Exhibit 2.6
This instrument prepared by: Indexing Instructions:
Ann F. Corso
P. O. Box 427
Jackson, Mississippi 39205
(601) 949-4900
DEED OF TRUST AND SECURITY AGREEMENT
STATE OF MISSISSIPPI )
JACKSON COUNTY )
THIS DEED OF TRUST AND SECURITY AGREEMENT ("Deed of Trust"), made and
entered into this 2nd day of November, 2005 by THE GRAND SHELL LANDING ,INC., a
Mississippi corporation, whose address is 3944 Shell Landing Blvd., Gautier,
Mississippi ("Grand Shell"), AZUR SHELL LANDING DEVELOPMENT II, LLC, a
Mississippi limited liability company whose address is 3499 Shell Landing Blvd.,
Gautier, Mississippi ("Azur-Shell"), AZUR INTERNATIONAL, INC., a Nevada
corporation (the "Company"), AZUR SHELL LANDING RESORT, INC., a Mississippi
corporation whose address is 3499 Shell Landing Blvd., Gautier, Mississippi
("ASLR" collectively with Grand Shell, the Company and Azur Shell are sometimes
referred to collectively as the "Grantors" and individually as the "Grantor") in
favor of Ann F. Corso ("Trustee," said term referring always to the named
Trustee and his successors in trust) for the use and benefit of Omicron Master
Trust, a foreign business trust organized in Bermuda with principal offices in
New York, New York, whose address is 650 Fifth Avenue, 26th Floor, New York, New
York 10019 as Collateral Agent for itself and the other lenders (the "Lenders")
collectively lending the Grantors the sum of Six Million and No/100 Dollars
($6,000,000.00). Herein Omicron Master Trust in its capacity as Collateral Agent
for itself and the Lenders shall be referred to as the "Beneficiary."
WHEREAS, the Beneficiary and the Lenders on even date herewith
collectively loaned to the Grantors the aggregate sum of Six Million and NO/100
Dollars ($6,000,000.00);
WHEREAS, the Lenders have requested Grand Shell to pledge its interest in
the property described on Exhibit A and Azur-Shell to pledge its interest in the
property described on Exhibit B to the Beneficiary to secure the Grantors'
repayment obligations and the Grantors desire to make such pledges and all of
the Grantors to grant in security agreement in their respective assets;
NOW, THEREFORE, for and in consideration of the recitals made above and
other good and valuable consideration, the receipt, sufficiency and adequacy of
which are hereby acknowledged, the parties hereto agree as follows:
W I T N E S S E T H:
That for and in consideration of the indebtedness and other obligations of
Grantors hereinafter set forth, and the trust herein created, each Grantor does
hereby irrevocably CONVEY, WARRANT, GRANT, BARGAIN, SELL, ASSIGN, TRANSFER,
PLEDGE and set over unto Trustee, and the successors and assigns of Trustee, all
of the following described land and interests in land, estates, easements,
rights, improvements, personal property, fixtures, equipment, furniture,
furnishings, appliances and appurtenances, including replacements and additions
thereto (hereinafter referred to collectively as the "Premises"):
(a) All of such Grantor's tracts, pieces or parcels of land, and interests
in land, located in Jackson County, Mississippi, more particularly described in
Exhibits A and B attached hereto and by this reference made a part hereof (the
"Land");
(b) All of such Grantor's buildings, structures and improvements of every
nature whatsoever now or hereafter situated on the Land, and all gas and
electric fixtures, radiators, heaters, engines and machinery, boilers, ranges,
elevators and motors, plumbing and heating fixtures, carpeting and other floor
coverings, water heaters, awnings and storm sashes, and cleaning apparatus which
are or shall be attached to said buildings, structures or improvements, and all
other furnishings, furniture, fixtures, machinery, equipment, appliances,
vehicles and personal property of every kind and nature whatsoever now or
hereafter owned by such Grantor and located in, on or about, or used or intended
to be used with or in connection with the construction, use, operation or
enjoyment of the Premises, including all extensions, additions, improvements,
betterments, renewals and replacements, substitutions, or proceeds from a
permitted sale of any of the foregoing, and all building materials and supplies
of every kind now or hereafter placed or located on the Land (collectively the
"Improvements"), all of which are hereby declared and shall be deemed to be
fixtures and accessions to the Land and a part of the Premises as between the
parties hereto and all persons claiming by) through or under them, and which
shall be deemed to be a portion of the security for the indebtedness herein
described and to be secured by this Deed of Trust;
(c) All of such Grantor's easements, rights-of-way, strips and gores of
land, vaults, streets, ways, alleys, passages, sewer rights, waters, water
courses, water rights and powers, minerals, flowers, shrubs, crops, trees,
timber and other emblements now or hereafter located on the Land or under or
above the same or any part or parcel thereof, and all ground leases, estates,
rights, titles, interests, privileges, liberties, tenements, hereditaments and
appurtenances, reversions, and remainders whatsoever, in any way belonging,
relating or appertaining to the Premises or any part thereof, or which hereafter
shall in any way belong, relate or be appurtenant thereto, whether now owned or
hereafter acquired by them; and
(d) All of such Grantor's rents, issues, profits and revenues of the
Premises from time to time accruing (including without limitation all payments
under leases, ground leases or tenancies, proceeds of insurance, condemnation
payments, tenant security deposits, escrow funds and Azur-Shell's interest in
that certain Co-Ownership Agreement, dated November 2, 2005, and all of the
estate, right, title, interest, property, possession, claim and demand
whatsoever at law, as well as in equity, of each Grantor of, in and to the same,
reserving only the right to them to collect the same so long as each Grantor is
not in default hereunder or such collection is not otherwise restricted by this
Deed of Trust.
(e) All of such Grantor's furniture, machinery, supplies, construction
materials, goods, equipment, fixtures, inventory, accounts, contract rights,
permits, chattel paper, documents, instruments and general intangibles
(including, without limitation, the right to use all names, logos and other
identification) associated with operation of the Property or used or useful in
connection therewith and all books and records in any way related to the
Property.
TO HAVE AND TO HOLD the Premises and all parts, rights, members and
appurtenances thereof, to the use and benefit of Trustee and the successors,
successors-in-title and assigns of Trustee, forever; and each Grantor covenants
that it is lawfully seized and possessed of the Premises as aforesaid and has
good right to convey the same, that the same are unencumbered except for those
matters expressly set forth in Exhibit A hereto, and each Grantor does warrant
and will forever defend the title thereto against the claims of all persons
whomsoever, except (i) as to Tract A which is currently encumbered by that
certain Deed of Trust, Security Agreement and Fixture Filing from Grand Shell to
Textron Financial Corporation and recorded in Book 2217, Page 617 of the land
records of Jackson County, Mississippi, (ii) as to Tract B which is currently
encumbered by that certain Deed of Trust from Azur-Shell in favor of Olympic
Coast Investments, Inc. and recorded in Book 2276, Page 401 of the records of
Jackson County, Mississippi, and (iii) those matters set forth in said Exhibit
C.
But this conveyance is made IN TRUST for the following uses and trusts,
and for no other purposes, to-wit:
(a) To secure the payment of an indebtedness for borrowed money in the
principal amount not exceeding Six Million and No/100 Dollars ($6,000,000.00),
together with interest thereon, which Beneficiary and the Lenders have advanced,
or have agreed to advance, which is evidenced by one or more promissory notes
and any extensions, modifications and/or renewals thereof and any notes given in
payment of any such principal and/or interest, being finally due and payable on
November 3, 2008 (all of which are herein sometimes individually and
collectively referred to as the "Note");
(b) To secure all sums advanced by Beneficiary or any Lender to either
Grantor or expended by Beneficiary or any Lender for either Grantor's account,
including but not limited to advances for taxes and insurance pursuant to the
terms of this Deed of Trust, and the faithful performance of all terms and
conditions contained herein, and in the Loan Agreement between Grantor and
Beneficiary of even date herewith (hereinafter, together with any extensions,
revisions, modifications or amendments hereafter made, the ("Loan Agreement");
(c) To secure the payment of all court costs, expenses and costs of
whatever kind incident to the collection of any indebtedness secured hereby and
the enforcement or protection of the lien of this conveyance, including
reasonable attorney's fees; and
(d) To secure any amounts expended by Beneficiary in removing, isolating
or cleaning up any hazardous materials from the Premises, whether or not such
action is required by any "Applicable Environmental Law" (as hereinafter
defined). Should the indebtedness secured by this Deed of Trust (hereinafter
referred to collectively as the "Secured Indebtedness") be paid according to the
tenor and effect thereof when the same shall become due and payable, and should
the Grantors perform all covenants herein contained in a timely manner, then
this Deed of Trust shall be cancelled and released.
EACH GRANTOR HEREBY FURTHER COVENANTS AND AGREES WITH TRUSTEE AND
BENEFICIARY AS FOLLOWS:
ARTICLE I
1.01 Payment of Indebtedness. Grantors shall pay the indebtedness
evidenced by the Note according to the tenor thereof and the remainder of the
Secured Indebtedness promptly as the same shall become due.
1.02 Taxes, Liens and Other Charges.
(a) Grantors shall pay, on or before the delinquency date thereof, all
taxes, levies, license fees, permit fees and all other charges (in each case
whether general or special, ordinary or extraordinary, or foreseen or
unforeseen) of every character whatsoever (including all penalties and interest
thereon) now or hereafter levied, assessed, confirmed or imposed on, or in
respect of, or which may be a lien upon the Premises, or any part thereof, or
any estate, right or interest therein, or upon the rents, issues, income or
profits thereof, and shall submit to Beneficiary such evidence of the due and
punctual payment of all such taxes, assessments and other fees and charges as
Beneficiary may require. Each Grantor shall have the right before they become
delinquent to contest or object to the amount or validity of any such tax,
assessment, fee or charge by appropriate legal proceedings but this shall not be
deemed or construed in any way as relieving, modifying or extending such
Grantor's covenant to pay any such tax, assessment, fee or charge at the time
and in the manner provided herein, unless such Grantor has given prior written
notice to Beneficiary of such Grantor's intent to so contest or object, and
unless at Beneficiary's sole option, (i) Grantors shall demonstrate to
Beneficiary's satisfaction that the legal proceedings shall conclusively operate
to prevent the sale of the Premises, or any part thereof, to satisfy such tax,
assessment, fee or charge prior to final determination of such proceedings; and
(ii) Grantors shall furnish a good and sufficient bond or surety as requested by
and satisfactory to Beneficiary; and (iii) Grantors shall have provided a good
and sufficient undertaking as may be required or permitted by law to accomplish
a stay of such proceedings.
(b) Grantors shall pay, on or before the due date thereof, all taxes,
assessments, charges, expenses, costs and fees which may now or hereafter be
levied upon, or assessed or charged against, or incurred in connection with, the
Note, the Secured Indebtedness, this Deed of Trust or any other instrument now
or hereafter evidencing, securing or otherwise relating to the Secured
Indebtedness.
(c) Grantors shall pay, on or before the due date thereof, (i) all
premiums on policies of insurance covering, affecting or relating to the
Premises, as required pursuant to Section 1.03, below; (ii) all premiums on
collaterally assigned life insurance policies, if any; (iii) all ground rentals,
other lease rentals and other sums, if any, owing by Grantors and becoming due
under any lease or rental contract affecting the Premises; and (iv) all utility
charges which are incurred by Grantors for the benefit of the Premises, or which
may become a charge or lien against the Premises for gas, electricity, water and
sewer services and the like furnished to the Premises, and all other public or
private assessments or charges of a similar nature affecting the Premises or any
portion thereof, whether or not the nonpayment of same may result in a lien
thereon. Grantors shall submit to Beneficiary such evidence of the due and
punctual payment of all such premiums, rentals and other sums as Beneficiary may
require.
(d) In the event of the passage of any state, federal, municipal or other
governmental law, order, rule or regulation, subsequent to the date hereof, in
any manner changing or modifying the laws now in force governing the taxation of
deeds of trust or security agreements, or debts secured thereby or in the manner
of collecting such taxes so as to adversely affect Beneficiary, Grantors will
pay any such tax on or before the due date thereof.
If Grantors fail to make such prompt payment or if, in the opinion, of
Beneficiary, any such state, federal, municipal, or other governmental law,
order, rule or regulation prohibits Grantors from making such payment or would
penalize Grantors if Grantors makes such payment, or if, in the opinion of
Beneficiary, the making of such payment might result in the imposition of
interest beyond the maximum amount permitted by applicable law, then the entire
balance of the Secured Indebtedness and all interest accrued thereon shall, at
the option of Beneficiary, become immediately due and payable.
(e) Grantors shall not suffer any mechanic's, materialmen's, laborer's,
statutory or other lien to be created or remain outstanding against the
Premises; provided, however, that Grantors may contest any such lien in good
faith by appropriate legal proceedings provided the lien is bonded in such
manner as not to adversely affect the Premises or this Deed of Trust.
Beneficiary has not consented and will not consent to the performance of any
work or the furnishing of any materials which might be deemed to create a lien
or liens superior to the lien hereof.
1.03 Insurance.
(a) Upon the request of Beneficiary, Grantors shall procure for, deliver
to and maintain for the benefit of Beneficiary during the term of this Deed of
Trust, original paid-up insurance policies of such insurance companies, in such
amounts, in form and substance, and with such expiration dates as are acceptable
to Beneficiary and containing non-contributory standard mortgagee clauses, their
equivalent, or a satisfactory mortgagee loss payable endorsement in favor of
Beneficiary, providing the following types of insurance covering the Premises
and the interest and liabilities incident to the ownership, possession and
operation thereof:
(i) insurance against loss or damage by fire, lightning, windstorm,
hail, explosion, riot, riot attending a strike, civil commotion, aircraft,
vehicles, smoke, vandalism and malicious mischief and against such other hazards
as, under good insurance practices, from time to time are insured against for
properties of similar character and location, the amount of which insurance
shall be not less than the full replacement cost of the Premises without
deduction for depreciation, and which policies of insurance shall contain
satisfactory replacement cost endorsements;
(ii) during the course of any construction or repair of the
Premises, to maintain nonreporting builder's risk insurance with standard waiver
of subrogation clauses, and, in the event any portion of the improvements are
completed prior to the satisfaction of the Secured Indebtedness, to maintain
insurance on all buildings and other improvements on the Premises against damage
by fire, windstorm, and other risks normally insured against under so-called
"extended coverage," in companies and amounts satisfactory to Beneficiary. All
policies evidencing such insurance shall have attached thereto standard
mortgagee riders making such insurance payable to Beneficiary as its interest
may appear, and all such policies or appropriate certificates, at Beneficiary's
request, shall be deposited with it;
(iii) comprehensive public liability insurance on an "occurrence
basis" against claims for "personal injury," including without limitation bodily
injury, death or property damage occurring on, in or about the Premises and the
adjoining streets, sidewalks and passageways, such insurance to afford immediate
minimum protection to a limit of not less than $1,000,000 with respect to
personal injury or death to any one or more persons or damage to property and a
$10,000,000 umbrella liability policy;
(iv) worker's compensation insurance (including employer's liability
insurance, if requested by Beneficiary) for all employees of Grantors engaged on
or with respect to the Premises, in such amount as is reasonably satisfactory to
Beneficiary, or, if such limits are established by law, in such amounts;
(v) rental continuation or business interruption insurance against
loss of income arising out of damage or destruction by fire, lightning,
windstorm, hail, explosion, riot, riot attending a strike, civil commotion,
aircraft, vehicles, smoke, vandalism and malicious mischief and such other
hazards as are presently included in so-called "extended coverage," of twelve
(12) months' anticipated gross income from the Premises; and
(vi) such other insurance on the Premises or any replacements or
substitutions therefor and in such amounts as may from time to time be
reasonably required by Beneficiary against other insurable casualties which at
the time are commonly insured against in the case of premises similarly
situated, due regard being given to the height and type of the improvements,
their construction, location, use and occupancy, or any replacements or
substitutions therefor.
(b) All policies of insurance required by the terms of this Deed of Trust
shall contain an endorsement or agreement by the insurer that any loss shall be
payable in accordance with the terms of such policy notwithstanding any act of
negligence of either Grantor which might otherwise result in forfeiture of said
insurance, and the further agreement of the insurer waiving all rights of set
off, counterclaim or deductions against Grantors.
(c) Beneficiary is hereby authorized and empowered, at its option, to
adjust or compromise any loss under any insurance policies maintained pursuant
to this Section 1.03, and to collect and receive the proceeds from any such
policy or policies. Each insurance company is hereby authorized and directed to
make payment for all such losses directly to Beneficiary as its interest may
appear, instead of to Grantors and Beneficiary jointly. In the event any
insurance company fails to disburse directly and solely to Beneficiary but
disburses instead either solely to Grantors or to Grantors and Beneficiary
jointly, Grantors agree immediately to endorse and transfer such proceeds to
Beneficiary to the extent of Beneficiary's interest therein. Upon the failure of
Grantors to endorse and transfer such proceeds as aforesaid, Beneficiary may
execute such endorsements or transfers for and in the name of Grantors, and
Grantors hereby irrevocably appoint Beneficiary as Grantors' agent and
attorney-in-fact so to do. After deducting from said insurance proceeds all of
its expenses incurred in the collection and administration of such sums,
including reasonable attorney's fees, Beneficiary shall apply the net insurance
proceeds or any part thereof, at its option,
(i) to the payment of the Secured Indebtedness, whether or not due
and in whatever order Beneficiary elects,
(ii) to the repair and/or restoration of the Premises, or
(iii) for any other purposes or objects for which Beneficiary is
entitled to advance funds under this Deed of Trust, all without affecting the
lien and security interest created by this Deed of Trust, and any balance of
such monies then remaining shall be paid to Grantors or the person or entity
lawfully entitled thereto. Beneficiary shall not be held responsible for any
failure to collect any insurance proceeds due under the terms of any policy
regardless of the cause of such failure.
(d) At least fifteen (15) days prior to the expiration date of each policy
maintained pursuant to this Section 1.03, a renewal or replacement thereof
satisfactory to Beneficiary shall be delivered to Beneficiary. Grantors shall
deliver to Beneficiary receipts evidencing the payment for all such insurance
policies and renewals or replacements. The delivery of any insurance policies
hereunder shall constitute an assignment of all unearned premiums as further
security hereunder. In the event of the foreclosure of this Deed of Trust or any
other transfer of title to the Premises in extinguishment or partial
extinguishment of the Secured Indebtedness, all right, title and interest of
Grantors in and to all insurance policies then in force shall pass to the
purchaser or Beneficiary, and Beneficiary is hereby irrevocably appointed by
Grantors as attorney-in-fact for Grantors to assign any such policy to said
purchaser or to Beneficiary without accounting to Grantors for any unearned
premiums thereon.
(e) All policies of insurance required pursuant to the terms of this
Section 1.03, shall contain a provision that such policies will not be cancelled
or materially amended, which term shall include any reduction in the scope or
limits of coverage, without at least thirty (30) days prior written notice to
Beneficiary. In the event Grantors fail to provide, maintain, keep in force or
deliver and furnish to Beneficiary the policies of insurance required by this
Section 1.03, Beneficiary may procure such insurance or single-interest
insurance for such risks covering Beneficiary's interest, and Grantors will pay
all premiums thereon promptly upon demand by Beneficiary. Until such payment is
made by Grantors, the amount of all such premiums, together with interest as
hereinafter set forth, shall be added to the Secured Indebtedness and shall be
secured by this Deed of Trust.
1.04 Monthly Deposits. At the option of Beneficiary and further to secure
the payment of the taxes, assessments and other sums referred to in Section 1.02
and the premiums on the insurance referred to in Section 1.03, in the event that
on or after the date of this Deed of Trust, any Grantor has failed to pay any
such taxes, assessment or other sums referred to in Section 1.02 when due,
Grantors shall upon request of Beneficiary deposit with Beneficiary, on the due
date of each installment under the Note, such amounts as, in the estimation of
Beneficiary, shall be necessary to pay such charges as they become due; said
deposits to be held and to be used by Beneficiary to pay current taxes and
assessments, insurance premiums and other charges on the Premises as the same
accrue and are payable. Payment from said sums for said purposes shall be made
by Beneficiary at its discretion and may be made even though such payments will
benefit subsequent owners of the Premises. Said deposits shall not be, nor be
deemed to be, trust funds, but may be, to the extent permitted by applicable
law, commingled with the general funds of Beneficiary, and no interest shall be
payable in respect thereof. If said deposits are insufficient to pay the taxes
and assessments, insurance premiums and other charges in full as the same become
payable, Grantors will deposit with Beneficiary such additional sum or sums as
may be required in order for Beneficiary to pay such taxes and assessments,
insurance premiums and other charges in full. Upon any default in the provisions
of this Deed of Trust or the Note, or any instrument evidencing, securing or in
any way related to the Secured Indebtedness, Beneficiary may, at its option,
apply any money in the fund relating from said deposits to the payment of the
Secured Indebtedness in such manner as it may elect.
1.05 Condemnation. If all or any portion of the Premises shall be damaged
or taken through condemnation (which term when used in this Deed of Trust shall
include any damage or taking by any governmental or quasigovernmental authority
and any transfer by private sale in lieu thereof), either temporarily or
permanently, other than an insubstantial taking for the purpose of widening
existing roads bordering the Land which does not adversely affect access or the
use of the Land and is not so substantial as to permit any tenant (whether or
not then in possession) to terminate its lease or reduce the term thereof or the
rent payable thereunder, then the entire Secured Indebtedness shall, at the
option of Beneficiary, immediately become due and payable. Grantors, immediately
upon obtaining knowledge of the institution, or the proposed, contemplated or
threatened institution of any action or proceeding for the taking through
condemnation of the Premises or any part thereof will notify Beneficiary, and
Beneficiary is hereby authorized, at its option, to commence, appear in and
prosecute, through counsel selected by Beneficiary, in its own or in Grantors'
name, any action or proceeding relating to any condemnation. Grantors may
compromise or settle any claim for compensation but shall not make any
compromise or settlement for an award that is less than the Secured Indebtedness
without the prior written consent of Beneficiary. All such compensation, awards,
damages, claims, rights of action and proceeds and the right thereto are hereby
assigned by Grantors to Beneficiary, and Beneficiary is authorized, at its
option, to collect and receive all such compensation, awards or damages and to
give proper receipts and acquittance therefor without any obligation to question
the amount of any such compensation, awards or damages. After deducting from
said condemnation proceeds all of its expenses incurred in the collection and
administration of such sums, including reasonable attorney's fees, Beneficiary
shall apply the net proceeds as provided in Section 1.03 hereof.
1.06 Care of Premises.
(a) Grantors will keep the buildings, parking areas, roads and walkways,
landscaping, and all other improvements of any kind now or hereafter erected on
the Land or any part thereof in good condition and repair, will not commit or
suffer any waste and will not do or suffer to be done anything which would or
could increase the risk of fire or other hazard to the Premises or any other
part thereof or which would or could result in the cancellation of any insurance
policy carried with respect to the Premises.
(b) Grantors will not remove, demolish or alter the structural character
of any improvement located on the land without the written consent of
Beneficiary nor make or permit use of the Premises for any purpose other than
the development currently planned.
(c) If the Premises or any part thereof is damaged by fire or any other
cause, Grantors will give immediate written notice thereof to Beneficiary.
(d) Beneficiary or its representative is hereby authorized to enter upon
and inspect the Premises at any time.
(e) Grantors will promptly comply with all present and future laws,
ordinances, rules and regulations of any governmental authority affecting the
Premises or any part thereof.
(f) If all or any part of the Premises shall be damaged by fire or other
casualty, Grantors will promptly restore the Premises to the equivalent of its
original condition; and if a part of the Premises shall be damaged through
condemnation, Grantors will promptly restore, repair or alter the remaining
portions of the Premises in a manner satisfactory to Beneficiary.
Notwithstanding the foregoing, Grantors shall not be obligated so to restore
unless in each instance, Beneficiary agrees to make available to Grantors
(pursuant to a procedure satisfactory to Beneficiary) any net insurance or
condemnation proceeds actually received by Beneficiary hereunder in connection
with such casualty loss or condemnation, to the extent such proceeds are
required to defray the expense of such restoration; provided, however, that the
insufficiency of any such insurance or condemnation proceeds to defray the
entire expense of restoration shall in no way relieve Grantors of their
obligation to restore. In the event all or any portion of the Premises shall be
damaged or destroyed by fire or other casualty or by condemnation, shall
promptly deposit with Beneficiary a sum equal to the amount by which the
estimated cost of the restoration of the Premises (as determined by Beneficiary
in its good faith judgment) exceeds the actual net insurance or condemnation
proceeds with respect to such damages or destruction.
1.07 Leases, Contracts, Etc.
(a) As additional collateral and further security for the Secured
Indebtedness, Grantors do hereby assign to Beneficiary Grantors' interest in and
rights under any and all ground leases, leases, tenant contracts, rental
agreements, franchise agreements, management contracts, contracts for the sale
of any site within the Premises and other contracts, licenses and permits now or
hereafter affecting the Premises, or any part thereof, and Grantors agree to
execute and deliver to Beneficiary such additional instruments, in form and
substance satisfactory to Beneficiary, as hereafter may be requested by
Beneficiary further to evidence and confirm said assignment; provided, however,
that acceptance of any such assignment shall not be construed as a consent by
Beneficiary to any lease, tenant contract, rental agreement, franchise
agreement, management contract, sales contract or other contract, license or
permit, or to impose upon Beneficiary any obligation with respect thereto.
Without first obtaining on each occasion the written approval of Beneficiary
(which approval shall not be unreasonably withheld), Grantors shall not cancel
or permit the cancellation of any franchise agreement, management contract,
license, permit, lease or other contract, or accept, or permit to be made, any
prepayments of any installment of rent or fees thereunder (except the usual
prepayment of rent which results from the acceptance by a landlord on the first
day of each month of the rent for the ensuing month). Grantors shall faithfully
keep and perform, or cause to be kept and performed, all of the covenants,
conditions and agreements contained in each of said instruments, now or
hereafter existing, on the part of Grantors to be kept and performed and shall
at all times do all things necessary to compel performance by each other party
to said instruments of all obligations, covenants and agreements by such other
party to be performed thereunder.
(b) Grantors shall not execute an assignment of the rents, issues or
profits or any part thereof, from the Premises unless Beneficiary shall first
consent to such assignment, which consent may be given or denied in
Beneficiary's sole discretion, and unless such assignment shall expressly
provide that it is subordinate to the assignment contained in this Deed of Trust
and any assignment executed pursuant hereto.
(c) Grantors shall furnish to Beneficiary, within thirty (30) days after a
request by Beneficiary to do so, a sworn statement setting forth the names of
all lessees and tenants of the Premises, the terms of their respective leases,
tenant contracts or rental agreements, the space occupied, and the rentals
payable thereunder, and stating whether any defaults, off-sets or defenses exist
under or in connection with any of said leases, tenant contracts or rental
agreements.
(d) Grantors shall submit to Beneficiary, within ten (10) days of its
receipt thereof, copies of all leases executed and options exercised with
respect to the Premises. Grantors will not lease any space for a lesser rent
than is currently being paid for such space, without the prior written consent
of Beneficiary.
(e) Each future lease, tenant contract or rental agreement pertaining to
the Premises, or any part thereof, shall provide that in the event of the
enforcement by Beneficiary of the remedies provided for by law or by this Deed
of Trust, the lessee or tenant thereunder will, upon request of Beneficiary or
any other person or entity succeeding to the interest of Beneficiary as a result
of such enforcement, automatically become the lessee or tenant of Beneficiary or
said successor in interest, without change in the terms or other provisions of
said lease, tenant contract or rental agreement. The Grantors shall cause the
foregoing requirement to be satisfied by the execution by such tenants of
subordination and attornment agreements satisfactory to Beneficiary.
1.08 Security Agreement. With respect to the apparatus, fittings, fixtures
and articles of personal property referred to or described in this Deed of
Trust, or in any way connected with the use and enjoyment of the Premises, this
Deed of Trust is hereby made and declared to be a security agreement encumbering
each and every item of personal property included herein as a part of the
Premises, in compliance with the provisions of the Uniform Commercial Code as
enacted in the state wherein the Land is situated, and each Grantors hereby
grants to Beneficiary a security interest in said personal property. A financing
statement or statements reciting this Deed of Trust to be a security agreement
affecting all of said personal property aforementioned shall be executed by the
Grantors and Beneficiary and appropriately filed. The remedies for any violation
of the covenants, terms and conditions of the security agreement contained in
this Deed of Trust, or otherwise in respect of an Event of Default hereunder,
shall be (i) as prescribed herein, or (ii) as prescribed by general law, or
(iii) as prescribed by the specific statutory consequences now or hereafter
enacted and specified in said Uniform Commercial Code, all at Beneficiary's sole
election. Grantors and Beneficiary agree that the filing of such financing
statement(s) in the records normally having to do with personal property shall
not in any way affect the agreement of Grantors and Beneficiary that everything
used in connection with the production of income from the Premises or adapted
for use therein or which is described or reflected in this Deed of Trust, is,
and at all times and for all purposes and in all proceedings, both legal or
equitable, shall be, regarded as part of the real estate conveyed hereby
regardless of whether (a) any such item is physically attached to the
improvements, (b) serial numbers are used for the better identification of
certain items capable of being thus identified in an Exhibit to this Deed of
Trust, or (c) any such item is referred to or reflected in any such financing
statement(s) so filed at any time.
Similarly, the mention in any such financing statement(s) of the rights in
and to (i) the proceeds of any fire and/or hazard insurance policy, or (ii) any
award in eminent domain proceedings for taking or for loss of value, or
(iii)each Grantor's interest as lessor in any present or future lease or rights
to income growing out of the use and/or occupancy of the Premises, whether
pursuant to lease or otherwise, shall not in any way alter any of the rights of
Beneficiary as determined by this instrument or affect the priority of
Beneficiary's security interest granted hereby or by any other recorded
document, it being understood and agreed that such mention in such financing
statement(s) is solely for the protection of Beneficiary in the event any court
shall at any time hold, with respect to the foregoing items (i), (ii), or (iii),
that notice of Beneficiary's priority of interest, to be effective against a
particular class of persons, must be filed in the Uniform Commercial Code
records. This Deed of Trust may be filed as a financing statement in any office
where Beneficiary deems such filing necessary or desirable, and Grantors will
promptly upon demand reimburse Beneficiary for the costs therefor.
1.09 Further Assurances: After-Acquired Property. At any time, and from
time to time, upon request by Beneficiary, Grantors will make, execute and
deliver or cause to be made, executed and delivered, to Beneficiary and, where
appropriate, cause to be recorded and/or filed and from time to time thereafter
to be rerecorded and/or refiled at such time and in such offices and places as
shall be deemed desirable by Beneficiary, any and all such other and further
deeds of trusts, security agreements, financing statements, continuation
statements, instruments of further assurance, certificates and other documents
as may, in the opinion of Beneficiary, be necessary or desirable in order to
effectuate, complete or perfect, or to continue and preserve (a) the obligations
of Grantors under the Note, the Loan Agreement, and under this Deed of Trust,
and (b) the security interest created by this Deed of Trust as a security
interest upon and security title in and to all of the Premises, whether now
owned or hereafter acquired by Grantors. Upon any failure by Grantors so to do,
Beneficiary may make, execute, record, file, rerecord and/or refile any and all
such deeds of trust, security agreements, financing statements, continuation
statements, instruments, certificates, and documents for and in the name of
Grantors, and Grantors hereby irrevocably appoint Beneficiary the agent and
attorney-in-fact of so to do. The security title of this Deed of Trust will
automatically attach, without further act, to all after-acquired property
attached to and/or used in the operation of the Premises or any part thereof.
l.10 Indemnity; Expenses. Grantors will pay or reimburse Trustee and
Beneficiary, upon demand therefor, for all reasonable attorney's fees, costs and
expenses incurred by Trustee and/or Beneficiary in any suit, action, legal
proceeding or dispute of any kind in which Trustee and/or Beneficiary is made a
party or appears as party plaintiff or defendant, affecting the Secured
Indebtedness, this Deed of Trust or the interest created herein, or the
Premises, including, but not limited to, the exercise of the power of sale
contained in this Deed of Trust, any condemnation action involving the Premises
or any action to protect the security hereof, and any such amounts paid by
Trustee and/or Beneficiary shall be added to the Secured Indebtedness and shall
be secured by this Deed of Trust. Grantors will indemnify and hold Trustee and
Beneficiary harmless from and against all claims, damages, and expenses,
including attorney's fees and court costs, resulting from any action by a third
party against Trustee or Beneficiary relating to this Deed of Trust or the
interest created herein, or the Premises, including, but not limited to, any
action or proceeding claiming loss, damage or injury to person or property, or
any action or proceeding claiming a violation of any national, state or local
law, rule or regulation now in force or which may hereafter be in force,
including those relating to environmental standards or dangerous or hazardous
wastes, provided Grantors shall not be required to indemnify Trustee or
Beneficiary for matters directly caused by Trustee's or Beneficiary's
intentional or reckless misconduct.
1.11 Estoppel Affidavits. Either Beneficiary or Grantors, upon ten (10)
days prior written notice, shall furnish the other a written statement, duly
acknowledged, based upon its records, setting forth the unpaid principal of, and
interest on, the Secured Indebtedness, stating whether or not to its knowledge
any off-sets or defenses exist against the Secured Indebtedness, or any portion
thereof, and, if such off-sets or defenses exist, stating in detail the specific
facts relating to each such off-set or defense.
1.12 Subrogation. To the full extent of the Secured Indebtedness,
Beneficiary is hereby subrogated to the liens, claims and demands, and to the
rights of the owners and holders of each and every lien, claim, demand and other
encumbrance on the Premises which is paid or satisfied, in whole or in part, out
of the proceeds of the Secured Indebtedness and the respective liens claims,
demands and other encumbrances shall be, and each of them is hereby preserved
and shall pass to and be held by Beneficiary as additional collateral and
further security for the Secured Indebtedness, to the same extent they would
have been preserved and would have been passed to and held by Beneficiary had
they been duly and legally assigned, transferred, set over and delivered unto
Beneficiary by assignment, notwithstanding the fact that the same may be
satisfied and cancelled of record.
1.13 Books, Records, Accounts and Annual Reports. Grantors shall keep and
maintain or shall cause to be kept and maintained, at Grantors' cost and
expense, and in accordance with standard accounting principles, and Grantors
grant Beneficiary a security interest in, books, records and accounts reflecting
all items of income and expense in connection with any services, equipment or
furnishings provided in connection with the operation of the Premises.
Beneficiary, by Beneficiary's agents, accountants and attorneys, shall have the
right from time to time to examine such books, records and accounts at the
office of Grantors or such other person or entity maintaining such books,
records and accounts, to make such copies or extracts thereof as Beneficiary
shall desire, and to discuss Grantors' affairs, finances and accounts with
Grantors and with the officers and principals of Grantors, at such reasonable
times as may be requested by Beneficiary. Grantors will furnish to Beneficiary
annually within ninety (90) days after the end of Grantors' fiscal year
financial statements for the Premises for such fiscal year prepared and
certified by a principal officer of such Grantor, containing a profit and loss
statement and all supporting schedules covering the operation of the Premises,
all in reasonable detail, prepared in accordance with generally accepted
accounting principles consistently applied. In addition, Grantors will furnish
to Beneficiary, at any time within thirty (30) days after demand by Beneficiary,
statements, certified by a principal officer of such Grantor, covering such
financial matters as Beneficiary may reasonably request, including, without
limitation, year-to-date operating statements and a current rent roster with
respect to the Premises, each in form satisfactory to Beneficiary. Grantors
shall also cause any guarantor of the Note, or of any other portion of the
Secured Indebtedness, to deliver to Beneficiary such financial statements or
other information regarding the financial condition of such guarantor as may be
required by the terms of such guaranty or as Beneficiary may otherwise request.
1.14 Limit of Validity. If from any circumstances whatsoever, fulfillment
of any provision of this Deed of Trust or of the Note, at the time performance
of such provision shall be due, shall involve transcending the limit of validity
presently prescribed by any applicable usury statute or any other applicable
law, with regard to obligations of like character and amount, then, ipso facto,
the obligation to be fulfilled shall be reduced to the limit of such validity,
so that in no event shall any exaction be possible under this Deed of Trust or
under the Note that is in excess of the current limit of such validity, but such
obligation shall be fulfilled to the limit of such validity. The provisions of
this Section 1.14 shall control every other provision of this Deed of Trust and
of the Note.
1.15 No Default Affidavits. At Beneficiary's request, all payments made
under the Note or hereunder shall be accompanied by the affidavit of such
Grantor, a principal officer thereof if such Grantor is a partnership or a
principal financial or accounting officer of such Grantor if such Grantor is a
corporation, dated within five (5) days of the delivery of such payment to
Beneficiary, swearing that such Grantor knows of no Event of Default (as
hereinafter defined), nor of any default which after notice or lapse of time or
both would constitute an Event of Default, which has occurred and is continuing
or, if any such default or Event of Default has occurred and is continuing,
specifying the nature and period of existence thereof and the action such
Grantor has taken or proposes to take with respect thereto and, except as
otherwise specified, stating that such Grantor has fulfilled all of such
Grantors' obligations under this Deed of Trust which are required to be
fulfilled on or prior to the date of such affidavit.
1.16 Legal Actions. In the event that Trustee and/or Beneficiary is made a
party, either voluntarily or involuntarily, in any action or proceeding
affecting the Premises, the Note, the Secured Indebtedness or the validity or
priority of this Deed of Trust (but excluding any action or proceeding involving
a dispute solely between Beneficiary and a participating lender, if any),
Grantors shall immediately, upon demand, reimburse Trustee and/or Beneficiary
for all costs, expenses and liabilities incurred by Trustee and/or Beneficiary
by reason of any such action or proceeding, including reasonable attorney's
fees, and any such amounts paid by Trustee and/or Beneficiary shall be added to
the Secured Indebtedness and shall be secured by this Deed of Trust.
1.17 Use and Management of Premises. Grantors shall at all times operate
the Premises as a retail shopping center. Grantors shall not be permitted to
alter or change the use of the Premises without the prior written consent of
Beneficiary.
1.18 Conveyance of Premises. Grantors shall not directly or indirectly
encumber (by lien, junior mortgage, or otherwise), pledge, convey, transfer or
assign any or all of its interest in the Premises-without the prior written
consent of Beneficiary. Beneficiary's consent to such a transfer, if given in
Beneficiary's sole discretion, shall not release or alter in any manner the
liability of Grantors or anyone who has assumed or guaranteed the payment of the
Secured Indebtedness or any portion thereof. At the option of Beneficiary the
Secured Indebtedness shall be immediately due and payable in the event that
Grantors convey all or any portion of the Premises or any interest therein, or
in the event that Grantors' equitable title thereto or interest therein shall be
assigned, transferred or conveyed in any manner, without obtaining Beneficiary's
prior written consent thereto, and any waiver or consent for any prior transfer
shall not preclude Beneficiary from declaring the Secured Indebtedness due and
payable for any subsequent transfer. A change in control of either Grantor shall
constitute a transfer in violation of this restriction.
1.19 Acquisition of Collateral. Grantors shall not acquire any portion of
the personal property covered by this Deed of Trust subject to any security
interest, conditional sales contract, title retention arrangement or other
charge or lien taking precedence over the security title and lien of this Deed
of Trust.
1.20 Compliance with Applicable Environmental Law. The term "Applicable
Environmental Law" shall be defined as any statutory law or case law pertaining
to health or the environment, or petroleum products, or oil, or hazardous
substances, including without limitation the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA") as codified at 42
U.S.C. ss. 9601 et. seq.; the Resource Conservation and Recovery Act of 1976, as
amended, as codified at 42 U.S.C. ss. 6901 et seq.; and the Superfund Amendments
and Reauthorization Act of 1986, as codified at 42 U.S.C. ss. 9671, et seq.; the
terms "hazardous substance" and "release" shall have the meanings specified in
CERCLA; provided, in the event CERCLA is amended to broaden the meaning of any
term defined thereby, such broader meaning shall apply subsequent to the
effective date of such amendment; and provided, to the extent that the laws of
the State of Mississippi establish a meaning for "hazardous substance" or
"release" which is broader than that specified in CERCLA, such broader meaning
shall apply. The Grantors represent and warrant to the Beneficiary that, to the
best of its knowledge, the Premises and the Grantors are not in violation of or
subject to any existing, pending or threatened investigation or inquiry by any
governmental authority or any response costs or remedial obligations under any
Applicable Environmental Law and this representation and warranty would continue
to be true and correct following disclosure to the applicable governmental
authorities of all relevant facts, conditions and circumstances, if any,
pertaining to the Premises; that, to the best of its knowledge, the Grantors
have not obtained and is not required to obtain any permits, licenses or similar
authorizations to construct, occupy, operate or use any buildings, improvements,
fixtures or equipment forming a part of the Premises by reason of any Applicable
Environmental Law; that, to the best of its knowledge, the Grantors have taken
all steps necessary to determine and has determined that no petroleum products,
oil, hazardous substances, or solid wastes have been disposed of or otherwise
released on the Premises; and that, to the best of its knowledge, the use which
the Grantors has made, makes or intends to make of the Premises will not result
in the location on or disposal or other release of any petroleum products, oil,
hazardous substances or solid waste on or to the Premises. The Grantors hereby
agree to pay any fines, charges, fees, expenses, damages, losses, liabilities,
or response costs arising from or pertaining to the application of any such
Applicable Environmental Law to the Premises and to indemnify and forever save
the Trustee and the Beneficiary harmless from any and all judgments, fines,
charges, fees, expenses, damages, losses, liabilities, response costs, or
attorneys' fees and expenses arising from the application of any such Applicable
Environmental Law to the Premises or the Beneficiary; and this indemnity shall
survive any payment of the Note or foreclosure of this Deed of Trust or the
taking by the Beneficiary of a deed in lieu of foreclosure. The Grantors agree
to notify the Beneficiary in the event that any governmental agency or other
entity notifies the Grantors that it may not be in compliance with any
Applicable Environmental Laws. The Grantors agree to permit the Beneficiary to
have access to the Premises at all reasonable times in order to conduct, at the
Beneficiary's expense, any tests which the Beneficiary deems are necessary to
ensure that the Grantors and the Premises are in compliance with all Applicable
Environmental Laws.
ARTICLE II
2.01 Events of Default. The terms "default," "Event of Default" or "Events
of Default," wherever used in this Deed of Trust, shall mean any one or more of
the following events:
(a) Failure by Grantors to pay any portion principal amount of the Notes,
interest (including late fees) on the Notes and any other Secured Indebtedness
as and when the same comes due, which failure is not cured within ten (10) days
after written notice thereof; or
(b) Failure by Grantors duly to observe or perform any other term,
covenant, condition or agreement of this Deed of Trust which failure is not
cured within ten (10) days of written notice thereof; or
(c) The occurrence of a default or Event of Default, or failure by
Grantors duly to observe or perform any term, covenant, condition or agreements
under the Note, the Loan Agreement or any instrument or agreement now or
hereafter evidencing or securing the Note or the Secured Indebtedness, which
failure is not cured within ten (10) days after written notice thereof; or
(d) Any representation, statement or warranty of Grantors contained in
this Deed of Trust, the Note, or in any other instrument, document, transfer,
conveyance, assignment or loan agreement given by Grantors with respect to the
Secured Indebtedness, proving to be untrue or misleading in any material
respect, whether or not the falsity of such representation, statement or
warranty was known to Grantors at the time of the making thereof, and whether or
not such representation, statement or warranty was limited to the best knowledge
or belief of Grantors; or
(e) Failure by Azur International, Inc. (the "Parent") duly to observe or
perform any term, condition, agreement, representation or warranty of that
certain Securities Purchase Agreement (the "Securities Agreement"), dated
November 3, 2005, by and among the Parent and Lenders, and any other agreements
entered into in connection therewith, including but not limited to, the
registration rights agreement and warrant; or
(f) The occurrence of a default or event of default (subject to any grace
or cure period provided for in he applicable agreement, document or instrument)
shall occur under any other material agreement, lease, document, instrument,
mortgage, deed of trust, credit agreement or other agreement evidencing
indebtedness to which the Grantors or the Parent are bound; or
(g) After the Effective Date (as defined in the Securities Agreement), the
common stock of the Parent shall not be eligible for quotation on or quoted for
trading on a Trading Market (as defined in the Securities Agreement) and shall
not again be eligible for and quoted or listed for trading thereon with five
business days; or
(h) the initial registration statement required to be filed pursuant to
the terms of the registration rights agreement entered into in connection with
the Securities Agreement shall not have been declared effective by the
Securities and Exchange Commission on or prior to the 210th calendar day
following the date of this Deed of Trust; or
(i) The filing by Grantors or any guarantor of the Note of a voluntary
petition in bankruptcy or any such person's adjudication as a bankrupt or
insolvent; or the filing by any such person of any petition or answer seeking or
acquiescing in any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief for itself under any present or
future federal, state or other law or regulation relating to bankruptcy,
insolvency or other relief for debtors; or any such person's seeking or
consenting to or acquiescing in the appointment of any trustee, receiver or
liquidator of any such person or its property or of all or any substantial part
of the Premises or of any or all of the rents, issues, profits, or revenues
thereof; or the making by any such person of any general assignment for the
benefit of creditors; or the admission in writing by any such person of its
inability to pay its debts generally as they become due; or
(j) The entry by a court of competent jurisdiction of an order, judgment
or decree approving a petition filed against Grantors or any guarantor of the
Note and not dismissed within sixty (60) days seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future federal, state or other law or regulation
relating to bankruptcy, insolvency or other relief for debtors or the
appointment of any trustee, receiver or liquidator of any such person or its
property or of all or any substantial part of the Premises or of any or all
rents, issues, profits or revenues thereof without the consent or acquiescence
of such person; or
(k) The Premises are subjected to actual or threatened waste, or any part
thereof is removed, demolished or altered without the prior written consent of
Beneficiary; or
(l) Any materially adverse claim relating to the Land or the Premises, by
title, lien or otherwise is established in any legal or equitable proceeding; or
(m) Unless the written consent of Beneficiary is first obtained (which
consent may be withheld in Beneficiary's sole discretion) there occurs any
transfer of the Premises, or any interest therein, or any further encumbrance of
the Premises.
1. Provided that with respect to any of the foregoing, such Event of Default
will be deemed to have occurred upon the occurrence of such event without
notice being required if Beneficiary is prevented from giving notice by
bankruptcy or other applicable law.
2.02 Acceleration of Maturity. If an Event of Default shall have occurred,
then the entire Secured Indebtedness shall, at the option of Beneficiary,
immediately become due and payable without notice or demand, time being of the
essence of this Deed of Trust, and no omission on the part of Beneficiary to
exercise such option when entitled to do so shall be construed as a waiver of
such right.
2.03 Right to Enter and Take Possession.
(a) If an Event of Default shall have occurred, Grantors, upon demand of
Beneficiary, shall forthwith surrender to Beneficiary the actual possession of
the Premises and, if and to the extent permitted by law, Beneficiary itself, or
by such officers or agents as it may appoint, may enter and take possession of
all or any part of the Premises without the appointment of a receiver or an
application therefor, and may exclude Grantors and its agents and employees
wholly therefrom, and take possession of the books, papers and accounts of
Grantors;
(b) If Grantors shall for any reason fail to surrender or deliver the
Premises or any part thereof after such demand by Beneficiary, Beneficiary may
obtain a judgment or decree conferring upon Beneficiary the right to immediate
possession or requiring Grantors to deliver immediate possession of the Premises
to Beneficiary. Grantors will pay to Beneficiary, upon demand, all expenses of
obtaining such judgment or decree, including reasonable compensation to
Beneficiary, its attorneys and agents, and all such expenses and compensation
shall, until paid, become part of the Secured Indebtedness and shall be secured
by this Deed of Trust;
(c) Upon every such entering upon or taking of possession, Beneficiary may
hold, store, use, operate, manage and control the Premises and conduct the
business thereof, and, from time to time (i) make all necessary and proper
maintenance, repairs, renewals, replacements, additions, betterments and
improvements thereto and thereon and purchase or otherwise acquire additional
fixtures, personalty and other property; (ii) insure or keep the Premises
insured; (iii) manage and operate the Premises and exercise all of the rights
and powers of Grantors to the same extent as Grantors could in its own name or
otherwise act with respect to the same; and (iv) enter into any and all
agreements with respect to the exercise by others of any of the powers herein
granted to Beneficiary, all as Beneficiary from time to time may determine to be
in its best interest. Beneficiary may collect and receive all the rents, issues,
profits and revenues from the Premises, including those past due as well as
those accruing thereafter, and, after deducting (A) all expenses of taking,
holding, managing and operating the Premises (including compensation for the
services of all persons employed for such purposes); (B) the cost of all such
maintenance, repairs, renewals, replacements, additions, betterments,
improvements, purchases and acquisitions; (C) the cost of such insurance; (D)
such taxes, assessments and other similar charges as Beneficiary may at its
option pay; (E) other proper charges upon the Premises or any part thereof; and
(F) the reasonable compensation, expenses and disbursements of the attorneys and
agents of Beneficiary, Beneficiary shall apply the remainder of the monies and
proceeds so received by Beneficiary, first, to the payment of accrued interest;
second, to the payment of deposits required in Section 1.04 and to other sums
required to be paid hereunder; and third, to the payment of overdue installments
of principal. Anything in this Section 2.03 to the contrary notwithstanding,
Beneficiary shall not be obligated to discharge or perform the duties of a
landlord to any tenant or incur any liability as a result of any exercise by
Beneficiary of its rights under this Deed of Trust, and Beneficiary shall be
liable to account only for the rents, incomes, issues and profits actually
received by Beneficiary;
(d) Whenever all such interest, deposits and principal installments and
other sums due under any of the terms, covenants, conditions and agreements of
this Deed of Trust shall have been paid and all Events of Default shall have
been cured, Beneficiary shall surrender possession of the Premises to Grantors,
its successors or assigns. The same right of taking possession, however, shall
exist if any subsequent Event of Default shall occur and be continuing.
2.04 Performance by Beneficiary. If Grantors shall default in the payment,
performance or observance of any term, covenant or condition of this Deed of
Trust, Beneficiary may, at its option, pay, perform or observe the same, and all
payments made or costs or expenses incurred by Beneficiary in connection
therewith, with interest thereon at two percent (2%) in excess of the rate
provided in the Note or at the maximum rate from time to time allowed by
applicable law, whichever is less, shall be secured hereby and shall be, without
demand, immediately repaid by Grantors to Beneficiary. Beneficiary shall be the
sole judge of the necessity for any such actions and of the amounts to be paid.
Beneficiary is hereby empowered to enter and to authorize others to enter upon
the Premises or any part thereof for the purpose of performing or observing any
such defaulted term, covenant or condition without thereby becoming liable to
Grantors or any person in possession holding under Grantors. Notwithstanding
anything to the contrary herein, Beneficiary shall have no obligation, explicit
or implied to pay, perform, or observe any term, covenant, or condition.
2.05 Receiver. If any Event of Default shall have occurred, Beneficiary,
upon application to a court of competent jurisdiction, shall be entitled as a
matter of strict right, without notice and without regard to the occupancy or
value of any security for the Secured Indebtedness or the solvency of any party
bound for its payment, to the appointment of a receiver to take possession of
and to operate the Premises and to collect and apply the rents, issues, profits
and revenues thereof. The receiver shall have all of the rights and powers
permitted under the laws of the state wherein the Land is situated. will pay
unto Beneficiary upon demand all expenses, including receiver's fees, reasonable
attorney's fees, costs and agent's compensation, incurred pursuant to the
provisions of this Section 2.05, and any such amounts paid by Grantors shall be
added to the Secured Indebtedness and shall be secured by this Deed of Trust.
2.06 Enforcement.
(a) If an Event of Default shall have occurred, then at the option of
Beneficiary this Deed of Trust may be foreclosed in any manner now provided by
Mississippi law, and the Trustee, or the agent or successor of Trustee, at the
request of Beneficiary, may sell the Premises or any part of the Premises at one
or more public sales at the courthouse of the county in which the Land or any
part of the Land is situated, at public outcry, to the highest bidder for cash,
and in bar of the right and equity of redemption, statutory right of redemption,
homestead, dower, appraisement, stay, elective share and all other rights and
exemptions of every kind, all of which are hereby expressly waived by, in order
to pay the Secured Indebtedness and all expenses of sale and of all proceedings
in connection therewith, including reasonable attorney's fees, after advertising
the time, place and terms of sale at least once a week for three (3) consecutive
weeks preceding the date of such sale in some newspaper published in the county
in which the Land is located, and by posting one notice of such sale at the
courthouse door where such sale is to be held. At any such public sale, Trustee
may execute and deliver to the purchaser a conveyance of the Premises or any
part of the Premises in fee simple. Beneficiary shall have the right to enforce
any of its remedies set forth herein without notice to Grantors, except for such
notice as may be required by law. In the event of any sale under this Deed of
Trust by virtue of the exercise of the powers herein granted, or pursuant to any
order in any judicial proceedings or otherwise, the Premises may be sold as an
entirety or in separate parcels and in such manner or order as Beneficiary in
its sole discretion may elect, and if Beneficiary so elects, Trustee or
Beneficiary may sell the personal property covered by this Deed of Trust at one
or more separate sales in any manner permitted by the Uniform Commercial Code of
the state in which the Land is located, and one or more exercises of the powers
herein granted shall not extinguish or exhaust such powers, until the entire
Premises are sold or the Secured Indebtedness is paid in full. If the Secured
Indebtedness is now or hereafter further secured by any chattel mortgages,
pledges, contracts of guaranty, assignments of lease or other security
instruments, Beneficiary at its option may exhaust the remedies granted under
any of said security instruments or this Deed of Trust either concurrently or
independently, and in such order as Beneficiary may determine.
Said sale may be adjourned by the Trustee, or his agent or successors, and
reset at a later date without additional publication; provided that an
announcement to that effect be made at the scheduled place of sale at the time
and on the date the sale is originally set. Any sale or sales may be made by an
agent acting for the Trustee and his appointment need not be in writing.
(b) In the event of any sale of the Premises as authorized by this Section
2.06, all prerequisites of such sale shall be presumed to have been performed,
and in any conveyance given hereunder all statements of facts, or other recitals
therein made, as to the non-payment of the Secured Indebtedness or as to the
advertisement of sale, or the time, place and manner of sale, or as to any other
fact or thing, shall be taken in all courts of law or equity as prima facie
evidence that the facts so stated or recited are true.
(c) If an Event of Default shall have occurred, Beneficiary may, in
addition to and not in abrogation of the rights covered under subparagraph (a)
of this Section 2.06, either with or without entry or taking possession as
herein provided or otherwise, proceed by a suit or suits in law or in equity or
by any other appropriate proceeding or remedy to pursue any other remedy
available to it, all as Beneficiary in its sole discretion shall elect.
2.07 Purchase by Beneficiary. Upon any foreclosure sale or sale of all or
any portion of the Premises under the power herein granted, Beneficiary may bid
for and purchase the Premises and shall be entitled to apply all or any part of
the Secured Indebtedness as a credit to the purchase price.
2.08 Application of Proceeds of sale. In the event of a foreclosure or
other sale of all or any portion of the Premises, the proceeds of said sale
shall be applied, first, to the expenses of such sale and of all proceedings in
connection therewith, including reasonable fees of the attorney and trustee (and
attorney and trustee fees and expenses shall become absolutely due and payable
whenever foreclosure is commenced); then to insurance premiums, liens,
assessments, taxes and charges including utility charges advanced by
Beneficiary, and interest thereon; then to payment of the Secured Indebtedness
and accrued interest thereon, in such order of priority as Beneficiary shall
determine, in its sole discretion; and finally the remainder, if any, shall be
paid to Grantors, or to the person or entity lawfully entitled thereto.
2.09 Grantors as Tenant Holding Over. In the event of any such foreclosure
sale or sale under the powers herein granted, Grantors (if Grantors shall remain
in possession) shall be deemed a tenant holding over and shall forthwith deliver
possession to the purchaser or purchasers at such sale or be summarily
dispossessed according to provisions of law applicable to tenants holding over.
2.10 Waiver of Appraisement, Valuation, Etc. Grantors agrees, to the full
extent permitted by law, that in case of a default on the part of Grantors
hereunder, neither Grantors nor anyone claiming through or under Grantors will
set up, claim or seek to take advantage of any appraisement, valuation, stay,
extension, homestead, exemption or redemption laws now or hereafter in force, in
order to prevent or hinder the enforcement or foreclosure of this Deed of Trust,
or the absolute sale of the Premises, or the delivery of possession thereof
immediately after such sale to the purchaser at such sale, and Grantors, for
itself and all who may at any time claim through or under it, hereby waives to
the full extent that it may lawfully so do, the benefit of all such laws, and
any and all right to have the assets subject to the security interest of this
Deed of Trust marshaled upon any foreclosure or sale under the power herein
granted.
2.11 Waiver of Homestead. Grantors hereby waive and renounce all homestead
and exemption rights provided for by the Constitution and the laws of the United
States and of any state, in and to the Premises as against the collection of the
Secured Indebtedness, or any part thereof.
2.12 Leases. Beneficiary, at its option, is authorized to foreclose this
Deed of Trust subject to the rights of any tenants of the Premises, and the
failure to make any such tenants parties to any such foreclosure proceedings and
to foreclose their rights will not be, nor be asserted to be by Grantor, a
defense to any proceeding instituted by Beneficiary to collect the sums secured
hereby.
2.13 Discontinuance of Proceedings. In case Beneficiary shall have
proceeded to enforce any right, power or remedy under this Deed of Trust by
foreclosure, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to Beneficiary, then in every such case, Grantors, Trustee and
Beneficiary shall be restored to their former positions and rights hereunder,
and all rights, powers and remedies of Beneficiary shall continue as if no such
proceedings had occurred.
2.14 Remedies Cumulative. No right, power or remedy conferred upon or
reserved to Beneficiary by this Deed of Trust is intended to be exclusive of any
other right, power or remedy, but each and every such right, power and remedy
shall be cumulative and concurrent and shall be in addition to any other right,
power and remedy given hereunder or now or hereafter existing at law, in equity
or by statute.
2.15 Waiver.
(a) No delay or omission by Beneficiary or by any holder of the Note to
exercise any right, power or remedy accruing upon any default shall exhaust or
impair any such right, power or remedy or shall be construed to be a waiver of
any such default, or acquiescence therein, and every right, power and remedy
given by this Deed of Trust to Beneficiary may be exercised from time to time
and as often as may be deemed expedient by Beneficiary. No consent or waiver
expressed or implied by Beneficiary to or of any breach or default by Grantor in
the performance of the obligations of Grantor hereunder shall be deemed or
construed to be a consent or waiver to or of any other breach or default in the
performance of the same or any other obligations of Grantor hereunder. Failure
on the part of Beneficiary to complain of any act or failure to act or failure
to declare an Event of Default, irrespective of how long such failure continues,
shall not constitute a waiver by Beneficiary of its rights hereunder or impair
any rights, powers or remedies of Beneficiary hereunder. (b) No act or omission
by Trustee or Beneficiary shall release, discharge, modify, change or otherwise
affect the original liability under the Note or this Deed of Trust or any other
obligation of Grantors or any subsequent purchaser of the Premises or any part
thereof, or any maker, co-signer, endorser, surety or guarantor, nor preclude
Trustee and/or Beneficiary from exercising any right, power or privilege herein
granted or intended to be granted in the event of any default then existing or
of any subsequent default, nor alter the lien of this Deed of Trust, except as
expressly provided in an instrument or instruments executed by Beneficiary.
Without limiting the generality of the foregoing, Beneficiary may (i) grant
forbearance or an extension of time for the payment of all or any portion of the
Secured Indebtedness; (ii) take other or additional security for the payment of
any of the Secured Indebtedness; (iii) waive or fail to exercise any right
granted herein or in the Note; (iv) release any part of the Premises from the
security interest or lien of this Deed of Trust or otherwise change any of the
terms, covenants, conditions or agreements of the Note or this Deed of Trust;
(v) consent to the filing of any map, plat or replat affecting the Premises;
(vi) consent to the granting of any easement or other right affecting the
Premises; (vii) make or consent to any agreement subordinating the security
title or lien hereof, or (viii) take or omit to take any action whatsoever with
respect to the Note, this Deed of Trust, the Premises or any document or
instrument evidencing, securing or in any way related to the Secured
Indebtedness, all without releasing, discharging, modifying, changing or
affecting any such liability, or precluding Beneficiary from exercising any such
right, power or privilege or affecting the lien of this Deed of Trust. In the
event of the sale or transfer by operation of law or otherwise of all or any
part of the Premises, Beneficiary, without notice, is hereby authorized and
empowered to deal with any such vendee or transferee with reference to the
Premises or the Secured Indebtedness, or with reference to any of the terms,
covenants, conditions or agreements hereof, as fully and to the same extent as
it might deal with the original parties hereto and without in any way releasing
or discharging any liabilities, obligations or undertakings.
2.16 Suits to Protect the Premises. Beneficiary shall have power to
institute and maintain such suits and proceedings as it may deem expedient (a)
to prevent any impairment of the Premises by any acts which may be unlawful or
constitute a default under this Deed of Trust; (b) to preserve or protect its
interest in the Premises and in the rents, issues, profits and revenues arising
therefrom; and(c) to restrain the enforcement of or compliance with any
legislation or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid, if the enforcement of or compliance with
such enactment, rule or order would materially impair the security hereunder or
be prejudicial to the interest of Beneficiary.
2.17 Proofs of Claim. In the case of any receivership, insolvency,
bankruptcy, reorganization, arrangement, adjustment, composition or other
proceedings affecting Grantors, their creditors or its property, Beneficiary, to
the extent permitted by law, shall be entitled to file such proofs of claim and
other documents as may be necessary or advisable in order to have the claims of
Beneficiary allowed in such proceedings for the entire amount due and payable by
Grantors under this Deed of Trust at the date of the institution of such
proceedings and for any additional amount which may become due and payable by
Grantors hereunder after such date.
ARTICLE III
3.01 Successors and Assigns: Successor Trustee. This Deed of Trust shall
inure to the benefit of and be binding upon Grantors, Trustee and Beneficiary
and their respective heirs, executors, legal representatives, successors,
successors-in-title, and assigns. Whenever a reference is made in this Deed of
Trust to "Grantors," "Trustee" or "Beneficiary," such reference shall be deemed
to include a reference to the heirs, executors, legal representatives,
successors, successors-in-title and assigns of Grantor, Trustee or Beneficiary,
as the case may be, but shall not imply any permission to make or permit any
transfer which is otherwise prohibited. In the event of the death, dissolution,
absence, inability or refusal to act of Trustee, or for any other reason,
Beneficiary at any time and from time to time shall have the right to name and
appoint, by instrument in writing recorded in the appropriate records in the
office(s) in which this Deed of Trust is recorded, a successor or any number of
successors to execute this trust, who shall be vested with all of the right,
title, estate, powers, privileges and duties of the above named Trustee without
the necessity of any conveyance from the above named Trustee or any successor.
3.02 Terminology. All personal pronouns used in this Deed of Trust,
whether used in the masculine, feminine or neuter gender, shall include all
other genders; the singular shall include the plural, and vice versa. Titles and
Articles are for convenience only and neither limit nor amplify the provisions
of this Deed of Trust, and all references herein to Articles, Sections or
subparagraphs shall refer to the corresponding Articles, Sections or
subparagraphs of this Deed of Trust unless specific reference is made to
Articles, Sections or subparagraphs of another document or instrument.
3.03 Severability; Complete Agreement. If any provisions of this Deed of
Trust or the application thereof to any person or circumstance shall be invalid
or unenforceable to any extent, the remainder of this Deed of Trust and the
application of such provisions to other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by law.
This Deed of Trust, the Note and the instruments executed in connection herewith
constitute the full and complete agreement of the parties and supersede all
prior negotiations, correspondence, and memoranda relating to the subject matter
hereof, and this Deed of Trust may not be amended except by a writing signed by
the parties hereto.
3.04 Applicable Law. This Deed of Trust shall be construed and interpreted
in accordance with the laws of the State of Mississippi.
3.05 Notices. All notices provided for herein shall be given in accordance
with the terms of the Note.
3.06 Replacement of Note. Upon receipt of evidence reasonably satisfactory
to Grantors of the loss, theft, destruction or mutilation of the Note, and in
the case of any such loss, theft or destruction, upon delivery of an indemnity
agreement reasonably satisfactory to Grantors or, in the case of any such
mutilation, upon surrender and cancellation of the Note, Grantors at
Beneficiary's expense will execute and deliver, in lieu thereof, a replacement
note, identical in form and substance to such Note and dated as of the date of
such Note, and upon such execution and delivery all references in this Deed of
Trust to the Note shall be deemed to refer to such replacement note.
3.07 Assignment. This Deed of Trust is assignable by Beneficiary and any
assignment hereof by Beneficiary shall operate to vest in the assignee all
rights and powers herein conferred upon and granted to Beneficiary.
3.08 Time of the Essence. Time is of the essence with respect to each and
every covenant, agreement and obligation of Grantor under this Deed of Trust,
the Note and any and all other instruments now or hereafter evidencing, securing
or otherwise relating to the Secured Indebtedness.
3.09 Release. Provided that no Event of Default then exists, Lender agrees
to release this Deed of Trust upon payment in full by Grantor of all obligations
on its part under the Note and this Deed of Trust.
IN WITNESS WHEREOF, Grantors have caused this Deed of Trust to be executed
under seal by its duly authorized principal officer as of the day and year first
above written.
AZUR-SHELL LANDING DEVELOPMENT II, LLC
By: /s/ Carl Crawford
-----------------------------------
Name: Carl Crawford
-----------------------------------
Title: Manager
-----------------------------------
By:
--------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
THE GRAND SHELL LANDING, INC.
By: /s/ Carl Crawford
--------------------------------------
Name: Carl Crawford
-----------------------------------
Title: President
-----------------------------------
AZUR INTERNATIONAL, INC.
By: /s/ Donald Winfrey
-----------------------------------
Name: Donald Winfrey
-----------------------------------
Title: President
-----------------------------------
AZUR SHELL LANDING RESORT, INC.
By: /s/ Donald Winfrey
-----------------------------------
Name: Donald Winfrey
-----------------------------------
Title: Vice President
-----------------------------------
STATE OF MISSISSIPPI
COUNTY OF JACKSON
Personally appeared before me, the undersigned authority in and for the
said county and state, on this 2nd day of November, 2005, within my
jurisdiction, the within named Carl Crawford, duly identified before me, who
acknowledged that (s)he is President of The Grand Shell Landing, Inc., a
Mississippi corporation and that for and on behalf of said corporation, and as
its act and deed, (s)he executed the above and foregoing instrument, after first
having been duly authorized by said corporation so to do.
/s/ Paulette Schmidt
-----------------------------------
NOTARY PUBLIC
My Commission Expires:
August 29, 2008
- ------------------------
(Affix official seal)
STATE OF STATE OF MISSISSIPPI
COUNTY OF JACKSON
Personally appeared before me, the undersigned authority in and for the
said county and state, on this 2nd day of November, 2005, within my
jurisdiction, the within named Carl Crawford who acknowledged that he is Manager
of Azur-Shell Landing Development II, LLC, a Mississippi manager-managed limited
liability company, and that for and on behalf of the said limited liability
company, and as its act and deed they executed the above and foregoing
instrument, after first having been duly authorized by said limited liability
company so to do.
/s/ Paulette Schmidt
-----------------------------------
(NOTARY PUBLIC)
My commission expires:
August 29, 2008
- -------------------
(Affix Official Seal)
STATE OF MISSISSIPPI
COUNTY OF JACKSON
Personally appeared before me, the undersigned authority in and for the
said county and state, on this 2nd day of November, 2005, within my
jurisdiction, the within named Donald Winfrey, who acknowledged that he is
President of Azur International, Inc., a Nevada corporation, and that for and on
behalf of the said corporation and as its act and deed he executed the above and
foregoing instrument, after first having been duly authorized by said
corporation so to do.
/s/ Paulette Schmidt
-----------------------------------
(NOTARY PUBLIC)
My commission expires:
August 29, 2008
- -------------------
(Affix Official Seal)
STATE OF STATE OF MISSISSIPPI
COUNTY OF JACKSON
Personally appeared before me, the undersigned authority in and for the
said county and state, on this 2nd day of November, 2005, within my
jurisdiction, the within named Donald Winfrey, who acknowledged that he is Vice
President of Azur Shell Landing Resort, Inc., a Mississippi corporation, and
that for and on behalf of the said corporation and as its act and deed he
executed the above and foregoing instrument, after first having been duly
authorized by said corporation so to do.
/s/ Paulette Schmidt
-----------------------------------
(NOTARY PUBLIC)
My commission expires:
August 29, 2008
- -------------------
(Affix Official Seal)