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EXHIBIT 10.66
DEED OF TRUST
THIS DEED OF TRUST IS DATED JULY 21, 1998 AMONG NEWSTAR MEDIA INC., WHOSE
ADDRESS IS 8955 BEVERLY BOULEVARD, WEST HOLLYWOOD, CA 90028 (REFERRED TO BELOW
AS "TRUSTOR"); APOLLO PARTNERS, LLC, WHOSE ADDRESS IS 1 STAMFORD PLAZA, 12TH
FLOOR, STAMFORD, CONNECTICUT 06901 (REFERRED TO BELOW SOMETIMES AS "LENDER" AND
SOMETIMES AS "BENEFICIARY"); AND NORTH AMERICAN TITLE COMPANY WHOSE ADDRESS IS
520 NORTH BRAND BOULEVARD, GLENDALE, CA 91203 (REFERRED TO BELOW AS "TRUSTEE").
CONVEYANCE AND GRANT. FOR VALUABLE CONSIDERATION, TRUSTOR IRREVOCABLY GRANTS,
TRANSFERS AND ASSIGNS TO TRUSTEE IN TRUST, WITH POWER OF SALE, FOR THE BENEFIT
OF LENDER AS BENEFICIARY, all of Trustor's right title and interest in and to
the following described real property, together with all existing or
subsequently erected or affixed buildings, improvements and fixtures; all
easements, rights of way , and appurtenances; all water, water rights and ditch
rights (including stock in utilities with ditch or irrigation rights); and all
other rights, royalties and profits relating to the real property, including
without limitations all mineral, oil, gas, geothermal and similar matters,
LOCATED IN LOS ANGELES COUNTY, STATE OF CALIFORNIA (THE "REAL PROPERTY"):
PLEASE SEE EXHIBIT "A" ATTACHED HERETO AND BY THIS REFERENCE MADE A
PART HEREOF.
THE REAL PROPERTY OR ITS ADDRESS IS COMMONLY KNOWN AS 8955 BEVERLY BOULEVARD,
WEST HOLLYWOOD, CA 90048.
In addition, Trustor grants Lender a Uniform Commercial Code security interest
in the Personal Property defined below.
DEFINITIONS. The following words shall have the following meanings when used in
this Deed of Trust. Terms not otherwise defined in this Deed of Trust shall have
the meanings attributed to such terms in the Uniform Commercial Code. All
reference to dollar amounts shall mean amounts in lawful money of the United
States of America.
BENEFICIARY. The word "Beneficiary" means APOLLO PARTNERS, LLC its
successors and assigns. APOLLO PARTNERS, LLC also is referred to as
"Lender" in this Deed of Trust.
DEED OF TRUST. The words "Deed of Trust" mean this Deed of Trust among
Trustor, Lender, and Trustee, and includes without limitation all
assignment and security interest provisions relating to the Personal
Property.
IMPROVEMENTS. The word "Improvements" means and includes without
limitation all existing and future improvements, fixtures, buildings,
structures, mobile homes affixed on the Real Property, facilities,
additions, replacements and other construction on the Real Property.
INDEBTEDNESS. The word "Indebtedness" means all principal and interest
payable under the Note and any amounts expended or advanced by Lender to
discharge obligations of Trustor or expenses incurred by Trustee or
Lender to enforce obligations of Trustor under this Deed of Trust,
together with interest on such amounts as provided in this Deed of Trust.
LENDER. The word "Lender" means APOLLO PARTNERS, LLC, its successors and
assigns.
NOTE. THE WORD "NOTE" MEANS THE NOTE DATED JULY 21, 1998, IN THE
PRINCIPAL AMOUNT OF $1,500,000.00 from Trustor to Lender, together with
all renewals, extensions, modifications, refinancings, and substitutions
for the Note.
PERSONAL PROPERTY. The words "Personal Property" mean all equipment,
fixtures, and other articles of personal property now or hereafter owned
by Trustor, and now or hereafter attached or affixed to the Real
Property; together with all accessions, parts, and additions to, all
replacements of, and all substitutions for, any
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of such property; and together with all proceeds (including without
limitation all insurance proceeds and refunds of premiums) from any sale
or other disposition of the Property.
PROPERTY. The word "Property" means collectively the Real Property and
the Personal Property.
REAL PROPERTY. The words "Real Property" mean the property, interests and
rights described above in the "Conveyance and Grant" section.
RELATED DOCUMENTS. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages,
deeds of trust, and all other instruments, agreements and documents,
whether now or hereafter existing, executed in connection with the
Indebtedness.
TRUSTEE. The word "Trustee" means North American Title Company and any
substitute or successor trustees.
TRUSTOR. The word "Trustor" means any and all persons and entities
executing this Deed of Trust, including without limitation all Trustors
named above.
THIS DEED OF TRUST, INCLUDING THE SECURITY INTEREST IN THE PERSONAL PROPERTY, IS
GIVEN TO SECURE (1) PAYMENT OF THE INDEBTEDNESS AND (2) PERFORMANCE OF ANY AND
ALL OBLIGATIONS OF TRUSTOR UNDER THE NOTE, THE RELATED DOCUMENTS, AND THIS DEED
OF TRUST. THIS DEED OF TRUST IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS:
PAYMENT AND PERFORMANCE. Except as otherwise provided in this Deed of Trust,
Trustor shall pay to Lender all amounts secured by this Deed of Trust as they
become due, and shall strictly and in a timely manner perform all of Trustor's
obligations under the Note, this Deed of Trust, and the Related Documents.
POSSESSION AND MAINTENANCE OF THE PROPERTY. Trustor agrees that Trustor's
possession and use of the Property shall be governed by the following
provisions:
POSSESSION AND USE. Until the occurrence of an Event of Default Trustor
may (a) remain in possession and control of the Property and (b) use,
operate or manage the Property.
DUTY TO MAINTAIN. Trustor shall maintain the Property in tenantable
condition and promptly perform all repairs, replacements, and maintenance
necessary to preserve its value.
HAZARDOUS SUBSTANCES. The terms "hazardous waste," "hazardous substance,"
"disposal," "release," and "threatened release," as used in this Deed of
Trust, shall have the same meanings as set forth in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"),
the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et
seq., the Resource Conservation and Recovery Act, 49 U.S.C. Section 6901,
et seq., Chapters 6.5 through 7.7 of Division 20 of the California Health
and Safety Code, Section 25100, et seq., or other applicable state or
Federal laws, rules or regulations adopted pursuant to any of the
foregoing. The terms "hazardous waste" and "hazardous substance" shall
also include, without limitation, petroleum and petroleum by-products or
any fraction thereof and asbestos. Trustor represents and warrants to
Lender that: (a) During the period of Trustor's ownership of the
Property, there as been no use, generation, manufacture, storage,
treatment, disposal, release or threatened release of any hazardous waste
or substance by any person on, under, about or from the Property; (b)
Trustor has no knowledge of, reason to believe that there has been,
except as previously disclosed to and acknowledged by Lender in writing,
(i) any use, generation, manufacture, storage, treatment, disposal,
release, or threatened release of any hazardous waste or substance on,
under, about or from the Property by any prior owners or occupants of the
Property or (ii) any actual or threatened litigation or claims of any
kind by any person relating to such matters; and (c) Except as previously
disclosed to and acknowledged by Lender in
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writing, (i) neither Trustor nor any tenant, contractor, agent or other
authorized user of the Property shall use, generate, manufacture, store,
treat, dispose of, or release any hazardous waste or substance on, under,
about or from the Property and (ii) any such activity shall be conducted
in compliance with all applicable federal, state, and local laws,
regulations and ordinances, including without limitation those laws,
regulations, and ordinances described above. Trustor authorizes Lender
and its agents to enter upon the Property to make such inspections and
tests, at Trustor's expense, as Lender may deem appropriate to determine
compliance of the Property with this section of the Deed of Trust. Any
inspections or tests made by Lender shall be for Lender's purposes only
and shall not be construed to create any responsibility or liability on
the part of Lender to Trustor or to any other person. The representations
and warranties contained herein are based on Trustor's due diligence in
investigating the Property for hazardous waste and hazardous substances.
Trustor hereby (a) releases and waives any future claims against Lender
for indemnity or contribution in the event Trustor becomes liable for
cleanup or other costs under any such laws, and (b) agrees to indemnify
and hold harmless Lender against any and all claims, losses, liabilities,
damages, penalties, and expenses which Lender may directly or indirectly
sustain or suffer resulting from a breach of this section of the Deed of
Trust or as a consequence of any use, generation, manufacture, storage,
disposal, release or threatened release occurring prior to Trustor's
ownership or interest in the Property, whether or not the same was or
should have been known to Trustor. The provisions of this section of the
Deed of Trust, including the obligation to indemnify, shall survive the
payment of the Indebtedness and the satisfaction and reconveyance of the
lien of this Deed of Trust and shall not be affected by Lender's
acquisition of any interest in the Property, whether by foreclosure or
otherwise.
NUISANCE, WASTE. Trustor shall not cause, conduct or permit any nuisance
nor commit, permit, or suffer any stripping of or waste on or to the
Property or any portion of the Property. Without limiting the generality
of the foregoing, Trustor will not remove, or grant to any other party
the right to remove, any timber, minerals (including oil and gas), soil,
gravel or rock products without the prior written consent of Lender.
REMOVAL OF IMPROVEMENTS. Trustor shall not demolish or remove any
Improvements from the Real Property without the prior written consent of
Lender. As a condition to the removal of any Improvements, Lender may
require Trustor to make arrangements satisfactory to Lender to replace
such Improvements with Improvements of at least equal value.
LENDER'S RIGHT TO ENTER. Lender and its agents and representatives may
enter upon the Real Property at all reasonable times to attend to
Lender's interests and to inspect the Property for purposes of Trustor's
compliance with the terms and conditions of this Deed of Trust.
COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Trustor shall promptly comply
with all laws, ordinances, and regulations, now or hereafter in effect of
all governmental authorities applicable to the use or occupancy of the
Property, including without limitation, the Americans With Disabilities
Act. Trustor may contest in good faith any such law, ordinance, or
regulation and withhold compliance during any proceeding, including
appropriate appeals, so long as Trustor has notified Lender in writing
prior to doing so and so long as, in Lender's sole opinion, Lender's
interests in the Property are not jeopardized. Lender may require Trustor
to post adequate security or a surety bond, reasonably satisfactory to
Lender, to protect Lender's interest.
DUTY TO PROTECT. Trustor agrees neither to abandon nor leave unattended
the Property. Trustor shall do all other act, in addition to those acts
set forth above in this section, which from the character and use of the
Property are reasonably necessary to protect and preserve the Property.
DUE ON SALE - CONSENT BY LENDER. Lender may, at its option, declare immediately
due and payable all sums secured by this Deed of Trust upon the sale or
transfer, without the Lender's prior written consent, of all or any part of the
Real Property, or any interest in the Real Property. A "sale or transfer" means
the conveyance of Real Property or any right, title or interest therein; whether
legal, beneficial or equitable; whether voluntary or involuntary; whether by
outright sale, deed, installment sale contract, land contract, contract for
deed, leasehold interest with a term greater than three (3) years, lease-option
contract, or by sale, assignment, or transfer of any beneficial interest in or
to any land trust holding title to the Real Property, or by any other method of
conveyance of
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Real Property interest. If any Trustor is a corporation, partnership or limited
liability company, transfer also includes any change in ownership of more than
twenty-five percent (25%) of the voting stock, partnership interests or limited
liability company interests, as the case may be, of Trustor. However, this
option shall not be exercised by Lender if such exercise is prohibited by
applicable law.
TAXES AND LIENS. The following provisions relating to the taxes and liens on the
Property are a part of this Deed of Trust.
PAYMENT. Trustor shall pay when due (and in all events at least (10) days
prior to delinquency) all taxes, special taxes, assessments, charges
(including water and sewer), fines and impositions levied against or on
account of the Property, and shall pay when due all claims for work done
on or for services rendered or material furnished to the Property.
Trustor shall maintain the Property free of all liens having priority
over or equal to the interest of Lender under this Deed of Trust, except
(i) the interest of Asahi Bank of California under the Deed of Trust (the
"Asahi Deed of Trust") dated April 24, 1996 among Trustor, Asahi Bank of
California and the trustee named therein, (ii) for the lien of taxes and
assessments not due and (iii) as otherwise provided in this Deed of
Trust.
RIGHT TO CONTEST. Trustor may withhold payment of any tax, assessment, or
claim in connection with a good faith dispute over the obligation to pay,
so long as Lender's interest in the Property is not jeopardized. If a
lien arises or is filed as a result of nonpayment, Trustor shall within
fifteen (15) days after the lien arises or, if a lien is filed, within
fifteen (15) days after Trustor has notice of the filing, secure the
discharge of the lien, or if requested by Lender, deposit with Lender
cash or a sufficient corporate surety bond or other security satisfactory
to Lender in an amount sufficient to discharge the lien plus any costs
and attorneys' fees or other charges that could accrue as a result of a
foreclosure or sale under the lien. In any contest, Trustor shall defend
itself and Lender and shall satisfy any adverse judgment before
enforcement against the Property. Trustor shall name Lender as an
additional obligee under any surety bond furnished in the contest
proceedings.
EVIDENCE OF PAYMENT. Trustor shall upon demand furnish to Lender
satisfactory evidence of payment of the taxes or assessments and shall
authorize the appropriate governmental official to deliver to Lender at
any time a written statement of the taxes and assessments against the
Property.
NOTICE OF CONSTRUCTION. Trustor shall notify Lender at least fifteen (15)
days before any work is commenced, any services are furnished, or any
materials are supplied to the Property, if any mechanic's lien,
materialmen's lien, or other lien could be asserted on account of the
work, services, or materials. Trustor will upon request of Lender furnish
to Lender advance assurances satisfactory to Lender that Trustor can and
will pay the cost of such improvements.
PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the
Property are a part of this Deed of Trust.
MAINTENANCE OF INSURANCE. Trustor shall procure and maintain policies of
fire insurance with standard extended coverage endorsements on a
replacement basis for the full insurable value covering all improvements
on the Real Property in an amount sufficient to avoid application of any
coinsurance clause, and with a standard mortgagee clause in favor of
Lender. Grantor shall also procure and maintain comprehensive general
liability insurance in such coverage amounts as Lender may request with
trustee and Lender being named as additional insureds in such liability
insurance policies. Additionally, Grantor shall maintain such other
insurance, including but not limited to hazard, business interruption,
and boiler insurance, as Lender may reasonably require. Notwithstanding
the foregoing, in no event shall Trustor be required to provide hazard
insurance in excess of the replacement value of the improvements on the
Real Property. Policies shall be written in form, amounts, coverages and
basis reasonably acceptable to Lender and issued by a company or
companies reasonably acceptable to Lender. Trustor, upon request of
Lender, will deliver to Lender from time to time the policies or
certificates of insurance in form satisfactory to Lender, including
stipulations that coverages will not be canceled or diminished without at
least ten (10) days' prior written notice to Lender.
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Each insurance policy also shall include an endorsement providing that
coverage in favor of Lender will not be impaired in any way by any act,
omission or default of Trustor or any other person. Should the Real
Property at any time become located in an area designated by the Director
of the Federal Emergency Management Agency as a special flood hazard
area, Trustor agrees to obtain and maintain Federal Flood Insurance to
the extent such insurance is required by Lender and is or becomes
available, for the term of the loan and for the full unpaid principal
balance of the loan, or the maximum limit of coverage that is available,
whichever is less.
APPLICATION OF PROCEEDS. Trustor shall promptly notify Lender of any loss
or damage to the Property. Lender may make proof of loss if Trustor fails
to do so within fifteen (15) days of the casualty. Subject to the
interest of Asahi Bank of California in the proceeds of insurance, if in
Lender's sole judgment Lender's security interest in the Property has
been impaired, Lender may, at its election, receive and retain the
proceeds of any insurance and apply the proceeds to the reduction of the
Indebtedness, payment of any lien affecting the Property, or the
restoration and repair of the Property. If the proceeds are to be applied
to restoration and repair, Trustor shall repair or replace the damaged or
destroyed Improvements in a manner satisfactory to Lender. Lender shall,
upon satisfactory proof of such expenditure, pay or reimburse Trustor
from the proceeds for the reasonable cost of repair or restoration if
Trustor is not in default under this Deed of Trust. Subject to the
interest of Asahi Bank of California in the proceeds of insurance, any
proceeds which have not been disbursed within 180 days after their
receipt and which Lender has not committed to the repair or restoration
of the Property shall be used first to pay any amount owing to Lender
under this Deed of Trust, then to pay accrued interest, and the
remainder, if any, shall be applied to the principal balance of the
Indebtedness. If Lender holds any proceeds after payment in full of the
indebtedness such proceeds shall be paid to Trustor as Trustor's
interests may appear.
UNEXPIRED INSURANCE AT SALE. Any unexpired insurance shall inure to the
benefit of, and pass to, the purchaser of the Property covered by this
Deed of Trust at any trustee's sale or other sale held under the
provisions of this Deed of Trust, or at any foreclosure sale of such
Property.
TRUSTOR'S REPORT ON INSURANCE. Upon request of Lender, however not more
than once a year, Trustor shall furnish to Lender a report on each
existing policy of insurance showing: (a) the name of the insurer; (b)
the risks insured; (c) the amount of the policy; (d) the property
insured, the then current replacement value of such property, and the
manner of determining that value; and (e) the expiration date of the
policy. Trustor shall, upon the request of Lender, have an independent
appraiser satisfactory to Lender determine the cash value replacement
cost of the Property.
EXPENDITURES BY LENDER. If Trustor fails to comply with any provisions of this
Deed of Trust, or if any action or proceeding is commenced that would materially
affect Lender's interests in the Property, Lender on Trustor's behalf may, but
shall not be required to, take any action that Lender deems appropriate. Any
amount that Lender expends in so doing will bear interest at the rate charged
under the Note from the date incurred or paid by Lender to the date of repayment
by Trustor. All such expenses, at Lender's option, will (a) be payable on
demand, (b) be added to the balance of the Note and be apportioned among and be
payable with any installment payments to become due during either (i) the term
of any applicable insurance policy or (ii) the remaining term of the Note, or
(c) be treated as a balloon payment which will be due and payable at the Note's
maturity. This Deed of Trust also will secure payment of these amounts. The
rights provided for in this paragraph shall be in addition to any other rights
or any remedies to which Lender may be entitled on account of the default. Any
such action by Lender shall not be construed as curing the default so as to bar
Lender from any remedy that it otherwise would have had.
WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of
the Property are a part of this Deed of Trust.
TITLE. Trustor warrants that: (a) Trustor holds good and marketable title
of record to the Property in fee simple, free and clear of all liens and
encumbrances other than (i) the lien of Asahi Bank of California granted
in the Asahi Deed of Trust, (ii) those set forth in the Real Property
description, in the Preliminary Title Report delivered to the Lender or
in any other title insurance policy, title report, or final title opinion
delivered to the
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Lender and (b) Trustor has the full right, power, and authority to
execute and deliver this Deed of Trust to Lender.
DEFENSE OF TITLE. Subject to the exception in the paragraph above,
Trustor warrants and will forever defend the title to the Property
against the lawful claims of all persons. In the event any action or
proceeding is commenced that questions Trustor's title or the interest of
Trustee or Lender under this Deed of Trust, Trustor shall defend the
action at Trustor's expense. Trustor may be the nominal party in such
proceeding, but Lender shall be entitled to participate in the proceeding
and to be represented in the proceeding by counsel of Lender's own
choice, and Trustor will deliver, or cause to be delivered, to Lender
such instruments as Lender may request from time to time to permit such
participation.
COMPLIANCE WITH LAWS. Trustor warrants that the Property and Trustor's
use of the Property complies with all existing applicable laws,
ordinances, and regulations of governmental authorities.
CONDEMNATION. The following provisions relating to condemnation proceedings are
a part of this Deed of Trust.
APPLICATION OF NET PROCEEDS. If all or any part of the Property is
condemned by eminent domain proceedings or by any proceeding or purchase
in lieu of condemnation, Lender may at its election require that all or
any portion of the net proceeds of the award be applied to the
Indebtedness or the repair or restoration of the Property, subject to the
interests of Asahi Bank of California to such proceeds. The net proceeds
of the award shall mean the award after payment of all reasonable costs,
expenses, and attorneys' fees incurred by Trustee or Lender in connection
with the condemnation.
PROCEEDINGS. If any proceeding in condemnation is filed, Trustor shall
promptly notify Lender in writing, and Trustor shall promptly take such
steps as may be necessary to defend the action and obtain the award.
Trustor may be the nominal party in such proceeding, but Lender shall be
entitled to participate in the proceeding and to be represented in the
proceeding by counsel of its own choice, and Trustor will deliver or
cause to be delivered to Lender such instruments as may be requested by
it from time to time to permit such participation.
IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following
provisions relating to governmental taxes, fees and charges are a part of this
Deed of Trust:
CURRENT TAXES, FEES AND CHARGES. Upon request by Lender, Trustor shall
execute such documents in addition to this Deed of Trust and take
whatever other action is requested by Lender to perfect and continue
Lender's lien on the Real Property. Trustor shall reimburse Lender for
all taxes, as described below, together with all expenses incurred in
recording, perfecting or continuing this Deed of Trust, including without
limitation all taxes, fees, documentary stamps, and other charges for
recording or registering this Deed of Trust.
TAXES. The following shall constitute taxes to which this section
applies: (a) a specific tax upon this type of Deed of Trust or upon all
or any part of the Indebtedness secured by this Deed of Trust; (b) a
specific tax on Trustor which Trustor is authorized or required to deduct
from payments on the Indebtedness secured by this type of Deed of Trust;
(c) a tax on this type of Deed of Trust chargeable against the Lender or
the holder of the Note; and (d) a specific tax on all or any portion of
the Indebtedness or on payments of principal and interest made by
Trustor.
SUBSEQUENT TAXES. If any tax to which this section applies is enacted
subsequent to the date of this Deed of Trust, this event shall have the
same effect as an Event of Default (as defined below), and Lender may
exercise any or all of its available remedies for an Event of Default as
provided below unless Trustor either (a) pays the tax before it becomes
delinquent, or (b) contests the tax as provided above in the Taxes and
Liens section and deposits with Lender cash or a sufficient corporate
surety bond or other security satisfactory to Lender.
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SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to
this Deed of Trust as a security agreement are a part of this Deed of Trust.
SECURITY AGREEMENT. This instrument shall constitute a security agreement
to the extent any of the Property constitutes fixtures or other personal
property, and Lender shall have all of the rights of a secured party
under the Uniform Commercial Code as amended from time to time.
SECURITY INTEREST. Upon request by Lender, Trustor shall execute
financing statements and take whatever other action is requested by
Lender to perfect and continue Lender's security interest in the Personal
Property. Trustor shall reimburse Lender for all expenses incurred in
perfecting or continuing this security interest. Upon default, Trustor
shall assemble the Personal Property in a manner and at a place
reasonably convenient to Trustor and Lender and make it available to
Lender within three (3) days after receipt of written demand from Lender.
ADDRESSES. The mailing addresses of Trustor (debtor) and Lender (secured
party), from which information concerning the security interest granted
by this Deed of Trust may be obtained (each as required by the Uniform
Commercial Code), are as stated on the first page of this Deed of Trust.
FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to
further assurances and attorney-in-fact are a part of this Deed of Trust.
FURTHER ASSURANCES. At any time, and from time to time, upon request of
Lender, Trustor will make, execute and deliver, or will cause to be made,
executed or delivered, to Lender or to Lender's designee, and when
requested by Lender, cause to be filed, recorded, refiled, or
re-recorded, as the case may be, at such times and in such offices and
places as Lender may deem appropriate, any and all such mortgages, deeds
of trust, security deeds, security agreements, financing statements,
continuation statements, instruments of further assurance, certificates,
and other documents as may, in the sole opinion of Lender, be necessary
or desirable in order to effectuate, complete, perfect, continue, or
preserve (a) the obligations of Trustor under the Note, this Deed of
Trust, and the Related Documents, and (b) the liens and security
interests created by this Deed of Trust as first and prior liens on the
Property, whether now owned or hereafter acquired by Trustor. Unless
prohibited by law or agreed to the contrary by Lender in writing, Trustor
shall reimburse Lender for all costs and expenses incurred in connection
with the matters referred to in this paragraph.
ATTORNEY-IN-FACT. If Trustor fails to do any of the things referred to in
the preceding paragraph, Lender may do so for and in the name of Trustor
and at Trustor's expense. For such purposes, Trustor hereby irrevocably
appoints Lender as Trustor's attorney-in-fact coupled with an interest
for the purpose of making, executing, delivering, filing, recording, and
doing all other things as may be necessary or desirable, in Lender's sole
opinion, to accomplish the matters referred to in the preceding
paragraph.
FULL PERFORMANCE. If Trustor pays all the Indebtedness when due, and otherwise
performs all the obligations imposed upon Trustor under this Deed of Trust,
Lender shall execute and deliver to Trustee a request for full reconveyance and
shall execute and deliver to Trustor suitable statements of termination of any
financing statement on file evidencing Lender's security interest in the
Personal Property. Lender may charge Trustor a reasonable reconveyance fee at
the time or reconveyance.
DEFAULT. Each of the following, at the option of Lender, shall constitute an
event of default ("Event of Default") under this Deed of Trust:
DEFAULT ON INDEBTEDNESS. Failure of Trustor to make any payment when due
on the Indebtedness.
DEFAULT ON OTHER PAYMENTS. Failure of Trustor within the time required by
this Deed of Trust to make any payment for taxes or insurance and any
other payment required by this Deed of Trust, or any other payment
necessary to prevent filing of or to effect discharge of any lien.
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DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower default under any
loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or
person that may materially affect any of Borrower's property or
Borrower's ability to repay the Loans or perform their respective
obligations under this Deed of Trust or any of the Related Documents.
COMPLIANCE DEFAULT. Failure to comply with any other term, obligation,
covenant or condition contained in this Deed of Trust, the Note or in
any of the Related Documents. If such a failure is curable and if Trustor
has not been given a notice of breach of the same provision of this Deed
of Trust within the preceding twelve (12) months, it may be cured (and no
Event of Default will have occurred) if Trustor, after Lender sends
written notice demanding cure of such failure: (a) cures the failure
within fifteen (15) days; or (b) if the cure requires more than fifteen
(15) days, immediately initiates steps sufficient to cure the failure and
thereafter continues and completes all reasonable and necessary steps
sufficient to produce compliance as soon as reasonably practical.
FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Trustor under this Deed of Trust,
the Note or the Related Documents is false or misleading in any material
respect, either now or at the time made or furnished.
INSOLVENCY. The dissolution or termination of Trustor's existence as a
going business, the insolvency of Trustor, the appointment of a receiver
for any part of Trustor's property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Trustor.
FORECLOSURE, FORFEITURE, ETC. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or
any other method, by any creditor of Trustor or by any governmental
agency against any of the Property. However, this subsection shall not
apply in the event of a good faith dispute by Trustor as to the validity
or reasonableness of the claim which is the basis of the foreclosure or
forfeiture proceeding, provided that Trustor gives Lender written notice
of such claim and furnishes reserves or a surety bond for the claim
satisfactory to Lender.
ADVERSE CHANGE. A material adverse change occurs in Trustor's financial
condition, or Lender believes the prospect of payment or performance of
the Indebtedness is impaired.
RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default and
at any time thereafter, Trustee or Lender, at its option, may exercise any one
or more of the following rights and remedies, in addition to any other rights or
remedies provided by law:
FORECLOSURE BY SALE. Upon an Event of Default under this Deed to Trust,
Beneficiary may declare the entire Indebtedness secured by this Deed of
Trust immediately due and payable by delivery to Trustee of written
declaration of default and demand for sale and of written notice of
default and of election to cause to be sold the Property, which notice
Trustee shall cause to be filed for record. Beneficiary also shall
deposit with Trustee this Deed of Trust, the Note, other documents
requested by Trustee, and all documents evidencing expenditures secured
hereby. After the lapse of such time as may then be required by sale
following the recordation of the notice of default, and notice of sale
having been given as then required by law, Trustee, without demand on
Trustor, shall sell the Property at the time and place fixed by it in the
notice of sale, either as a whole or in separate parcels, and in such
order as it may determine, at public auction to the highest bidder for
cash in lawful money of the United States, payable at time of sale.
Trustee may postpone sale of all or any portion of the Property by public
announcement at such time and place of sale, and from time to time
thereafter may postpone such sale by public announcement at the time
fixed by the preceding postponement in accordance with applicable law.
Trustee shall deliver to such purchaser its deed conveying the Property
so sold, but without any covenant or warranty, express or implied. The
recitals in such deed of any matters or facts shall be conclusive proof
of the truthfulness thereof. Any person, including Trustor, Trustee or
Beneficiary may purchase at such sale. After deducting all costs, fees
and expenses of Trustee and of this Trust, including cost of evidence of
title in connection with sale, Trustee shall apply the proceeds of sale
to
9
payment of: all sums expended under the terms hereof, not then repaid,
with accrued interest at the amount allowed by law in effect at the date
hereof; all other sums then secured hereby; and the remainder, if any, to
the person or persons legally entitled thereto.
JUDICIAL FORECLOSURE. With respect to all or any part of the Real
Property, Lender shall have the right in lieu of foreclosure by power of
sale to foreclose by judicial foreclosure in accordance with and to the
full extent provided by California law.
UCC REMEDIES. With respect to all or any part of the Personal Property,
Lender shall have all the rights and remedies of a secured party under
the Uniform Commercial Code, including without limitation the right to
recover any deficiency in the manner and to the full extent provided by
California law.
APPOINT RECEIVER. Lender shall have the right to have a receiver
appointed to take possession of all or any part of the Property and
collect rents, if any, with the power to protect and preserve the
Property, to operate the Property preceding foreclosure or sale, and
apply the proceeds, over and above the cost of the receivership, against
the Indebtedness. The receiver may serve without bond if permitted by
law. Lender's right to the appointment of a receiver shall exist whether
or not the apparent value of the Property exceeds the indebtedness by a
substantial amount. Employment by Lender shall not disqualify a person
from serving as a receiver.
TENANCY AT SUFFERANCE. If Trustor remains in possession of the Property
after the Property is sold as provided above or Lender otherwise becomes
entitled to possession of the Property upon default of Trustor, Trustor
shall become a tenant at sufferance of Lender or the purchaser of the
Property and shall, at Lender's option, either (a) pay a reasonable
rental for the use of the Property, or (b) vacate the Property
immediately upon the demand of Lender.
OTHER REMEDIES. Trustee or Lender shall have all other rights and
remedies provided in this Deed of Trust or the Note or by law.
NOTICE OF SALE. Lender shall give Trustor reasonable notice of the time
and place of any public sale of the Personal Property or of the time
after which any private sale or other intended disposition of the
Personal Property is to be made. Reasonable notice shall mean notice
given at least five (5) days before the time of the sale or disposition.
Any sale of Personal Property may be made in conjunction with any sale of
the Real Property.
SALE OF THE PROPERTY. To the extent permitted by applicable law, Trustor
hereby waives any and all rights to have the Property marshalled. In
exercising its rights and remedies, the Trustee or Lender shall be free
to sell all or any part of the Property together or separately, in one
sale or by separate sales. Lender shall be entitled to bid at any public
sale on all or any portion of the Property.
WAIVER; ELECTION OF REMEDIES. A waiver by any party of a breach of a
provision of this Deed of Trust shall not constitute a waiver of or
prejudice the party's rights otherwise to demand strict compliance with
that provision or any other provision. Election by Lender to pursue any
remedy provided in this Deed of Trust, the Note, in any Related Document,
or provided by law shall not exclude pursuit of any other remedy, and an
election to make expenditures or to take action to perform an obligation
of Trustor under this Deed of Trust after failure of Trustor to perform
shall not affect Lender's right to declare a default and to exercise any
of its remedies.
ATTORNEYS' FEES; EXPENSES. Whether or not any court action is involved,
all reasonable expenses incurred by Lender which in Lender's opinion are
necessary at any time for the protection of its interest or the
enforcement of its rights shall become a part of the Indebtedness payable
on demand and shall bear interest at the Note rate from the date of
expenditure until repaid. Expenses covered by this paragraph include,
without limitation, however subject to any limits under applicable law,
Lender's attorneys' fees whether or not there is a lawsuit, including
attorneys' fees for bankruptcy proceedings (including efforts to modify
or vacate any automatic stay
10
or injunction), appeals and any anticipated post-judgment collection
services, the cost of searching records, obtaining title reports
(including foreclosure reports), surveyors' reports, appraisal fees,
title insurance, and fees for the Trustee, to the extent permitted by
applicable law. Trustor also will pay any court costs, in addition to all
other sums provided by law.
RIGHTS OF TRUSTEE. Trustee shall have all of the rights and duties of
Lender as set forth in this section.
POWERS AND OBLIGATIONS OF TRUSTEE. The following provisions relating to the
powers and obligations of Trustee are part of this Deed of Trust.
POWERS OF TRUSTEE. In addition to all powers of Trustee arising as a
matter of law, Trustee shall have the power to take the following actions
with respect to the Property upon the written request of Lender and
Trustor: (a) join in preparing and filing a map or plat of the Real
Property, including the dedication of streets or other rights to the
public; (b) join in granting any easement or creating any restriction on
the Real Property; and (c) join in any subordination or other agreement
affecting this Deed of Trust or the interest of Lender under this Deed of
Trust.
OBLIGATIONS TO NOTIFY. Trustee shall not be obligated to notify any other
party of a pending sale under any other trust deed or lien, or of any
action or proceeding in which Trustor, Lender, or Trustee shall be a
party.
TRUSTEE. Trustee shall meet all qualifications required for Trustee under
applicable law. In addition to the rights and remedies set forth above,
with respect to all or any part of the Property, the Trustee shall have
the right to foreclose by notice and sale, and Lender shall have the
right to foreclose by judicial foreclosure, in either case in accordance
with and to the full extent provided by applicable law.
SUCCESSOR TRUSTEE. Lender, at Lender's option, may from time to time
appoint a successor Trustee to any Trustee appointed hereunder by an
instrument executed and acknowledged by Lender and recorded in the office
of the recorder of Los Angeles County, California. The instrument shall
contain, in addition to all other matters required by state law, the
names of the original Lender, Trustee, and Trustor, the book and page
where this Deed of Trust is recorded, and the name and address of the
successor trustee, and the instrument shall be executed and acknowledged
by Lender or its successors in interest. The successor trustee, without
conveyance of the Property, shall succeed to all the title, power, and
duties conferred upon the Trustee in this Deed of Trust and by applicable
law. This procedure for substitution of trustee shall govern to the
exclusion of all other provisions for substitution.
NOTICES TO TRUSTOR AND OTHER PARTIES. Any notice under this Deed of Trust shall
be in writing, may be sent by tele-facsimile, and shall be effective when
actually delivered, or when deposited with a nationally recognized overnight
courier, or, if mailed, shall be deemed effective when deposited in the United
States mail first class, registered mail, postage prepaid, directed to the
addresses shown near the beginning of this Deed of Trust. Any party may change
its address for notices under this Deed of Trust by giving formal written notice
to the other parties, specifying that the purpose of the notice is to change the
party's address. All copies of notices of foreclosure from the holder of any
lien which has priority over this Deed of Trust shall be sent to Lender's
address, as shown near the beginning of this Deed of Trust. For notice purposes,
Trustor agrees to keep Lender and Trustee informed at all times of Trustor's
current address. Each Trustor requests that copies of any notices of default and
sale be directed to Trustor's address shown near the beginning of this Deed of
Trust.
STATEMENT OF OBLIGATION. Lender may collect a fee, in an amount not to exceed to
statutory maximum, for furnishing the statement of obligation as provided by
Section 2943 of the Civil Code of California.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Deed of Trust:
AMENDMENTS. This Deed of Trust, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Deed of Trust. No alteration of or
amendment to
11
this Deed of Trust shall be effective unless given in writing and signed
by the party or parties sought to be charged or bound by the alteration
or amendment.
ACCEPTANCE BY TRUSTEE. Trustee accepts this Trust when this Deed of
Trust, duly executed and acknowledged, is made a public record as
provided by law.
APPLICABLE LAW. THIS DEED OF TRUST HAS BEEN DELIVERED TO LENDER AND
ACCEPTED BY LENDER IN THE STATE OF CALIFORNIA. THIS DEED OF TRUST SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA.
CAPTION HEADINGS. Caption headings in this Deed of Trust are for
convenience purposes only and are not to be used to interpret or define
the provisions of this Deed of Trust.
MERGER. There shall be no merger of the interest or estate created by
this Deed of Trust with any other interest or estate in the Property at
any time held by or for the benefit of Lender in any capacity, without
the written consent of Lender.
SEVERABILITY. If a court of competent jurisdiction finds any provision of
this Deed of Trust to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to be within the
limits of enforceability or validity; however, if the offending provision
cannot be so modified, it shall be stricken and all other provisions of
this Deed of Trust in all other respects shall remain valid and
enforceable.
SUCCESSORS AND ASSIGNS. Subject to the limitations stated in this Deed of
Trust on transfer of Trustor's interest, this Deed of Trust shall be
binding upon and inure to the benefit of the parties, their successors
and assigns. If ownership of the Property becomes vested in a person
other than Trustor, Lender, without notice to Trustor, may deal with
Trustor's successors with reference to this Deed of Trust and the
Indebtedness by way of forbearance or extension without releasing Trustor
from the obligations of this Deed of Trust or liability under the
Indebtedness.
TIME IS OF THE ESSENCE. Time is of the essence in the performance of this
Deed of Trust.
WAIVERS AND CONSENTS. Lender shall not be deemed to have waived any
rights under this Deed of Trust (or under the Related Documents) unless
such waiver is in writing and signed by Lender. No delay or omission on
the part of Lender in exercising any right shall operate as a waiver of
such right or any other right. A waiver by any party of a provision of
this Deed of Trust shall not constitute a waiver of or prejudice the
party's right otherwise to demand strict compliance with that provision
or any other provision. No prior waiver by Lender, nor any course of
dealing between Lender and Trustor, shall constitute a waiver of any of
Lender's rights or any of Trustor's obligations as to any future
transactions. Whenever consent by Lender is required in this Deed of
Trust, the granting of such consent by Lender in any instance shall not
constitute continuing consent to subsequent instances where such consent
is required.
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TRUSTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS DEED OF TRUST, AND
TRUSTOR AGREES TO ITS TERMS.
TRUSTOR
NEWSTAR MEDIA INC.
BY: /s/ NEIL TOPHAM
----------------------------------
NEIL TOPHAM, VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
13
CERTIFICATE OF ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
On July 20, 1998 before me, David A Sailing, personally appeared Neil Topham,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his authorized capacity, and
that by his signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
WITNESS MY HAND AND OFFICIAL SEAL.
SIGNATURE /s DAVID A. SAILING (SEAL)
-------------------------------
14
EXHIBIT A
PARCEL 1:
LOT 332 OF TRACT NO. 5125, IN THE CITY OF WEST HOLLYWOOD, COUNTY OF LOS ANGELES,
STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 62 PAGES 39 AND 40 OF MAPS, IN
THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THE SOUTHERLY 55 FEET THEREOF.
PARCEL 2:
LOT 331 AND THE SOUTHERLY 55 FEET OF LOT 332 OF TRACT NO. 5125, IN THE CITY OF
WEST HOLLYWOOD, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED
IN BOOK 62 PAGES 39 AND 40 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY.
PARCEL 3:
LOTS 284, 285, 286, 329 AND 330 OF TRACT 5125, IN THE CITY OF WEST HOLLYWOOD,
COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 62 PAGES
39 AND 40 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
PARCEL 4:
LOT 282 OF TRACT. 5125, IN THE CITY OF WEST HOLLYWOOD, COUNTY OF LOS ANGELES,
STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 62 PAGE 39 OF MAPS, IN THE
OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
PARCEL 5:
LOT 283 OF TRACT NO. 5125, IN THE CITY OF WEST HOLLYWOOD, COUNTY OF LOS ANGELES,
STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 62 PAGES 39 AND 40 OF MAPS, IN
THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.