EXHIBIT 10.11
PROMISSORY NOTE
FOR VALUE RECEIVED, Shawn D. Phillips, an individual with an address of
8468 Lewis Court, Arvada, Colorado 80005 (the "Borrower") promises to pay
Bishane Race, LLC, a Colorado limited liability company, with an address of Post
Office Box 31403, Aurora, Colorado 80041 ("Note Holder"), the principal sum of
Six Hundred Thousand Dollars ($600,000), with interest, until paid on or before
August 1, 2017. Payments are due in monthly payments of $11,000, with the first
payment of principal only in the amount of $5,000 due on August 1, 2014, and all
subsequent payments of principal and interest due on the 1st day of each month
thereafter. Such payments shall continue until the entire indebtedness evidenced
by this Note is fully paid; provided, however, if not sooner paid, the entire
principal amount outstanding thereon shall be due and payable on August 1, 2017.
1. Borrower shall pay to Note Holder a late charge of 5% of any payment not
received by Note Holder within 10 days after the payment is due.
2. Payments received for application to this Note shall be applied as
follows, and as set forth in the Payment Schedule attached hereto: $6,000
applied to accrued interest and $5,000 applied in reduction of the principal
amount hereof. In addition to the monthly payment stated above, Borrower shall
make quarterly principal payments of $25,000 each, and each $25,000 payment
shall be applied in reduction of the principal amount of the Note. The first
quarterly payment is due on October 1, 2014 and then each subsequent quarterly
payment shall be made every three months until the Note is paid in full.
3. Borrower may prepay the principal balance of this Note at any time
without penalty.
4. If any payment required by this Note is not paid when due, after any
applicable grace period, Borrower shall be given a ten (10) day notice of
default, as set forth herein. Such notice of default shall specify the amount of
the nonpayment, plus any unpaid late charges and other costs, expenses and fees
due under this Note. Until the expiration of said ten-day period, the Borrower
may cure all defaults consisting of a failure to make required payments by
tendering the amounts of all unpaid sums due at the time of tender, without
acceleration, as specified by the Note Holder in such notice. Cure restores the
Borrower to his rights under this Note as though defaults had not occurred.
Notice to Borrower provided for in this section shall be as set forth in
paragraph 5 below. If, after thirty (30) days, any payment required by this Note
is not paid, Borrower shall be in default and interest will accrue on the then
unpaid principal balance at a rate of 18%.
5. In addition to default in the payment of principal and interest as
described above, if there is a default in the performance of any other covenant
or agreement contained in the Deed of Trust, after giving effect to the
applicable grace, notice or cure period, if any, then or at any time thereafter
at the option of Lender, and so long as such default remains uncured, the entire
loan balance shall immediately become due and payable without further notice,
and Lender may exercise any and all of it remedies under the Note and Deed of
Trust or available at law or in equity. The failure of the Note Holder to
exercise such option set forth in paragraph 4 above or this paragraph 5 upon
default shall not be taken or construed to be a waiver of the right to exercise
such options for any subsequent default.
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6. Any notice to Borrower provided for in this Note shall be in writing and
shall be given and be effective upon (1) electronic delivery to Borrower; or (2)
mailing such notice by first-class U.S. mail, addressed to Borrower at
Borrower's address stated below, or to such other address as Borrower may
designate by notice to the Note Holder. Any notice to the Note Holder shall be
in writing and shall be given and be effective upon (1) electronic delivery to
Note Holder; or (2) by mailing such notice by first-class U.S. mail to the Note
Holder at the address stated in the first paragraph of this Note, or to such
other address as Note Holder may designate by notice to Borrower.
Notice to Note Holder:
Bishane Race, LLC
c/o Anthony Whitmore
P.O. Box 31403
Aurora, CO 80041
Notice to Borrower:
Shawn D. Phillips
8468 Lewis Court
Arvada, CO 80005
7. The indebtedness evidenced by this Note is secured by a Deed of Trust,
Security Agreement and Financing Statement dated contemporaneously herewith,
which until terminated contained additional rights of Note Holder.
[CAUTION: SIGN ORIGINAL NOTE ONLY/RETAIN COPY]
EXECUTED this 24th day of July, 2014.
BORROWER
/s/ Shawn D. Phillips
---------------------
Shawn D. Phillips
ASSIGNMENT OF NOTE
THIS ASSIGNMENT is entered into effective this ___ day of October, 2014 by
and between Shawn D. Phillips, ("Assignor") and Strainwise, Inc., a Colorado
corporation ("Assignee").
Recitals
WHEREAS, Shawn D. Phillips executed a Promissory Note originally payable to
Bishane Race, LLC ("Note Holder") in the principal amount of Six Hundred
Thousand Dollars ($600,000.00) ("the Note") and a Deed of Trust ("Deed of
Trust") executed on July 29, 2014 guaranteeing the Note as well as a Security
Agreement executed on August 27, 2014 ("Security Agreement"); and
WHEREAS, Assignor desires to assign to Assignee all of Assignor's
obligations in the Note, Deed of Trust and Security Agreement to Assignee, and
Assignee desires to assume the same, subject to the terms, provisions and
modifications contained herein.
NOW THEREFORE, in consideration of the mutual promises made herein and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. Assignment. As of the effective date referenced above, Assignor hereby
assigns, transfers and conveys to Assignee any and all of Assignor's
obligations. Hereafter, Assignor disclaims any further obligation under the
Note, Deed of Trust and Security Agreement. In conjunction with the assignment,
Assignor represents and warrants that:
(i) Assigner is the legal borrower under the Note; and
(ii) Assignor has the right, power and authority to execute this
Assignment; and
(iii) Except as reflected above, the Note has not been amended or
modified; and
(iv) That no act or omission on the part of the Note Holder has
occurred, which would constitute a default under the Note.
2. Acceptance and Indemnification. Assignee hereby accepts the foregoing
assignment and transfer and promises to observe and perform all services and
obligations required under the Note, Deed of Trust and Security Agreement
accruing on or after the Assignment Date or otherwise attributable to the period
commencing on said date and continuing thereafter for so long as the Note
remains in full force and effect. Assignee shall indemnify, defend and hold
harmless Assignor, its affiliates, agents and assigns, from any and all claims,
demands, actions, causes of action, suits, proceedings, damages, liabilities,
costs and expenses of every nature whatsoever, including attorneys' fees, which
arise from or relate to the Note on or after the Assignment Date.
3. Binding Effect. This Agreement shall be binding upon the parties hereto,
their successors and assigns.
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IN WITNESS WHEREOF, the parties have executed this Assignment as of the
date first above written.
ASSIGNOR: SHAWN D. PHILLIPS
By: /s/ Shawn D. Phillips
-------------------------------------
ASSIGNEE: STRAINWISE, INC.
By: /s/ Shawn D. Phillips
-------------------------------------
Shawn D. Phillips, Chief Executive Officer
DEED OF TRUST, SECURITY AGREEMENT AND FINANCING STATEMENT
THIS INDENTURE is made and entered into this f day of July , 2014 , between
Shawn D. Phillips, an individual ("Grantor"), whose address is 8468 Lewis Court,
Arvada, Colorado 80005 and the Public Trustee of Denver County, Colorado
("Trustee").
WITNESSETH:
WHEREAS, Grantor has executed that certain promissory note ("Note") bearing
even date herewith for the principal sum of Six Hundred Thousand And No/100
Dollars ($ 600,000.00), payable to the order of Bishane Race, LLC
("Beneficiary"), whose address is Post Office Box 31403, Aurora, Colorado 80041
with interest thereon from the date hereof as provided in the Note and with the
balance of principal and interest due and payable in full on August 1, 2017; and
WHEREAS, Grantor is desirous of securing to Beneficiary, their successors
and assigns, the payment of the principal and interest becoming due under the
Note, together with any and all advances made, expenditures authorized, costs
and attorneys' fees incurred, or any other additional sums as provided for
herein or in the Note secured hereby which are expended or incurred by
Beneficiary (all of which shall collectively hereinafter sometimes be referred
to as the "Secured Indebtedness");
NOW, THEREFORE, Grantor, in consideration of the premises and for the
purpose of securing payment of the Note and the other Secured Indebtedness, does
hereby grant, bargain, sell, and convey unto Trustee, in trust forever, that
real property ("Property"), whether now owned or hereafter acquired by Grantor,
situated in the County of Denver, State of Colorado ("Property") and more
particularly described in Exhibit A attached hereto.
TOGETHER with all and singular the tenements, hereditaments, easements,
rights-of-way, licenses, and appurtenances thereunto belonging or in any wise
appertaining, whether now owned or hereafter acquired by Grantor, and any and
all rights of ingress and egress to and from adjoining property (whether such
rights now exist or subsequently arise), together with the rents, issues,
profits and other income thereof, and also the entire estate, right, title,
interest, claim, and demand whatsoever of Grantor of, in, and to the same and
of, in, and to every part and parcel thereof; and
TOGETHER with all buildings, structures, and improvements now or hereafter
located on the Property, and any and all easements, rights-of-way, and licenses
used in connection therewith; and
TOGETHER with all oil, gas, minerals, water and water rights, and drains
and drainage rights appurtenant to, located on, under, or above, or used in
connection with the Property and the improvements situated thereon, or any part
thereof, whether now existing or hereafter created or acquired; and .
TOGETHER with all machinery, apparatus, equipment, fittings, fixtures, and
articles of personal property of every kind and nature whatsoever, now or
hereafter located in or upon the Property or any part thereof and used or usable
in connection with any present or future operation of the Property ("equipment")
and now owned or hereafter acquired by Grantor, including, without limiting the
generality of the foregoing, all heating, lighting, laundry, incinerating, and
power equipment, engines, pipes, pumps, tanks, motors, conduits, switchboards,
plumbing, lifting, cleaning, fire-prevention, fire-extinguishing, refrigerating,
ventilating, and communications apparatus, air-cooling and air-conditioning
apparatus, elevators, escalators, shades, awnings, screens, storm doors and
windows, stoves, refrigerators, attached cabinets, partitions, ducts, and
compressors and all of the right, title, and interest of Grantor in and to any
equipment which may be subject to any title retention or security agreement or
chattel mortgage superior to the lien of this Deed of Trust. It is understood
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and agreed that all equipment is part and parcel of the Property and
appropriated to the use of the Property and, whether affixed or annexed or not,
shall for the purpose of this Deed of Trust be deemed conclusively to be real
estate and conveyed hereby. Grantor agrees to execute and deliver, from time to
time, such further instruments as may be requested by Beneficiary to confirm the
lien of this Deed of Trust on any equipment; and
TOGETHER with all leases, rents, issues, royalties, bonuses, income, and
profits, of each and every kind, now or hereafter relating to or arising from
the Property and the improvements situated thereon; and
TOGETHER with any and all awards or payments, including interest thereon,
and the right to receive the same, resulting from the exercise of any right of
eminent domain, the alteration of the grade of any road or street, or other
injury to, taking of, or decrease in the value of the Property and the
improvements situated thereon; and
TOGETHER with all right, title and interest of Grantor, if any, in and to
the land lying in the bed of any street, road, avenue or alley whether open,
proposed or vacated, in front of or adjoining the property; and
TOGETHER with all other or greater rights and interests of every nature in
the foregoing property and Grantor's rights to the possession or use thereof and
income therefrom, whether now owned or subsequently acquired by Grantor.
ALL OF THE FOREGOING property is sometimes hereinafter collectively
referred to as the "Mortgaged Property."
IN TRUST NEVERTHELESS, and time being of the essence hereof, that in the
event of any default by Grantor as defined herein, Beneficiary or the legal
holder of the Note may file notice with Trustee declaring such default and their
election and demand that the Mortgaged Property be advertised for sale and sold
in accordance with the statutes of the State of Colorado; and thereupon, Trustee
shall sell and dispose of the Mortgaged Property (en masse or in separate
parcels, as Trustee deems best), and all the right, title, and interest of
Grantor, its successors and assigns, in and to the Mortgaged Property, at public
auction at the front door of the courthouse in the county of Colorado wherein
the Mortgaged Property is situated, or on said premises as may be specified in
the notice of such sale, for the highest and best price the same will bring in
cash, after public notice having been previously given of the time and place of
such sale in accordance with the statutes of the State of Colorado by
advertisement weekly in some newspaper of general circulation at that time
published in said county in Colorado wherein the Mortgaged Property is situated;
copies of said notice shall be mailed in accordance with the statutes of the
State of Colorado governing sales of real estate by Trustee, and Trustee shall
make and give to the purchaser of the Mortgaged Property at said sale a
Certificate of Purchase, describing such Mortgaged Property sold, the sum paid
therefor, and the time when the purchaser (or other persons entitled thereto)
shall be entitled to a deed therefor, unless the same shall be redeemed as
provided by law; and Trustee shall, upon demand by the party holding the said
Certificate of Purchase, the time for redemption having expired, make, execute,
and deliver to such party a deed to the Mortgaged Property purchased in
accordance with the statutes of the State of Colorado, and Trustee shall, out of
the proceeds of said sale, after first paying and retaining all fees, charges,
and costs incident to such foreclosure sale, including, without limiting the
generality of the foregoing, all attorneys' fees and court costs and charges of
every character, pay to Beneficiary or the legal holder of the Note the
principal, interest, and additional sums due on the Note, including, without
limiting the generality of the foregoing, late charges, default interest
charges, and fees due under the Note, according to the tenor and effect thereof,
and all monies advanced by Beneficiary or the legal holder of the Note for
insurance, taxes, assessments, repairs, maintenance, utilities, maintenance
fees, mechanics' liens or any other liens on the Mortgaged Property of whatever
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nature, or for the payment of Grantor's debts, and any other Secured
Indebtedness with interest thereof from the date of the foreclosure sale to the
date of such payment by Trustee at an interest rate per annum equal to the
default interest rate set forth in the Note, rendering the overplus, if any,
first unto any subsequent lienors in accordance with the statutes of the State
of Colorado, and then unto Grantor, which sale and deed so made shall be a
perpetual bar, both in law and equity, against Grantor and all other persons
claiming the Mortgaged Property, or any part thereof, by, from, through, or
under Grantor, or any of them.
It shall be specifically authorized herein that Beneficiary or the legal
holder of the Note or their representatives may bid at the foreclosure sale held
by Trustee or by Order of Court and any bid by Beneficiary or the legal holder
of the Note may take into consideration anticipated taxes, assessments,
insurance premiums, utilities, maintenance expense, management costs, repairs,
title expense, and the then going real estate agent's commission all or any of
which may be incurred during the period of redemption or in order to
subsequently sell or otherwise dispose of the Mortgaged Property after the
issuance of the Public Trustee's deed, and such amounts shall not be deemed an
overplus distributable to junior lienors or Grantor.
This Deed of Trust shall secure, as a part of the Secured Indebtedness,
without limiting the generality of the foregoing, any additional advances and
any expenditures made by Beneficiary or the legal holder of the Note (as
determined in their sole discretion) for all sums due under any lien prior to
this Deed of Trust, which sums Beneficiary and/or the legal holder of the Note
elect to pay in order to protect their security interest in the Mortgaged
Property, together with any taxes, special assessments, insurance premiums,
costs of completing the construction of any unfinished improvements, costs of
repairing, maintaining, and preserving said improvements, cost of storage of
materials for incorporation into the improvements and purchased with funds
disbursed under the Note, utility charges, delinquent payments fees, attorneys'
fees, and any other expenditures made or charges incurred by Beneficiary and I
or the legal holder of the Note, with interest thereon from the date of such
expenditure at an interest rate per annum equal to the default interest rate set
forth in the Note, all of which sums may be added to Beneficiary's or the legal
holder of the Note's bid at any foreclosure sale held pursuant hereto. Grantor
hereby assigns to Beneficiary and the legal holder of the Note any right Grantor
may have by reason of any prior encumbrance on the Mortgaged Property or by law
or otherwise to cure any default under said prior encumbrance, and further
assigns to Beneficiary and the legal holder of the Note any right Grantor may
have by reason of contract or by law or otherwise to make any or all of the
payments described in this paragraph or which Beneficiary or the legal holder of
the Note is permitted to make on behalf of Grantor by the terms of this Deed of
Trust Further, it shall be lawful for the holder of the Certificate of Purchase
covering the Mortgaged Property to make any of the foregoing expenditures, and
upon filing receipts evidencing payment of the same with Trustee or the Sheriff
or other person lawfully conducting said sale and issuing said Certificate of
Purchase, such payments or expenditures shall thereupon become an additional
claim or indebtedness in favor of the holder of such Certificate of Purchase and
against the Mortgaged Property so sold. Before redemption can be made from such
foreclosure sale, the party redeeming shall be required to pay, in addition to
the amounts specified in said Certificate of Purchase, with interest thereon as
provided herein, the further and additional amounts represented by the foregoing
expenditures, together with interest thereon from the date of such expenditure
at an interest rate per annum equal to the default interest rate set forth in
the Note. In the event of default or foreclosure and if, in the opinion of
Beneficiary or the legal holder of the Note, it is necessary to complete
construction of any incomplete improvements or make repairs, alterations, or
renovations to the Mortgaged Property in order to preserve, protect, or prevent
waste, or change the manner of utilization or nature of occupancy, Beneficiary
shall have the right to proceed as it deems advisable and Grantor does hereby
appoint Beneficiary as its attorney-in-fact to do such things as are hereby
provided, and this power of attorney is coupled with an interest in the
Mortgaged Property and is irrevocable.
AND, Grantor represents, warrants, and covenants to Beneficiary, their
successors and assigns, that Grantor is now in a solvent condition; and no
bankruptcy or insolvency proceedings are pending or contemplated by Grantor, or
to Grantor's knowledge, threatened against Grantor. Grantor, for himself and for
his heirs, successors, and assigns, covenants and agrees to and with the Trustee
and Beneficiary that at the time of the ensealing and delivery of these
presents, it is well seized of the said lands and tenements in fee simple title
to the Mortgaged Property and has good right, full power and lawful authority to
grant, bargain, sell, convey, transfer, assign and mortgage the Mortgaged
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Property. Grantor hereby fully and absolutely waives and/or subordinates all
rights and claims it may have in or to the Mortgaged Property as a homestead
exemption or other exemption under or by virtue of any federal, state, or local
law now or hereafter in effect.
GENERAL COVENANTS
THE GRANTOR FURTHER COVENANTS AND AGREES AS FOLLOWS:
1 Payment. Grantor will make prompt payment, as the same become due, of all
installments of principal, interest, and other charges becoming due under the
Note or this Deed of Trust.
2 Payment of Taxes and Prior Encumbrances. During the continuance of the
Secured Indebtedness or any part thereof, the Grantor will, prior to
delinquency, pay all taxes and assessments levied on the Mortgaged Property
(including water) and all amounts due or to become due on account of principal
and interest on prior encumbrances, if any.
3 Insurance of Premises. Grantor shall keep the Mortgaged Property insured,
in such amounts and with such companies as Beneficiary shall approve in writing,
against loss by fire, lightning, windstorm, tornado, flood, boiler explosion or
malfunction, any other casualty, and public liability with loss of rents and
such other causes as may be required by Beneficiary with loss payable to the
Beneficiary hereunder as their interest may appear. Grantor will deliver to the
Beneficiary the policy or policies of insurance, with a standard mortgage clause
in favor of Beneficiary attached thereto, as further security for the Secured
Indebtedness. In the event of loss or damage, the proceeds of all such insurance
may be applied to the payment of the Secured Indebtedness or to the repair,
rebuilding, or replacement of the improvements damaged or destroyed, as the
Beneficiary in their sole discretion may elect or direct. The said proceeds of
such insurance, if to be applied to repair, rebuilding or replacement of
improvements, shall be retained in the possession of the Beneficiary until the
said repair, rebuilding or replacement, in the sole judgment of the Beneficiary,
is complete.
4 Advances by Beneficiary for Taxes, Insurance or Prior Encumbrances. In
the case of the refusal or neglect of the Grantor to thus insure and deliver the
policies of insurance or to pay such taxes or assessments or amounts due or to
become due on prior encumbrances, if any, the Beneficiary may procure said
insurance or pay such taxes, assessments or amount due upon prior encumbrances,
if any, and all monies thus paid, with interest thereon at fifteen percent (15%)
per annum, shall become so much additional indebtedness secured by this Deed of
Trust, and shall be paid out of the proceeds of sale of the Property aforesaid
if not otherwise paid by the Grantor. Such failure to so insure or to pay such
amounts shall be a violation or breach of the covenants of this Deed of Trust.
5 Security Agreement. This Deed of Trust shall also constitute a security
agreement from the Grantor to the Beneficiary under the Colorado Uniform
Commercial Code, as amended. IT IS INTENDED THAT THIS DEED OF TRUST SHALL BE
EFFECTIVE AS A FINANCING STATEMENT FILED AS A FIXTURE FILING under the Uniform
Commercial Code. Certain of the goods described herein are or are to become
fixtures related to the Property. The Grantor agrees to execute and deliver to
the Beneficiary for filing with the Office of the Clerk and Recorder where the
land is situated and with the Colorado Secretary of State's Office, such
financing and continuation statements as may be required in the Beneficiary's
sole opinion to perfect or continue as perfected the security interest created
by this Deed of Trust If the Grantor fails upon demand to execute and deliver to
the Beneficiary such financing or continuation statements, the Grantor shall
thereupon automatically and irrevocably have appointed and does hereby appoint
the Beneficiary as the Grantor's attorney-in-fact for the purpose of executing
such financing or continuation statements, the power of attorney hereby given by
the Grantor to the Beneficiary being a power of attorney coupled with an
interest and shall not be affected by the death or disability of Beneficiary.
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6. Environmental Requirements The Grantor represents and warrants to the
Beneficiary that ownership began on or about February 1. 2007 and commenced to
February 28m, 2010 wherein Grantor became a tenant on or about March 1st, 2010
and to present.
7 Possession of the Property-Appointment of Receiver In the case of any
default or breach under the terms and covenants of the Secured Indebtedness or
this Deed of Trust, the Beneficiary shall at once become entitled to the
possession, use and enjoyment of the Mortgaged Property and to the rents, issues
and profits therefrom, from the date of the accruing of such right and
continuing during the pendency of foreclosure proceedings including any period
of redemption. Such possession shall at once be delivered to the Beneficiary or
the holder of the Certificate of Purchase upon demand. Upon refusal, the
delivery of such possession may be enforced by the Beneficiary or the holder of
the Certificate of Purchase by an appropriate civil suit or proceeding. The
Beneficiary or the holder of the Certificate of Purchase shall be entitled to
appointment of a receiver for the Mortgaged Property to receive the rents,
issues and profits therefrom from and after any such default, including the time
covered by foreclosure proceedings and the period of redemption, as a matter of
right without regard to the solvency or insolvency of the Grantor or of the then
owner of said Property and without regard to the value of the Mortgaged
Property. Such receiver may be appointed by any court of competent jurisdiction
upon ex-parte application and without notice, notice being hereby expressly
waived. All rents, issues, profits, income and revenue from said Mortgaged
Property shall be applied by such receiver to the payment first of the fees and
costs of such receivership proceeding and then to the Secured Indebtedness. The
balance remaining, if any, shall be disposed of in accordance with the orders
and directions of the court. The fees of any such receiver, attorneys' fees
incurred in appointment of the receiver and administration of the receivership
estate and all costs, including court costs, shall be the liability of the
Grantor, its successors and assigns, shall be due and payable upon demand and
shall become so much additional indebtedness secured hereby. Failure to pay said
fees and costs upon demand shall be in breach of the terms of this Deed of
Trust. The rights of Beneficiary under this paragraph shall be in addition to
and not in lieu of any rights existing by virtue of a separate Assignment of
Leases, Rents and Other Income.
8 Alienation or Encumbrance of the Mortgaged Property. In the event the
Grantor shall sell, convey, alienate or dispose of the Mortgaged Property
described in this Deed of Trust, any part thereof or any interest therein
(including, but not limited to, outright conveyance; conveyance or alienation of
any interest in the Mortgaged Property or any part thereof by land installment
contract or contract for deed; and alienation of any interest in the Mortgaged
Property by lease or rental agreement with option to purchase) the entire
Secured Indebtedness, irrespective of the maturity dates expressed therein,
shall, at the option of the Beneficiary and without delay or notice, immediately
become due and payable. If the Beneficiary does not accelerate the obligation,
the Beneficiary, as a condition precedent to their waiver of their right to
accelerate the obligation, (a) may require the party to whom the Mortgaged
Property or any part thereof is alienated to assume the Mutual Encumbrance and
Secured Indebtedness; (b) may charge a transfer fee (which shall be in addition
to title insurance, abstracting, credit reports, surveys, attorneys' fees and
other charges pertaining to the transfer or sale); and/or (c) may increase the
interest rate on the Secured Indebtedness to a rate in excess of the rate set
forth in the Note secured by this Deed of Trust. If the Secured Indebtedness is
accelerated by reason of sale, conveyance, alienation or disposal of the
Property or any part thereof, the indebtedness as accelerated shall include as a
part of the principal balance and interest accrued at the rate set forth in said
Note, the equity participation amount, if any, as set forth in the said Note.
In the event the Grantor shall further encumber the Mortgaged Property
described in this Deed of Trust by creation of a lien or encumbrance junior to
the lien of this Deed of Trust without the prior written consent of the
Beneficiary hereunder, the entire Secured Indebtedness secured by this Deed of
Trust, irrespective of the maturity dates expressed therein, shall at the option
of the Beneficiary and without delay or notice become immediately due and
payable. The consent of the Beneficiary to such further encumbrance shall not be
unreasonably withheld. Nothing in this paragraph shall, however, limit the
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ability of the Beneficiary hereunder to withhold consent to alienation of the
Mortgaged Property as set forth in the paragraph immediately above.
9 Funds for Taxes and Insurance. Intentionally omitted. Not applicable.
10 Time of the Essence. Time is of the essence of this Deed of Trust and in
the event the Grantor or the Grantor's successors or assigns fail to pay
Beneficiary any and all sums due according to the terms of the Note and this
Deed of Trust and fail to observe and perform any of the covenants and
agreements contained in said Note or this Deed of Trust, Beneficiary may, at its
option, declare said Note and the remaining indebtedness owing thereunder due
and payable, and any tax assessments, insurance premiums, or other advances made
or paid by said Beneficiary and not repaid by the Grantor shall become an
additional indebtedness hereunder and secured by this Deed of Trust
11 Covenant Against Waste. The Grantor, for himself and for his heirs,
successors and assigns, covenants and agrees to maintain the Mortgaged Property
in good and safe repair and not to permit any waste upon the Mortgaged Property
which would impair the value of the security, which waste may consist of, but is
not limited to, cutting and removal of timber and lumber; removal of topsoil and
gravel; overgrazing; strip mining; and neglect in the repair and maintenance of
the improvements.
12 Condemnation. If the Mortgaged Property or any part thereof shall be
condemned and taken under the power of eminent domain, all damages and awards
for the portion of the Mortgaged Property so taken shall be applied at the
option of the Beneficiary either to the repayment of the Secured Indebtedness or
to the rebuilding, repair and restoration of the lands and/or improvements
damaged by said taking. Any balance of such damages or awards remaining after
application as above set forth shall be paid over to the Grantor.
13 Operating Statements, Inspection and Management. Beneficiary shall have
the right, at all reasonable times, to inspect the Mortgaged Property, upon
giving Grantor 48 hours written notice. If, Grantor has a monetary default three
times in a 12 month period, if requested by Beneficiary, Grantor shall furnish
to Beneficiary, within one hundred twenty (120) days after the request from
Beneficiary, a balance sheet and, a statement of income and expenses of the
Mortgaged Property, each in reasonable detail and certified by Grantor.
Prior to entering into any agreement or arrangement for the management of
the Mortgaged Property by any party or parties other than any entity wholly or
partially affiliated with Beneficiary, Grantor shall first submit such agreement
or arrangement to the Beneficiary. Grantor, or any party selected by Grantor to
manage the Mortgaged Property, shall at all times manage and operate said
Mortgaged Property in compliance with all applicable laws, ordinances, orders,
rules and regulations. Grantor, or its management agent, shall perform all
management functions, including, but not limited to, the providing of utilities,
cleaning, repair and maintenance services in a manner consistent with the
operation of a first-rate Property of similar nature to that encumbered hereby
in the general locale of the Mortgaged Property.
14 Approval of Leases. Intentionally omitted. Not applicable.
15 Forebearance; Substitution of Collateral; Partial Releases. It is
understood and agreed that the Beneficiary may, at any time, without notice to
any person, grant to the Grantor any indulgences of forebearance, grant any
extension of time for payment of any indebtedness secured hereby, or allow any
change or changes, substitution or substitutions, of or for any of the Property
described in this Deed of Trust or any other collateral which may be held by
Beneficiary. Beneficiary's action in so doing shall in no way affect the
liability of the Grantor, any endorsers of the indebtedness secured hereby, or
any other person liable for the payment of said indebtedness, nor shall it in
any way affect or impair the lien of this Deed of Trust upon the remainder of
the Property and upon other collateral which is not changed or substituted. It
is also understood and agreed that the Beneficiary and the Trustee may, at any
time, without notice to any person, release any portion of the Property
described in this Deed of Trust or any other collateral which may be held as
security for the payment of the Secured Indebtedness either with or without
consideration for such release or releases. Such releases shall not in any
6
manner affect the liability of the Grantor, all endorsers and all other persons
who are or shall be liable for the payment of said indebtedness, nor shall said
releases in any manner affect, disturb or impair the validity and priority of
this Deed of Trust, for the full amount of the indebtedness remaining unpaid
together with all interest and advances which shall become payable, upon the
remainder of the Property and other collateral which is unreleased. It is
distinctly understood and agreed by the Grantor and the Beneficiary that any
release or releases may be made by the Beneficiary and the Trustee without the
consent or approval of any person or persons whomsoever.
16 Prosecution or Defense of Actions Affecting Obligation or Lien. If
Grantor fails to perform the covenants and agreements contained in this Deed of
Trust or if any action or proceeding is commenced which affects Beneficiary's
interest in the Mortgaged Property or the validity of the Note secured hereby
including, but not limited to. actions in eminent domain, code enforcement,
insolvency or arrangements or proceedings involving a bankrupt or a decedent's
estate, or actions by parties claiming an interest senior and paramount to the
lien of this Deed of Trust, or if it becomes necessary for Beneficiary to file
an action to uphold or defend the lien of this Deed of Trust, then Beneficiary
shall have the right to employ its own legal counsel to defend, pursue,
compromise, negotiate, or prevent any such litigation and all sums expended by
Beneficiary including reasonable attorneys' fees and other costs in connection
with any such legal action shall become so much additional indebtedness secured
by this Deed of Trust. The failure of the Grantor to pay to Beneficiary all such
sums expended immediately upon demand shall entitle the Beneficiary, at its
option, to declare the entire indebtedness to be at once due and payable.
17 Foreclosure and Attorneys' Fees. In the case of default in any of the
payments of principal or interest, according to the tenor and effect of the Note
secured hereby, or of a breach or violation of any of the covenants or
agreements contained herein, or incorporated herein, then the whole of said
principal sum secured hereby, all interest thereon, and the equity participation
amount, if any, set forth in the Note secured hereby, may at once or at any time
thereafter, at the option of the Beneficiary, become due and payable. If
foreclosure is performed by the Public Trustee, attorneys' fees of a reasonable
amount for services in the supervision of said foreclosure proceedings together
with all other costs of said foreclosure proceedings and as provided herein
shall be added by the Public Trustee to the indebtedness secured hereby to be
satisfied from the proceeds of the sale of said Mortgaged Property. If
foreclosure is made through the courts, reasonable attorneys' fees shall be
taxed by the court as a part of the costs of such foreclosure proceedings and
such fees and costs shall be treated as a part of the indebtedness secured
hereby to be satisfied from the proceeds of the sale of said Mortgaged Property.
18 Severability; Governing Law; Forum. In the event that any provision or
clause of this Deed of Trust conflicts with applicable law, such conflicts shall
not affect or invalidate other provisions of this Deed of Trust which can be
given effect without the conflicting provision. To this end, the provisions of
this Deed of Trust are declared to be severable. The laws of the State of
Colorado shall govern the interpretation, construction and enforcement of this
Deed of Trust and the Note it secures. The courts of the State of Colorado shall
be the forum within which any and all issues of fact and law concerning the said
Note and this Deed of Trust shall be resolved.
19 Successors Bound; Terms; Captions The covenants herein contained shall
bind, and the benefits and advantages hereof shall inure to the respective
heirs, executors, administrators, successors and assigns of the parties hereto.
Whenever used herein, the singular number shall include the plural and
conversely, and the use of any gender shall be applicable to all genders.
Whenever the term "Beneficiary" is used herein, it shall include the legal
holder or holders of the Note or of the indebtedness secured hereby or, where
applicable, the holder of a Certificate of Purchase. Assignment or negotiation
of the Note secured hereby shall also be an assignment of the Beneficiary's
interest under this Deed of Trust. In particular, without limitations, the word
"Note" or the words "Promissory Note" shall be singular or plural as the case
may be. The captions and headings of this Deed of Trust are for convenience only
and are not to be used to interpret or define the terms of this document.
7
IN WITNESS WHEREOF, this Deed of Trust has been executed by the Grantor as
of the day and year first above written.
GRANTOR:
/s/ Shawn D. Phillips
---------------------
Shawn D. Phillips
STATE OF COLORADO )
) ss.
COUNTY OF DENVER )
The foregoing Deed of Trust, Security Agreement and Financing Statement
was subscribed, sworn to and acknowledged before me this 2-fi^dav of July,
2014, by Shawn D. Phillips.
Witness my hand and official seal.
/s/ Kenneth York Jr.
-------------------------------
Notary
My commission expires:
8/9/2016
----------------------
KENNETH YORK JR.
NOTARY PUBLIC STATE OF COLORADO
NOTARY ID 20124050354 My Commission Expires August 9, 2016
EXHIBIT A
Parcel II
A parcel of land located in the East 1/2, Southeast 1/4 of Section 14, Township
3 South, Range 68 West of the 6th P.m.; City and County of Denver, State of
Colorado, more particularly described as follows: Commencing at a point on the
Easterly Right-of-Way Line of Race Street which bears N00o00'00"E, (basis of
bearing) 611.26 feet from the Northerly line of 49th Avenue; Thence N00o00'00"E,
along said Easterly line 241.19 feet to the True Point of Beginning; Thence
N00o00'00"E, 177.06 feet to the Southerly Right- of_Way Line of Vacated 51st
Avenue; Thence S89(degree)59'35"E, along said Southerly line, 10.00 feet; Thence
N00(degree)00'00"E, 75.05 feet to the Southeasterly Right-of_Way Line of
Brighton Boulevard; Thence N45(degree)34'24"E, along said Southeasterly Line,
236.21 feet, to the Northerly corner of parcel of land described in Book 9908 at
Page 361; Thence along the Easterly and Northerly lines of said Parcel the
following Two(2) Courses:
(1) S00(degree)16'35W, 185.03 feet (184.55 feet record), Thence
(2) S89(degree)43'25"E, 85.70 feet;
Thence S00(degree)14'35"W, 25.04 feet to a point on the Westerly extension of
the Northerly line of parcel of land described in Book 8055 at Page 501, Thence
S89(degree)59'35"E, along said extension 3.31 feet to the Northwesterly corner
of said parcel; Thence Southerly along the Westerly line of said parcel the
following Three(3) Courses:
(1) S00o19'05W, 115.66 feet; Thence
(2) S89(degree)59'35"E, 11.10 feet; Thence
(3) S00(degree)19'05"W, 93.02 feet to a point on said Westerly line, said point
bearing N00o19'05"E, 60 feet from the Southerly terminus of that certain
course mentioned in said Book 8055 at Page 501, having a recorded value of
"South, a distance of 153.02 feet"; Thence N89(degree)38'54"W, 276.65 feet
to the True Point of Beginning, City and County of Denver, State of
Colorado, except portion described as follows:
A parcel of land located in the East 1/2, Southeast 1/4 of Section 14, Township
3 South, Range 68 West of the 6th P.M., City and County of Denver, State of
Colorado, more particularly descibed as follows: Commencing at a point on the
Easterly Right-of-Way line of Race Street which bears N00(degree)00'00"E, (basis
of bearing) 611.26 feet from the Northerly line of 49th Avenue; Thence
N00(degree)00'00"E, along said Easterly line 241.19 feet to the True Point of
Beginning; Thence N00o00'00"E, 177.06 feet to the Southerly Right- of-Way line
of vacated 51st Avenue; Thence S89(degree)59'35"E, along said Southerly line,
10.00 feet; Thence N00o00'00"E, 14.61 feet to a point on the West line of said
Parcel: Thence N89(degree)50(,)60"E, 256.84 feet to a point on the Easterly line
of said parcel; Thence Southerly and Westerly along the Following Three(3)
Courses:
(1) S00(degree)19'05"W, 101.43 feet; Thence
(2) S89"59'35" 11.10 feet; Thence
(3) S00(degree)19'05"W, 93.02 feet to a point on said Westerly line, said point
bearing N00P19'05"E, 60 feet from the Southerly terminus of that certain
course mentioned in said Book 8055 at Page 501, having a recorded value of
"South, a distance of 153.02 feet"; Thence N89(degree)38'54", 276.65 feet
to the True Point of Beginning, City and County of Denver, State of
Colorado.
Known as No. 5110 Race Street, Denver, CO 80216