1
EXHIBIT 10.12
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
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,
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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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