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EXHIBIT 10.13
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.), a Delaware
corporation
c/o Landels, Ripley & Diamond
350 Steuart Street
San Francisco, CA 94105-1250
Attn: Bruce W. Hyman, Esq.
DEED OF TRUST, FINANCING STATEMENT, SECURITY AGREEMENT
AND FIXTURE FILING (WITH ASSIGNMENT OF RENTS AND LEASES)
BY
MEGATEST CORPORATION, a Delaware corporation
as Trustor,
TO
CHICAGO TITLE COMPANY, a corporation,
as Trustee,
for the benefit of
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.),
a Delaware Corporation
as Beneficiary
August 25, 1995
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TABLE OF CONTENTS
Page
GRANTING CLAUSE ONE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
GRANTING CLAUSE TWO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
GRANTING CLAUSE THREE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
GRANTING CLAUSE FOUR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
GRANTING CLAUSE FIVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
GRANTING CLAUSE SIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
GRANTING CLAUSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
GRANTING CLAUSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
GRANTING CLAUSE NINE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
GRANTING CLAUSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
GRANTING CLAUSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE I
COVENANTS AND AGREEMENTS
1.1 Performance by Trustor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.2 Payment of Taxes, Assessments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
A. Impositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
B. Installments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
C. Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
D. Evidence of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
E. Payment by Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
F. Change in Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
G. Permitted Contest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
H. No Lease Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
I. Joint Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.3 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
A. Extended Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
B. Additional Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
C. Separate Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
D. Insurers; Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
E. Beneficiary's Right to Provide Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
F. Damage or Destruction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
G. Trustor's Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
H. Transfer of Interest in Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.4 Escrow Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.5 Care and Use of Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
A. Maintenance and Repairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
B. Standard of Repairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
C. Notice to Trustor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
D. Removal of Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
E. Compliance With Laws and Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
F. Permitted Contests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
G. Compliance With Instruments of Record . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
H. Alteration of Secured Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
I. Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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J. Entry on Secured Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
K. No Consent to Alterations or Repairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
L. Mechanics Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
M. Use of Secured Property by Trustor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
N. Use of Secured Property by Public . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
1.6 Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
A. Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
B. Right to Inspect Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
1.7 Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
A. Beneficiary's Right to Participate in Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
B. Application of Condemnation Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
C. Reimbursement of Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
D. Existing Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
E. Application of Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
1.8 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
A. Performance of Lessor's Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
B. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
C. Covenants Regarding Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
D. Application of Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
1.9 Assignment of Leases, Rents, Income, and Cash Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . 24
A. Assignment; Discharge of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
B. Entry Onto Secured Property; Lease of Secured Property . . . . . . . . . . . . . . . . . . . . . . . . 25
C. License to Manage Secured Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
D. Delivery of Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
E. Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
1.10 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
A. General; Appointment of Attorney-in-Fact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
B. Statement Regarding Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
C. Additional Security Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
D. Security Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
E. Preservation of Trustor's Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
F. Further Indemnities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
G. Absence of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
1.11 Further Sales or Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
A. Continuing Ownership and Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
B. Transfer or Encumbrance of Secured Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
C. Acceleration of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
D. Wrap-Around Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
1.12 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE II
WARRANTIES AND REPRESENTATIONS
2.1 Warranty of Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.2 Ownership Of Improvements And Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.3 No Pending Material Litigation or Proceeding; No Hazardous Materials . . . . . . . . . . . . . . . . . . . . 35
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A. Proceedings Affecting Trustor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
B. Proceedings Affecting Secured Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
C. No Litigation Regarding Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.4 Valid Organization, Good Standing and Qualification of Trustor . . . . . . . . . . . . . . . . . . . . . . . 36
2.5 Authorization; No Legal Restrictions on Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.6 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.7 Tax Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.8 Absence of Foreign or Enemy Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.9 Federal Reserve Board Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.10 Investment Company Act and Public Utility Holding Company Act . . . . . . . . . . . . . . . . . . . . . . . . 38
2.11 Exempt Status of Transactions Under Securities Act and Representations Relating Thereto . . . . . . . . . . . 38
2.12 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE III
DEFAULTS
3.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE IV
REMEDIES
4.1 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
4.3 Rights Pertaining to Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
4.4 Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.5 Prepayment Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.6 Environmental Defaults and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE V
MISCELLANEOUS
5.1 Non-Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
5.2 Sole Discretion of Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
5.3 Recovery of Sums Required To Be Paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
5.4 Legal Tender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
5.5 No Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
5.6 Discontinuance of Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
5.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
5.8 Notice to Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
5.9 Non-Recourse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
5.10 Successors and Assigns Included In Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
5.11 Number and Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
5.12 Changes and Modifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
5.13 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
5.14 Invalid Provisions to Affect No Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
5.15 Usury Savings Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
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5.16 No Statute of Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
5.17 Late Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
5.18 Continuing Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
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DEED OF TRUST, FINANCING STATEMENT, SECURITY AGREEMENT
AND FIXTURE FILING (WITH ASSIGNMENT OF RENTS AND LEASES)
THIS DEED OF TRUST, FINANCING STATEMENT, SECURITY AGREEMENT AND
FIXTURE FILING (WITH ASSIGNMENT OF RENTS AND LEASES) (this "Deed of Trust") is
made as of the 25th day of August, 1995 by MEGATEST CORPORATION, a Delaware
corporation ("Trustor"), having an office at 1321 Ridder Park Drive, San Jose,
California 95131-2306 ("Trustor") in favor of CHICAGO TITLE COMPANY, a Delaware
corporation ("Trustee") for the benefit of SUN LIFE ASSURANCE COMPANY OF CANADA
(U.S.), a Delaware corporation ("Beneficiary") having an office at One Sun
Life Executive Park, Wellesley Hills, MA 02181.
W I T N E S S E T H :
WHEREAS, Trustor has executed and delivered to Beneficiary that
certain Promissory Note (the "Note") dated the date hereof made by Trustor and
payable to Beneficiary in the original principal amount of FIVE MILLION FOUR
HUNDRED FIFTY THOUSAND and No/100 Dollars ($5,450,000.00) lawful money of the
United States, which Note is secured by this Deed of Trust and the terms,
covenants and conditions of which Note are hereby incorporated herein and made
a part hereof (the "Loan");
NOW, THEREFORE, in consideration of the sum of One Dollar ($1.00) this
day paid and other good and lawful consideration, the receipt and sufficiency
of which is hereby acknowledged, Trustor does hereby irrevocably bargain, sell,
transfer, grant, convey, assign and warrant to Trustee, the property described
in the Granting Clauses below in order to secure the following obligations
(collectively, the "Obligations"): the full and prompt payment and performance
of all of the indebtedness, obligations, covenants, agreements and liabilities
of Trustor to Beneficiary, together with all interest and other charges
thereon, whether direct or indirect, existing, future, contingent or otherwise,
due or to become due, under or arising out of or in connection with the Note,
this Deed of Trust, the Absolute Assignment of Leases, Rents, Income and Cash
Collateral dated the date hereof from Trustor as assignor, to Beneficiary, as
assignee, (the "Assignment"), the Environmental Agreement and Indemnity (the
"Indemnity"), and any other instrument now or hereafter given to evidence or
secure or guaranty Trustor's obligations hereunder (the Note, this Deed of
Trust, the Assignment, the Indemnity and such other instruments are herein
collectively called the "Loan Documents"); any and all modifications,
extensions and renewals of any of the foregoing; and any and all expenses and
costs of collection or enforcement, including, without limitation, attorneys'
fees incurred by
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Beneficiary in the collection or enforcement of any of the foregoing, or in the
exercise of any of the rights or remedies under the Loan Documents or
applicable law.
GRANTING CLAUSE ONE
All that tract or parcel of land more particularly described in
Schedule A hereto and made a part hereof (the "Land").
GRANTING CLAUSE TWO
TOGETHER WITH, any and all buildings and real property improvements
now or hereafter located or erected on the Land, including, without limitation,
any and all machinery, apparatus, equipment and fixtures now or hereafter used
or procured for use in connection with the operation of building utilities
and/or maintenance of, any building, structure or other real property
improvement (including, without limitation, all shades, awnings, venetian
blinds, screens, screen doors, storm doors and windows, curtain fixtures,
attached floor coverings, or articles used to supply sprinkler protection and
office area heating, ventilation and cooling equipment, but excluding trade
fixtures and personal property of tenants under Leases (as hereinafter defined)
which do not become the property of Trustor upon expiration or termination of
the term of such Leases), and all renewals and replacements thereof and
articles in substitution therefor used or procured for use in the operation of
any and all such buildings, structures and improvements, provided, in all
cases, that, whether or not any of the foregoing are attached to said
buildings, structures or other improvements in any manner, all such items shall
be deemed to be fixtures, part of the real estate and security for the
obligations (collectively, the "Improvements", and the Land and Improvements
are herein collectively called the "Premises"). Notwithstanding anything to
the contrary herein or in any other Loan Document the term "Improvements" shall
not include and in no event shall Beneficiary have any lien, interest or other
right whatsoever in any item of process heating, ventilating, cooling,
plumbing, or electrical equipment, communications equipment, production
machinery or equipment, moveable partitions, or any other equipment, machinery,
inventory, furniture or fixtures located within the building improvements which
may be removed from the Premises without any material permanent damage to the
Premises or the building systems thereof. Upon request Beneficiary shall
executed such documents as Trustor shall reasonably request to evidence the
foregoing to any prospective purchaser or lender of Trustor of such property.
To the extent any of the Improvements are not deemed real estate under the laws
of the State of California they shall be deemed personal property ("Personal
Property") and this Deed of Trust is and shall be deemed to be a
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Security Agreement for the purposes of creating hereby a security interest
under the California Commercial Code in Beneficiary as Secured Party in the
Personal Property as hereinafter provided.
GRANTING CLAUSE THREE
TOGETHER WITH, all easements, rights-of-way, strips and gores of land,
streets, ways, alleys, passages, sewer rights, waters, water courses, water
rights and powers, and all estates, rights, titles, interests, privileges,
liberties, tenements, hereditaments, air rights, development rights and credits
and appurtenances of any nature whatsoever, in any way belonging, relating or
pertaining to, or above or below the Premises.
GRANTING CLAUSE FOUR
TOGETHER WITH, all right, title and interest of Trustor, now owned or
hereafter acquired, in and to any land lying within the right-of-way of any
street, opened or proposed, adjoining the Premises, and any and all sidewalks,
alleys and strips and gores of land adjacent to or used in connection with the
Premises.
GRANTING CLAUSE FIVE
TOGETHER WITH, all right, title and interest of Trustor in and to all
options to purchase or lease the Premises or any portion thereof or interest
therein, and any greater estate in the Premises owned or hereafter acquired by
Trustor.
GRANTING CLAUSE SIX
TOGETHER WITH, all the estate, interest, right, title and other claim
or demand which Trustor now has or may hereafter acquire in any and all awards
or payments made for the taking by eminent domain, or by any proceeding or
purchase in lieu thereof, of the whole or any part of the Premises, including,
without limitation, any awards resulting from a change or grade of streets and
awards for severance damages to the Secured Property together, in all cases,
with any interest thereon.
GRANTING CLAUSE SEVEN
TOGETHER WITH, all proceeds of and any unearned premiums on any
insurance policies covering the Premises, including, without limitation, the
right to receive and apply the proceeds of any insurance or judgments, or
settlements made in lieu thereof, for damage to the Premises.
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GRANTING CLAUSE EIGHT
TOGETHER WITH, all the estate, interest, right, title and other claim
or demand which Trustor now has or may hereafter acquire against anyone with
respect to any damage to all or any part of the Premises, including, without
limitation, damage arising or resulting from any defect in or with respect to
the design or construction of all or any part of the Improvements.
GRANTING CLAUSE NINE
TOGETHER WITH, all deposits or other security or advance payments,
including rental payments, made by or on behalf of Trustor to others in
connection with the ownership or operation of all or any part of the Premises
including, without limitation, any such deposits or payments made with respect
to (i) insurance policies, (ii) utility service, (iii) cleaning, maintenance,
repair or similar services supplied for the Premises, (iv) refuse removal or
sewer service, (v) rental of equipment, if any, used by or on behalf of
Trustor, and (vi) parking or similar services or rights.
GRANTING CLAUSE TEN
TOGETHER WITH, all remainders, reversions, leasehold estate, other
estate, right, title, interest and other claim or demand of Trustor in and to
all leases or subleases covering the Premises or any portion thereof now or
hereafter existing or entered into, and all right, title and interest of
Trustor thereunder, including, without limitation, all cash or security
deposits, advance rentals and deposits or payments of similar nature
(including, without limitation, termination payments, damages or other payments
in lieu thereof).
GRANTING CLAUSE ELEVEN
TOGETHER WITH, absolutely and presently, all rents, issues, profits,
cash collateral, royalties, income and other benefits, including, without
limitation, benefits accruing from all present and future oil, gas and mineral
leases and agreements derived from the Premises (collectively, the "Rents"),
subject to the right, power and authority hereinafter given to Trustor as a
licensee to collect and apply such Rents prior to the occurrence of an Event of
Default. The foregoing Premises, Personal Property and the real property and
personal property rights set forth in Granting Clause Three through Granting
Clause Eleven inclusive, hereinabove described or mentioned are hereinafter
collectively referred to as the "Secured Property".
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TO HAVE AND TO HOLD the Secured Property unto Trustee, its successors
and assigns, in trust, for the benefit of Beneficiary, its successors and
assigns, subject, however, to the terms, covenants and conditions contained
herein.
PROVIDED, HOWEVER, if Trustor shall pay or cause to be paid to
Beneficiary in full the Obligations, at the times and in the manner stipulated
in the Loan Documents, and shall keep, perform and observe all and singular the
covenants and promises of Trustor in the Loan Documents, then this Deed of
Trust and all the properties, interests and rights hereby granted, encumbered,
transferred or assigned shall be released by Trustee and/or Beneficiary in
accordance with the laws of the State of California.
ARTICLE I
COVENANTS AND AGREEMENTS
Trustor hereby covenants and agrees for the benefit of Beneficiary and
Trustee as follows:
1.1 Performance by Trustor. Trustor shall pay the Obligations
evidenced by the Note to Beneficiary and shall keep and perform each and every
other Obligation.
1.2 Payment of Taxes, Assessments, Etc.
A. Impositions. Trustor shall pay when due and payable,
before any fine, penalty, interest or cost for the non-payment thereof may be
added thereto, all taxes, assessments, water and sewer rents, rates and
charges, transit taxes, county taxes, charges for public utilities, excises,
levies, vault and all other license and permit fees and other governmental
charges, general and special, ordinary and extraordinary, unforeseen and
foreseen, of any kind and nature whatsoever which at any time prior to or
during the term of this Deed of Trust may be assessed, levied, confirmed,
imposed upon or become due and payable out of or in respect to, or become a
lien on, the Secured Property or any part thereof or any appurtenance thereto,
prior to or on a parity with the obligations or the lien of this Deed of Trust,
as the case may be (all such taxes, assessments, water and sewer rents, rates
and charges, transit taxes, county taxes, charges for public utilities,
excises, levies, vault and all other license and permit fees and other
governmental charges including all interest, penalties, costs and charges
accrued or accumulated thereon, are herein collectively called "Impositions",
and individually, an "Imposition").
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B. Installments. Notwithstanding anything to the
contrary contained in subsection A of this Section 1.2, if by law any
Impositions may at the option of the taxpayer be paid in installments (whether
or not interest shall accrue on the unpaid balance of such Impositions),
Trustor may exercise the option to pay the same (and any accrued interest on
the unpaid balance of such Impositions) in installments and, in such event,
shall pay such installments as the same respectively become due and before any
fine, penalty, further interest or cost may be added thereto.
C. Receipts. Trustor, upon request of Beneficiary, will
furnish to Beneficiary within five (5) days after the date when any Imposition
would become delinquent, official receipts of the appropriate taxing authority,
or other evidence reasonably satisfactory to Beneficiary evidencing the payment
thereof.
D. Evidence of Payment. The certificate, advice or bill
issued by the appropriate official (designated by law either to make or issue
the same or to receive payment of any Imposition) of non-payment of an
Imposition shall be prima facie evidence that such Imposition is due and unpaid
at the time of the making or issuance of such certificate, advice or bill.
Trustor agrees to pay Beneficiary, on demand, all charges, costs and expenses
of every kind incurred by Beneficiary in connection with obtaining evidence
satisfactory to Beneficiary that the payment of all Impositions is current and
that there is no Imposition due and owing or which has become or given rise to
a lien on the Secured Property or any part thereof or any appurtenance thereto.
E. Payment by Beneficiary. Subject to subsection G of
this Section 1.2, if Trustor shall fail to pay any Imposition in accordance
with the provisions of this Section 1.2, Beneficiary may, at its option (but
shall be under no obligation to do so), pay such Imposition and Trustor will
repay to Beneficiary on demand any amount so paid by Beneficiary, with interest
thereon at the rate of five percent (5%) per annum greater than the interest
rate set forth in the Note (the "Increased Rate") to the date of repayment and
all such amounts shall be secured by this Deed of Trust. In no event shall the
Increased Rate be greater than the highest applicable interest rate permissible
by law, if any.
F. Change in Law. In the event of the passage after the
date of this Deed of Trust of any law of the State of California deducting the
Obligations from the value of the Secured Property or any part thereof for the
purpose of taxation or resulting in any lien thereon, or changing in any way
the laws now in force for the taxation of this Deed of Trust or the Obligations
for state or local purposes, or the manner of the
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operation of any such taxes so as to affect the interest of Beneficiary, then,
and in such event, Trustor shall bear and pay the full amount of such taxes,
provided that if for any reason payment by Trustor of any such new or
additional taxes would be unlawful or if the payment thereof would constitute
usury or render the loan or Obligations wholly or partially usurious under any
of the terms or provisions of the Note, this Deed of Trust or otherwise,
Beneficiary may, at its option, declare the whole sum secured by this Deed of
Trust with interest thereon to be immediately due and payable, or Beneficiary
may, at its option, pay that amount or portion of such taxes as renders the
loan or obligations unlawful or usurious, in which event Trustor shall
concurrently therewith pay the remaining lawful and non-usurious portion or
balance of said taxes.
G. Permitted Contest. Provided that Trustor shall not be
in default under any of the Loan Documents, Trustor shall have the right to
contest the amount or the validity, in whole or in part, of any Imposition by
appropriate proceedings diligently conducted in good faith. Notwithstanding
the provisions of this Section 1.2, but subject to the provisions of subsection
1.2H, Trustor may postpone or defer payment of such Imposition if Trustor, on
or before the due date thereof, shall (1) deposit or cause to be deposited with
Beneficiary a surety bond issued by a surety company of recognized
responsibility acceptable to Beneficiary conditioned upon and securing the
payment in full of such Imposition, pending the determination of such contest,
or (2) deposit or cause to be deposited with Beneficiary an amount equal to one
hundred (100%) percent of such Imposition or any balance thereof remaining
unpaid, and from time to time, but not more frequently than quarterly, deposit
amounts in order to keep in deposit at all such times an amount equal to one
hundred (100%) percent of the Imposition remaining unpaid, or (3) furnish or
cause to be furnished to Beneficiary other security reasonably satisfactory to
Beneficiary. If such deposit is made or such security furnished and Trustor
continues in good faith to contest the validity of such Imposition by
appropriate legal proceedings which shall operate to prevent the collection of
such Imposition so contested and the sale of the Secured Property or any part
thereof to satisfy such Imposition, Trustor shall be under no obligation to pay
such Imposition until such time as it has been finally determined to be a valid
lien on the Secured Property. Upon termination of any such proceedings,
Trustor shall pay in full the amount of such Imposition or part thereof as
shall have been finally determined in such proceedings together with any
liabilities in connection therewith. Beneficiary shall have the full power and
authority to apply or require the application of any amounts that may have been
deposited pursuant to this subsection 1.2G to payment of any unpaid Imposition
without liability, however, for any failure to apply any amount so
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deposited unless Trustor or the person making such deposit had requested in
writing the application of such amount to the payment of the particular
Imposition with respect to which it was deposited in which event Beneficiary
shall apply such amounts in accordance with such request. Any surplus
remaining in the hand of the Beneficiary after the Imposition for which the
deposit was made has been paid in full shall be repaid to Trustor or the person
making such deposit unless Trustor shall be in default under any of the Loan
Documents, and in case of such default such surplus shall be applied to cure
such default, and the remainder of such surplus, if any, shall be repaid to
Trustor.
H. No Lease Default. If contesting the validity or
amount of any Imposition shall cause a breach of any of the terms, conditions
or covenants required to be performed by Trustor as lessor under any Lease (as
hereinafter defined), then Trustor shall not have the right to contest the same
as provided in subsection 1.2G, and payment of such Imposition shall be made
pursuant to subsection 1.2A of this Section 1.2.
I. Joint Assessment. Trustor covenants and agrees not to
suffer, permit or initiate the joint assessment of the Premises and Personal
Property, or any other procedure whereby the lien of the personal property
taxes shall be assessed or levied or charged to the Secured Property together
with real property taxes.
1.3 Insurance.
A. Extended Coverage. Trustor, at its sole cost and
expense, shall keep the Personal Property and the Improvements insured during
the term of this Deed of Trust against loss or damage by fire and against loss
or damage by other risks now embraced by "Extended Coverage," so called, in
amounts, forms and substance satisfactory to Beneficiary, but in no event shall
the amounts be less than the greater of (1) 100% of the full replacement cost
of the Personal Property and the Improvements, including work performed for
tenants, without deduction for depreciation; (2) the amounts required to
prevent any insured from becoming a co-insurer; or (3) the amounts required
under any Lease.
B. Additional Coverage. Trustor, at its sole cost and
expense, shall also maintain:
(1) Personal injury and property damage liability
insurance against claims for bodily injury, death or property damage, occurring
on, in or about the Secured Property or in or about the adjoining streets,
sidewalks and passageways; such insurance to afford protection, during the term
of this Deed of
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Trust, in amounts and in form and substance reasonably satisfactory to
Beneficiary;
(2) If there are any Leases, rent or business
interruption insurance in an amount equal to one year's aggregate rentals
(including, without limitation, minimum rentals, escalation charges, percentage
rents, based on sales projections acceptable to Beneficiary, and other
additional rentals, and any other amounts payable by tenants or other occupants
under Leases or otherwise) payable by all tenants and other occupants at the
Premises, which amount shall be increased from time to time upon the leasing of
space at the Premises or upon the increase in aggregate rentals (including the
other items referred to above);
(3) War risk insurance upon the building and other
Improvements as and when such insurance is obtainable from the United States
of America or any agency or instrumentality thereof for the maximum amount of
insurance obtainable;
(4) Such other insurance, including, without
limitation, all risk in such amounts and in form and substance as may from time
to time be reasonably required by Beneficiary against other insurable hazards,
including, but not limited to, malicious mischief, vandalism, windstorm,
nuclear reaction or radioactive contamination, which at the time are commonly
insured against and generally available in the case of premises similarly
situated, due regard being or to be given to the height and type of
Improvement, its location, construction, use and occupancy;
(5) If the Improvements are located in a flood
hazard area, flood insurance on the Improvements in an amount equal to the
lesser of "full replacement cost" thereof or the maximum amount of insurance
obtainable; and
(6) Insurance against loss or damage from (a)
leakage of sprinkler systems and (b) explosion of steam boilers, air
conditioning equipment, pressure vessels or similar apparatus now or hereafter
installed in or on the Premises in such amounts as Beneficiary shall from time
to time require.
(7) Trustor shall pay all premiums and other
charges required to maintain or replace Beneficiary's title insurance policy
insuring the lien of this Deed of Trust in an amount equal to the Obligations.
C. Separate Insurance. Trustor shall not carry separate
insurance, concurrent in kind or form, and contributing, in the event of loss,
with any insurance required hereunder. Trustor may, however, effect for its
own account any insurance not required under the provisions of this Deed of
Trust but any
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such insurance effected by Trustor on the Secured Property whether or not
required under this Section 1.3 shall be for the mutual benefit of Trustor and
Beneficiary, as their respective interests may appear, and shall be subject to
all other provisions of this Section 1.3.
D. Insurers; Policies. All insurance provided for in this
Section 1.3 shall be effected under valid and enforceable policies issued by
financially responsible insurers authorized to do business in the State of
California, which are approved in writing by Beneficiary. All such policies
shall be deposited with and held by Beneficiary. All casualty insurance
policies and rent insurance policies shall be payable to Beneficiary pursuant
to a standard non-contributory mortgage endorsement in favor of Beneficiary,
and such policies shall contain a waiver of subrogation endorsement, all in
form and content satisfactory to Beneficiary. All original policies shall
contain a provision that such policies will not be canceled or materially
amended, which term shall include any reduction in the scope or limits of
coverage, without at least thirty (30) days' prior written notice to
Beneficiary. Not less than thirty (30) days prior to the expiration dates of
the policies theretofore furnished pursuant to this Deed of Trust, originals of
the policies bearing notations evidencing the payment of premiums or
accompanied by other evidence satisfactory to Beneficiary of such payment,
shall be delivered by Trustor to Beneficiary. In the event of a change in
ownership of the Secured Property immediate notice thereof shall be delivered
to all insurers by Trustor.
E. Beneficiary's Right to Provide Coverage. In the event
Trustor fails to provide, maintain, keep in force or deliver and furnish to
Beneficiary the original policies of insurance required by this Section 1.3,
Beneficiary may, at its sole option, procure such insurance and Trustor will
pay all premiums thereon promptly upon demand by Beneficiary with interest
thereon at the Increased Rate to the date of repayment and all such amounts
shall be secured by this Deed of Trust.
F. Damage or Destruction. After the happening of any
casualty to the Secured Property or any part thereof, Trustor shall give prompt
written notice thereof to Beneficiary and the following shall apply:
(1) In the event of any damage or destruction of
all or any part of the Secured Property, all proceeds of insurance shall be
payable to Beneficiary, and Trustor hereby authorizes and directs any affected
insurance company to make payment of such proceeds directly to Beneficiary.
Insurance proceeds held by Beneficiary may be commingled with other funds in
Beneficiary's possession, shall constitute additional security
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for the Obligations and Trustor shall not be entitled to the payment of
interest thereon. So long as no Event of Default exists, Trustor is hereby
authorized and empowered by Beneficiary, subject to the approval of
Beneficiary, to settle, adjust or compromise any claims for loss, damage or
destruction under any policy or policies of insurance; provided, however, that
Trustor shall give notice to and consult with Beneficiary prior to any such
action.
(2) In the event of any such damage or destruction,
subject to subsection 1.3G Beneficiary shall have the option in its sole and
absolute discretion and without regard to the adequacy of its security
hereunder, of applying all or part of the insurance proceeds (a) to the
repayment of principal, whether or not then due, in the inverse order of
maturity, or (b) to the repair or restoration of the Secured Property, or (c)
to cure any then current default under any of the Loan Documents, or (d) to
reimburse the Beneficiary for its costs and expenses in connection with the
recovery of such insurance proceeds, or (e) any combination of the foregoing.
(3) Nothing herein contained shall be deemed to
excuse Trustor from repairing or maintaining the Secured Property as provided
in Section 1.5 hereof or restoring all damage or destruction to the Secured
Property, regardless of whether there are insurance proceeds available or
whether such proceeds are sufficient in amount; provided, however, if
Beneficiary elects to apply all of the proceeds to repayment of principal as
set forth in subsection (2) above, Trustor shall be excused from such
restoration.
G. Trustor's Use of Proceeds.
(1) Notwithstanding the provisions of Section
1.3(F)(2) above (except for any destruction which occurs during the last six
(6) months of the loan term), upon full satisfaction of all of the conditions
set forth below, the insurance proceeds shall be made available to Trustor for
repair and restoration after deducting and payment to Beneficiary of
Beneficiary's costs of collection and disbursement of such proceeds (which
costs shall not include Beneficiary's overhead or the compensation of
Beneficiary's employees), provided:
(a) The proceeds are deposited with
Beneficiary;
(b) No default shall have occurred and be
continuing under the terms of any of the Loan Documents;
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(c) The insurance carrier does not deny
liability to any named insured;
(d) If Beneficiary so requests, Beneficiary
is furnished with an estimate of the cost of
restoration accompanied by a certificate of an
architect or registered engineer approved by
Beneficiary ("Beneficiary's Architect") as to such
costs;
(e) The value of the Secured Property so
restored or rebuilt shall be at least equal to what was
originally erected;
(f) Trustor furnishes Beneficiary with
evidence reasonably satisfactory to Beneficiary that all
Improvements to be restored and/or reconstructed and
their use shall fully comply with all (i) applicable
easements, covenants, conditions, restrictions or other
private agreements affecting the Premises, (ii) zoning
and building laws, ordinances and regulations and (iii)
all other applicable federal, state and municipal
laws, regulations and requirements;
(g) If the estimated cost of reconstruction
exceeds the proceeds available, at Beneficiary's
option, Trustor shall (i) furnish a bond of completion
or provide such other evidence satisfactory to
Beneficiary of Trustor's ability to meet such excess
costs or (ii) deposit with Beneficiary additional
funds equal to such excess;
(h) If such damage is in excess of $10,000,
Beneficiary shall have received notice of destruction
caused by such fire or other hazard from the Trustor
within ten (10) days from the date thereof, which
notice shall state the date of such fire or other
hazard and a request to Beneficiary to make the
insurance proceeds available to Trustor; and
(i) Beneficiary shall have reasonably
determined that such damage or destruction is fully
reparable prior to the Maturity Date (as defined in
the Note).
(2) Disbursement of the proceeds during the course
of reconstruction shall be conditioned upon the certification of Beneficiary's
Architect as to the cost of the
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work done and the conformity of the work to plans and specifications approved
by Beneficiary, and evidence supplied by a title insurance company acceptable
to Beneficiary that there are no liens arising out of the reconstruction or
otherwise. Notwithstanding the above, a portion of the proceeds may be
released prior to the commencement of reconstruction to pay for items approved
by Beneficiary in its sole discretion. Disbursements shall be made within ten
(10) business days after a request by Trustor. No payment made prior to the
final completion of work shall exceed ninety percent (90%) of the value of the
work performed from time to time, and at all times the undisbursed balance of
said proceeds remaining with the Beneficiary must be at least sufficient to pay
for the cost of completion of the work free and clear of liens. Final payment
shall be upon a certification of Beneficiary's Architect as to completion in
accordance with plans and specifications approved by Beneficiary.
(3) At such time as Beneficiary's Architect shall
certify to Beneficiary that the damaged or destroyed portion of the Secured
Property has been put in a state of repair equivalent to or better than that
existing prior to the date of such fire or other casualty, the work shall be
deemed completed. With Beneficiary's prior written consent, which may be
granted or withheld in Beneficiary's sole discretion, any certification
required to be made by an architect or registered engineer may be made by a
reputable contractor approved by Beneficiary. The balance of the insurance
proceeds so deposited with Beneficiary after full disbursement in accordance
with subsection 1.3G, at the sole option of Beneficiary, shall be either (a)
returned to Trustor, it being understood that such obligation or reimbursement
shall not exceed the amount of insurance proceeds for such restoration and/or
repair, or (b) applied to the payment of installments of the Obligations in
inverse order of maturity whether or not such installments shall be due and
payable.
(4) In all cases where any destruction to the
Secured Property by fire or other casualty occurs during the last six (6)
months of the loan term, or in Beneficiary's reasonable judgment, Trustor is
not proceeding with the repair or restoration in a manner that would entitle
Trustor to have the proceeds disbursed to it, or for any other reason
Beneficiary determines in its reasonable judgment that Trustor shall not be
entitled to such proceeds pursuant to the terms of this Deed of Trust,
Beneficiary shall have the options set forth in subsection F(2) above.
(5) Under no circumstances shall Beneficiary
become personally liable for the fulfillment of the terms,
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covenants and conditions contained in any of the Leases or obligated to take
any action to restore the Secured Property.
H. Transfer of Interest in Policies. In the event of
foreclosure of this Deed of Trust or other transfer of title or assignment of
the Secured Property in extinguishment, in whole or in part, of the
Obligations, all right, title and interest of Trustor in and to all policies of
insurance required by this Section 1.3 shall inure to the benefit of and pass
to the successor in interest to Trustor or the purchaser or grantee of the
Secured Property. If any claim under any insurance policy shall be paid after
the extinguishment of the Obligations, and if such foreclosure of this Deed of
Trust, or other transfer of title to or assignment of the Secured Property,
shall have resulted in extinguishing the Obligations for an amount less than
the total of the amount of the unpaid Obligations, with interest thereon at the
Increased Rate, plus counsel fees, costs and other disbursements incurred by
Beneficiary at the time of the extinguishment of the Obligations, then the
portion of the payment in satisfaction of the claim which is equal to the
difference between the total amount above referred to and the amount
theretofore paid to Beneficiary shall belong to and be the property of
Beneficiary and shall be paid to said Beneficiary, and Trustor hereby assigns,
transfers and sets over to Beneficiary all of Trustor's right, title and
interest in and to said sum. The balance, if any, shall be paid to Trustor.
Notwithstanding the above, Trustor shall retain an interest in the insurance
policies above-described during any redemption period.
1.4 Escrow Deposits. To further secure the payment of the
Impositions and the premiums for the insurance required by this Deed of Trust,
Trustor will deposit with Beneficiary, or its designee, on the due date of each
monthly installment of principal and interest under the Note, a sum which shall
be equal to one-twelfth (1/12) of the annual total of the Impositions and such
insurance premiums required to pay the next installment of Impositions or
insurance premiums, as estimated by Beneficiary, one month prior to the date
when such Impositions and insurance premiums shall become due and payable.
Such deposits shall be held by Beneficiary, or its designee, without obligation
for the payment of interest thereon to Trustor, free of any liens or claims on
the part of creditors of Trustor and as a part of the security of Beneficiary,
and shall be used by Beneficiary, or its designee, to pay current Impositions
and insurance premiums as the same shall become payable. Said deposits shall
not be, nor be deemed to be, trust funds but may, be commingled with general
funds of Beneficiary, or its designee. If at any time and for any reason
Beneficiary determines that said deposits are insufficient to pay the
Impositions and insurance premiums in
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full as they become payable, Trustor will deposit with Beneficiary, or its
designee, within ten (10) days after demand therefor, such additional sum or
sums as may be required in order for Beneficiary, or its designee, to pay such
Impositions and insurance premiums in full. It shall be the responsibility of
Trustor to furnish bills to Beneficiary in sufficient time for Beneficiary to
pay the Impositions and insurance premiums before any penalty attaches and
before the policies lapse. Transfer of legal title to the Secured Property
shall automatically transfer to the new owner of the beneficial interest in all
sums deposited under the provisions of this Section 1.4.
This Section 1.4 is intended to provide additional security for the
payment of all amounts now and in the future payable for the items set forth
above. To that end, Trustor hereby grants, pledges, transfers and assigns to
Beneficiary a continuing security interest in and right of set-off against the
following, whether now existing or hereafter acquired or arising: all right,
title and interest, in, to and under (i) all instruments, securities,
documents, accounts, general intangibles, money, and other property and
contents therein and thereof, and all rights relating thereto and proceeds
therefrom and thereof, including, without limitation, the deposits made into
any account from time to time at any time or from time to time in the
possession or control of the agent of Beneficiary, (ii) all books and records
relating to the types and items of property described in the foregoing clause
(i), and (iii) all proceeds (whether cash or non-cash, and including, without
limitation, insurance proceeds) and products of the property described in the
foregoing clause (i), and all replacements and substitutions therefor and all
additions and accessions thereto.
In addition to all rights and remedies given to Beneficiary by this
Deed of Trust, Beneficiary shall have the rights and remedies of a secured
party under the Uniform Commercial Code and any other applicable law. Upon
notice from Beneficiary, Trustor will promptly execute such financing
statements, continuation statements and other documents as may be necessary or
convenient to perfect, continue or otherwise evidence said security interest
and pay all expenses and fees for the preparation and filing thereof.
Upon occurrence of an Event of Default (as defined herein), all funds
held in any such account shall immediately be paid over to Beneficiary.
Beneficiary and Trustor agree that Beneficiary shall be entitled to apply such
funds to the balance of the Loan in its sole discretion.
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1.5 Care and Use of Premises.
A. Maintenance and Repairs. Trustor, at its sole cost
and expense, will take good care of the Secured Property and the sidewalks and
curbs adjoining the Secured Property and will keep the same in good order and
condition, and make all necessary repairs thereto, interior and exterior,
structural and nonstructural, ordinary and extraordinary, unforeseen and
foreseen, and will not commit or suffer to be committed any waste of the
Secured Property and will not do or suffer to be done anything which will
increase the risk of fire or other hazard to the Secured Property or any part
thereof.
B. Standard of Repairs. The necessity for and adequacy
of repairs to the Improvements pursuant to subsection 1.5A shall be measured by
the standard which is appropriate for a office, research and development
buildings containing 121,071 square feet and related facilities of similar
construction and class, provided that Trustor shall in any event make all
repairs necessary to avoid any structural damage to the Improvements and to
keep the Improvements in a proper condition for their intended use. When used
in this Section 1.5, the terms "repair" and "repairs" shall include all
necessary renewals and replacements. All repairs made by Trustor shall be made
with first-class materials and in a good, substantial and workmanlike manner
and shall be equal or better in quality and class to the original work.
C. Notice to Trustor. Trustor will notify Beneficiary
promptly of any damage to the Secured Property in excess of $10,000.00.
D. Removal of Equipment. Trustor shall have the right, at
any time and from time to time, to remove and dispose of equipment which is
Secured Property and which may have become obsolete or unfit for use or which
is no longer useful in the operation of the Secured Property. Trustor will
promptly replace any such equipment so disposed of or removed with other
equipment of a value and serviceability equal to or greater than the original
value and serviceability of the equipment so disposed of or removed, free of
superior title, liens and claims; except that, if by reasons of technological
or other developments in the operation and maintenance of buildings of the
general character of the Improvements, no replacement of the building equipment
so removed or disposed of is necessary or desirable in the proper operation or
maintenance of said Improvements, Trustor shall not be required to replace
same. All such replacements or additional equipment shall be covered by the
security interest herein granted.
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E. Compliance With Laws and Insurance. Trustor shall
promptly comply with all present and future laws, ordinances, orders, rules,
regulations and requirements of all federal, state and municipal governments,
courts, departments, commissions, boards and officers, any national or local
Board of Fire Underwriters, including, without limitation, all zoning, building
code, environmental protection and equal employment opportunity statutes,
ordinances, regulations, orders and restrictions, foreseen or unforeseen,
ordinary as well as extraordinary, which may be applicable to the Secured
Property and the sidewalks and curbs adjoining the Secured Property or to the
use or manner of use of the Secured Property (collectively, "Regulations")
whether or not such Regulations shall necessitate structural changes or
improvements. Trustor shall not bring or keep any article upon any of the
Secured Property or cause or permit any condition to exist thereon which would
be prohibited by or could invalidate any insurance coverage maintained, or
required hereunder to be maintained, by Trustor on or with respect to any part
of the Secured Property, and further shall do all other acts which from the
character or use of the Secured Property may be necessary to protect the
security hereof, the specific enumerations herein not excluding the general.
F. Permitted Contests. Trustor shall have the right,
after prior notice to Beneficiary, to contest by appropriate legal proceedings
diligently conducted in good faith, without cost or expense to Beneficiary, the
validity or application of any Hazardous Materials Law (as defined in the
Indemnity) and any other Regulation, and which does not subject Beneficiary to
any civil or criminal liability, subject to the following:
(1) If by the terms of any such Hazardous
Materials Law (as defined in the Indemnity) or any applicable Regulation,
compliance therewith pending the prosecution of any such proceeding may
legally be delayed without incurring any lien or charge of any kind against the
Secured Property, Trustor may delay compliance therewith until the final
determination of such proceeding.
(2) If any lien or charge against the Secured
Property would be incurred by reason of any such delay, Trustor, may contest
as aforesaid and delay as aforesaid, provided Trustor (a) furnishes to
Beneficiary-security, satisfactory to Beneficiary, against any loss or injury
by reason of such contest or delay, and (b) prosecutes the contest with due
diligence, Anything in subsection 1.5E or this subsection 1.5F to the contrary
notwithstanding, if the contesting of the validity or legality of any such
Hazardous Materials Law (as defined in the Indemnity) or any other Regulation
shall cause a breach of-any of the terms, conditions or covenants of any Lease
on Trustor's
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part, as lessor therein, to be performed, then Trustor shall not have the right
to contest the same as herein provided but compliance therewith must be made
pursuant to subsection 1.5E hereof.
G. Compliance With Instruments of Record. Trustor will
promptly perform and observe, or cause to be performed and observed, all of the
terms, covenants and conditions of all instruments of record affecting the
Secured Property, non-compliance with which may affect the priority of the lien
of this Deed of Trust, or which may impose any duty or obligation upon Trustor
or any lessee or other occupant of the Secured Property or any part thereof,
and Trustor shall do or cause to be done all things necessary to preserve
intact and unimpaired any and all easements, appurtenances and other interests
and rights in favor of or constituting any portion of the Secured Property.
H. Alteration of Secured Property. Trustor will not
demolish, remove, construct, restore, add to or alter any Improvement or any
extension thereof, nor consent to or permit any such demolition, removal,
construction, restoration, addition or alteration without Beneficiary's prior
written consent, except for (1) tenant improvement work and tenant alterations
provided for in any Lease approved by Beneficiary in writing, (2) ordinary,
non-structural maintenance or other work, and (3) structural repairs and
restorations having a cost of less than $100,000.
I. Parking. Trustor will grant no parking rights in the
Secured Property except with Beneficiary's prior written consent. The Secured
Property shall contain at all times not less than 401 on-site parking spaces
for standard-size American automobiles, said parking spaces to be located upon
the Land. if any part of the automobile parking areas included within said
Secured Property is taken by condemnation or said areas are otherwise reduced,
Trustor will provide parking facilities in kind, size and location to comply
with all Leases, and before making any contract therefor will furnish to
Beneficiary satisfactory assurance of completion thereof free of liens and in
conformity with all governmental zoning ordinances and regulations.
J. Entry on Secured Property. Beneficiary or its
representative is hereby authorized to enter upon and inspect the Secured
Property at all reasonable times.
K. No Consent to Alterations or Repairs. Nothing
contained in this Deed of Trust shall be deemed or construed in any way as
constituting the consent or request of Beneficiary, express or implied by
inference or otherwise to any contractor,
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subcontractor, laborer or materialman for the performance of any labor or the
furnishing of any materials for any specific improvement, alteration to or
repair of the Secured Property or any part thereof.
L. Mechanics Liens. Trustor will discharge, pay, or
bond, or cause to be discharged, paid or bonded, from time to time when the
same shall become due, all lawful claims and demands of mechanics, materialmen,
laborers and others which, if unpaid, might result in, or permit the creation
of, a lien on the Secured Property or any part thereof, or on the revenues,
rents, issues, income and profits arising therefrom, and Trustor will do or
cause to be done everything necessary so that the lien of this Deed of Trust
shall be fully preserved, at the cost of Trustor without expense to
Beneficiary.
M. Use of Secured Property by Trustor. Trustor will
use, or cause to be used, the Secured Property principally and continuously as
and for office, research and development and light manufacturing uses. Trustor
shall not use, or permit the use of the Secured Property or any part thereof
for any other principal use without the prior written consent of Beneficiary.
N. Use of Secured Property by Public. Trustor shall not
suffer or permit the Secured Property, or any portion thereof, to be used by
the public as such, without restriction or in such manner as might impair
Trustor's title to the Secured Property or any portion thereof, or in such
manner as might make possible a claim or claims of adverse usage or adverse
possession by the public, or of implied dedication of the Secured Property or
any portion thereof.
1.6 Financial Information.
A. Audit. Trustor will keep and maintain complete and
accurate books and records of the earnings and expenses of the Secured Property
and, without expense to Beneficiary, furnish to Beneficiary, within ninety (90)
days after the end of each fiscal year of Trustor, an annual audit prepared and
certified by Trustor reasonably satisfactory to Beneficiary, and prepared by an
independent certified public accountant in accordance with generally accepted
accounting principles relating to real estate consistently applied, which shall
include, with respect to the prior fiscal year: (1) a statement of assets and
liabilities of Trustor with respect to the Secured Property only, (2) a
statement of the source and application of funds by Trustor with respect to the
Secured Property, (3) a detailed profit and loss statement relating to the
ownership and operation of the Secured Property, including, without limitation,
all rents and other income derived therefrom and all expenses paid or incurred
in
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connection therewith, and (4) such interim balance sheets and profit and loss
statements and income and expense reports as may be reasonably required by
Beneficiary. The audit shall also include annual sales figures for all tenants
in the Secured Property who are required by their respective lease to provide
same to Trustor. In addition to and simultaneously with the financial
statements Trustor shall deliver to Beneficiary a statement reflecting the
complete rental status of the Secured Property showing the name of each tenant,
the area in square feet occupied, the remaining term of the lease and the
rental being paid.
B. Right to Inspect Books and Records. Beneficiary or its
representative shall have the right to examine and make copies of such books
and records and all supporting vouchers and data at the Premises or at
Trustor's principal place of business at Trustor's expense.
1.7 Condemnation.
A. Beneficiary's Right to Participate in Proceedings. If
the Secured Property, or any part thereof, shall be taken in condemnation
proceedings or by exercise of any right of eminent domain (collectively,
"Condemnation Proceedings"), Beneficiary shall have the right to participate in
any such Condemnation Proceedings and the award or payment that may be made in
any such Condemnation Proceedings is hereby assigned to Beneficiary and shall
be deposited with Beneficiary and disbursed in the manner set forth in this
Section 1.7. Trustor will give Beneficiary immediate notice of the actual or
threatened commencement of any Condemnation Proceedings affecting all or any
part of the Secured Property, including severance and consequential damage and
change in grade in streets, and will deliver to Beneficiary copies of any and
all papers served in connection with any such proceedings. Notwithstanding the
foregoing, Beneficiary is hereby authorized, at its option, to commence, appear
in and prosecute in its own or Trustor's name any action or proceeding relating
to any such condemnation and to settle or compromise any claim in connection
therewith; provided however that Beneficiary shall give notice to and consult
with Trustor prior to any action. No settlement for the damages sustained
thereby shall be made by Trustor without Beneficiary's prior written approval
thereof. Trustor agrees to execute any and all further documents that may be
required in order to facilitate the collection of any award or awards and the
making of any such deposit.
B. Application of Condemnation Award. If at any time
title or temporary title to the whole or any part of the Secured Property shall
be taken in Condemnation Proceedings or pursuant to any agreement between
Trustor, Beneficiary and those
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authorized to exercise the right to condemnation, Beneficiary, at its option in
its sole and absolute discretion and without regard to the adequacy of its
security hereunder, shall have the right to apply such award or proceeds which
it receives to payment of the Obligations in inverse order of maturity. In the
event that all or substantially all of the Secured Property is taken and the
amount of the award or proceeds received by Beneficiary shall not be sufficient
to pay the then unpaid balance of the Obligations, then the balance of the
Obligations shall, at the option of Beneficiary, become immediately due and
payable and Trustor shall, within ten (10) days after the application of the
award or proceeds as aforesaid, pay such deficiency to Beneficiary.
"Substantially all of the Secured Property" shall be deemed to have been taken
if the remainder of the Secured Property (1) in the sole opinion of
Beneficiary's Architect, cannot be capable of being restored to a self-
contained and architecturally complete unit or units or (2) in the sole opinion
of Beneficiary, the balance of the Secured Property as restored will not be
economically viable and capable of supporting all carrying charges and
operation and maintenance expenses.
C. Reimbursement of Costs. In the case of any taking
covered by the provisions of this Section 1.7, Beneficiary (to the extent that
Beneficiary has not been reimbursed therefor by Trustor) shall be entitled, as
a first priority, to the reimbursement out of any award or awards for all
reasonable costs, fees, reimbursements to Beneficiary and expenses incurred in
the determination and collection of any such awards.
D. Existing Obligations. Notwithstanding any taking by
Condemnation Proceedings, Trustor shall continue to pay the monthly
installments due under the Note as well as all other sums secured by this Deed
of Trust at the rate provided therein until any such award or payment shall
have been actually received by Beneficiary and applied to the Obligations. Any
reduction in the Obligations resulting from Beneficiary's application of such
award or payment as hereinabove set forth shall be deemed to take effect only
on the date of receipt by Beneficiary. If prior to Beneficiary's receipt of
such award or payment the Secured Property shall have been sold on foreclosure
of this Deed of Trust, Beneficiary shall have the right to receive said award
or payment to the extent of any portion of the Obligations still unpaid after
application of the proceeds of the foreclosure sale, with interest thereon at
the Increased Rate, plus attorneys' fees and other costs and disbursements
incurred by Beneficiary in connection with the collection of such award or
payment and in establishing the deficiency. The application of condemnation
proceeds to the obligations secured by this Deed of Trust, whether or not then
due or payable, shall not postpone, abate or reduce any of the periodic
installments of principal and/or
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interest thereafter to become due under this Deed of Trust until the
Obligations are paid in full.
E. Application of Award. Notwithstanding the provisions
of Section 1.7B above (except for a taking which occurs during the last six
months of the loan term), upon full satisfaction of all of the following
conditions, Beneficiary shall, after deducting Beneficiary's costs in
connection with the disbursement of funds, apply the award or payment to the
cost to restore, repair or alter the remaining portion of the Secured Property,
subject to the provisions of subsection 1.3F (which shall apply in all respects
except that any reference therein to insurance proceeds shall be deemed to
refer to the award or payment in the taking), and Trustor will promptly
restore, repair or alter the remaining Secured Property. The provisions of
this subsection 1.7E shall not apply unless (1) the balance of the Improvements
shall, in the opinion of Beneficiary's Architect, be capable of being restored
to a self-contained and architecturally complete unit or units, (2) the balance
of the Improvements after restoration to a self-contained and architecturally
complete unit or units shall, in the opinion of Beneficiary, be economically
viable and capable of supporting all carrying charges and operating and
maintenance expenses of the Secured Property, after reduction, if any, of the
Obligations in accordance with the following sentence, and (3) Trustor shall
furnish to Beneficiary evidence satisfactory to Beneficiary that the
Improvements so restored or reconstructed and their use would fully comply with
all zoning and building laws, ordinances and regulations, and with all other
applicable federal, state and municipal laws and requirements. The balance of
the condemnation award or payment so deposited with Beneficiary, after
disbursement in accordance with this subsection 1.7E, shall be applied to the
Obligations in inverse order of maturity, whether or not the same shall then be
due and payable. All awards and payments and other sums deposited with
Beneficiary, until expended or applied as provided in this subsection 1.7E, may
be commingled with the general funds of Beneficiary and shall constitute
additional security for the Obligations and shall not bear interest. In all
cases where a taking occurs during the last six months of the loan term, or in
Beneficiary's sole judgment Trustor is not proceeding with the repair or
restoration in a manner that would entitle Trustor to have the awards or
payments disbursed to it or for any other reason Beneficiary determines in its
sole judgment that Trustor shall not be entitled to such awards or payments
pursuant to the terms of this Deed of Trust, Beneficiary, at its option in its
sole and absolute discretion and without regard to the adequacy of its security
hereunder, shall have the right to apply such award or proceeds which it
receives to payment of the Obligations in the inverse order of maturity,
whether or not the same shall then be due and payable.
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1.8 Leases.
A. Performance of Lessor's Covenants. Trustor, as
lessor, may, in accordance with the Assignment, enter into leases with space
tenants, as lessees, for parts or all of the Secured Property (all such leases
for parts or all of the Secured Property are hereinafter referred to
individually as a "Lease" and collectively as "Leases" and the lessees under
such Leases are hereinafter referred to individually as a "Lessee" and
collectively as "Lessees"). Trustor shall faithfully perform the lessor's
covenants under any subsisting and future Leases affecting the Secured Property
or any part thereof, and neither do, nor neglect to do, nor permit to be done
(other than enforce the terms of such Leases and exercise the lessor's remedies
thereunder following a default or event of default on the part of any Lessee in
the performance of its prescribed obligations), anything which may cause the
modification or termination of any of said Leases, or of the obligations of any
Lessee or any other person claiming through such Lessee, or which may diminish
or impair the value of any Lease or the rents provided for therein, or the
interest of the lessor or of Beneficiary therein or thereunder.
B. Notice of Default. Trustor will give Beneficiary
immediate notice, by certified mail, of any notice of default, event of default
or cancellation given to or received from any Lessee.
C. Covenants Regarding Leases. Except as otherwise
required under any such Lease, Trustor covenants it will not, without the prior
written consent of the Beneficiary obtained in each instance:
(1) lease to any person, firm or corporation,
except for actual occupancy by such person, firm or corporation all or any part
of the space in any of the Improvements;
(2) cancel, terminate or accept a surrender or
suffer or permit any cancellation, termination or surrender of any Lease,
except in accordance with the term of any Lease which as been pre-approved in
writing by Beneficiary;
(3) modify any Lease so as to reduce the term
thereof or the rent payable thereunder, or to change any renewal provision
contained therein;
(4) commence any summary proceeding or other
action to recover possession of any space demised pursuant to any Lease, other
than a proceeding brought in good faith by reason of a default of any Lessee;
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(5) receive or collect or permit the receipt or
collection of any rental payments of more than one monthly installment of rent
under any Lease in advance of the due dates of such rental payments;
(6) take any other action with respect to any
Lease which would tend to impair the security of the Beneficiary under this
Deed of Trust;
(7) extend any present Lease other than in the
manner presently provided for therein, or enter into any future Lease with any
person, firm or corporation, except on the best terms reasonably obtainable,
under Leases which shall in all respects be satisfactory to the Beneficiary as
to the form and substance thereof and the credit standing of the respective
Lessee thereunder;
(8) execute an Agreement or create or permit a
lien which may be or become superior to any existing Leases affecting the
Secured Property; or
(9) sell, assign, transfer, mortgage, pledge or
otherwise dispose of or encumber, whether by operation of law or otherwise, any
Lease or any rentals under any Lease or any rents, income, profits or cash
collateral issuing from the Secured Property.
D. Application of Rents. Trustor shall use and apply all
rents, income and profits from the Secured Property first to the payment of the
Obligations in accordance with the terms of the Loan Documents, and then to the
payment of all Impositions and costs and expenses of management, operation,
repair, maintenance, preservation, reconstruction and restoration of the
Secured Property in accordance with the requirements of this Deed of Trust and
the obligations of Trustor as the lessor under any Lease, and shall not use
such rents, income or profits for purposes unrelated to the Secured Property
unless and until all current payments on the Obligations, Impositions, and such
costs and expenses have been paid or provided for and reasonably adequate cash
reserves have been set aside to ensure the timely payment of all future
payments on such Obligations prior to the maturity thereof, Impositions and
such costs and expenses.
1.9 Assignment of Leases, Rents, Income, and Cash Collateral.
A. Assignment; Discharge of Obligations. Trustor does
hereby absolutely and presently bargain, sell, assign and set over unto
Beneficiary, all Leases, rents, income, profits cancellation fees, damages, or
similar payments in lieu of rents,
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and any and all cash collateral which, whether before or after foreclosure or
during the full period of redemption, shall be made upon or accrue and be owing
for the use or occupation of the Secured Property and of the buildings and
fixtures thereon, or any part thereof. For the aforesaid purpose, Trustor does
hereby constitute and appoint Beneficiary its attorney-in-fact, irrevocably in
its name, to receive, collect and receipt all sums due or owing for such use
and occupation, as the same accrue and, out of the amount so collected,
Beneficiary, its successors and assigns, are hereby authorized (but not
obligated) to pay and discharge all obligations of Trustor hereunder,
including, but not being limited to, the obligation to pay the Obligations (and
including any accelerated Obligations) in such order as Beneficiary, its
successors or assigns, may determine and whether due or not, and to pay the
remainder, if any, to Trustor, but neither this assignment nor any such action
shall constitute Beneficiary as a "mortgagee in possession". The assignments of
Leases, rents, income, profits and any and all cash collateral of the Secured
Property in this Section 1.9 is intended to be an absolute and present
assignment from Trustor to Beneficiary and not merely the passing of a security
interest. Trustor shall, at any time or from time to time, upon request of
Beneficiary, execute and deliver any instrument as may be requested by
Beneficiary to further evidence the assignment and transfer to Beneficiary of
Trustor's interest in any Lease. Nothing herein shall in any way limit
Beneficiary's remedies or Trustor's obligations under the Assignment to
Beneficiary.
B. Entry Onto Secured Property; Lease of Secured
Property. Upon the occurrence of an Event of Default (as hereinafter defined);
Beneficiary at its sole option shall have the right to enter and take
possession of the Secured Property and manage and operate the same as further
provided in subsection 4.1C, including, without limitation, the right to enter
into Leases and new agreements extending said termination dates beyond the
maturity set forth in the Note and take any action which, in Beneficiary's
judgment, is necessary or proper to conserve the value of the Secured Property.
The expenses (including any receiver's fees, attorneys' fees, costs and agent's
compensation) incurred pursuant to the powers herein contained shall be secured
hereby. Beneficiary shall not be liable to account to Trustor for any action
taken pursuant hereto other than to account for any rents actually received by
Beneficiary.
C. License to Manage Secured Property. Notwithstanding
anything to the contrary contained in subsection A of this Section 1.9, as long
as there shall exist no default hereunder, Trustor shall have the license to
manage and operate the Secured Property, including without limitation, the
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right to enter into Leases, and collect, as they accrue, all such rents,
income, profits and cash collateral.
D. Delivery of Assignments. Trustor will, as requested
from time to time by Beneficiary, execute such additional documents to evidence
the assignment to Beneficiary or its nominee of any Leases now or hereafter
made upon said Secured Property, such assignment documents to be in form and
content acceptable to Beneficiary. For the aforesaid purposes, Trustor agrees
to deliver to Beneficiary within thirty (30) days after Beneficiary's request,
a duplicate original of every Lease which is at the time of such request
outstanding upon the said Secured Property and in addition thereto shall supply
Beneficiary at its request a complete list of each and every Lease certified by
(1) an officer of Trustor, if Trustor is a corporation, or (2) a general
partner of Trustor (or an officer of any such general partner which is a
corporation) if Trustor is a partnership or (3) a trustee of Trustor (or an
officer of any such trustee which is a corporation) if Trustor is a trust, or
(4) Trustor if Trustor is an individual or individuals, showing unit number,
type, name of each Lessee, monthly rental, date to which rents have been paid,
term of Lease, date of occupancy, date of expiration and any and every special
provision, concession or inducement granted to Lessee.
E. Indemnity. Notwithstanding anything to the contrary
set forth in this Section 1.9, Trustor agrees that in the exercise of the
rights of Beneficiary contained in this Section 1.9, no liability shall be
asserted against Beneficiary, all such liability being expressly waived and
released by Trustor. Trustor hereby holds Beneficiary harmless from and
against any and all claims, liabilities and expenses of any kind or nature
against or incurred by Beneficiary arising out of such management, operation or
maintenance of the Secured Property or the collection and disposition of rents,
income, profits or cash collateral therefrom, except for any claim, liability
or expense arising out of Beneficiary's fraud, bad faith, willful misconduct or
gross negligence.
1.10 Further Assurances.
A. General; Appointment of Attorney-in-Fact. At any
time, and from time to time, upon request by Beneficiary, Trustor will make,
execute, and deliver or cause to be made, executed and delivered to
Beneficiary, any and all other instruments, certificates and other documents as
may, in the opinion of Beneficiary, be reasonably necessary or desirable in
order to effectuate, complete, perfect or continue and preserve the obligations
of Trustor under the Note and the Loan Documents. Upon any failure by Trustor
to do so, Beneficiary may make,
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execute and record any and all such instruments, certificates and documents for
and in the name of Trustor and Trustor hereby irrevocably appoints Beneficiary
the agent and attorney-in-fact of Trustor for such purposes. Trustor will
reimburse Beneficiary for any sums expended by Beneficiary in making, executing
and recording such instruments, certificates and documents and such sums shall
be secured by this Deed of Trust.
B. Statement Regarding Obligations. Trustor from time to
time, within ten (10) days after request by Beneficiary, shall furnish
Beneficiary with a written statement, duly acknowledged, setting forth the
unpaid principal of, and interest on, the Obligations secured hereby and
whether or not any set-offs or defenses exist against such principal and
interest, and, if so, the particulars thereof.
C. Additional Security Instruments. Trustor shall from
time to time, within fifteen (15) days after request by Beneficiary, execute,
acknowledge and deliver to Beneficiary such chattel mortgages, security
agreements or other similar security instruments, in form and substance
satisfactory to Beneficiary, covering all property of any kind whatsoever owned
by Trustor or in which Trustor may have any interest which in the sole opinion
of Beneficiary, is essential to the operation and maintenance of the Secured
Property. Trustor shall further from time to time within fifteen (15) days
after request by Beneficiary, execute, acknowledge and deliver any financing
statement, renewal, affidavit, certificate, continuation statement or other
document as Beneficiary may request in order to perfect, preserve, continue,
extend or maintain the security interest under, and the priority of, this Deed
of Trust or such chattel Deed of Trust or other security instrument as a first
lien. Trustor further agrees to pay to Beneficiary on demand all costs and
expenses incurred by Beneficiary in connection with the preparation, execution,
recording, filing and refiling of any such instrument or document, including
the charges for examining title and the attorneys' fee for rendering an opinion
as to the priority of this Deed of Trust and of such chattel Deed of Trust or
other security instrument as a valid first and subsisting lien. However,
neither a request so made by Beneficiary nor the failure of Beneficiary to make
such a request shall be construed as a release of such property, or any part
thereof, from the lien of this Deed of Trust, it being understood and agreed
that this covenant and any such chattel Deed of Trust, security agreement or
other similar security instrument, delivered to Beneficiary, are cumulative and
given as additional security. Trustor shall also pay all premiums and related
costs in connection with any title insurance policy or policies in full or
partial replacement of the title policy now insuring or which will insure the
lien of this Deed of Trust.
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D. Security Agreement.
(1) THIS DEED OF TRUST CREATES A LIEN ON THE
SECURED PROPERTY, AND TO THE EXTENT THE PROPERTY IS PERSONAL PROPERTY UNDER
APPLICABLE LAW, THIS DEED OF TRUST CONSTITUTES A SECURITY AGREEMENT UNDER THE
CALIFORNIA UNIFORM COMMERCIAL CODE (THE "U.C.C.") AND ANY OTHER APPLICABLE LAW
AND IS FILED AS A FIXTURE FILING. UPON THE OCCURRENCE OF AN EVENT OF DEFAULT,
BENEFICIARY MAY, AT ITS OPTION, PURSUE ANY AND ALL RIGHTS AND REMEDIES
AVAILABLE TO A SECURED PARTY WITH RESPECT TO ANY PORTION OF THE SECURED
PROPERTY, AND/OR BENEFICIARY MAY, AT ITS OPTION, PROCEED AS TO ALL OR ANY PART
OF THE SECURED PROPERTY IN ACCORDANCE WITH BENEFICIARY'S RIGHTS AND REMEDIES
WITH RESPECT TO THE LIEN CREATED BY THIS DEED OF TRUST.
(2) The grant of a security interest to
Beneficiary in the granting clauses of this Deed of Trust shall not be
construed to derogate from or impair the lien or provisions of or the rights of
Beneficiary under this Deed of Trust with respect to any property described
therein which is real property or which the parties have agreed to treat as
real property. The hereby stated intention of Trustor and Beneficiary is that
everything used in connection with the production of income from such real
property or adapted for use thereon is, and at all times and for all purposes
and in all proceedings, both legal and equitable, shall be regarded as real
property, irrespective of whether or not the same is physically attached to the
Land and/or Improvements.
(3) If reasonably required by Beneficiary, at any
time during the term of this Deed of Trust, Trustor will execute and deliver to
Beneficiary, in form satisfactory to Beneficiary, additional security
agreements, financing statements and/or other instruments covering all Personal
Property included in the Secured Property.
(4) Trustor hereby irrevocably constitutes and
appoints Beneficiary as its attorney-in-fact and such appointment is coupled
with an interest, to execute, deliver and file with the appropriate filing
officer or office such security agreements, financing statements and/or other
instruments as Beneficiary may request or require in order to impose and
perfect the lien and security interest created hereby more specifically on such
Personal Property.
(5) If Trustor enters into a separate security
agreement with Beneficiary relating to any of the Personal Property or
fixtures, the terms of such security agreement shall govern the rights and
remedies of Beneficiary after an Event of Default thereunder.
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(6) It is understood and agreed that, in order to
protect Beneficiary from the effect of U.C.C. Section 9313, as amended from
time to time, in the event that Trustor intends to purchase any goods which may
become Secured Property, or any part thereof, and such goods will be subject to
a purchase money security interest held by a seller or any other party:
(a) Trustor shall, before executing any security
agreement or other document evidencing or perfecting such security interest,
obtain the prior written approval of Beneficiary, and all requests for such
written approval shall be in writing and contain the following information:
(i) a description of the Secured Property
to be replaced, added to, installed or substituted;
(ii) the address at which the Secured
Property will be replaced, added to, installed or substituted; and
(iii) the name and address of the proposed
holder and proposed amount of the security interest.
(b) Trustor's execution of any such security
agreement or other document evidencing or perfecting such security interest
without Beneficiary's prior written approval shall constitute an Event of
Default. No consent by Beneficiary pursuant to this subparagraph shall be
deemed to constitute an agreement to subordinate any right of Beneficiary in
property covered by this Deed of Trust.
(7) If at any time Trustor fails to make any
payment on an obligation secured by a purchase money security interest in the
Personal Property, Beneficiary, at its option, may at any time pay the amount
secured by such security interest. Any money paid by Beneficiary under this
Subparagraph, including any expenses, costs, charges and attorney's fees
incurred by Beneficiary, shall be reimbursed to Beneficiary in accordance with
Section 1.2E hereof. Beneficiary shall be subrogated to the rights of the
holder of any such purchase money security interest in the Personal Property.
(8) Beneficiary shall have the right to acquire by
assignment from the holder of such security interest any and all contract
rights, accounts receivable, negotiable or non-negotiable instruments, or other
evidence of Trustor's indebtedness for such Personal Property, and, upon
acquiring such interest by assignment, shall have the right to enforce the
security interest as assignee thereof, in accordance with the
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terms and provisions of the U.C.C. and in accordance with any other provisions
of law.
(9) Whether or not Beneficiary has paid the
indebtedness secured by, or taken an assignment of, such security interest,
Trustor covenants to pay all sums and perform all obligations secured thereby,
and if Trustor at any time shall be in default under such security agreement,
it shall constitute an Event of Default.
(10) The provisions of this Section 1.10D shall not
apply if the goods which may become fixtures are of at least equivalent value
and quality as any property being replaced and if the rights of the party
holding such security interest have been expressly subordinated, at no cost to
Beneficiary, to the lien and security interest of this Deed of Trust in a
manner satisfactory to Beneficiary, including without limitation, at the option
of Beneficiary, providing to Beneficiary a satisfactory opinion of counsel to
the effect that this Deed of Trust constitutes a valid and subsisting first
lien on such fixtures which is not subordinate to the lien of such security
interest under any applicable law, including without limitation, the provisions
of Section 9313 of the U.C.C.
(11) Trustor hereby warrants, represents and
covenants as follows:
(a) To the best of Trustor's knowledge,
Trustor is the sole owner of the Personal Property free from any lien, security
interest, encumbrance or adverse claim thereon of any kind whatsoever. Trustor
will notify Beneficiary of, and will protect, defend and indemnify Beneficiary
against, all claims and demands of all persons at any time claiming any rights
or interest therein.
(b) The Personal Property is not used or
bought and shall not be used or bought for personal, family, or household
purposes, but shall be bought and used solely for the purpose of the Secured
Property.
(c) To the best of Trustor's knowledge,
the Personal Property is located on the Land and/or Improvements and will be
kept on or at the Land or the Improvements and Trustor will not remove the
Personal Property therefrom without the prior written consent of Beneficiary,
except such portions or items of Personal Property which are consumed or worn
out in ordinary usage, all of which shall be promptly replaced by Trustor with
other Personal Property of value equal to or greater than the value of the
replaced Personal Property when new, and except such portions or items of
Personal Property temporarily stored
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elsewhere to facilitate refurbishing or repair thereof or of the Improvements.
(d) Trustor maintains a place of business
in the State and Trustor will immediately notify Beneficiary in writing of any
change in its principal place of business as set forth in the beginning of this
Deed of Trust.
E. Preservation of Trustor's Existence. If Trustor is a
partnership or a corporation, it shall do all things necessary to preserve and
keep in full force and effect its existence, franchise, rights and privileges
under the laws of the state of its formation or incorporation and the state in
which the Secured Property is located, if required by the laws of such state,
and shall comply with all regulations, rules, ordinances, statutes, orders and
decrees of any governmental or quasi-governmental authority or court applicable
to it.
F. Further Indemnities. In addition to any other
indemnifies to Beneficiary specifically provided for in this Deed of Trust,
Trustor hereby indemnifies and saves Beneficiary harmless from and against any
and all losses, liabilities, suits, obligations, fines, damages, penalties,
claims, costs, charges, and expenses, including, without limitation, reasonable
architects', engineers' and attorneys' fees and all disbursements which may be
imposed upon, incurred or asserted against Beneficiary by reason of: (1) the
construction of the Improvements, (2) any capital improvements, other work or
things, done in, on or about the Secured Property or any part thereof, (3) any
use, non-use, misuse, possession, occupation, alteration, repair, condition,
operation, maintenance or management of the Secured Property or any part
thereof or any street, drive, sidewalk, curb, passageway or space comprising a
part thereof or adjacent thereto, (4) any negligence or wilful act or omission
on the part of Trustor, any Lessee under a Lease or their agents, contractors,
servants, employees, licensees or invitees, (5) any accident, injury (including
death) or damage to any person or property occurring in, on or about the
Secured Property or any part thereof or in, on or about any street, drive,
sidewalk, curb, passageway or space adjacent thereto, (6) any default or Event
of Default (as herein defined), (7) any lien or claim which may be alleged to
have arisen on or against the Secured Property or any part thereof under the
laws of the local or state government or any other governmental or
quasi-governmental authority or any liability asserted against Beneficiary with
respect thereto, (8) any tax attributable to the execution, delivery, filing or
recording of this Deed of Trust, the Note, any Lease, or any other Loan
Documents, or (9) any contest permitted pursuant to the provisions of this Deed
of Trust.
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G. Absence of Insurance. The obligations of Trustor
under this Section 1.10 shall not in any way be affected by the absence in any
case of covering insurance, by the amount of the insurance or by the failure or
refusal of any insurance carrier to perform any obligation on its part under
insurance policies affecting the Secured Property. If any claim, action or
proceeding is made or brought against Beneficiary by reason of any event as to
which Trustor is obligated to indemnify Beneficiary, then, upon demand by
Beneficiary, Trustor, at its sole cost and expense, shall resist or defend such
claim, action or proceeding in Beneficiary's name, if necessary, by the
attorneys for Trustor's insurance carrier, if such claim, action or proceeding
is covered by insurance, otherwise by such attorneys as Beneficiary shall
reasonably approve. Notwithstanding the foregoing, Beneficiary may engage its
own attorneys in its reasonable discretion to defend it or to assist in its
defense and Trustor shall pay the reasonable fees and disbursements of such
attorneys and such amounts shall bear interest at the Increased Rate and shall
be secured by this Deed of Trust.
1.11 Further Sales or Encumbrances.
A. Continuing Ownership and Management. Trustor
acknowledges that the continuous ownership of the Secured Property and the
continuous management and/or control of the operation of same by Trustor is of
a material nature to the transaction and the making of the loan evidenced by
the Note and secured by this Deed of Trust.
B. Transfer or Encumbrance of Secured Property. Trustor
shall not, without the prior written consent of Beneficiary being first had and
obtained (which consent may be granted or denied in Beneficiary's sole
discretion), voluntarily or involuntarily, by operation of law or otherwise,
transfer or dispose of, or suffer any third party to transfer or dispose of,
all or any portion of the Secured Property or any interest therein or the
management and/or operation by Trustor of the Secured Property. For purposes
of this Section 1.11, a transfer or disposition of the Secured Property or any
part thereof or interest therein shall include, without limitation, the sale of
the Secured Property or any portion thereof to a residential cooperative
corporation, conversion of all or any part of the Secured Property to a
condominium form of ownership, execution of a contract to sell or option to
purchase all or any portion of the Secured Property or any interest therein,
any transfer of or agreement to transfer air rights, any lease for space in any
Improvements on the Secured Property for purposes other than occupancy by the
tenant, any lease for space in Improvements containing an option to purchase,
or any direct or indirect sale,
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assignment, conveyance, transfer (including a transfer as a result of or in
lieu of condemnation), or other alienation of all or any portion of the Secured
Property or any interest therein, including, but not limited to, the creation
of a lien or other encumbrance on the Secured Property or any part thereof or
interest therein, and further including any assignment, pledge, grant of
security interest in, conditional sale, or the execution of a title retention
agreement with regard to any personalty included in the Secured Property. Any
such action described in this subsection 1.11B is herein called a "Transfer." A
Transfer shall also include, without limitation, any of the following events,
whether made directly or through an intermediary, and whether made in one
transaction or effected in more than one transaction:
(1) If Trustor is or becomes a corporation, a
transfer or disposition of more than 50% of the outstanding voting stock of
such corporation or of any other corporation directly or indirectly owning or
controlling 50% or more of the voting stock of Trustor;
(2) If Trustor is or becomes a partnership, a
transfer or disposition of any interest of any general partner in Trustor; or
(3) If Trustor is a trust or other entity, a
transfer or disposition of more than 50% of the beneficial interests in
Trustor.
For purposes of the foregoing, a "transfer or disposition" of such stock or
interests shall include, without limitation, any direct or indirect sale
thereof, any execution of a contract or other agreement to sell or option to
purchase such stock or interests, or any assignment of such stock or interests,
including any assignment for security purposes.
In no event shall the following be deemed a Transfer or disposition of the
Secured Property in violation of this Section 1.11(B):
(1) The transfer of the Secured Property to any
corporation which controls, is controlled by or is under common control with
Trustor, so long as Trustor continues to be liable for performance of the
Obligations after the transfer,
(2) The merger or consolidation of Trustor with
any other company, so long as the net worth of the combined company after
consummation of the transaction is not less than the net worth of Trustor
immediately prior to the merger or consolidation; or
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(3) The issuance or trading of the stock or debt
securities of Trustor or any parent of Trustor through any public exchange, in
one transaction or a series of transactions.
C. Acceleration of Obligations. In the event of a Transfer
without the prior written consent of Beneficiary, Beneficiary may, without
limiting any other right or remedy available to Beneficiary at law, in equity
or by agreement with Trustor, and in Beneficiary's absolute discretion and
without regard to the adequacy of its security, accelerate the maturity of the
Note and require the payment of the then existing outstanding principal balance
and all other sums due under the Note and under this Deed of Trust, including,
but not limited to, the prepayment charge provided in Section 4.6 herein. The
giving of consent by Beneficiary to a Transfer in any one or more instances
shall not limit or waive the need for such consent in any other or subsequent
instances.
D. Wrap-Around Financing. Should the Secured Property at
any time be or become subject to the lien of any agreement, deed of trust or
mortgage or similar instrument in connection with which payments on account of
the obligations secured hereby are to be made directly or indirectly by or
through a mortgagee, grantee or beneficiary thereunder, regardless of whether
or not payment of the obligations secured hereby is assumed by such mortgagee,
grantee or beneficiary, the whole of the principal sum and interest and other
sums hereby secured, at the option of Beneficiary, shall immediately become due
and payable.
1.12 Expenses. Trustor will pay or reimburse Beneficiary for all
reasonable attorneys' fees, costs and expenses incurred by Beneficiary in any
proceedings affecting the Obligations or the Secured Property, (A) involving
the estate of a decedent or an insolvent, or (B) in any action, legal
proceeding or dispute of any kind in which Beneficiary is made a party, or
appears as party plaintiff or defendant, including, but not limited to, any
exercise of the power of sale or judicial foreclosure as set forth in this Deed
of Trust, any condemnation action involving the Secured Property or any action
to protect the security hereof or upon the reasonable concern of Beneficiary
with the condition of the Secured Property, and any such amounts paid by
Beneficiary shall be added to the obligations and secured by this Deed of
Trust. If the obligations are referred to attorneys for collection,
foreclosure or for any cause set forth in Article III hereof, Trustor shall pay
all expenses incurred by Beneficiary, including reasonable attorneys' fees, all
costs of collection, litigation costs, and costs (which may be estimated as to
items
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to be expended after entry of the decree) of procuring title insurance
policies, whether or not obtained, Torrens certificates, and similar assurances
with respect to title and value as Beneficiary may deem reasonably necessary
together with all statutory costs, with or without the institution of an action
or proceeding. All such costs and expenses with interest thereon at the
Increased Rate shall be deemed to be secured by this Deed of Trust.
ARTICLE II
WARRANTIES AND REPRESENTATIONS
Trustor makes the following warranties and representations:
2.1 Warranty of Title. Trustor (A) is lawfully seized and
possessed of the Secured Property, in fee simple, subject to no mortgage, lien,
charge or encumbrance, except as specifically set forth in the title insurance
policy issued to Beneficiary upon recordation of this Deed of Trust, (B) has
full power and lawful authority to grant, bargain, sell, convey, assign,
transfer and mortgage the Secured Property in the manner and form hereby
mortgaged and conveyed, (C) is the fee owner of the Improvements, (D) is the
owner of the Personal Property, and (E) does warrant and will defend the title
to the Secured Property against all claims and demands whatsoever.
2.2 Ownership Of Improvements And Personal Property. All
Improvements and Personal Property now or hereafter affixed, placed or used by
Trustor are and will hereafter be owned by Trustor free from any prior liens or
encumbrances, provided, however, that if any of the foregoing Improvements or
Personal Property shall be subject to a conditional bill of sale, chattel
mortgage or other agreement creating a security interest, then all of the
right, title and interest of Trustor in and to such Improvements and Personal
Property together with the benefits of any deposits or payments now or
hereafter made thereon shall be covered by and subject to this Deed of Trust.
2.3 No Pending Material-Litigation or Proceeding; No Hazardous
Materials.
A. Proceedings Affecting Trustor. Except as disclosed in
the Affidavit being delivered concurrently herewith, to the best knowledge and
belief of Trustor, there are no actions, suits or proceedings pending, and,
there are no actions, suits, investigations or proceedings threatened, against
or affecting Trustor, or the business, operations, properties or assets of
Trustor, or before or by any governmental department, commission, board,
regulatory authority, bureau, agency or
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instrumentality, domestic, foreign, federal, state or municipal (collectively,
"Governmental Agency") , or any court, arbitrator or grand jury, which may
result in any material adverse change in the business, operations, properties
or assets or in the condition, financial or otherwise, of Trustor, or in the
ability of Trustor to perform its obligations under the Note or this Deed of
Trust. To the best knowledge and belief of Trustor, Trustor is not in default,
and there is no other default, with respect to any judgment, order, writ,
injunction, decree, demand, rule or regulation of any court, arbitrator, grand
jury or of any Governmental Agency, default under which might have consequences
which would materially and adversely affect the business, operations,
properties or assets or the condition, financial or otherwise, of Trustor or
the ability of Trustor to perform its obligations under the Note or this Deed
of Trust.
B. Proceedings Affecting Secured Property. There are no
proceedings of any kind pending, or, to the best of Trustor's knowledge,
threatened against or affecting Trustor, the Secured Property (including any
attempt or threat by any Governmental Agency to condemn or rezone all or any
portion of the Secured Property), any party constituting Trustor in any such
party, or involving the validity, enforceability or priority of this Deed of
Trust, the Note or any of the other Loan Documents or enjoining or preventing
or threatening to enjoin or prevent the use and occupancy of the Secured
Property or the performance by Beneficiary of its obligations hereunder, and
there are no rent controls, governmental moratoria or environmental controls
(other than those generally imposed by federal or state law upon property in
the State of California) presently in existence, or to the best knowledge of
Trustor, threatened, affecting the Secured Property, except as identified in
writing to, and approved by, Beneficiary.
C. No Litigation Regarding Hazardous Materials. No
litigation, administrative enforcement actions or proceedings have been
brought, threatened nor have any settlements been reached by or with any party
or parties, public or private, in disputes in which the presence, disposal,
release or threatened release of any Hazardous Material (as defined in the
Indemnity) on, from, or under any of the Secured Property had been alleged.
2.4 Valid organization, Good Standing and Qualification of
Trustor. Trustor is a duly and validly organized and existing Corporation
under the laws of the State of Delaware and is entitled to own its properties
and assets, and to carry on its business, all as, and in the places where, such
properties and assets are now owned or operated or such business is now
conducted or proposed to be conducted.
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2.5 Authorization; No Legal Restrictions on Performance. The
execution and delivery by Trustor of this Deed of Trust and the other Loan
Documents and its compliance with the terms and conditions hereof and thereof
have been duly and validly authorized by all necessary partnership action,
including, without limitation, all necessary corporate action of all of
Trustor's corporate general partners, if any. The Loan Documents are valid and
enforceable obligations of Trustor in accordance with the terms hereof and
thereof. Neither the execution and delivery by Trustor of this Deed of Trust
or any of the other Loan Documents nor the consummation of the transactions
contemplated herein or therein, nor compliance with the terms and conditions
hereof and thereof will, to Trustor's current and actual knowledge, (A)
conflict with or result in a material breach of, or constitute a default under,
any of the terms, obligations, covenants, conditions or provisions of (1)
Trustor's articles of incorporation, bylaws or any indenture, mortgage, deed of
trust, pledge, bank loan or credit agreement, agreement creating, evidencing or
securing any indebtedness of Trustor or any other agreement or instrument to
which Trustor is now a party or by which its properties may be bound or
affected, or (2) any judgment, order, writ, injunction, decree or demand of any
court, arbitrator, grand jury or Governmental Agency, or (B) result in the
creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any property or asset of Trustor under the terms or provisions
of any of the foregoing. Trustor is not in default in the performance,
observance or fulfillment of any of the terms, obligations, covenants,
conditions or provisions contained in any indenture or other agreement
creating, evidencing or securing indebtedness of Trustor or pursuant to which
Trustor is a party or by which Trustor or its properties may be bound or
affected, which may result in any material adverse change in the business,
operations, properties, or assets or in the condition, financial or otherwise,
of Trustor, or in the ability of Trustor to perform its obligations under the
Note or this Deed of Trust.
2.6 Compliance With Laws., Trustor has complied, and at all future
times shall comply, with all applicable statutes, rules, regulations, orders
and restrictions of any domestic or foreign government or any instrumentality
or agency thereof, in respect of the conduct of its business and ownership of
its properties (including, without limitation, applicable statutes, rules,
regulations, orders and restrictions relating to equal employment opportunities
or environmental standards or controls). No governmental orders, permissions,
consents, approvals or authorizations are required to be obtained and no
registrations or declarations are required to be filed in connection with the
execution and delivery or performance of this Deed of Trust or any of the other
Loan Documents.
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2.7 Tax Status. Trustor has filed all United States income tax
returns and all state and municipal tax returns which are required to be filed,
and has paid, or made provision for the payment of, all taxes which have become
due pursuant to said returns or pursuant to any assessment received by Trustor,
except such filings and taxes, if any, as are being contested in good faith and
as to which adequate reserves have been provided.
2.8 Absence of Foreign or Enemy Status. Trustor is not a "national"
of a "designated foreign country" (or a person defined as a "designated foreign
country") within the definitions in the Foreign or Cuban Assets Control
Regulations of the United States Treasury Department, 31 CFR, Subtitle B,
Chapter V, as amended, or any regulation or ruling issued thereunder.
2.9 Federal Reserve Board Regulations. Trustor does not own any
"margin security" as such term is defined in Regulation G of the Board of
Governors of the Federal Reserve System (12 CFR Part 207), as amended, except
margin securities owned or which may be acquired by Trustor which do not and
would not in the aggregate constitute a substantial part of the assets of
Trustor within the meaning of Section 207.2(i) of the aforesaid Regulation G,
and Trustor will not use any part of the proceeds from the loans to be made
under this Agreement (A) directly or indirectly, to purchase or carry any such
security or to reduce or retire any indebtedness originally incurred to purchase
any such security within the meaning of such Regulation, (B) so as to involve
Trustor in a violation of Regulation T, U or X of such Board (12 CFR Parts 220,
221 and 224), or (C) for any other purpose not permitted by Section 7 of the
Securities Exchange Act of 1934, as amended, or any of the rules and regulations
respecting the extension of credit promulgated thereunder.
2.10 Investment Company Act and Public Utility Holding Company Act.
Trustor is not an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended, and Trustor is not a "holding company" or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended.
2.11 Exempt Status of Transactions Under Securities Act and
Representations Relating Thereto. Trustor has not, either directly or through
any agent, offered all or any part of the loan made or to be made by Beneficiary
and secured by this Deed of Trust to, or solicited any offers to make all or any
part of such loan from, or otherwise approached or negotiated or communicated in
respect of all or any part of such loan with
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anyone other than Beneficiary. Neither Trustor nor any agent on its behalf
will offer to obtain all or any part of such loan from, or solicit any offers
to make all or any part of such loan from, or otherwise approach or negotiate
or communicate in respect of all or any part of such loan with, any person or
persons so as thereby to bring the obtaining of such loan by Trustor and the
delivery of the Note within the registration provisions of the Securities Act
of 1933, as amended.
2.12 Employee Benefit Plans.
A. None of the employee benefit plans maintained at any
time by Trustor (herein called "Employee Benefit Plans") or the trusts created
thereunder has engaged in a prohibited transaction which could subject any such
Employee Benefit Plan or trust to a tax or penalty on prohibited transactions
imposed under Internal Revenue Code Section 4975 or the Employee Retirement
Income Security Act of 1974 and the regulations thereunder (herein called
"ERISA").
B. None of the Employee Benefit Plans which are employee
pension benefit plans or the trusts created thereunder has been terminated; nor
has any such Employee Benefit Plan incurred any liability to the Pension
Benefit Guaranty Corporation established pursuant to ERISA which would be
material to Trustor, other than for required insurance premiums which have been
paid when due, or incurred any accumulated funding deficiency which would be
material to Trustor, whether or not waived; nor has there been any reportable
event, or other event or condition, which presents a risk of termination of any
such Employee Benefit Plan by such Pension Benefit Guaranty Corporation which
termination would be material to Trustor.
C. The present value of all benefits vested under the
Employee Benefit Plans which are employee pension benefit plans did not, as of
the most recent valuation date, exceed the then current value of the assets of
such Employee Benefit Plans allocable to such vested benefits by an amount that
would materially affect the financial condition of Trustor or the ability of
Trustor to perform under the Loan Documents.
D. The consummation of the loan from Beneficiary referred
to in this Deed of Trust, and the execution and delivery of the Note hereunder
and the performance by Trustor of its obligations under the Loan Documents,
will not involve any prohibited transaction.
E. As used in this Section 2.12, the terms "employee
benefit plans," "employee pension benefit plans," "accumulated funding
deficiency," "reportable event," "accrued benefits,"
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"separate account" and "multiemployer plan" shall have the respective meanings
assigned to them in ERISA, and the term "prohibited transaction" shall have the
meaning assigned to it in Internal Revenue Code Section 4975 and ERISA.
ARTICLE III
DEFAULTS
3.1 Events of Default. Any of the following events shall be deemed
an Event of Default or a default hereunder:
A. if default shall be made in the payment of any
installment of the principal of, or interest on the Obligations or any other
sum which is payable hereunder as and when the same shall become due and
payable as in the Note or herein provided; or
B. if Trustor fails to perform or observe any material
term, provision, covenant or agreement in the Note, this Deed of Trust or in
any other Loan Documents; provided, however in the event of any default other
than a default which can be cured by the payment of money (a "non-monetary
default"), the Beneficiary shall be entitled to enforce the remedies therefor
provided herein only after giving notice thereof to Trustor and such default
shall have continued uncorrected for thirty (30) days, unless such non-monetary
default is of such a character as to require more than thirty (30) days to cure
and the Trustor shall, prior to the expiration of said thirty (30) days,
promptly commence and diligently and continuously proceed with due diligence to
cure such default, in which event such period shall be extended for a
reasonable time necessary to cure such default, but in no event more than
ninety (90) days after such default; provided, however, that the foregoing
opportunity to cure shall not apply to (a) any default under any letter of
credit agreement made by the Beneficiary and the Trustor, if any, or the
Beneficiary's rights under the letter(s) of credit delivered to the Beneficiary
in connection therewith; (b) any sale, assignment, transfer, encumbrance, or
lien in violation of this Note or the Deed of Trust; or (c) the Beneficiary's
right to (i) charge interest at the Default Rate as provided herein, (ii)
impose a late charge as provided herein, or (iii) make payments and cure
defaults of the Trustor under the Note as provided therein, all of which
amounts shall be immediately due and payable without any obligation on the part
of the Beneficiary to notify any party and whether or not such default is
cured; or
C. if any warranty, representation, certification,
financial statement or other information made or furnished at any time pursuant
to the terms of this Deed of Trust or otherwise, by
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Trustor, or by any person or entity liable for the Obligations in connection
with the loan transaction, shall prove to be materially false and to have been
made or furnished with knowledge of the false nature thereof; or
D. if Trustor shall:
(1) apply for, consent to or acquiesce in the
appointment of a receiver, trustee or liquidator of it or of all or a
substantial part of its assets, or the Secured Property or any interest in any
part thereof (the term "acquiesce" includes, but is not limited to, the failure
to file a petition or motion to vacate or discharge any order, judgment or
decree providing for such appointment within ten (10) days after the
appointment); or
(2) commence a voluntary case or other proceeding
in bankruptcy, or admit in writing its inability to pay its debts as they come
due; or
(3) make a general assignment for the benefit of
creditors; or
(4) file a petition or an answer seeking
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief for itself under the present or any future
federal bankruptcy act or any other statute or law relative to bankruptcy,
insolvency, or other relief for debtors; or
(5) file an answer admitting the material
allegations of, or consent to, or default in answering, a petition filed
against it in any bankruptcy, reorganization or insolvency case or proceeding;
or
E. if an order for relief shall be entered against
Trustor by a court of competent jurisdiction under any present or future
bankruptcy law, which order shall continue unstayed and in effect for any
period of forty-five (45) consecutive days; or
F. if an order, judgment or decree shall be entered by
any court of competent jurisdiction, adjudicating Trustor insolvent, approving
a petition seeking reorganization or arrangement of Trustor or appointing a
receiver, trustee or liquidator of it or of all or a substantial part of its
assets, and such order, judgment or decree shall continue unstayed and in
effect for any period of forty-five (45) consecutive days; or
G. if Trustor has assigned or purports to assign the
whole or any part of the rents, income or profits arising from
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the Secured Property, without the prior written consent of Beneficiary; or
H. if a Transfer not consented to by Beneficiary shall
have occurred; or
I. if Trustor shall enter into a mortgage or other
security instrument with respect to the Secured Property which does not comply
with the requirements of Section 1.11; or
J. if Trustor shall be in default beyond any applicable
grace period under any other mortgage or security instrument affecting all or
any part of the Secured Property; or
K. if any mechanic's, laborer's or materialman's lien,
federal tax lien, broker's lien or other lien not permitted hereunder and
affecting the Secured Property or any part thereof is not discharged, by
payment, bonding, order of a court of competent jurisdiction or otherwise,
within twenty (20) days after Trustor receives notice thereof from the lienor
or from Beneficiary.
ARTICLE IV
REMEDIES
4.1 Remedies. Upon the occurrence of any one or more Events of
Default, Trustee and/or Beneficiary may (but shall not be obligated), in
addition to any rights or remedies available to them hereunder or under the
other Loan Documents, take such action personally or by their agents or
attorneys, with or without entry, and without notice, demand, presentment or
protest (each and all of which are hereby waived to the extent permitted by
law) as they deem necessary or advisable to protect and enforce Beneficiary's
rights and remedies against Trustor and Secured Property, including the
following actions, each of which may be pursued concurrently or otherwise, at
such time and in such order as Trustee and/or Beneficiary may determine, in
their sole discretion, without impairing or otherwise affecting its or their
other rights or remedies:
(a) declare the entire balance of the Obligations
(including the entire principal balance thereof, all accrued and unpaid
interest and any premium thereon and all other such sums secured hereby) to be
immediately due and payable and upon any such declaration the entire unpaid
balance of the Obligations shall become and be immediately due and payable,
without presentment, demand, protest or further notice of any kind, all of
which are hereby expressly waived by Trustor anything in the Loan Documents to
the contrary notwithstanding; or
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(b) institute a proceeding or proceedings, judicial or
otherwise, for the complete foreclosure of this Deed of Trust under any
applicable provision of law; or
(c) institute a proceeding or proceedings for the partial
foreclosure of this Deed of Trust under any applicable provision of law for the
portion of the Obligations then due and payable, subject to the lien of this
Deed of Trust continuing unimpaired and without loss of priority so as to
secure the balance of the Obligations not then due and payable; or
(d) cause any or all of the Secured Property to be sold
under the power of sale granted by this Deed of Trust or any of the other Loan
Documents in any manner permitted by applicable law. For any sale under the
power of sale granted by this Deed of Trust, Trustee or Beneficiary must record
and give all notices required by law and then, upon the expiration of such time
as is required by law, may sell the Secured Property, and all estate, right,
title, interest, claim and demand of Trustor therein, and all rights of
redemption thereof, at one or more sales, as an entirety or in parcels, with
such elements of real and/or personal property (and, to the extent permitted by
applicable law, may elect to deem all of the Secured Property to be real
property for purposes thereof), and at such time or place and upon such terms
as Trustee and Beneficiary may determine and shall execute and deliver to the
purchaser or purchasers thereof a deed or deeds conveying the property sold,
but without any covenant or warranty, express or implied, and the recitals in
the deed or deeds of any facts affecting the regularity or validity of the sale
will be conclusive against all persons. In the event of a sale, by foreclosure
or otherwise, of less than all of the Secured Property, this Deed of Trust
shall continue as a lien and security interest on the remaining portion of the
Secured Property; or
(e) institute an action, suit or proceeding in equity for
the specific performance of any of the provisions contained in the Loan
Documents; or
(f) apply for the appointment of a receiver custodian,
trustee, liquidator or conservator of the Secured Property, to be vested with
the fullest powers permitted under applicable law, as a matter of right and
without regard to or the necessity to disprove the adequacy of the security for
the Obligations or the solvency of Trustor or any other person liable for the
payment of the Obligations, and Trustor and each other person so liable waives
or shall be deemed to have waived such necessity and consents or shall be
deemed to have consented to such appointment; or
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(g) subject to the provisions and restrictions of any
applicable law, enter upon the Premises, and exclude Trustor and its agents and
servants wholly therefrom, without liability for trespass, damages or
otherwise, and take possession of all books, records and accounts relating
thereto and all other Secured Property, and Trustor agrees to surrender
possession of the Secured Property and of such books, records and accounts to
Trustor or Beneficiary on demand after the happening of any Event of Default;
and having and holding the same may use, operate, manage, preserve, control and
otherwise deal therewith and conduct the business thereof, either personally or
by its superintendents, managers, agents, servants, attorneys or receivers,
without interference from Trustor; and upon each such entry and from time to
time thereafter may, at the expense of Trustor and the Secured Property,
without interference by Trustor and as Beneficiary may deem advisable, (i)
either by purchase, repair or construction, maintain and restore the Premises,
(ii) insure or reinsure the same, (iii) make all necessary or proper repairs,
renewals, replacements, alterations, additions, betterments and improvements
thereto and thereon, (iv) complete the construction of the Improvements and, in
the course of such completion, may make such changes in the contemplated or
completed Improvements as it may deem advisable, (v) in every such case in
connection with the foregoing have the right to exercise all rights and powers
of Trustee with respect to the Secured Property, either in Trustor's name or
otherwise, including the right to make, terminate, cancel, enforce or modify
Leases, obtain and evict Lessees and sublessees on such terms as Beneficiary
shall deem advisable and to take any actions described in subsection (i) of
this Section 4.1; or
(h) subject to the provisions and restrictions of any
applicable law, may, with or without the entrance upon the Premises, collect,
receive, sue for and recover in its own name all Rents and cash collateral
derived from the Premises, and after deducting therefrom all costs, expenses
and liabilities of every character incurred by Trustee and/or Beneficiary in
collecting the same and in using, operating, managing, preserving and
controlling the Premises, and otherwise in exercising Trustee's and/or
Beneficiary's rights under subsection (g) of this Section 4.1, including all
amounts necessary to pay Impositions, insurance premiums and other charges in
connection with the Premises, as well as compensation for the services of
Trustee and Beneficiary and their respective attorneys, agents and employees,
to apply the remainder as provided in Section 4.5; or
(i) release any portion of the Secured Property for such
consideration as Beneficiary may require without, as to the remainder of the
Secured Property, in any way impairing or
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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 shall have been reduced by the actual monetary consideration,
if any, received by Trustee and/or Beneficiary for such release, and may accept
by assignment, pledge or otherwise any other property in place thereof as
Trustee and/or Beneficiary may require without being accountable for so doing
to any other lienholder; or
(j) may take all actions permitted under the Uniform
Commercial Code of the State of California; or
(k) may take any other action, or pursue any other right
or remedy, as Trustee and/or Beneficiary may have under applicable law, and
Trustor does hereby grant the same to Trustee and Beneficiary.
In the event that Trustee and/or Beneficiary shall exercise any of the
rights or remedies set forth in subsections (g) and (h) of this Section 4.1,
neither Trustee nor Beneficiary shall be deemed to have entered upon or taken
possession of the Secured Property except upon the exercise of its option to do
so, evidenced by its demand and overt act for such purpose, nor shall it be
deemed a beneficiary or mortgagee in possession by reason of such entry or
taking possession, unless applicable law requires that it be deemed to be a
beneficiary or mortgagee in possession. Neither Trustee nor Beneficiary shall
be liable to account for any action taken pursuant to any such exercise other
than for rents actually received by such party, nor liable for any loss
sustained by Trustor resulting from any failure to let the Premises, or from
any other act or omission of Trustee and/or Beneficiary, except to the extent
such loss is caused by the willful misconduct or bad faith of such party or
such liability may not be waived under applicable law. Trustor hereby consents
to, ratifies and confirms the exercise by Trustee and/or Beneficiary of said
rights and remedies.
4.2 Expenses. If any action is commenced to foreclose this Deed of
Trust, or to enforce any other remedy of Trustee and/or Beneficiary under any
of the Loan Documents, whether such action is judicial or pursuant to the power
of sale contained herein or otherwise, there shall be added to the Obligations
secured by this Deed of Trust all costs and expenses, including attorney's
fees, plus interest thereon at the Default Rate (as defined in the Note) until
paid, in the commencement and prosecution of such action, whether or not such
action results in a foreclosure sale, foreclosure or other judicial decree or
judgment.
4.3 Rights Pertaining to Sales. Subject to the provisions or other
requirements of law, the following provisions shall
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apply to any sale or sales of the Secured Property under or by virtue of this
Article IV, whether made under the power of sale herein granted or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale:
(a) Trustee, at the request of Beneficiary, may conduct
any number of sales from time to time. The power of sale set forth in Section
4.1(d) hereof shall not be exhausted by any one or more such sales as to any
part of the Secured Property which shall not have been sold, nor by any sale
which is not completed or is defective in Trustee's or Beneficiary's opinion,
until the Obligations shall have been paid in full.
(b) Any sale may be postponed or adjourned by public
announcement at the time and place appointed for such sale or for such
postponed or adjourned sale without further notice.
(c) After each sale, Trustee, or an officer of any court
empowered to do so, shall execute and deliver to the purchaser or purchasers at
such sale a good and sufficient instrument or instruments granting, conveying,
assigning and transferring all right, title and interest of Trustor in and to
the property and rights sold and shall receive the proceeds of said sale or
sales and apply the same as herein provided. Trustee is hereby appointed the
true and lawful attorney-in-fact of Trustor, which appointment is irrevocable
and shall be deemed to be coupled with an interest, in Trustor's name and
stead, to make all necessary conveyances, assignments, transfers and deliveries
of the property and rights so sold, and for that purpose Trustee may execute
all necessary instruments of conveyance, assignment, transfer and delivery, and
may substitute one or more persons with like power, Trustor hereby ratifying
and confirming all that said attorney or such substitute or substitutes shall
lawfully do by virtue thereof. Nevertheless, Trustor, if requested by Trustee
or Beneficiary, shall ratify and confirm any such sale or sales by executing
and delivering to Trustee or such purchaser or purchasers all such instruments
as may be advisable, in Trustee's or Beneficiary's judgment, for the purposes
as may be designated in such request.
(d) Any and all statements of fact or other recitals made
in any of the instruments referred to in subsection (c) of this Section 4.3
given by Trustee and/or Beneficiary as to nonpayment of the Obligations, or as
to the occurrence of any Event of Default, or as to Beneficiary having declared
all or any of the Obligations to be due and payable, or as to the request to
sell, or as to notice of time, place and terms of sale and of the property or
rights to be sold having been duly given, or as to the refusal, failure or
inability to act of Trustee, or as to the
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appointment of any substitute or successor Trustee, or as to any other act or
thing having been duly done by Trustor, Beneficiary, or by such Trustee, shall
be taken as conclusive and binding against all persons as to evidence of the
truth of the facts so stated and recited. Trustee and/or Beneficiary may
appoint or delegate any one or more persons as agent to perform any act or acts
necessary or incident to any sale so held, including the posting of notices and
the conduct of sale, but in the name and behalf of Trustee or Beneficiary, as
applicable.
(e) receipt of Trustee for the purchase money paid at any
such sale, or the receipt of any other person authorized to receive the same,
shall be sufficient discharge therefor to any purchaser of any property or
rights sold as aforesaid, and no such purchaser, or its representatives,
grantees or assigns, after paying such purchase price and receiving such
receipt, shall be bound to see to the application of such purchase price of any
part thereof upon or for any trust or purpose of this Deed of Trust or, in any
manner whatsoever, be answerable for any loss, misapplication or
non-application of any such purchase money, or part thereof, or be bound to
inquire as to the authorization, necessity, expediency or regularity of any
such sale.
(f) Any such sale or sales shall operate to divest all of
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 any and all
persons claiming or who may claim the same, or any part thereof or any interest
therein, by, through or under Trustor to the fullest extent permitted by
applicable law.
(g) Upon any such sale or sales, Beneficiary may bid for
and acquire the Secured Property and, in lieu of paying cash therefor, may make
settlement for the purchase price by crediting against the Obligations the
amount of the bid made therefor, after deducting therefrom the expenses of the
sale, the cost of any enforcement proceeding hereunder and any other sums which
Trustee or Beneficiary is authorized to deduct under the terms hereof, to the
extent necessary to satisfy such bid.
(h) In the event that Trustor, or any person claiming by,
through or under Trustor, shall transfer or refuse or fail to surrender
possession of the Secured Property after any sale thereof, then Trustor, or
such person shall be deemed a tenant at sufferance of the purchaser at such
sale, subject to eviction by means of forcible entry and detainer proceedings,
or subject to any other right or remedy available hereunder or under applicable
law.
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(i) Upon any such sale, it shall not be necessary for
Trustee, Beneficiary or any public officer acting under execution or order of
court to have present or constructively in its possession any of the Secured
Property.
(j) In the event a foreclosure hereunder shall be
commenced by Trustee at the request of Beneficiary, Trustee or Beneficiary may
at any time before the sale of the Secured Property abandon the sale, and may
institute suit for the collection of the Obligations and for the foreclosure of
this Deed of Trust, or in the event that Trustee or Beneficiary should
institute a suit for collection of the Obligations, and for the foreclosure of
this Deed of Trust, Beneficiary may at any time before the entry of final
judgment in said suit dismiss the same and sell or require Trustee to sell the
Secured Property in accordance with the provisions of this Deed of Trust.
4.4 Application of Proceeds. The purchase money, proceeds or
avails of any sale referred to in Section 4.3, together with any other sums
which may be held by Trustee or Beneficiary hereunder, whether under the
provisions of this Article IV or otherwise, shall, except as herein expressly
provided to the contrary, be applied as follows:
First: To the payment of the costs and expenses of any such
sale, including compensation to Trustee and/or Beneficiary, their
agents and counsel, and of any judicial proceeding wherein the same may
be made, and of all expenses, liabilities and advances made or incurred
by Trustee and/or Beneficiary hereunder, together with interest thereon
as provided herein, and all taxes, assessments and other charges,
except any taxes, assessments or other charges subject to which
the Secured Property shall have been sold.
Second: To the payment in full of the Obligations (including
principal, interest, premium and fees) in such order as Beneficiary
may elect.
Third: To the payment of any other sums secured hereunder or
required to be paid by Trustor pursuant to any provision of the
Loan Documents.
Fourth: To the payment of the surplus, if any, to whomsoever
may be lawfully entitled to receive the same.
4.5 Prepayment Charge. Trustor hereby agrees to pay the charge
provided in the Note for prepayment of the Obligations, if for any reason any
of said Obligations shall be paid prior to the stated maturity date thereof,
even if and notwithstanding that an
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Event of Default shall have occurred and Beneficiary, by reason thereof, shall
have declared said Obligations due and payable, and whether or not said payment
is made prior to or at any sale held under or by virtue of this Article IV.
Trustor acknowledges that Beneficiary, in making the loan evidenced by the Note
and entering into this Deed of Trust, is relying on Trustor's credit worthiness
and its agreement to repay the Obligations in strict accordance with the terms
set forth in the Note. Trustor acknowledges that Beneficiary would not make
the loan without full and complete assurance by Trustor of its agreement to
make regular payments of principal and interest under the Note and its further
agreement not to prepay all or any part of the principal of the Note prior to
the final maturity date thereof, except on the terms expressly set forth herein
and in the Note. Therefore, any prepayment of the Note, whether occurring as a
voluntary prepayment by Trustor or occurring upon an acceleration of the
principal balance of the Note by Beneficiary on account of any default by
Trustor (including, but not limited to, the making or suffering by Trustor, of
any transfer or disposition of all or any portion of the Secured Property or
any interest therein as prohibited by Section 1.11 of this Deed of Trust) will
prejudice Beneficiary's ability to meet its obligations and to earn the return
on the funds advanced to Trustor, which Beneficiary intended and expected to
earn when it agreed to make the subject loan and will also result in other loss
and additional expenses to Beneficiary. Accordingly, in recognition of the
foregoing and in consideration of Beneficiary making the loan secured by this
Deed of Trust at the interest rate and for the term set forth in the Note,
Trustor hereby expressly (A) waives any and all rights it may have under
applicable law to prepay without charge or premium all or any part of the Note,
either voluntarily or upon an acceleration of the maturity date of the Note on
account of any default of Trustor (including, but not limited to, the making or
suffering by Trustor of any transfer or disposition prohibited by Section 1.11
of this Deed of Trust) and (B) agrees that if, for any reason, whether due to
the voluntary acceptance by Beneficiary of a prepayment tendered by Trustor or
the acceleration by Beneficiary of the maturity date of the Note, as aforesaid,
on account of any such default by Trustor, a prepayment of all or any part of
the principal of the Note is made by or on behalf of Trustor, or is otherwise
made or occurs in connection with any reinstatement of the Loan Documents under
any foreclosure proceedings, or any right of redemption exercised by Trustor or
any other party having the right to redeem or to prevent any foreclosure of
this Deed of Trust, or upon the consummation of any foreclosure sale, then
Trustor or any other party making any such prepayment shall be obligated to
pay, concurrently therewith, the prepayment charge set forth in the Note, and
the payment of such premium shall be a condition to the making of such
prepayment and shall be secured by this Deed of
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Trust. Such prepayment charge shall be paid without prejudice to the right of
Beneficiary to collect any other amounts provided to be paid or to declare a
default hereunder. Nothing herein shall be construed as permitting any partial
prepayment except with Beneficiary's prior written consent thereto obtained in
each instance.
4.6 Environmental Defaults and Remedies. In the event that any
portion of the Secured Property is determined to be "environmentally impaired"
(as "environmentally impaired" is defined in California Code of Civil Procedure
Section 726.5(e)(3)) or to be an "affected parcel" (as "affected parcel is
defined California Code of Civil Procedure Section 726.5(e)(1)), then, without
otherwise limiting or in any way affecting Beneficiary's or Trustee's rights
and remedies under this Deed of Trust, Beneficiary may elect to exercise its
right under California Code of Civil Procedure Section 726.5(a) to (1) waive
its lien on such environmentally impaired or affected parcel portion of the
Secured Property and (2) exercise (i) the rights and remedies of an unsecured
creditor, including reduction of its claim against Trustor to judgment, and
(ii) any other rights and remedies permitted by law. All costs and expenses,
including, but not limited to, attorneys' fees, incurred by Beneficiary in
connection with any action commenced under this Section 4.6, including any
action required by California Code of Civil Procedure Section 726.5(b) to
determine the degree to which the Secured Property is environmentally impaired,
plus interest thereon at the Default Rate (as defined in the Note) until paid,
shall be added to the Obligations secured by this Deed of Trust and shall be
due and payable to Beneficiary upon its demand made at any time following the
conclusion of such action.
ARTICLE V
MISCELLANEOUS
5.1 Non-Waiver. The failure of Beneficiary to insist upon strict
performance of any term of this Deed of Trust shall not be deemed to be a
waiver of any term of this Deed of Trust. Trustor shall not be relieved of its
obligation to pay the Obligations at any time and in the manner provided for
its payment in the Note and this Deed of Trust by reason of (A) a failure by
Beneficiary to comply with any request of Trustor to take any action to
foreclose this Deed of Trust or otherwise enforce any of the provisions of this
Deed of Trust or of the Note or any other Loan Document, (B) the release,
regardless of consideration, of the whole or any part of the Secured Property
or any other security for the Obligations, or (C) any agreement or stipulation
between Beneficiary and any subsequent owner or owners of the Secured
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Property or other person extending the time of payment or otherwise modifying
or supplementing the terms of the Note, this Deed of Trust or any Loan Document
securing or guaranteeing the Obligations or any portion thereof, without first
having obtained the consent of Trustor and, in the latter event, Trustor shall
continue to be obligated to pay the Obligations at the time and in the manner
provided in the Note and this Deed of Trust, as so extended, modified and
supplemented, unless expressly released and discharged by Beneficiary.
Regardless of consideration, and without the necessity for any notice to or
consent by the holder of any subordinate lien, encumbrance, right, title or
interest in or to the Secured Property, Beneficiary may release any person at
any time liable for the payment of the Obligations or any portion thereof or
any part of the security held for the Obligations and may extend the time of
payment or otherwise modify the terms of any Loan Documents, including, without
limitation, a modification of the interest rate payable on the principal
balance of the Note, without in any manner impairing or affecting any of the
Loan Documents or the lien thereof or the priority of this Deed of Trust, as so
extended and modified, as security for the Obligations over any such
subordinate lien, encumbrance, right, title or interest. Beneficiary may
resort for the payment of the Obligations to any other security held by
Beneficiary in such order and manner as Beneficiary, in its discretion, may
elect. Beneficiary may take action to recover the Obligations, or any portion
thereof, or to enforce any covenant of this Deed of Trust without prejudice to
the right of Beneficiary thereafter to foreclose this Deed of Trust.
Beneficiary shall not be limited exclusively to the rights and remedies stated
in this Deed of Trust but shall be entitled to every additional right and
remedy now or hereafter afforded by law. 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 of this Deed of
Trust to the exclusion of any other provision.
5.2 Sole Discretion of Beneficiary. Wherever, pursuant to this
Deed of Trust, Beneficiary's consent or approval is required, the decision as
to whether or not to consent or approve shall be in the sole discretion of
Beneficiary and Beneficiary's decision shall be final and conclusive, except
where this Deed of Trust expressly provides to the contrary. If Trustor shall
seek the approval by or consent of Beneficiary under this Deed of Trust and
Beneficiary shall fail or refuse to give such consent or approval, Trustor
shall not be entitled to any damages for any withholding of such approval or
consent by Beneficiary, it being intended that Trustor's sole remedy shall be
an action for injunctive or declaratory relief, which remedy shall be available
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only in those cases where Beneficiary has expressly agreed not to unreasonably
withhold its consent or approval.
5.3 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 Obligations as such sums shall become due, without
regard to whether or not the balance of the Obligations 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.
5.4 Legal Tender. All payments of principal, interest and any and
all other payments required or provided herein shall be paid in lawful money of
the United States of America which shall be legal tender in payment of all
debts and dues, public and private, at the time of payment, at the office of
Beneficiary or at such other place either within or without the State of
California as Beneficiary may from time to time designate.
5.5 No Merger. If both the lessor's and lessee's estates under any
lease or any portion thereof which constitutes a part of the Secured 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 the application of the
doctrine of merger and in such event, Beneficiary shall continue to have and
enjoy all of the rights and privileges of Beneficiary as to the separate
estates. In addition, upon the foreclosure of the lien created by this Deed of
Trust on the Secured Property pursuant to the provisions hereof, any leases or
subleases then existing and created by Trustor 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 any 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 or sublease unless
Beneficiary or such purchaser shall give written notice thereof to such lessee
or sublessee.
5.6 Discontinuance of Actions. In case Beneficiary shall have
proceeded to enforce any right under this Deed of Trust by foreclosure, sale or
entry or otherwise, and such proceedings shall have been discontinued or
abandoned for any reason or shall have been determined adversely, then, in
every such case, Trustor and Beneficiary shall be restored to their former
positions and rights hereunder with respect to the Secured Property which shall
remain subject to the lien of this Deed of Trust.
5.7 Headings. The headings of the sections, paragraphs and
subdivisions of this Deed of Trust are for the convenience of
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reference only, are not to be considered a part hereof and shall not limit or
otherwise affect any of the terms hereof.
5.8 Notice to Parties. All notices and demands hereunder shall be
in writing and shall be deemed to have been sufficiently given or served for
all purposes when presented personally or sent by certified or registered mail
with return receipt requested or generally recognized overnight delivery
service, addressed to the parties at the addresses stated below, or at such
other address as either party may hereafter notify the other in writing as
aforesaid:
Trustor: Megatest Corporation
1321 Ridder Park Drive
San Jose, California 95131-2306
Attn: Patrick J. Ryan
with a copy to: Halgrimson, McNichols, et. al.
40 South Market Street, Suite 700
San Jose, California 95113
Attn: Eric Wong, Esq.
Beneficiary: SUN LIFE ASSURANCE COMPANY OF CANADA
(U.S.), a Delaware corporation
One Sun Life Executive Park
Wellesley Hills, MA 02181
Attn: Property Investments
with a copy to: Landels, Ripley & Diamond
350 Steuart Street
San Francisco, CA 94105
Attn: Bruce W. Hyman, Esq.
Service of any such notice or demand so made shall be deemed effective on the
day of actual delivery as shown by the addressee's return receipt or the
expiration of forty-eight (48) hours after the date sent by generally
recognized overnight delivery service or mailed, whichever is the earlier in
time, except that service of any notice of default or notice of sale provided
or required by law shall, if mailed, be deemed effective on the date of
mailing.
5.9 Non-Recourse. If an Event of Default has occurred, Beneficiary
shall have all rights reserved in the Note, this Deed of Trust and every other
Loan Document and shall have full recourse to the Secured Property and to the
other collateral given by Trustor to secure the Note, provided, however, that
any judgment obtained by Beneficiary in any proceeding to enforce such rights
shall be enforced only against the Secured Property and such other collateral.
Notwithstanding the foregoing,
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Beneficiary shall not in any way be prohibited from naming Trustor or any of
its successors or assigns or any person holding under or through them as
parties to any actions, suits or other proceedings initiated by Beneficiary to
enforce such rights or to foreclose its mortgage lien or otherwise realize upon
any other lien or security interest created in any other collateral given to
secure the payment of the Obligations. The foregoing restriction shall not
apply to, and Trustor shall be personally liable for, any losses, damages,
costs and expenses incurred by Beneficiary as a result of (A) any material
misstatement of fact (1) made by Trustor or any person or entity constituting
Trustor to induce Beneficiary to advance the principal amount evidenced hereby
or (2) contained in any Loan Document, (B) fraud committed by Trustor or any
person or entity constituting Trustor, (C) misapplication of rents, income,
insurance proceeds, condemnation awards or trust funds, (D) any loss, damage,
expense or liability on the part of Beneficiary (including, without
limitations, attorneys fees and disbursements) not reimbursable to Beneficiary
pursuant to the Indemnity executed on even date herewith including, but not
limited to the diminution in value of the Secured Property due to the existence
of Hazardous Substances (as defined in the Indemnity), or if required in the
reasonable judgment of Beneficiary, the preparation of an environmental audit
on the Secured Property, whether conducted or authorized by Trustor,
Beneficiary or a third party or the implementation of any environmental audit's
recommendations, (E) all losses, damages or liability suffered by Beneficiary
arising from any acts of commission or omission by Trustor that result in waste
upon the Secured Property, (F) failure to pay real property taxes when due, (G)
taking of any rents prepaid for more than one month in advance, (H) cost of any
property repair as a result of a casualty not reimbursed by insurance to the
extent insurance is required pursuant to this Deed of Trust, or (I) failure to
fully comply with the provisions of the Americans With Disabilities Act.
5.10 Successors and Assigns Included In Parties. Subject to the
provisions of Section 1.11, whenever in this Deed of Trust one of the parties
hereto is named or referred to, the heirs, legal representatives, successors
and assigns of such party shall be included and all covenants and agreements
contained in this Deed of Trust by or on behalf of Trustor or by or on behalf
of Beneficiary shall bind and inure to the benefit of their respective heirs,
legal representatives, successors and assigns, whether so expressed or not.
5.11 Number and Gender. Whenever the singular or plural number,
masculine or feminine or neuter gender is used herein, it shall equally include
the other.
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5.12 Changes and Modifications. This Deed of Trust cannot be
changed except by an agreement in writing, signed by the party against whom
enforcement of any change or modification is sought.
5.13 Applicable Law. This Deed of Trust shall be construed and
enforced according to the laws of the State of California.
5.14 Invalid Provisions to Affect No Others. The unenforceability
or invalidity of any provision or provisions of this Deed of Trust as to any
persons or circumstances shall not render that provision or those provisions
unenforceable or invalid as to any other persons or circumstances, and all
provisions hereof, in all other respects, shall remain valid and enforceable.
5.15 Usury Savings Clause. It is the intention of Trustor and
Beneficiary to conform strictly to the usury laws now or hereafter in force in
the State of California and any interest payable under the Note, this Deed of
Trust, or any of the other Loan Documents executed by Trustor, to the extent
that any sums secured hereby or the advancing of such sums by Beneficiary shall
not be exempt from such laws, shall be subject to reduction to the amount equal
to the maximum non-usurious amount allowed under the usury laws of California
as now or hereafter construed by the courts having jurisdiction over such
matters. In the event the maturity of the Note is accelerated by reason of any
provision of this Deed of Trust including, without limitation, an election by
Beneficiary resulting from an Event of Default (or an event permitting
acceleration) under this Deed of Trust or any other Loan Documents, voluntary
prepayment of the Note, or otherwise, then earned interest may never include
more than the maximum amount permitted by law, computed from the dates of each
advance of the Obligations until payment, and any interest in excess of the
maximum amount permitted by law shall be canceled automatically and, if
theretofore paid, shall at the option of Beneficiary either be rebated to
Trustor or credited on the principal amount of the Note or if all principal has
been repaid, then the excess shall be rebated to Trustor. The aggregate of all
interest (whether designated as interest, service charges, points or otherwise)
contracted for, chargeable, or receivable under the Note, this Deed of Trust,
or any other Loan Document shall under no circumstances exceed the maximum
legal rates upon the unpaid principal balance of the Note remaining unpaid from
time to time. In the event such interest does exceed the maximum legal rate,
it shall be deemed a mistake and such excess shall be canceled automatically
and if theretofore paid, rebated to Trustor or credited on the principal amount
of the Note, or if the Note has been repaid, then such excess shall be rebated
to Trustor.
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5.16 No Statute of Limitations. The pleadings of any statute of
limitations as a defense to any and all obligations secured by this Deed of
Trust are hereby waived to the full extent permissible by law.
5.17 Late Charges. In the event that any installment of principal,
interest or escrow deposit shall become overdue, a "late charge" of four cents
($.04) for each dollar ($1.00), or part thereof so overdue, may be charged to
Trustor by Beneficiary for the purpose of defraying Beneficiary's expenses
incident to handling such delinquent payment. This charge shall be in addition
to, and not in lieu of, any other remedy Beneficiary may have and is in
addition to any reasonable fees and charges of any agents or attorneys which
Beneficiary is entitled to employ on any default hereunder whether authorized
herein or by law. Such "late charges", if not previously paid, shall, at the
option of Beneficiary, be added to and become part of the succeeding monthly
payment to be made under the Note and secured by this Deed of Trust.
5.18 Continuing Effectiveness. This Deed of Trust shall cover any
and all advances made pursuant to the Loan Documents, rearrangements and
renewals of the Obligations and all extensions in the time of payment thereof,
whether such advances extensions or renewals are evidenced by new promissory
notes or other instruments hereafter executed and irrespective of whether filed
or recorded. Likewise, the execution of this Deed of Trust shall not impair or
affect any other security which may be given to secure the payment of the
Obligations, and all such additional security shall be considered as
cumulative. The taking of additional security, execution of partial releases
of the
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security, or any extension of time of payment of the Obligations shall not
diminish the force, effect or lien of this Deed of Trust and shall not affect
or impair the liability of any maker, surety or endorser for the payment of the
Obligations.
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the
date and year first above written.
Trustor
MEGATEST CORPORATION, a Delaware
corporation
By: /s/ PAUL W. EMERY, II
--------------------------------
Its: VP FIN & CFO
By:
--------------------------------
Its:
---------------------------
[ALL SIGNATURES MUST BE ACKNOWLEDGED]
[IMPRINT OF NOTORIAL SEAL AND ACKNOWLEDGEMENT APPEAR HERE]
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PROMISSORY NOTE
$5,450,000.00 San Jose, California
August 25, 1995
FOR VALUE RECEIVED, MEGATEST CORPORATION, a Delaware corporation
("Maker"), having an office at 1321 Ridder Park Drive, San Jose, CA 95131-2306
promises to pay to SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.), a Delaware
corporation ("Holder") having its principal office address, at One Sun Life
Executive Park, Wellesley Hills, MA 02181, or order, at its principal office in
Wellesley Hills, MA or at such other place as may be designated in writing by
Holder, the principal sum of FIVE MILLION FOUR HUNDRED FIFTY THOUSAND and
NO/100 Dollars ($5,450,000.00) (the "Principal Indebtedness"), in lawful money
of the United States, together with interest thereon at the rate of eight and
one eighth percent (8.125%) per annum, payable in monthly installments of
principal and interest in the sum of Forty Nine Thousand Three Hundred
Sixty-One and 76/100 Dollars ($49,361.76), commencing October 1, 1995 and
payable on the first day (1st) of each month for fifty-nine (59) months with
the last installment being due and payable on August 31, 2000 (the "Maturity
Date"), at which time the entire unpaid balance together with accrued interest
shall be due and payable. Interest accrued from the date Holder initially
disburses funds to the first (1st) day of the month following the month during
which Holder initially disburses funds, shall be due and payable at the time of
closing.
This Note is secured by, among other things, (i) a Deed of Trust,
Financing Statement, Security Agreement and Fixture Filing (with Assignment of
Rents and Leases) (the "Deed of Trust") dated as of the date hereof made by
Maker for the benefit of Holder and encumbering certain premises situate in the
City of San Jose, County of Santa Clara and the improvements thereon, along
with other property more particularly described in the Deed of Trust
(collectively, the "Secured Property"), and (ii) an Absolute Assignment of
Leases, Rents, Income and Cash Collateral dated as of the date hereof from
Maker to Holder. Each of the documents mentioned in this paragraph and all
other documents either evidencing or further securing the Principal
Indebtedness are collectively referred to herein as the "Loan Documents".
Upon the occurrence of an Event of Default (as such term is defined in
the Deed of Trust) (including, without limitation, the failure of Maker to pay
any sum herein specified when due regardless of whether or not there has been
an acceleration), all delinquent payments and all accrued and unpaid interest
thereon,
64
and all other delinquent sums evidenced and/or secured by the Loan Documents
shall bear interest from the date of delinquency at a rate per annum (the
"Default Rate") equal to the lesser of: (i) the highest rate of interest
permitted to be contracted for under the laws of the State of California, if
any, or (ii) twelve and one eighth percent (12.125%) per annum. The Default
Rate shall be in lieu of any other interest rate otherwise applicable and shall
commence, without notice, immediately upon and from the occurrence of such
Event of Default and shall continue until all defaults are cured and all sums
then due and payable under the Loan Documents are paid in full.
No privilege is reserved to prepay the Principal Indebtedness either
in whole or in part prior to September 1, 1997 (the "Closed Period").
Thereafter, beginning on September 1, 1997, and except as provided hereinafter,
the privilege is reserved by Maker to prepay the entire principal balance
hereunder together with accrued interest thereon to the date of payment on such
date or any subsequent monthly installment date, upon not less than ninety (90)
days' prior written notice to Holder of Maker's intention to make such
prepayment, provided there is paid, in addition to interest accrued to the date
of such prepayment, a prepayment fee which shall be equal to the greater of (a)
two percent (2%) of the then outstanding balance of the Principal Indebtedness,
or (b) a Discounted Yield Maintenance Prepayment Fee computed as follows: the
proceeds of the prepayment will be assumed to be immediately reinvested in a
United States Treasury Security having a coupon interest rate and maturity most
closely equivalent to that of this Note. If the yield (the "Treasury Yield")
on that certain United States Treasury Security, as published in the "Wall
Street Journal" on the fifth business day prior to the date of prepayment, is:
1. less than the interest rate of this Note, Maker will pay to
Holder a fee equal to the positive difference between the two
interest rates, divided by 12 and multiplied by the then
outstanding balance of the Principal Indebtedness to arrive
at the monthly payment differential. Holder shall then
determine the present value of the series of monthly payment
differentials for the number of whole and partial months from
the prepayment date to the maturity date using the Treasury
Yield as the discount rate compounding monthly. The
resulting sum of the discounted monthly payment differentials
will be the Discounted Yield Maintenance Prepayment Fee, or,
2. greater than or equal to the interest rate on this Note, then
the prepayment fee shall be 2% of the then outstanding
balance of the Principal Indebtedness.
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In the event the outstanding balance of the Principal Indebtedness
shall become due and payable as a result of (a) an Event of Default (as such
term is defined in the Deed of Trust) causing acceleration under this Note,
which Event of Default shall be conclusively deemed to be a willful default for
purposes of avoiding the prepayment charges to which Holder is entitled; (b)
the exercise by Maker of any right of redemption or other action to prevent a
foreclosure of the Secured Property; or (c) an acceleration by Holder as a
result of the sale or further encumbrance of the Secured Property in violation
of the applicable provisions of the Deed of Trust; then, in such event, Maker
shall pay the prepayment charge which would otherwise be applicable hereunder;
or if at that time there is no such privilege of prepayment (e.g., during the
Closed Period), then, to the extent permitted by law, and except as provided
hereinafter, such prepayment fee shall be equal to the greater of (a) three
percent (3%) of the then outstanding balance of the Principal Indebtedness, or
(b) a Discounted Acceleration Premium amount calculated as follows: the
proceeds of the prepayment will be assumed to be immediately reinvested in a
United States Treasury Security having a coupon interest rate and maturity most
closely equivalent to that of this Note. If the yield on that certain United
States Treasury Security, as published in the Wall Street Journal on the fifth
business day prior to the date of prepayment, is:
1. less than the interest of this Note, Maker will pay to
Holder a fee equal to the positive difference between the two
interest rates, divided by 12 and multiplied by the then
outstanding balance of the Principal Indebtedness to arrive
at the monthly payment differential. Holder shall then
determine the present value of the series of monthly payment
differentials for the number of whole and partial months from
the prepayment date to the maturity date using the Treasury
Yield as the discount rate compounding monthly. The
resulting sum of the discounted monthly payment differential
will be the Discounted Acceleration Premium, or,
2. greater than or equal to the interest rate on this Note,
then the prepayment fee shall be 3% of the then outstanding
balance of the Principal Indebtedness.
MAKER HEREBY EXPRESSLY (A) WAIVES ANY RIGHTS IT MAY HAVE UNDER
CALIFORNIA CIVIL CODE SECTION 2954.10 TO PREPAY THIS NOTE, IN WHOLE OR IN PART,
WITHOUT PENALTY, UPON ACCELERATION OF THE MATURITY DATE OF THE NOTE, AND (B)
AGREES THAT IF, FOR ANY REASON, A PREPAYMENT OF ANY OR ALL OF THIS NOTE IS
MADE, WHETHER VOLUNTARY OR INVOLUNTARY, OR UPON OR FOLLOWING ANY ACCELERATION
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OF THE MATURITY DATE OF THE NOTE BY HOLDER ON ACCOUNT OF ANY DEFAULT BY
MAKER UNDER ANY LOAN DOCUMENT, INCLUDING BUT NOT LIMITED TO ANY TRANSFER OR
DISPOSITION AS PROHIBITED OR RESTRICTED BY SECTION 1.11 OF THE DEED OF TRUST,
THEN MAKER SHALL BE OBLIGATED TO PAY, CONCURRENTLY THEREWITH, AS A PREPAYMENT
FEE, THE APPLICABLE SUM SPECIFIED IN THE PRECEDING PARAGRAPH. BY SIGNING THIS
PROVISION IN THE SPACE PROVIDED BELOW, MAKER AGREES THAT HOLDER'S AGREEMENT TO
MAKE THE LOAN EVIDENCED BY THIS NOTE AT THE INTEREST RATE AND FOR THE TERM SET
FORTH IN THE NOTE CONSTITUTES ADEQUATE CONSIDERATION, GIVEN INDIVIDUAL WEIGHT
BY MAKER FOR THIS WAIVER AND AGREEMENT.
MEGATEST CORPORATION, a Delaware
corporation
By: /s/ PAUL W. EMERY, II
-----------------------------
Its: VP, FIN & CFO
------------------------
By:
-----------------------------
Its:
------------------------
Notwithstanding the foregoing, no prepayment fee shall be payable in
connection with any voluntary or involuntary prepayment made on or after June
1, 2000, or any payment as a result of casualty or condemnation.
Upon the occurrence of any other Event of Default, then and in any
such events, Holder may, at its option, declare this Note and the entire
Principal Indebtedness to be immediately due and payable and collectible then
or thereafter as Holder may elect, regardless of the stated Maturity Date.
Should the Principal Indebtedness or any part thereof be collected at
law or in equity, or in bankruptcy, receivership, or any other court proceeding
(whether at the trial or appellate level), or should this Note be placed in the
hands of attorneys for collection upon default, Maker agrees to pay, in
addition to the principal, prepayment charge, interest and any other
outstanding amounts due and payable hereon, all costs of collecting or
attempting to collect this Note and enforcing Holder's remedies under the Loan
Documents, including reasonable attorneys' fees and expenses, and the same
shall constitute additional indebtedness secured by the Deed of Trust.
Maker recognizes that any default in the payment of any installment of
principal and/or interest due hereunder on the date the same is due will result
in loss and additional expense
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to Holder in servicing the Principal Indebtedness, handling such delinquent
payments and meeting its other financial obligations, and that the extent of
such loss and additional expenses is extremely difficult and impractical to
ascertain. Maker therefore agrees that in the event any installment of
principal and/or interest due hereunder is not paid on the date the same is due
and payable, without regard to any grace periods, a late charge of four percent
(4%) of the overdue installment of principal and/or interest shall be paid by
Maker and that such amount is a reasonable estimate of such loss and expense
and may be charged by Holder, at its option, for the purpose of defraying such
loss and expenses, unless applicable law requires a lesser such charge, in
which event the maximum rate permitted by such law may be charged by Holder for
said purposes.
The failure of Holder to exercise the option for acceleration of
maturity, foreclosure or any other remedies provided in the Loan Documents
following any default as aforesaid or to exercise any other option granted to
it hereunder, under the Deed of Trust or under any of the other Loan Documents,
in any one or more instances, or the acceptance by Holder of partial payments
or partial performance, shall not constitute a waiver of any such default, but
such option shall remain continuously in force. Acceleration of maturity, once
claimed hereunder by Holder, may at its option be rescinded by written
acknowledgement to such effect, but the tender and acceptance of partial
payment or partial performance alone shall not in any way affect or rescind
such acceleration of maturity.
Maker hereby covenants and agrees that, together with and in addition
to the monthly payments of principal and/or interest payable under the terms of
this Note, Maker will deposit with Holder of this Note or its agent, as
directed by Holder, until this Note is fully paid, installments of insurance
premiums and Impositions (as defined and required in the Deed of Trust).
Amounts held hereunder shall not be deemed to be trust funds, but may be
commingled with the general funds of Holder.
It is the intention of Maker and Holder to conform strictly to the
usury laws now or hereafter in force in the State of California, and any
interest payable under this Note, the Deed of Trust, the other Loan Documents,
and/or any of the other documents or instruments executed by Maker in
connection with the loan made or to be made hereunder shall be subject to
reduction to the amount not in excess of the maximum non-usurious amount
allowed under the usury laws of the State of California as now or hereafter
construed by the courts having jurisdiction over such matters. If the
aggregate of all interest (whether designated as interest, service charges,
points or otherwise) contracted for, chargeable or receivable under this Note,
the Deed of Trust and
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any other Loan Document should exceed the maximum legal rate, it shall be
deemed a mistake and such excess shall be canceled automatically and, if
theretofore paid, shall at the option of Holder either be rebated to Maker or
credited on the principal amount of this Note, or, if the Note has been repaid,
such excess shall be rebated to Maker. In the event the Maturity Date is
accelerated by reason of any provision of this Note or by reason of an election
by Holder resulting from an Event of Default under the Loan Documents,
voluntary prepayment by Maker, or otherwise, then earned interest may never
include more than the maximum amount permitted by law, computed from the dates
of each advance of loan proceeds hereunder until payment, and any interest in
excess of the maximum amount permitted by law shall be canceled automatically
and, if theretofore paid, shall at the option of Holder either be rebated to
Maker or credited on the principal amount of this Note or, if the Note has been
repaid, the excess shall be rebated to the Maker. This provision shall control
every other provision of all agreements between Maker and Holder.
Maker hereby waives presentment, protest, notice of protest, notice of
dishonor and diligence in collection, and any and all other notices and matters
of a like nature, except for those expressly required by the Deed of Trust or
this Note. Maker consents to any extension of time (whether one or more) of
payment hereof, release of all or any part of the security for the payment of
this obligation or release of any person or entity liable for payment of this
Note. Any such extension or release may be made without notice to any such
party and without discharging said party's liability hereunder.
This Note may not be changed orally, but only by an agreement in
writing, signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought.
No failure or delay on the part of Holder in exercising any right,
power or privilege under this Note and no course of dealing between Maker and
Holder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein expressly provided are cumulative
and not exclusive of any rights or remedies which Holder would otherwise have
at law or equity. No notice to or demand on Maker in any case shall entitle
Maker to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the right of Holder to any other or
further action in any circumstances without notice or demand.
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Maker acknowledges that the ownership (and the continuation thereof)
of the Secured Property by Maker is of a material nature to the loan and the
making of the loan evidenced by this Note. Therefore, Maker agrees that in
the event of any transfer that is prohibited by the terms of Section 1.11 of
the Deed of Trust or other Loan Document, howsoever evidenced or occasioned,
then, at the option of Holder, the entire Principal Indebtedness along with
all accrued interest thereon shall immediately become due and payable.
Whenever in this Note one of the parties hereto is named or referred
to, the heirs, legal representatives, successors and assigns of such party shall
be included and all covenants and agreements contained in this Note by or on
behalf of Maker or by or on behalf of Holder shall bind and inure to the
benefit of such party's heirs, legal representatives, successors and assigns,
whether so expressed or not.
The obligations of each person and entity comprising Maker (if more
than one) shall be joint and several.
The unenforceability or invalidity of any provision or provisions of
this Note as to any persons or entities or circumstances shall not render that
provision or those provisions unenforceable or invalid as to any other persons
or entities or circumstances, and all provisions hereof, in all other respects,
shall remain valid and enforceable.
In the event of any default by Maker under this Note, the Deed of Trust
or any other Loan Document, Holder shall have all rights reserved in this Note,
the Deed of Trust and every other Loan Document and shall have full recourse to
the Secured Property and to the other collateral given by Maker to secure this
Note, provided, however, that any judgment obtained by Holder in any proceeding
to enforce such rights shall be enforced only against the Secured Property and
such other collateral. Notwithstanding the foregoing, Holder shall not in any
way be prohibited from naming Maker or any of its successors or assigns or any
person holding under or through them as parties to any actions, suits or other
proceedings initiated by Holder to enforce such rights or to foreclose its
mortgage lien or otherwise realize upon any other lien or security interest
created in any other collateral given to secure the payment of this Note. The
foregoing restriction shall not apply to, and Maker shall be personally liable
for, any losses, damages, costs and expenses incurred by Holder as a result of
(i) any material misstatement of fact (A) by Maker or any person or entity
constituting Maker to induce Holder to advance the principal amount evidenced
hereby or (B) contained in any Loan Document, (ii) fraud committed by Maker or
any person or entity
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constituting Maker, (iii) misapplication of rents, security deposits, income,
insurance proceeds, condemnation awards or trust funds, (iv) any loss, damage,
expense or liability on the part of Holder (including, without limitation,
attorneys' fees and disbursements) not reimbursable to Holder pursuant to the
Environmental Agreement and Indemnity (the "Indemnity") executed on even date
herewith including, but not limited to the diminution in value of the Secured
Property due to the existence of Hazardous Substances (as defined in the
Indemnity), or if required in the reasonable judgment of Holder, the
preparation of an environmental audit on the Secured Property, whether
conducted or authorized by Maker, Holder or a third party or the implementation
of any environmental audit's recommendations, (v) all losses, damages or
liability suffered by Holder arising from any acts of commission or omission by
Maker that result in waste upon the Secured Property, (vi) failure to pay real
property taxes when due, (vii) taking of any rents prepaid for more than one
(1) month in advance, (viii) cost of any property repair as a result of a
casualty not reimbursed by insurance to the extent insurance is required
pursuant to the Deed of Trust, or (ix) failure to fully comply with the
provisions of the Americans With Disabilities Act.
Whenever used, the words "Maker" and "Holder" shall be deemed to
include the respective heirs, successors, assigns and legal representatives of
Maker and Holder.
This Note is to be construed and enforced according to and governed by
the laws of the State of California.
IN WITNESS WHEREOF, Maker has executed this Note as of the date first
above written.
MAKER
MEGATEST CORPORATION, a Delaware
corporation
By: /s/ PAUL W. EMERY, II
-------------------------------------
Its: VP, FIN & CFO
--------------------------------
By:
-------------------------------------
Its:
--------------------------------
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