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EXHIBIT 10.13
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Jeffer, Mangels, Butler & Marmaro LLP
2121 Avenue of the Stars, 10th Floor
Los Angeles, California 90067
Attn: Joel J. Berman, Esq.
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THIS DEED OF TRUST SECURES A LOAN AGREEMENT WHICH PROVIDES FOR A VARIABLE
INTEREST RATE
DEED OF TRUST
WITH ABSOLUTE ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THE PARTIES TO THIS DEED OF TRUST WITH ABSOLUTE ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING ("Deed of Trust"), made as of December 15
2000, are COMMUNICATIONS & POWER INDUSTRIES, INC., a Delaware corporation
("Trustor"), First American Title Company, a California corporation ("Trustee"),
and FOOTHILL CAPITAL CORPORATION, a California corporation, as Agent for itself
and the other Lenders (as hereinafter defined) ("Beneficiary").
ARTICLE 1. GRANT IN TRUST
1.1 GRANT. For the purposes of and upon the terms and conditions in
this Deed of Trust, Trustor irrevocably grants, conveys and
assigns to Trustee, in trust for the benefit of Beneficiary,
with power of sale and right of entry and possession, all of
that real property located in the County of Santa Clara, State
of California, described on Exhibit A attached hereto, together
with all right, title, interest, and privileges of Trustor in
and to all streets, ways, roads, and alleys used in connection
with or pertaining to such real property, all development rights
or credits, air rights, water, water rights and water stock
related to the real property, and all minerals, oil and gas, and
other hydrocarbon substances in, on or under the real property,
and all appurtenances, easements, rights and rights of way
appurtenant or related thereto; all buildings, other
improvements and fixtures now or hereafter located on the real
property, including, but not limited to, all water wells,
pipelines, irrigation systems, pumps, fuel tanks and other crop
fixtures, and all apparatus, equipment, and appliances used in
the operation or occupancy of the real property, it being
intended by the parties that all such items shall be
conclusively considered to be a part of the real property,
whether or not attached or affixed to the real property (the
"Improvements"); all interest or estate which Trustor may
hereafter acquire in the property described above, and all
additions and accretions thereto, and the proceeds of any of the
foregoing; (all of the foregoing being collectively referred to
as the "Subject Property"). The listing of specific rights or
property shall not be interpreted as a limit of general terms.
ARTICLE 2. OBLIGATIONS SECURED
2.1 OBLIGATIONS SECURED. Trustor makes this Deed of Trust for the
purpose of securing the following obligations ("Secured
Obligations"):
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(a) Payment to Beneficiary of all sums at any time owing and
performance of all covenants and obligations on the part
of Trustor under that certain Loan and Security
Agreement ("Loan Agreement") of even date herewith by
and among Trustor, Beneficiary, the other Lenders named
therein and other Obligors named therein, relating to a
loan in the principal amount of Sixty-One Million
Dollars ($61,000,000.00); and
(b) Payment and performance of all covenants and obligations
of Trustor under this Deed of Trust; and
(c) Payment and performance of all covenants and
obligations, if any, of any rider attached as an Exhibit
to this Deed of Trust; and
(d) Payment and performance of all future advances and other
obligations that the then record owner of all or part of
the Subject Property may agree to pay and/or perform
(whether as principal, surety or guarantor) for the
benefit of Beneficiary, when such future advance or
obligation is evidenced by a writing which recites that
it is secured by this Deed of Trust; and
(e) All modifications, extensions and renewals of any of the
obligations secured hereby, however evidenced,
including, without limitation: (i) modifications of the
required principal payment dates or interest payment
dates or both, as the case may be, deferring or
accelerating payment dates wholly or partly; or (ii)
modifications, extensions or renewals at a different
rate of interest.
2.2 OBLIGATIONS. The term "obligations" is used herein in its
broadest and most comprehensive sense and shall be deemed to
include, without limitation, all interest and charges,
prepayment charges (if any), late charges and loan fees at any
time accruing or assessed on any of the Secured Obligations.
2.3 INCORPORATION. All terms of the Secured Obligations and the
documents evidencing such obligations are incorporated herein by
this reference. All persons who may have or acquire an interest
in the Subject Property shall be deemed to have notice of the
terms of the Secured Obligations and to have notice, if provided
therein, that: (a) the Loan Agreement may permit borrowing,
repayment and re-borrowing so that repayments shall not reduce
the amounts of the Secured Obligations; and (b) the rate of
interest on one or more Secured Obligations may vary from time
to time.
2.4 DEFINED TERMS. Capitalized terms which are used herein but not
defined herein shall have the meanings ascribed to them in the
Loan Agreement. "Lenders" means, collectively, Foothill Capital
Corporation, a California corporation, and Ableco Finance LLC, a
Delaware limited liability company, together with their
respective successors and assigns, and shall include any other
Person made a party to the Loan Agreement in accordance with the
provisions of Section 14.1 thereof.
ARTICLE 3. ASSIGNMENT OF LEASES AND RENTS
3.1 ASSIGNMENT. Trustor hereby irrevocably assigns to Beneficiary
all of Trustor's right, title and interest in, to and under: (a)
all leases of the Subject Property or any portion thereof, and
all other agreements of any kind relating to the use or
occupancy of the Subject Property or any portion thereof,
whether now existing or entered into after the date hereof
("Leases"); and (b) the rents, revenue, income, issues, deposits
and profits of the Subject Property, including, without
limitation, all amounts payable and all rights and benefits
accruing to Trustor under the Leases ("Payments"). The term
"Leases" shall also include all guarantees of and security for
the lessees' performance thereunder, and all amendments,
extensions, renewals or modifications thereto which are
permitted hereunder. This is a present and absolute assignment,
not an assignment for security purposes only, and Beneficiary's
right to the Leases and Payments is not contingent upon, and may
be exercised without possession of, the Subject Property.
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3.2 GRANT OF LICENSE. Beneficiary confers upon Trustor a license
("License") to collect and retain the Payments as they become
due and payable, until the occurrence of a Default (as
hereinafter defined). Upon a Default, the License shall be
automatically revoked and so long as the Default continues, the
License shall remain revoked and Beneficiary may collect and
apply the Payments pursuant to Section 6.4 without notice and
without taking possession of the Subject Property. Trustor
hereby irrevocably authorizes and directs the lessees under the
Leases to rely upon and comply with any notice or demand by
Beneficiary for the payment to Beneficiary of any rental or
other sums which may at any time become due under the Leases, or
for the performance of any of the lessees' undertakings under
the Leases, and the lessees shall have no right or duty to
inquire as to whether any Default has actually occurred or is
then existing hereunder. Trustor hereby relieves the lessees
from any liability to Trustor by reason of relying upon and
complying with any such notice or demand by Beneficiary.
3.3 EFFECT OF ASSIGNMENT. The foregoing irrevocable assignment shall
not cause Beneficiary to be: (a) a mortgagee in possession; (b)
responsible or liable for the control, care, management or
repair of the Subject Property or for performing any of the
terms, agreements, undertakings, obligations, representations,
warranties, covenants and conditions of the Leases; or (c)
responsible or liable for any waste committed on the Subject
Property by the lessees under any of the Leases or any other
parties; for any dangerous or defective condition of the Subject
Property; or for any negligence in the management, upkeep,
repair or control of the Subject Property resulting in loss or
injury or death to any lessee, licensee, employee, invitee or
other person. Beneficiary and Trustee shall not directly or
indirectly be liable to Trustor or any other person as a
consequence of: (i) the exercise or failure to exercise by
Beneficiary or Trustee, or any of their respective employees,
agents, contractors or subcontractors, any of the rights,
remedies or powers granted to Beneficiary or Trustee hereunder;
or (ii) the failure or refusal of Beneficiary to perform or
discharge any obligation, duty or liability of Trustor arising
under the Leases.
3.4 REPRESENTATIONS AND WARRANTIES. Trustor represents and warrants
that: (a) the Schedule of Leases attached hereto as Schedule 1
is, as of the date hereof, a true, accurate and complete list of
all Leases; (b) all existing Leases are in full force and effect
and are enforceable in accordance with their respective terms,
and no breach or default, or event which would constitute a
breach or default after notice or the passage of time, or both,
exists under any existing Leases on the part of any party; (c)
no rent or other payment under any existing Lease has been paid
by any lessee for more than one (1) month in advance; and (d)
none of the lessor's interests under any of the Leases has been
transferred or assigned.
3.5 COVENANTS. The provisions of this Section 3.5 and Section 3.6
shall only be applicable to Leases wherein Trustor is lessor.
Trustor covenants and agrees at Trustor's sole cost and expense
to: (a) perform the obligations of lessor contained in the
Leases and subject to the exercise of Trustor's good faith
business judgment, enforce by all available remedies performance
by the lessees of the obligations of the lessees contained in
the Leases; (b) give Beneficiary prompt written notice of any
default which occurs with respect to any of the Leases, whether
the default be that of the lessee or of the lessor; (c) deliver
to Beneficiary fully executed, counterpart original(s) of each
and every Lease if requested to do so; and (d) execute and
record such additional assignments of any Lease or specific
subordinations (or subordination, attornment and non-disturbance
agreements executed by the lessor and lessee) of any Lease to
the Deed of Trust, in form and substance acceptable to
Beneficiary, as Beneficiary may request. Trustor shall not,
without Beneficiary's prior written consent or as otherwise
permitted by any provision of the Loan Agreement: (i) enter into
any Leases after the date thereof, except for Leases of space no
longer needed for use in Trustor's business operations, which
Leases are to Persons who are not Affiliates of Trustor, are
negotiated on an arm's length basis, and are at market rental;
(ii) execute any other assignment relating to any of the Leases;
(iii) discount any rent or other sums due under the Leases or
collect the same in advance, other than to collect rentals one
(1) month in advance of the time when it becomes due; (iv)
except in the exercise of Trustor's good faith
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business judgment at times when no Event of Default has occurred
or is continuing, terminate, modify or amend any of the terms of
the Leases or in any manner release or discharge the lessees
from any obligations thereunder; (v) except in the exercise of
Trustor's good faith business judgment at times when no Event of
Default has occurred or is continuing, consent to any assignment
or subletting by any lessee; or (vi) subordinate or agree to
subordinate any of the Leases to any other deed of trust or
encumbrance. Any such attempted action in violation of the
provisions of this Section 3.5 shall be null and void.
3.6 ESTOPPEL CERTIFICATES. Within thirty (30) days after written
request by Beneficiary, Trustor shall deliver to Beneficiary and
to any party designated by Beneficiary estoppel certificates
executed by Trustor and by each of the lessees, in recordable
form, certifying (if such be the case): (a) that the foregoing
assignment and the Leases are in full force and effect; (b) the
date of each lessee's most recent payment of rent; (c) that
there are no defenses or offsets outstanding, or stating those
claimed by Trustor or lessees under the foregoing assignment or
the Leases, as the case may be; and (d) any other information
reasonably requested by Beneficiary.
ARTICLE 4. SECURITY AGREEMENT AND FIXTURE FILING
4.1 SECURITY INTEREST. Trustor hereby grants and assigns to
Beneficiary as of the Closing Date a security interest, to
secure payment and performance of all of the Secured
Obligations, in all of the following described personal property
in which Trustor now or at any time hereafter has any interest
(collectively, the "Collateral"):
All goods, building and other materials, supplies, work in
process, equipment, machinery, fixtures, furniture,
furnishings, signs and other personal property (including,
without limitation, all water wells, pipelines, irrigation
systems, pumps, fuel tanks and other crop fixtures),
wherever situated, which are or are to be incorporated into,
used in connection with, or appropriated for use on (i) the
real property described on Exhibit A attached hereto and
incorporated by reference herein (to the extent the same are
not effectively made a part of the real property pursuant to
Section 1.1 above), or (ii) the Improvements (which real
property and Improvements are collectively referred to
herein as the Subject Property); together with all timber,
crops and other plantings, growing or to be grown, and the
products thereof; all rents (to the extent, if any, they are
not subject to Article 3); all inventory, accounts, cash
receipts, deposit accounts, accounts receivable, contract
rights, licenses, agreements, general intangibles, chattel
paper, instruments, documents, notes, drafts, letters of
credit, insurance policies, insurance and condemnation
awards and proceeds, any other rights to the payment of
money, trade names, trademarks and service marks arising
from or related to the ownership, management, leasing or
operation of the Subject Property or any business now or
hereafter conducted thereon by Trustor; all permits,
consents, approvals, licenses, authorizations and other
rights granted by, given by or obtained from, any
governmental entity with respect to the Subject Property;
all deposits or other security now or hereafter made with or
given to utility companies by Trustor with respect to the
Subject Property; all advance payments of insurance premiums
made by Trustor with respect to the Subject Property; all
plans, drawings and specifications relating to the Subject
Property; all loan funds held by Beneficiary, whether or not
disbursed; all funds deposited with Beneficiary pursuant to
any loan agreement; all reserves, deferred payments,
deposits, accounts, refunds, cost savings and payments of
any kind related to the Subject Property or any portion
thereof; together with all replacements and proceeds of, and
additions and accessions to, any of the foregoing; together
with all books, records and files relating to any of the
foregoing.
As to all of the above described personal property which is
or which hereafter becomes a "fixture" under applicable law,
this Deed of Trust constitutes a fixture filing under
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Sections 9313 and 9402(6) of the California Uniform
Commercial Code, as amended or recodified from time to time.
4.2 REPRESENTATIONS AND WARRANTIES. Trustor represents and warrants
that: (a) Trustor has, or will have, good title to the
Collateral; (b) Trustor has not previously assigned or
encumbered the Collateral, and no financing statement covering
any of the Collateral has been delivered to any other person or
entity; and (c) Trustor's principal place of business is located
at the address shown in Section 7.11.
4.3 RIGHTS OF BENEFICIARY. In addition to Beneficiary's rights as a
"Secured Party" under the California Uniform Commercial Code, as
amended or recodified from time to time ("UCC"), Beneficiary
may, but shall not be obligated to, at any time without notice
and at the expense of Trustor: (a) give notice to any person of
Beneficiary's rights hereunder and enforce such rights at law or
in equity; (b) insure, protect, defend and preserve the
Collateral or any rights or interests of Beneficiary therein;
(c) inspect the Collateral; and (d) endorse, collect and receive
any right to payment of money owing to Trustor under or from the
Collateral. Notwithstanding the above, in no event shall
Beneficiary be deemed to have accepted any property other than
cash in satisfaction of any obligation of Trustor to Beneficiary
unless Beneficiary shall make an express written election of
said remedy under UCC Section 9505, or other applicable law.
4.4 RIGHTS OF BENEFICIARY ON DEFAULT. Upon the occurrence and during
the continuance of a Default (hereinafter defined) under this
Deed of Trust, then in addition to all of Beneficiary's rights
as a "Secured Party" under the UCC or otherwise at law:
(a) Beneficiary may (i) upon written notice, require Trustor
to assemble any or all of the Collateral and make it
available to Beneficiary at a place designated by
Beneficiary; (ii) without prior notice, enter upon the
Subject Property or other place where any of the
Collateral may be located and take possession of,
collect, sell, and dispose of any or all of the
Collateral, and store the same at locations acceptable
to Beneficiary at Trustor's expense; (iii) sell, assign
and deliver at any place or in any lawful manner all or
any part of the Collateral and bid and become the
purchaser at any such sales; and
(b) Beneficiary may, for the account of Trustor and at
Trustor's expense: (i) operate, use, consume, sell or
dispose of the Collateral as Beneficiary deems
appropriate for the purpose of performing any or all of
the Secured Obligations; (ii) subject to the terms of
the Loan Agreement, enter into any agreement,
compromise, or settlement, including insurance claims,
which Beneficiary may deem desirable or proper with
respect to any of the Collateral; and (iii) endorse and
deliver evidences of title for, and receive, enforce and
collect by legal action or otherwise, all indebtedness
and obligations now or hereafter owing to Trustor in
connection with or on account of any or all of the
Collateral.
Notwithstanding any other provision hereof, Beneficiary
shall not be deemed to have accepted any property other
than cash in satisfaction of any obligation of Trustor
to Beneficiary unless Trustor shall make an express
written election of said remedy under UCC Section 9505,
or other applicable law.
4.5 POWER OF ATTORNEY. Trustor hereby irrevocably appoints
Beneficiary as Trustor's attorney-in-fact (such agency being
coupled with an interest), and as such attorney-in-fact
Beneficiary may, without the obligation to do so, in
Beneficiary's name, or in the name of Trustor, prepare, execute
and file or record financing statements, continuation
statements, applications for registration and like papers
necessary to create, perfect or preserve any of Beneficiary's
security interests and rights in or to any of the Collateral,
and, upon the occurrence and during the continuance of a Default
hereunder, take any other action required of Trustor; provided,
however, that Beneficiary as such attorney-in-fact shall be
accountable only for such funds as are actually received by
Beneficiary.
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4.6 POSSESSION AND USE OF COLLATERAL. Except as otherwise provided
in this Section or the other Loan Documents, so long as no
Default exists under this Deed of Trust or any of the Loan
Documents, Trustor may possess, use, move, transfer or dispose
of any of the Collateral in the ordinary course of Trustor's
business and in accordance with the Loan Agreement.
ARTICLE 5. RIGHTS AND DUTIES OF THE PARTIES
5.1 TITLE. Trustor represents and warrants that, except as disclosed
to Beneficiary in a writing which refers to this warranty,
Trustor lawfully holds and possesses fee simple title to the
Subject Property without limitation on the right to encumber,
and that this Deed of Trust is a first and prior lien on the
Subject Property.
5.2 TAXES AND ASSESSMENTS. Subject to Trustor's rights to contest
payment of taxes as may be provided in the Loan Agreement,
Trustor shall pay prior to delinquency all taxes, assessments,
levies and charges imposed by any public or quasi-public
authority or utility company which are or which may become a
lien upon or cause a loss in value of the Subject Property or
any interest therein. Trustor shall also pay prior to
delinquency all taxes, assessments, levies and charges imposed
by any public authority upon Beneficiary by reason of its
interest in any Secured Obligation or in the Subject Property,
or by reason of any payment made to Beneficiary pursuant to any
Secured Obligation; provided, however, Trustor shall have no
obligation to pay taxes which may be imposed from time to time
upon Beneficiary and which are measured by and imposed upon
Beneficiary's net income.
5.3 TAX AND INSURANCE IMPOUNDS. At any time following the occurrence
of a Default and during the continuance thereof, at
Beneficiary's option and upon its demand, Trustor, shall, until
all Secured Obligations have been paid in full, pay to
Beneficiary monthly, annually or as otherwise directed by
Beneficiary an amount estimated by Beneficiary to be equal to:
(a) all taxes, assessments, levies and charges imposed by any
public or quasi-public authority or utility company which are or
may become a lien upon the Subject Property or Collateral and
will become due for the tax year during which such payment is so
directed; and (b) premiums for fire, hazard and insurance
required or requested pursuant to the Loan Documents when same
are next due. If Beneficiary determines that any amounts paid by
Trustor are insufficient for the payment in full of such taxes,
assessments, levies, charges and/or insurance premiums,
Beneficiary shall notify Trustor of the increased amounts
required to pay all amounts when due, whereupon Trustor shall
pay to Beneficiary within thirty (30) days thereafter the
additional amount as stated in Beneficiary's notice. All sums so
paid shall not bear interest, except to the extent and in any
minimum amount required by law; and Beneficiary shall, unless
Trustor is otherwise in Default hereunder or under any Loan
Document, apply said funds to the payment of, or at the sole
option of Beneficiary release said funds to Trustor for the
application to and payment of, such sums, taxes, assessments,
levies, charges, and insurance premiums. Upon Default by Trustor
hereunder or under any Secured Obligation, Beneficiary may apply
all or any part of said sums to any Secured Obligation and/or to
cure such Default, in which event Trustor shall be required to
restore all amounts so applied, as well as to cure any other
events or conditions of Default not cured by such application.
Upon assignment of this Deed of Trust, Beneficiary shall have
the right to assign all amounts collected and in its possession
to its assignee whereupon Beneficiary and the Trustee shall be
released from all liability with respect thereto. Within
ninety-five (95) days following full repayment of the Secured
Obligations (other than full repayment of the Secured
Obligations as a consequence of a foreclosure or conveyance in
lieu of foreclosure of the liens and security interests securing
the Secured Obligations) or at such earlier time as Beneficiary
may elect, the balance of all amounts collected and in
Beneficiary's possession shall be paid to Trustor and no other
party shall have any right or claim thereto.
5.4 PERFORMANCE OF SECURED OBLIGATIONS. Trustor shall promptly pay
and perform each Secured Obligation when due.
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5.5 LIENS, ENCUMBRANCES AND CHARGES. Trustor shall immediately
discharge any lien not approved by Beneficiary in writing that
has or may attain priority over this Deed of Trust. Subject to
the provisions of the Loan Agreement regarding mechanics' liens,
Trustor shall pay when due all obligations secured by or which
may become liens and encumbrances which shall now or hereafter
encumber or appear to encumber all or any part of the Subject
Property or Collateral, or any interest therein, whether senior
or subordinate hereto.
5.6 DAMAGES; INSURANCE AND CONDEMNATION PROCEEDS.
(a) The following (whether now existing or hereafter
arising) are all absolutely and irrevocably assigned by
Trustor to Beneficiary and, at the request of
Beneficiary, shall be paid directly to Beneficiary: (i)
all awards of damages and all other compensation payable
directly or indirectly by reason of a condemnation or
proposed condemnation for public or private use
affecting all or any part of, or any interest in, the
Subject Property or Collateral; (ii) all other claims
and awards for damages to, or decrease in value of, all
or any part of, or any interest in, the Subject Property
or Collateral; (iii) all proceeds of any insurance
policies payable by reason of loss sustained to all or
any part of the Subject Property or Collateral; and (iv)
all interest which may accrue on any of the foregoing.
Subject to applicable law, and without regard to any
requirement contained in Section 5.7(d), Beneficiary may
at its discretion apply all or any of the proceeds it
receives to its reasonable and documented out-of-pocket
expenses in settling, prosecuting or defending any
claim. In the event of the occurrence and continuance of
a Default or an impairment (in Beneficiary's sole good
faith judgment) of Beneficiary's security hereunder,
Beneficiary may apply the balance to the Secured
Obligations in any order acceptable to Beneficiary. In
the absence of the occurrence and continuance of a
Default or an impairment (in Beneficiary's sole good
faith judgment) of Beneficiary's security hereunder,
Beneficiary shall release the balance of the proceeds to
Trustor for repair or restoration upon such reasonable
conditions as Beneficiary may impose. Beneficiary may
commence, appear in, defend or prosecute any assigned
claim or action and may adjust, compromise, settle and
collect all claims and awards assigned to Beneficiary;
provided, however, in no event shall Beneficiary be
responsible for any failure to collect any claim or
award, regardless of the cause of the failure,
including, without limitation, any malfeasance or
nonfeasance by Beneficiary or its employees or agents.
(b) When required to do so pursuant to the provisions of
Section 5.6(a), Beneficiary shall, and at all other
times, Beneficiary may, permit insurance or condemnation
proceeds held by Beneficiary to be used for repair or
restoration but may condition such application upon
reasonable conditions, including, without limitation:
(i) the deposit with Beneficiary of such additional
funds which Beneficiary reasonably determines are needed
to pay all costs of the repair or restoration,
(including, without limitation, taxes, financing
charges, insurance and rent during the repair period);
(ii) the establishment of an arrangement for lien
releases and disbursement of funds acceptable to
Beneficiary; (iii) the delivery to Beneficiary of plans
and specifications for the work, a contract for the work
signed by a contractor acceptable to Beneficiary, a cost
breakdown for the work and a payment and performance
bond for the work, all of which shall be reasonably
acceptable to Beneficiary; and (iv) the delivery to
Beneficiary of evidence reasonably acceptable to
Beneficiary of the satisfaction of any additional
conditions that Beneficiary may reasonably establish to
protect its security. Trustor hereby acknowledges that
the conditions described above are reasonable, and, if
such conditions have not been satisfied within ninety
(90) days of receipt by Beneficiary of such insurance or
condemnation proceeds, then Beneficiary may apply such
insurance or condemnation proceeds to pay the Secured
Obligations in such order and amounts as Beneficiary in
its sole discretion may choose.
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5.7 MAINTENANCE AND PRESERVATION OF THE SUBJECT PROPERTY. Subject to
the provisions of the Loan Agreement, Trustor covenants: (a) to
insure the Subject Property and Collateral against such risks as
Beneficiary may require and, at Beneficiary's request, to
provide evidence of such insurance to Beneficiary, and to comply
with the requirements of any insurance companies providing such
insurance; (b) to keep the Subject Property and Collateral in
good condition and repair; (c) not to remove or demolish the
Subject Property or Collateral or any part thereof, not to
alter, restore or add to the Subject Property or Collateral and
not to initiate or acquiesce in any change in any zoning or
other land classification which affects the Subject Property
without Beneficiary's prior written consent (which consent shall
not be unreasonably withheld) or as provided in the Loan
Agreement; (d) to complete or restore promptly and in good and
workmanlike manner the Subject Property and Collateral, or any
part thereof which may be damaged or destroyed, provided that if
Beneficiary is required to release insurance proceeds for repair
or restoration in accordance with Section 5.6, Beneficiary so
releases such proceeds; (e) to comply with all laws, ordinances,
regulations and standards, and all covenants, conditions,
restrictions and equitable servitudes, whether public or
private, of every kind and character which affect the Subject
Property or Collateral and pertain to acts committed or
conditions existing thereon, including, without limitation, any
work, alteration, improvement or demolition mandated by such
laws, covenants or requirements; (f) not to commit or permit
waste of the Subject Property or Collateral; and (g) to do all
other acts which from the character or use of the Subject
Property or Collateral may be reasonably necessary to maintain
and preserve its value.
5.8 DEFENSE AND NOTICE OF LOSSES, CLAIMS AND ACTIONS. At Trustor's
sole expense, Trustor shall protect, preserve and defend the
Subject Property and Collateral and title to and right of
possession of the Subject Property and Collateral, the security
hereof and the rights and powers of Beneficiary and Trustee
hereunder against all adverse claims. Trustor shall give
Beneficiary and Trustee prompt notice in writing of the
assertion of any claim, of the filing of any action or
proceeding, of the occurrence of any damage to the Subject
Property or Collateral and of any condemnation offer or action.
5.9 ACCEPTANCE OF TRUST; POWERS AND DUTIES OF TRUSTEE.
(a) Trustee accepts this trust when this Deed of Trust is
recorded. Except as may be required by applicable law,
Trustee or Beneficiary may from time to time apply to
any court of competent jurisdiction for aid and
direction in the execution of the trust hereunder and
the enforcement of the rights and remedies available
hereunder, and may obtain orders or decrees directing or
confirming or approving acts in the execution of said
trust and the enforcement of said remedies.
(b) Trustee shall not be required to take any action toward
the execution and enforcement of the trust hereby
created or to institute, appear in, or defend any
action, suit, or other proceeding in connection
therewith where, in his opinion, such action would be
likely to involve him in expense or liability, unless
requested so to do by a written instrument signed by
Beneficiary and, if Trustee so requests, unless Trustee
is tendered security and indemnity satisfactory to
Trustee against any and all cost, expense, and liability
arising therefrom. Trustee shall not be responsible for
the execution, acknowledgment, or validity of the Loan
Documents, or for the proper authorization thereof, or
for the sufficiency of the lien and security interest
purported to be created hereby, and Trustee makes no
representation in respect thereof or in respect of the
rights, remedies, and recourses of Beneficiary.
(c) With the approval of Beneficiary, Trustee shall have the
right to take any and all of the following actions: (i)
to select, employ, and advise with counsel (who may be,
but need not be, counsel for Beneficiary) upon any
matters arising hereunder, including the preparation,
execution, and interpretation of the Loan Documents, and
shall be fully protected in relying as to legal matters
on the advice of counsel, (ii) to execute any of the
trusts and powers hereof and to perform any duty
hereunder either directly or through his agents or
attorneys, (iii) to select and employ, in
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and about the execution of his duties hereunder,
suitable accountants, engineers and other experts,
agents and attorneys-in-fact, either corporate or
individual, not regularly in the employ of Trustee, and
Trustee shall not be answerable for any act, default,
negligence, or misconduct of any such accountant,
engineer or other expert, agent or attorney-in-fact, if
selected with reasonable care, or for any error of
judgment or act done by Trustee in good faith, or be
otherwise responsible or accountable under any
circumstances whatsoever, except for Trustee's gross
negligence or bad faith, and (iv) any and all other
lawful action as Beneficiary may instruct Trustee to
take to protect or enforce Beneficiary's rights
hereunder. Trustee shall not be personally liable in
case of entry by Trustee, or anyone entering by virtue
of the powers herein granted to Trustee, upon the
Subject Property for debts contracted for or liability
or damages incurred in the management or operation of
the Subject Property. Trustee shall have the right to
rely on any instrument, document, or signature
authorizing or supporting any action taken or proposed
to be taken by Trustee hereunder, believed by Trustee in
good faith to be genuine. Trustee shall be entitled to
reimbursement for expenses incurred by Trustee in the
performance of Trustee's duties hereunder and to
reasonable compensation for such of Trustee's services
hereunder as shall be rendered. TRUSTOR WILL, FROM TIME
TO TIME, PAY THE COMPENSATION DUE TO TRUSTEE HEREUNDER
AND REIMBURSE TRUSTEE FOR, AND INDEMNIFY AND HOLD
HARMLESS TRUSTEE AGAINST, ANY AND ALL LIABILITY AND
REASONABLE AND DOCUMENTED OUT-OF-POCKET EXPENSES WHICH
MAY BE INCURRED BY TRUSTEE IN THE PERFORMANCE OF
TRUSTEE'S DUTIES.
(d) All moneys received by Trustee shall, until used or
applied as herein provided, be held in trust for the
purposes for which they were received, but need not be
segregated in any manner from any other moneys (except
to the extent required by applicable law) and Trustee
shall be under no liability for interest on any moneys
received by Trustee hereunder.
(e) Should any deed, conveyance, or instrument of any nature
be required from Trustor by any Trustee or substitute
Trustee to more fully and certainly vest in and confirm
to the Trustee or substitute Trustee such estates,
rights, powers, and duties, then, upon request by the
Trustee or substitute Trustee, any and all such deeds,
conveyances and instruments shall be made, executed,
acknowledged, and delivered and shall be caused to be
recorded and/or filed by Trustor.
(f) By accepting or approving anything required to be
observed, performed, or fulfilled or to be given to
Trustee pursuant to the Loan Documents, including
without limitation, any deed, conveyance, instrument,
officer's certificate, balance sheet, statement of
profit and loss or other financial statement, survey,
appraisal, or insurance policy, Trustee shall not be
deemed to have warranted, consented to, or affirmed the
sufficiency, legality, effectiveness, or legal effect of
the same, or of any term, provision, or condition
thereof, and such acceptance or approval thereof shall
not be or constitute any warranty or affirmation with
respect thereto by Trustee.
5.10 COMPENSATION; EXCULPATION; INDEMNIFICATION.
(a) Trustor shall pay Trustee's fees and reimburse Trustee
for reasonable and documented out-of-pocket expenses in
the administration of this trust, including reasonable
and documented out-of-pocket attorneys' fees. Trustor
shall pay to Beneficiary reasonable compensation for
services rendered concerning this Deed of Trust,
including without limit any statement of amounts owing
under any Secured Obligation. Beneficiary shall not
directly or indirectly be liable to Trustor or any other
person as a consequence of (i) the exercise of the
rights, remedies or powers granted to Beneficiary in
this Deed of Trust; (ii) the failure or refusal of
Beneficiary to perform or discharge any obligation or
liability of Trustor under any agreement related to the
Subject Property or Collateral or under this Deed of
Trust; or (iii) any loss sustained by Trustor or any
third party resulting from Beneficiary's failure
(whether by malfeasance, nonfeasance or refusal
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to act) to lease the Subject Property after a Default
(hereinafter defined) or from any other act or omission
(regardless of whether same constitutes negligence) of
Beneficiary in managing the Subject Property after a
Default unless the loss is caused by the gross
negligence or willful misconduct of Beneficiary and no
such liability shall be asserted against or imposed upon
Beneficiary, and all such liability is hereby expressly
waived and released by Trustor.
(b) TRUSTOR INDEMNIFIES TRUSTEE AND BENEFICIARY AGAINST, AND
HOLDS TRUSTEE AND BENEFICIARY HARMLESS FROM, ALL LOSSES,
DAMAGES, LIABILITIES, CLAIMS, CAUSES OF ACTION,
JUDGMENTS, COURT COSTS, REASONABLE AND DOCUMENTED
OUT-OF-POCKET ATTORNEYS' FEES AND OTHER LEGAL EXPENSES,
COST OF EVIDENCE OF TITLE, COST OF EVIDENCE OF VALUE,
AND OTHER REASONABLE AND DOCUMENTED OUT-OF-POCKET
EXPENSES WHICH EITHER MAY SUFFER OR INCUR: (i) BY REASON
OF THIS DEED OF TRUST; (ii) BY REASON OF THE EXECUTION
OF THIS TRUST OR IN PERFORMANCE OF ANY ACT REQUIRED OR
PERMITTED HEREUNDER OR BY LAW; (iii) AS A RESULT OF ANY
FAILURE OF TRUSTOR TO PERFORM TRUSTOR'S OBLIGATIONS; OR
(iv) BY REASON OF ANY ALLEGED OBLIGATION OR UNDERTAKING
ON BENEFICIARY'S PART TO PERFORM OR DISCHARGE ANY OF THE
REPRESENTATIONS, WARRANTIES, CONDITIONS, COVENANTS OR
OTHER OBLIGATIONS CONTAINED IN ANY OTHER DOCUMENT
RELATED TO THE SUBJECT PROPERTY. THE ABOVE OBLIGATION OF
TRUSTOR TO INDEMNIFY AND HOLD HARMLESS TRUSTEE AND
BENEFICIARY SHALL SURVIVE THE RELEASE AND CANCELLATION
OF THE SECURED OBLIGATIONS AND THE RELEASE AND
RECONVEYANCE OR PARTIAL RELEASE AND RECONVEYANCE OF THIS
DEED OF TRUST.
(c) TRUSTOR shall pay all amounts and indebtedness arising
under this Section 5.10 immediately upon demand by
Trustee or Beneficiary together with interest thereon
from the date the indebtedness arises at the rate of
interest then applicable to the principal balance under
the Loan Agreement as specified therein.
5.11 SUBSTITUTION OF TRUSTEES. From time to time, by a writing,
signed and acknowledged by Beneficiary and recorded in the
Office of the Recorder of the County in which the Subject
Property is situated, Beneficiary may appoint another trustee to
act in the place and stead of Trustee or any successor. Such
writing shall set forth any information required by law. The
recordation of such instrument of substitution shall discharge
Trustee herein named and shall appoint the new trustee as the
trustee hereunder with the same effect as if originally named
Trustee herein. A writing recorded pursuant to the provisions of
this Section 5.11 shall be conclusive proof of the proper
substitution of such new Trustee.
5.12 DUE ON SALE OR ENCUMBRANCE. Except as otherwise expressly
permitted in the Loan Agreement, if the Subject Property or any
interest therein shall be sold, transferred (including, without
limitation, through sale or transfer of a majority or
controlling interest of the corporate stock or general
partnership interests or limited liability company interests of
Trustor), mortgaged, assigned, further encumbered or leased,
whether directly or indirectly, whether voluntarily,
involuntarily or by operation of law, without the prior written
consent of Beneficiary, THEN Beneficiary, in its sole
discretion, may declare all Secured Obligations immediately due
and payable.
5.13 RELEASES, EXTENSIONS, MODIFICATIONS AND ADDITIONAL SECURITY.
Without notice to or the consent, approval or agreement of any
persons or entities having any interest at any time in the
Subject Property and Collateral or in any manner obligated under
the Secured Obligations ("Interested Parties"), Beneficiary may,
from time to time, release any person or entity from liability
for the payment or performance of any Secured Obligation, take
any action or make any agreement extending the maturity or
otherwise altering the terms or increasing the amount of any
Secured Obligation, or accept additional security or release all
or a portion of the Subject Property and Collateral and other
security for the Secured Obligations. None of the foregoing
actions shall release or reduce the personal liability
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of any of said Interested Parties, or release or impair the
priority of the lien of and security interests created by this
Deed of Trust upon the Subject Property and Collateral.
5.14 RECONVEYANCE. Upon Beneficiary's written request, and upon
surrender to Trustee for cancellation of this Deed of Trust or a
certified copy thereof and any note, instrument, or instruments
setting forth all obligations secured hereby, Trustee shall
reconvey, without warranty, the Subject Property or that portion
thereof then held hereunder. To the extent permitted by law, the
reconveyance may describe the grantee as "the person or persons
legally entitled thereto" and the recitals of any matters or
facts in any reconveyance executed hereunder shall be conclusive
proof of the truthfulness thereof. Neither Beneficiary nor
Trustee shall have any duty to determine the rights of persons
claiming to be rightful grantees of any reconveyance. When the
Subject Property has been fully reconveyed, the last such
reconveyance shall operate as a reassignment of all future
rents, issues and profits of the Subject Property to the person
or persons legally entitled thereto.
5.15 SUBROGATION. Beneficiary shall be subrogated to the lien of all
encumbrances, whether released of record or not, paid in whole
or in part by Beneficiary pursuant to the Loan Documents or by
the proceeds of any loan secured by this Deed of Trust.
5.16 RIGHT OF INSPECTION. Subject to the provisions of the Loan
Agreement, Beneficiary, its agents and employees, may enter the
Subject Property at any reasonable time for the purpose of
inspecting the Subject Property and Collateral and ascertaining
Trustor's compliance with the terms hereof.
ARTICLE 6. DEFAULT PROVISIONS
6.1 DEFAULT. For all purposes hereof, the term "Default" shall mean
(a) at Beneficiary's option, the failure of Trustor to make any
payment of principal or interest under the Loan Agreement or to
pay any other amount due hereunder or under the Loan Agreement
when the same is due and payable, whether at maturity, by
acceleration or otherwise; (b) the failure of Trustor to perform
any non-monetary obligation hereunder, or the failure to be true
of any representation or warranty of Trustor contained herein
and the continuance of such failure for ten (10) days after
notice, or within any longer grace period, if any, allowed in
the Loan Agreement for such failure, or (c) the existence of any
Event of Default as defined in the Loan Agreement.
6.2 RIGHTS AND REMEDIES. At any time after Default and during the
continuance thereof, Beneficiary and Trustee shall each have all
the following rights and remedies:
(a) With or without notice, to declare all Secured
Obligations immediately due and payable; without
limiting the foregoing, Beneficiary may, in addition, at
its option, demand cash collateral in the full amount of
the obligations under all L/C's and L/C Undertakings,
whether or not then due and payable by Beneficiary;
(b) With or without notice, and without releasing Trustor
from any Secured Obligation, and without becoming a
mortgagee in possession, to cure any breach or Default
of Trustor and, in connection therewith, to enter upon
the Subject Property and do such acts and things as
Beneficiary or Trustee deem necessary or desirable to
protect the security hereof, including, without
limitation: (i) to appear in and defend any action or
proceeding purporting to affect the security of this
Deed of Trust or the rights or powers of Beneficiary or
Trustee under this Deed of Trust; (ii) to pay, purchase,
contest or compromise any encumbrance, charge, lien or
claim of lien which, in the sole judgment of either
Beneficiary or Trustee, is or may be senior in priority
to this Deed of Trust, the judgment of Beneficiary or
Trustee being conclusive as between the parties hereto;
(iii) to obtain insurance; (iv) to pay any premiums or
charges with respect to
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insurance required to be carried under this Deed of
Trust; or (v) to employ counsel, accountants,
contractors and other appropriate persons.
(c) To commence and maintain an action or actions in any
court of competent jurisdiction to foreclose this
instrument as a mortgage or to obtain specific
enforcement of the covenants of Trustor hereunder, and
Trustor agrees that such covenants shall be specifically
enforceable by injunction or any other appropriate
equitable remedy and that for the purposes of any suit
brought under this subparagraph, Trustor waives the
defense of laches and any applicable statute of
limitations;
(d) To apply to a court of competent jurisdiction for and
obtain appointment of a receiver of the Subject Property
as a matter of strict right and without regard to the
adequacy of the security for the repayment of the
Secured Obligations, the existence of a declaration that
the Secured Obligations are immediately due and payable,
or the filing of a notice of default, and Trustor hereby
consents to such appointment;
(e) To enter upon, possess, manage and operate the Subject
Property or any part thereof, to take and possess all
documents, books, records, papers and accounts of
Trustor or the then owner of the Subject Property, to
make, terminate, enforce or modify Leases of the Subject
Property upon such terms and conditions as Beneficiary
deems proper, to make repairs, alterations and
improvements to the Subject Property as necessary, in
Trustee's or Beneficiary's sole judgment, to protect or
enhance the security hereof;
(f) To execute a written notice of such Default and of its
election to cause the Subject Property to be sold to
satisfy the Secured Obligations. As a condition
precedent to any such sale, Trustee shall give and
record such notice as the law then requires. When the
minimum period of time required by law after such notice
has elapsed, Trustee, without notice to or demand upon
Trustor except as required by law, shall sell the
Subject Property at the time and place of sale fixed by
it in the notice of sale, at one or several sales,
either as a whole or in separate parcels and in such
manner and order, all as Beneficiary in its sole
discretion may determine, at public auction to the
highest bidder for cash, in lawful money of the United
States, payable at time of sale. Neither Trustor nor any
other person or entity other than Beneficiary shall have
the right to direct the order in which the Subject
Property is sold. Subject to requirements and limits
imposed by law, Trustee may from time to time postpone
sale of all or any portion of the Subject Property by
public announcement at such time and place of sale.
Trustee shall deliver to the purchaser at such sale a
deed conveying the Subject Property or portion thereof
so sold, but without any covenant or warranty, express
or implied. The recitals in the deed of any matters or
facts shall be conclusive proof of the truthfulness
thereof. Any person, including Trustee, Trustor or
Beneficiary may purchase at the sale;
(g) To resort to and realize upon the security hereunder and
any other security now or later held by Beneficiary
concurrently or successively and in one or several
consolidated or independent judicial actions or lawfully
taken non-judicial proceedings, or both, and to apply
the proceeds received upon the Secured Obligations all
in such order and manner as Trustee and Beneficiary, or
either of them, determine in their sole discretion.
(h) Upon sale of the Subject Property at any judicial or
non-judicial foreclosure, Beneficiary may credit bid (as
determined by Beneficiary in its sole and absolute
discretion) all or any portion of the Secured
Obligations. In determining such credit bid, Beneficiary
may, but is not obligated to, take into account all or
any of the following: (i) appraisals of the Subject
Property as such appraisals may be discounted or
adjusted by Beneficiary in its sole and absolute
underwriting discretion; (ii) expenses and costs
incurred by Beneficiary with respect to the Subject
Property prior to foreclosure; (iii) expenses and costs
which Beneficiary anticipates will be incurred with
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respect to the Subject Property after foreclosure, but
prior to resale, including, without limitation, costs of
structural reports and other due diligence, costs to
carry the Subject Property prior to resale, costs of
resale (e.g. commissions, attorneys' fees, and taxes),
costs of any hazardous materials clean-up and
monitoring, costs of deferred maintenance, repair,
refurbishment and retrofit, costs of defending or
settling litigation affecting the Subject Property, and
lost opportunity costs (if any), including the time
value of money during any anticipated holding period by
Beneficiary; (iv) declining trends in real property
values generally and with respect to properties similar
to the Subject Property; (v) anticipated discounts upon
resale of the Subject Property as a distressed or
foreclosed property; (vi) the fact of additional
collateral (if any), for the Secured Obligations; and
(vii) such other factors or matters that Beneficiary (in
its sole and absolute discretion) deems appropriate. In
regard to the above, Trustor acknowledges and agrees
that: (w) Beneficiary is not required to use any or all
of the foregoing factors to determine the amount of its
credit bid; (x) this Section does not impose upon
Beneficiary any additional obligations that are not
imposed by law at the time the credit bid is made; (y)
the amount of Beneficiary's credit bid need not have any
relation to any loan-to-value ratios specified in the
Loan Documents or previously discussed between Trustor
and Beneficiary; and (z) Beneficiary's credit bid may be
(at Beneficiary's sole and absolute discretion) higher
or lower than any appraised value of the Subject
Property.
6.3 APPLICATION OF FORECLOSURE SALE PROCEEDS. After deducting all
costs, fees and expenses of Trustee, and of this trust,
including, without limitation, cost of evidence of title and
attorneys' fees in connection with sale and costs and expenses
of sale and of any judicial proceeding wherein such sale may be
made, Trustee shall apply all proceeds of any foreclosure sale:
(a) to payment of all sums expended by Beneficiary under the
terms hereof and not then repaid, with accrued interest at the
rate of interest specified in the Loan Agreement to be
applicable on or after maturity or acceleration of the
indebtedness under the Loan Agreement; (b) to payment of all
other Secured Obligations; and (c) the remainder, if any, to the
person or persons legally entitled thereto.
6.4 APPLICATION OF OTHER SUMS. All sums received by Beneficiary
under Section 6.2 or Section 3.2, less all costs and expenses
incurred by Beneficiary or any receiver under Section 6.2 or
Section 3.2, including, without limitation, attorneys' fees,
shall be applied in payment of the Secured Obligations in such
order as Beneficiary shall determine in its sole discretion;
provided, however, Beneficiary shall have no liability for funds
not actually received by Beneficiary.
6.5 NO CURE OR WAIVER. Neither Beneficiary's nor Trustee's nor any
receiver's entry upon and taking possession of all or any part
of the Subject Property and Collateral, nor any collection of
rents, issues, profits, insurance proceeds, condemnation
proceeds or damages, other security or proceeds of other
security, or other sums, nor the application of any collected
sum to any Secured Obligation, nor the exercise or failure to
exercise of any other right or remedy by Beneficiary or Trustee
or any receiver shall cure or waive any breach, Default or
notice of default under this Deed of Trust, or nullify the
effect of any notice of default or sale (unless all Secured
Obligations then due have been paid and performed and Trustor
has cured all other defaults), or impair the status of the
security, or prejudice Beneficiary or Trustee in the exercise of
any right or remedy, or be construed as an affirmation by
Beneficiary of any tenancy, lease or option or a subordination
of the lien of or security interests created by this Deed of
Trust.
6.6 PAYMENT OF COSTS, EXPENSES AND ATTORNEYS' FEES. Trustor agrees
to pay to Beneficiary immediately and without demand all
reasonable and documented out-of-pocket costs and expenses
incurred by Trustee and Beneficiary pursuant to Section 6.2
(including, without limitation, court costs and reasonable and
documented out-of-pocket attorneys' fees, whether incurred in
litigation or not) with interest from the date of expenditure
until said sums have been paid at the rate of interest then
applicable to the principal balance under the Loan Agreement as
specified therein. In addition, Trustor shall pay to Trustee all
Trustee's fees hereunder and shall reimburse Trustee for all
reasonable and
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documented out-of-pocket expenses incurred in the administration
of this trust, including, without limitation, any attorneys'
fees.
6.7 POWER TO FILE NOTICES AND CURE DEFAULTS. Trustor hereby
irrevocably appoints Beneficiary and its successors and assigns,
as its attorney-in-fact, which agency is coupled with an
interest, (a) to execute and/or record any notices of
completion, cessation of labor, or any other notices that
Beneficiary deems appropriate to protect Beneficiary's interest,
(b) upon the issuance of a deed pursuant to the foreclosure of
the lien of this Deed of Trust or the delivery of a deed in lieu
of foreclosure, to execute all instruments of assignment or
further assurance with respect to the Subject Property and
Collateral, Leases and Payments in favor of the grantee of any
such deed, as may be necessary or desirable for such purpose,
(c) to prepare, execute and file or record financing statements,
continuation statements, applications for registration and like
papers necessary to create, perfect or preserve Beneficiary's
security interests and rights in or to any of the Subject
Property and Collateral, and (d) upon the occurrence of an
event, act or omission which, with notice or passage of time or
both, would constitute a Default, Beneficiary may perform any
obligation of Trustor hereunder; provided, however, that: (i)
Beneficiary as such attorney-in-fact shall only be accountable
for such funds as are actually received by Beneficiary; and (ii)
Beneficiary shall not be liable to Trustor or any other person
or entity for any failure to act (whether such failure
constitutes negligence) by Beneficiary under this Section.
ARTICLE 7. MISCELLANEOUS PROVISIONS
7.1 ADDITIONAL PROVISIONS. The Loan Documents contain or incorporate
by reference the entire agreement of the parties with respect to
matters contemplated herein and supersede all prior
negotiations. The Loan Documents grant further rights to
Beneficiary and contain further agreements and affirmative and
negative covenants by Trustor which apply to this Deed of Trust
and to the Subject Property and Collateral and such further
rights and agreements are incorporated herein by this reference.
7.2 MERGER. No merger shall occur as a result of Beneficiary's
acquiring any other estate in, or any other lien on, the Subject
Property unless Beneficiary consents to a merger in writing.
7.3 OBLIGATIONS OF TRUSTOR, JOINT AND SEVERAL. If more than one
person has executed this Deed of Trust as "Trustor", the
obligations of all such persons hereunder shall be joint and
several.
7.4 RECOURSE TO SEPARATE PROPERTY. Any married person who executes
this Deed of Trust as a Trustor agrees that any money judgment
which Beneficiary or Trustee obtains pursuant to the terms of
this Deed of Trust or any other obligation of that married
person secured by this Deed of Trust may be collected by
execution upon that person's separate property, and any
community property of which that person is a manager.
7.5 WAIVER OF MARSHALLING RIGHTS. Trustor, for itself and for all
parties claiming through or under Trustor, and for all parties
who may acquire a lien on or interest in the Subject Property
and Collateral, hereby waives all rights to have the Subject
Property and Collateral and/or any other property, which is now
or later may be security for any Secured Obligation ("Other
Property") marshalled upon any foreclosure of the lien of this
Deed of Trust or on a foreclosure of any other lien or security
interest against any security for any of the Secured
Obligations. Beneficiary shall have the right to sell, and any
court in which foreclosure proceedings may be brought shall have
the right to order a sale of, the Subject Property and any or
all of the Collateral or Other Property as a whole or in
separate parcels, in any order that Beneficiary may designate.
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7.6 RULES OF CONSTRUCTION. When the identity of the parties or other
circumstances make it appropriate the masculine gender includes
the feminine and/or neuter, and the singular number includes the
plural. The term "Subject Property" and "Collateral" means all
and any part of the Subject Property and Collateral,
respectively, and any interest in the Subject Property and
Collateral, respectively.
7.7 SUCCESSORS IN INTEREST. The terms, covenants, and conditions
herein contained shall be binding upon and inure to the benefit
of the heirs, successors and assigns of the parties hereto;
provided, however, that this Section 7.7 does not waive or
modify the provisions of Section 5.12.
7.8 EXECUTION IN COUNTERPARTS. To facilitate execution, this
document may be executed in as many counterparts as may be
convenient or required. It shall not be necessary that the
signature or acknowledgment of, or on behalf of, each party, or
that the signature of all persons required to bind any party, or
the acknowledgment of such party, appear on each counterpart.
All counterparts shall collectively constitute a single
document. It shall not be necessary in making proof of this
document to produce or account for more than a single
counterpart containing the respective signatures of, or on
behalf of, and the respective acknowledgments of, each of the
parties hereto. Any signature or acknowledgment page to any
counterpart may be detached from such counterpart without
impairing the legal effect of the signatures or acknowledgments
thereon and thereafter attached to another counterpart identical
thereto except having attached to it additional signature or
acknowledgment pages.
7.9 GOVERNING LAW. This Deed of Trust shall be construed, governed
and enforced in accordance with the laws of the State of New
York, except as to matters relating to the creation, perfection,
priority and enforcement of the liens on and security interests
in the Subject Property and the Collateral, which shall be
construed, governed and enforced in accordance with the laws of
the State of California, and except to the extent that federal
laws preempt the laws of either the State of New York or the
State of California.
7.10 INCORPORATION. Exhibits A and B and Schedule 1, as attached, are
incorporated into this Deed of Trust by this reference.
7.11 NOTICES. All notices, demands or other communications required
or permitted to be given pursuant to the provisions of this Deed
of Trust shall be in writing and shall be considered as properly
given if delivered personally or sent by first class United
States Postal Service mail, postage prepaid, except that notice
of Default may be sent by certified mail, return receipt
requested, or by Overnight Express Mail or by overnight
commercial courier service, charges prepaid. Notices so sent
shall be effective three (3) days after mailing, if mailed by
first class mail, and otherwise upon receipt at the address set
forth below; provided, however, that non-receipt of any
communication as the result of any change of address of which
the sending party was not notified or as the result of a refusal
to accept delivery shall be deemed receipt of such
communication. For purposes of notice, the address of the
parties shall be:
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Trustor: Communications & Power Industries, Inc.
607 Hansen Way
Palo Alto, California 94303
Attn: Lynn E. Harvey, Chief Financial Officer
Trustee: First American Title Company
520 North Central Avenue
Glendale, California 91203
Beneficiary: FOOTHILL CAPITAL CORPORATION. as Agent
2450 Colorado Avenue
Suite 3000 West
Santa Monica, California 90404
Attn: Business Finance Division Manager
Any party shall have the right to change its address for notice hereunder to any
other location within the continental United States by the giving of thirty (30)
days notice to the other party in the manner set forth hereinabove. Trustor
shall forward to Beneficiary, without delay, any notices, letters or other
communications delivered to the Subject Property or to Trustor naming
Beneficiary, "Lender" or any similar designation as addressee, or which could
reasonably be deemed to affect the ability of Trustor to perform its obligations
to Beneficiary under the Loan Agreement.
7.12 CONFLICT AMONG AGREEMENTS. In the event of any conflict between
the provisions of this Deed of Trust and the provisions of the
Loan Agreement, the provisions of the Loan Agreement shall
prevail, and Trustor shall be bound by such provisions of the
Loan Agreement fully to the same extent as if they were set
forth herein in their entirety.
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IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and
year set forth above.
"TRUSTOR"
COMMUNICATIONS & POWER INDUSTRIES, INC.,
a Delaware corporation
By:
-------------------------------------
Name:
Title:
(ALL SIGNATURES MUST BE ACKNOWLEDGED)
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EXHIBIT A
DESCRIPTION OF SUBJECT PROPERTY
Exhibit A to Deed of Trust with Absolute Assignment of Leases and Rents,
Security Agreement and Fixture Filing executed by COMMUNICATIONS & POWER
INDUSTRIES, INC., a Delaware corporation, as Trustor, to First American Title
Company, as Trustee, for the benefit of FOOTHILL CAPITAL CORPORATION, a
California corporation, as Agent for itself and the other Lenders, as
Beneficiary, dated as of December 15, 2000.
All the certain real property located in the County of Santa Clara, State of
California, described as follows:
See Page 16A Hereof
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EXHIBIT B
LEASEHOLD RIDER TO DEED OF TRUST
THIS LEASEHOLD RIDER TO DEED OF TRUST ("Rider") is attached to and forms a part
of that certain Deed of Trust with Absolute Assignment of Leases and Rents,
Security Agreement and Fixture Filing dated December 15, 2000, and executed by
the undersigned, as Trustor, in favor of FIRST AMERICAN TITLE COMPANY, as
Trustee, for the benefit of FOOTHILL CAPITAL CORPORATION, a California
corporation, as Agent for itself and the other Lenders, as Beneficiary (the
"Deed of Trust"). Capitalized terms used in this Rider and not otherwise defined
herein shall have the same meaning as in the Deed of Trust.
1. LEASEHOLD ESTATE. All or a portion of Trustor's interest in the Subject
Property consists of one or more leasehold or subleasehold estates created
pursuant to one or more leases or subleases in which Trustor is the tenant or
subtenant. Such lease or leases are identified on Exhibit A to this Deed of
Trust and are hereinafter referred to as the "Ground Lease". The landlord or
sublandlord under any Ground Lease is hereinafter referred to as "Landlord".
2. REPRESENTATIONS OF TRUSTOR. Trustor hereby represents and warrants that: (i)
the Ground Lease is unmodified except as indicated on Exhibit A to this Deed of
Trust and is in full force and effect; (ii) all rents and other charges to be
paid by Trustor as tenant under the Ground Lease are current; (iii) Trustor is
not in default under any of the provisions of the Ground Lease and no
circumstances exist which would constitute a default by Trustor under the Ground
Lease or would otherwise permit Landlord to cancel, terminate or otherwise limit
the Ground Lease in any manner; (iv) Trustor is not aware of any default by
Landlord under the Ground Lease or the existence of circumstances which would
constitute a default by Landlord under the Ground Lease; (v) Trustor's interest
in the Ground Lease is subject to no liens or encumbrances except as previously
disclosed to Beneficiary in writing; and (vi) Trustor owns and holds the Ground
Lease and the entire leasehold estate created by the Ground Lease and has the
right under the Ground Lease or has received all appropriate consents required
in order for Trustor to execute this Deed of Trust.
3. PERFORMANCE. In no event shall Trustor do or permit to be done or omit to do
or permit the omission of any act, the doing or omission of which would impair
the security of this Deed of Trust or would constitute grounds for the
termination of the Ground Lease or would entitle Landlord to declare a
forfeiture or termination of the Ground Lease or to re-enter the Subject
Property. Trustor agrees to pay, keep and perform all covenants, conditions,
agreements and obligations of the tenant set forth in the Ground Lease, and not
to commit or permit any breach thereof.
4. NOTICES. Trustor shall promptly (i) send to Beneficiary a copy of any notice
from Landlord claiming the existence of a default by Trustor under the Ground
Lease or the existence of any circumstances which would constitute such a
default, and (ii) notify Beneficiary in writing of the existence of any default
by Landlord under the Ground Lease or the existence of any circumstances which
would constitute such a default.
5. INDEPENDENT OBLIGATION. Trustor agrees that the provisions hereof shall be
deemed to be obligations of Trustor in addition to Trustor's obligations as
tenant with respect to similar matters contained in the Ground Lease; provided,
however, the inclusion herein of any covenants relating to similar matters under
which Trustor is obligated under the Ground Lease shall not restrict or limit
Trustor's duties and obligations to keep and perform promptly all of its
covenants as tenant under the Ground Lease, and nothing in this Deed of Trust
shall be construed as requiring the taking of or the omitting to take any action
by Trustor or Beneficiary which would cause a default under the Ground Lease.
Trustor further agrees that no release or forbearance of any of Trustor's
obligations under the Ground Lease, pursuant to the Ground Lease or otherwise,
shall release Trustor from any of its obligations under this Deed of Trust.
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6. NO MERGER. Trustor agrees that so long as this Deed of Trust is in effect,
there shall be no merger of the Ground Lease or any interest therein, nor of the
leasehold estate created thereby with the fee estate in the Subject Property or
any portion thereof, by reason of the fact that the Ground Lease may be held
directly or indirectly by or for the account of any person who shall hold the
fee estate in the Subject Property. If Trustor acquires the fee title or any
other estate, title or interest in the Subject Property, this Deed of Trust
shall attach to and be a lien upon the fee title or such other estate so
acquired, and such fee title or other estate shall, without further assignment,
mortgage or conveyance, become and be subject to the lien of this Deed of Trust.
Trustor shall notify Beneficiary of any such acquisition by Trustor and, on
written request by Beneficiary, shall cause to be executed and recorded such
further documents or instruments as may in the sole discretion of Beneficiary be
necessary or desirable to carry out the intent hereof.
7. NO MODIFICATION OR SURRENDER. Trustor agrees that (i) no surrender or
termination of the Ground Lease (except a surrender upon the expiration of the
term of the Ground Lease or the termination by Landlord pursuant to the
provisions thereof) shall be valid or effective, and (ii) neither the Ground
Lease nor the terms thereof may be amended, supplemented, surrendered or
cancelled, or subordinated to any fee mortgage, to any lease, or to any other
interest, either orally or in writing, without the prior written consent of
Beneficiary, and Trustor agrees that any such action, without the prior written
consent of Beneficiary, shall be void and constitute an Event of Default under
this Deed of Trust.
8. ARBITRATION PROCEEDINGS. Trustor shall promptly notify Beneficiary in writing
upon the initiation of any arbitration or appraisal proceedings under and
pursuant to the provisions of the Ground Lease. Trustor shall not designate,
appoint or select an arbitrator or appraiser in any such proceedings without the
prior written consent of Beneficiary.
9. TRUSTOR'S DEFAULT UNDER GROUND LEASE.
9.1 BENEFICIARY'S ADDITIONAL RIGHTS. If Trustor shall default under the
Ground Lease, in addition to all the rights and remedies provided for in this
Deed of Trust and available at law, Beneficiary may, at its option but without
any obligation to do so, take any action necessary or desirable to cure any
default by Trustor in the performance of any of the terms, covenants and
conditions of the Ground Lease. Trustor shall, upon demand, pay to Beneficiary
all reasonable and documented out-of-pocket costs incurred by Beneficiary in
curing or attempting to cure such default, together with interest on such costs
from the date of expenditure at the rate applicable pursuant to the Debt
Instrument, and all such sums shall be secured by this Deed of Trust. Upon
receipt by Beneficiary of any written notice of default by Trustor under the
Ground Lease, Beneficiary may rely thereon and take any action to cure such
default even though the existence or nature of the default may be disputed by
Trustor. Trustor hereby grants to Beneficiary, and agrees that Beneficiary shall
have, the absolute and immediate right to enter in and upon the Subject Property
or any part thereof to such extent and as often as Beneficiary, in its sole
discretion, deems necessary or desirable in order to prevent or cure any default
by Trustor. Notwithstanding the foregoing nor anything to the contrary contained
in this Rider, this Deed of Trust shall not constitute a present assignment of
the Ground Lease and Beneficiary does not hereby assume, nor shall Beneficiary
be deemed to assume or otherwise be responsible for, performance of the
obligations of Trustor as tenant under the Ground Lease. Beneficiary shall be
liable for the obligations of the Trustor as tenant under the Ground Lease only
during the period of time which Beneficiary is in possession of the Subject
Property or has acquired, by foreclosure or otherwise, and is holding, all of
Trustor's right, title and interest in the Ground Lease.
9.2 ADDITIONAL EVENT OF DEFAULT. Any breach or default by Trustor of any
term, condition or covenant contained in the Ground Lease or the occurrence of
any circumstances which would permit Landlord to cancel, terminate or otherwise
limit the Ground Lease in any manner shall constitute an Event of Default under
this Deed of Trust.
10. NOTICE TO LANDLORD. Promptly after the execution and delivery of this Deed
of Trust, Trustor shall notify Landlord in writing of such execution and
delivery and provide Landlord with a copy of this Deed of Trust.
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11. ESTOPPEL CERTIFICATE. Trustor shall promptly furnish to Beneficiary all
information that Beneficiary may request concerning the performance by Trustor
of its obligations under the Ground Lease. Promptly upon demand by Beneficiary,
Trustor shall obtain from Landlord and furnish to Beneficiary an estoppel
certificate executed by Landlord stating, among other things, the date through
which rent has been paid, whether or not there are any defaults under the Ground
Lease, and the nature of such defaults.
12. NEW LEASE. Trustor agrees that, if the Ground Lease is for any reason
whatsoever terminated prior to the natural expiration of its term and
Beneficiary or its designee shall acquire from Landlord a new lease of the
Subject Property or any part thereof, Trustor shall have no right, title or
interest in or to such new lease or the leasehold estate created thereby.
13. NOTICE OF BANKRUPTCY. Trustor shall promptly notify Beneficiary orally of
any filing by or against Landlord or Trustor of a petition under the Bankruptcy
Code, Title 11 of the United States Code (as the same may be amended or
recodified from time to time, the "Bankruptcy Code"). Trustor shall promptly
thereafter give written notice of such filing to Beneficiary, setting forth any
information available to Trustor including the date of such filing, the court in
which such petition was filed, and the relief sought therein. Trustor shall
promptly deliver to Beneficiary, any and all notices, summonses, pleadings,
applications and other documents received by Trustor in connection with any such
petition and any proceedings relating thereto.
14. RESTRICTION ON ACTIONS UNDER BANKRUPTCY CODE. Trustor shall not commence any
action, suit, proceeding or case, or file any application or make any motion in
respect of the Ground Lease in any such case, without the prior written consent
of Beneficiary.
15. BANKRUPTCY OF LANDLORD.
15.1 ELECTION IN BANKRUPTCY. Trustor acknowledges that, pursuant to
Section 365 of the Bankruptcy Code, it is possible that a trustee in bankruptcy
of Landlord or Landlord as a debtor-in-possession could reject the Ground Lease,
in which case Trustor, as tenant, would have the election described in Section
365(h) of the Bankruptcy Code (which election, as the same may be amended,
revised or recodified from time to time, and together with any comparable right
under any other state or federal law relating to bankruptcy, reorganization or
other relief for debtors, whether now or hereafter in effect, is herein called
the "Election") to treat the Ground Lease as terminated by such rejection or, in
the alternative, to remain in possession for the balance of the term of such
Ground Lease and any renewal or extension thereof that is enforceable by the
tenant under applicable non-bankruptcy law. Trustor covenants that it will not
suffer or permit the termination of the Ground Lease by exercise of the Election
or otherwise without the prior written consent of Beneficiary. Trustor
acknowledges that, since the Ground Lease is a primary part of Beneficiary's
security for the obligations secured under this Deed of Trust, Beneficiary does
not anticipate that it would consent to termination of the Ground Lease and
shall not under any circumstances be obliged to give such consent.
15.2 ASSIGNMENT OF ELECTION. In order to secure the covenants made in
Section 15.1 and as security for the other obligations secured under this Deed
of Trust, Trustor assigns the Election to Trustee and Beneficiary. Trustor
acknowledges and agrees that Trustee and Beneficiary may use the Election at any
time in order to protect and preserve the rights and interests of Trustee and
Beneficiary under this Deed of Trust, since exercise of the Election in favor of
terminating the Ground Lease would constitute waste hereunder.
15.3 EFFECT OF ASSIGNMENT. Trustor acknowledges and agrees that the
Election is in the nature of a remedy and is not a Subject Property interest
which Trustor can separate from the Ground Lease. Therefore, Trustor agrees that
exercise of the Election in favor of preserving the right to possession under
the Ground Lease shall not be deemed to constitute a taking or sale of the
Subject Property by Trustee or Beneficiary and shall not entitle Trustor to any
credit against the obligations secured by this Deed of Trust.
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15.4 RIGHT TO POSSESSION. Trustor acknowledges and agrees that, in the
event the Election is exercised in favor of Trustor remaining in possession,
Trustor's resulting right to possession and use of (and rents and profits from)
the Subject Property, as adjusted by the effect of Section 365 of the Bankruptcy
Code, whether or not all or any part of the Subject Property has been subleased,
shall then be part of the Trust Estate and shall be subject to the lien created
by this Deed of Trust. However, Trustor acknowledges and agrees that said right
to possession and use of the Subject Property as so adjusted shall not be
equivalent to the leasehold interest which is included in the Trust Estate at
the time of execution of this Deed of Trust.
15.5 ASSIGNMENT OF RIGHTS ARISING FROM REJECTION OF GROUND LEASE.
Trustor hereby unconditionally assigns, transfers and sets over to Beneficiary
all of Trustor's claims and rights to the payment of damages arising from any
rejection by Landlord of the Ground Lease under the Bankruptcy Code. Beneficiary
shall have the right to proceed in its own name or in the name of Trustor in
respect of any claim, suit, action or proceeding relating to the rejection of
the Ground Lease, including, without limitation, the right to file and prosecute
any proofs of claim, complaints, motions, applications, notices and other
documents. This assignment constitutes a present, irrevocable and unconditional
assignment of the foregoing claims, rights and remedies, and shall continue in
effect until all of the obligations secured by this Deed of Trust shall have
been fully satisfied and discharged. Any amounts received by Beneficiary as
damages arising out of the rejection of the Ground Lease shall be applied first
to all costs and expenses of Beneficiary (including, without limitation,
attorneys' fees) incurred in connection with the exercise of any of its rights
or remedies under this Section 15 and then to the indebtedness secured hereby.
16. BANKRUPTCY OF TRUSTOR.
16.1 ASSUMPTION OF LEASE BY BENEFICIARY. If there shall be filed by or
against Trustor a petition under the Bankruptcy Code, and Trustor, as tenant
under the Ground Lease, shall determine to reject the Ground Lease pursuant to
the Bankruptcy Code, Trustor shall give Beneficiary not less than thirty (30)
days' prior notice of the date on which Trustor shall apply to the Bankruptcy
Court for authority to reject the Ground Lease. Beneficiary shall have the
right, but not the obligation, to serve upon Trustor within such thirty (30) day
period a notice stating that (i) Beneficiary demands that Trustor assume and
assign the Ground Lease to Beneficiary pursuant to Section 365 of the Bankruptcy
Code, and (ii) Beneficiary agrees to cure or provide adequate assurance of
prompt cure of all defaults reasonably susceptible of cure by Beneficiary and
provides adequate assurance of future performance under the Ground Lease. If
Beneficiary serves upon Trustor the notice described in the preceding sentence,
Trustor shall not seek the rejection of the Ground Lease and shall comply with
the demand provided for in clause (i) of the preceding sentence within thirty
(30) days after the notice shall have been given, subject to the performance by
Beneficiary of the agreement provided for in clause (ii) of the preceding
sentence.
16.2 BENEFICIARY'S RIGHT TO FILE FOR EXTENSION. Effective upon the entry
of an order for relief in respect of Trustor under the Bankruptcy Code, Trustor
hereby assigns and transfers to Beneficiary a non-exclusive right to apply to
the Bankruptcy Court for an order extending the period during which the Ground
Lease may be rejected or assumed.
Trustor has caused this Rider to be executed as of the day and year first above
written.
TRUSTOR:
COMMUNICATIONS & POWER INDUSTRIES, INC.,
a Delaware corporation
By:
-----------------------------------
Name:
Title:
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SCHEDULE 1
SCHEDULE OF LEASES
Schedule 1 to Deed of Trust with Absolute Assignment of Leases and Rents,
Security Agreement and Fixture Filing executed by COMMUNICATIONS & POWER
INDUSTRIES, INC., a Delaware corporation, as Trustor, to First American Title
Company, as Trustee, for the benefit of FOOTHILL CAPITAL CORPORATION, a
California corporation, as Agent for itself and the other Lenders, as
Beneficiary, dated as of December 15, 2000.
Initial
Tenant Commencement Date Termination Date
- ------------------------------ ----------------- ----------------
Pillsbury, Madison & Sutro LLP 4/14/2000 4/14/2001
Varian Associates, Inc. 4/15/1999 4/15/2002
Weil, Gotshal & Manges LLP 11/15/2000 8/31/2001
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STATE OF CALIFORNIA
COUNTY OF _____________________________________ ss.
On this ____ day of December, 2000, before me ____________________, a Notary
Public in and for the State of California, personally appeared
____________________ personally known to me (or proved on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument.
WITNESS my hand and official seal
Signature
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My commission expires .
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