Lender also
agrees that this section shall not apply to nor prohibit any
repurchase/redemption by Borrower of stock in Borrower held by members of the
Lindal family and/or trusts created by such individuals, and shall not
constitute an Event of Default under the Deed of Trust, provided in both cases
that Lindal family members at all times remain the majority stockholders of the
Company. Consent to this particular restructuring and to such
repurchases/redemptions shall not be deemed to waive any rights and restrictions
with regard to any subsequent or other restructurings, repurchases, redemptions
or other transfers, all of which shall remain fully subject to the provisions of
this section.
2. NOTICE OF CONSTRUCTION. The first sentence of the section entitled
"Notices of Construction" on page 4 of the Deed of Trust is modified as follows:
the figure $5,000.00 is changed to $100,000.00.
3. APPLICATION OF PROCEEDS. The first sentence of the section entitled
"Application of Proceeds" on page 4 of the Deed of Trust is modified as follows:
the figure $500.00 is changed to $50,000.00.
4. NO OTHER MODIFICATIONS. Except as modified hereby, all other terms and
conditions of the Deed of Trust shall remain in full force and effect.
BORROWER:
LINDAL CEDAR HOMES, INC., a Washington
corporation
By: /s/ ROBERT W. LINDAL
----------------------------------
Robert W. Lindal, CEO