HomeMy WebLinkAbout1995-06-27; Industrial Development Authority; 002 Exhibit 5; Deed of TrustRECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
SPACE ABOVE THIS LINE FOR RECORDER'S USE
DEED OF TRUST, FIXTURE FILING AND ASSIGNMENT OF RENTS
(CONSTRUCTION TRUST DEED)
THELOANSECUREDHEREBYPROVIDES
FOR A VARIABLE INTEREST RATE
THIS DEED OF TRUST, FIXTURE FILING AND ASSIGNMENT OF RENTS (CONSTRUCTION
TRUST DEED) (the "Deed of Trust") is made as of July 1, 1995, by and among CIP LIMITED, L.P., a
California Limited Partnership ("Trustor"), whose address is 475 W. Bradley Avenue, El Cajon,
California, 92020, FIRST INTERSTATE BANK OF CALIFORNIA, a California corporation (and in such
capacity herein called "Trustee"), and FIRST INTERSTATE BANK OF CALIFORNIA, a California
corporation, acting as Trustee under that certain Indenture ("Indenture"), dated July 1, 1995, between
the Industrial Development Authority of the City of Carlsbad, California, ("Issuer"), and First
Interstate Bank of California (and in such capacity herein called "Beneficiary"), whose address is 707
Wilshire Boulevard, W11-1, Los Angeles, California, 90017.
THIS DEED OF TRUST is given, inter alia, for the purpose of securing a loan (the "Loan") from
the Industrial Development Authority of the City of Carlsbad, California, as lender to Trustor as
borrower, pursuant to that certain Loan Agreement dated July 1, 1995, (together with all modifications,
extensions, renewals and replacements thereof, the "Loan Agreement") between Trustor and/or
designated subsidiaries and Issuer, the proceeds of which are to be used for the purpose of
constructing improvements on the real property located in the City of Carlsbad, County of San Diego,
State of California, more particularly described in Exhibit A attached hereto and by this reference
incorporated herein (the "Property"). Pursuant to the Indenture the Issuer has assigned its rights under
the Loan Agreement to the Beneficiary.
FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein recited
and the trust herein created, the receipt of which is hereby acknowledged, Trustor hereby irrevocably
grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF SALE, for the benefit
and security of Beneficiary, under and subject to the terms and conditions hereinafter set forth, the
Property;
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TOGETHER WITH any and all buildings and improvements now or hereafter erected on the
Property including, without limitation fixtures, tenements, attachments, appliances, equipment, building
systems, machinery, and other articles now or hereafter attached to said buildings and improvements
(collectively, the "Improvements"), all of which shall be deemed and construed to be a part of the real
property;
TOGETHER WITH all earnings, rents, issues, profits, revenue, royalties, income, proceeds and
other benefits, including without limitation prepaid rents and security deposits (collectively, the "Rents")
derived from any lease, sublease, license, franchise or concession or other agreement (collectively, the
"Leases") now or hereafter affecting all or any portion of the Property or the Improvements or the use or
occupancy thereof;
TOGETHER WITH all interests, estates or other claims, both in law and in equity, which Trustor
now has or may hereafter acquire in the Property or the Improvements, including without limitation all
right, title and interest now owned or hereafter acquired by Trustor in and to any greater estate in the
Property or the Improvements;
TOGETHER WITH all easements, tenements, hereditaments, appurtenances, rights-of-way and
rights now owned or hereafter acquired by Trustor used or useful in connection with the Property or as a
means of access thereto, including, without limiting the generality of the foregoing, all rights pursuant to
any trackage agreement and all rights to the nonexclusive use of common drive entries, all oil and gas
and other hydrocarbons and all other minerals and water and water rights and shares of stock
evidencing the same;
TOGETHER WITH all leasehold estate, right, title and interest of Trustor in and to all leases,
subleases, subtenancies, licenses, franchises, occupancy agreements and other agreements covering
the Property, the Improvements or any portion thereof now or hereafter existing or entered into, and all
right, title and interest of Trustor thereunder, including, without limitation, all cash or security deposits,
prepaid or advance rentals, and deposits or payments of similar nature;
TOGETHER WITH all right, title and interest of Trustor, now owned or hereafter acquired, in
and to any land lying within the right-of-way of any street, open or proposed, adjoining the Property, and
any and all sidewalks, vaults, alleys and strips and gores of land adjacent to or used in connection with
the Property;
TOGETHER WITH all the estate, interest, right, title, other claim or demand, both in law and in
equity, including claims or demands with respect to the proceeds of insurance in effect with respect to
the Property, which Trustor now has or may hereafter acquire in the Property or the Improvements, and
any and all awards made for the taking by eminent domain, or by any proceeding of purchase in lieu
thereof, of the whole or any part of the Trust Estate (as hereinafter defined), including, without limitation,
any awards resulting from a change of grade of streets and awards for severance damages.
The entire estate, property and interest hereby conveyed to Trustee may hereafter be
collectively referred to as the "Trust Estate".
FOR THE PURPOSE OF SECURING:
(a) payment of indebtedness in the original principal amount of Two million seventy
thousand Dollars ($1,102,500.00), or so much thereof as may have been advanced from time to time,
with interest thereon, pursuant to the Loan Agreement.
(b) payment of all sums advanced by Beneficiary, its successors and assigns, or Trustee to
protect the Trust Estate, with interest thereon at the Default Rate (as defined in the Loan Agreement);
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(c) performance of every obligation, covenant or agreement of Trustor contained herein or in
the Loan Agreement or the Loan Documents (other than the Environmental Indemnity);
(d) performance of every obligation, covenant and agreement of Trustor contained in any document, instrument or agreement now or hereafter executed by Trustor which recites that the
obligations thereunder are secured by this Deed of Trust, including, without limitation payment of all
other sums, with interest thereon, which may hereafter be loaned to Trustor, or its successors or
assigns, by Beneficiary, or its successors or assigns, when evidenced by a promissory note or notes
reciting that they are secured by this Deed of Trust;
(e) compliance with and performance of each and every material provision of any declaration
of covenants, conditions and restrictions pertaining to the Trust Estate or any portion thereof; and
(9 payment and performance of all obligations of Trustor arising from any and all existing and
future agreements with Beneficiary which may afford interest rate protection to all or part of the Loan,
when such agreement recites that the obligations thereunder are secured by this Deed of Trust.
All initially capitalized terms used herein which are defined in the Loan Agreement shall have
the same meaning herein unless the context otherwise requires. The rate of interest of the obligation
secured hereunder may vary from time to time.
TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR HEREBY
COVENANTS AND AGREES AS FOLLOWS:
ARTICLE 1.
COVENANTS AND AGREEMENTS OF TRUSTOR
1.01. Payment of Secured Obligations. Trustor shall pay when due the principal of and the
interest on the indebtedness evidenced by the Note; all charges, fees and other sums as provided in the
Loan Documents; the principal of and interest on any future advances secured by this Deed of Trust;
and the principal of and interest on any other indebtedness secured by this Deed of Trust.
1.02. Maintenance, Repair, Alterations. Trustor (a) shall keep the Trust Estate in good
condition and repair; (b) shall not remove, demolish or substantially alter any of the Improvements
except upon the prior written consent of Beneficiary; (c) shall complete promptly and in a good and
workmanlike manner any Improvement which may be now or hereafter constructed on the Property and
promptly restore in like manner any portion of the Improvements which may be damaged or destroyed
thereon from any cause whatsoever, and pay when due all claims for labor performed and materials
furnished therefor; (d) shall comply with all laws, ordinances, regulations, covenants, conditions and
restrictions now or hereafter affecting the Trust Estate or any part thereof or requiring any alterations or
improvements, including without limitation, all Environmental Laws, the Americans with Disabilities Act,
Public Law 101-336 (the “ADA”) and the California Fair Housing Act of 1992; (e) shall not commit or
permit any waste or deterioration of the Trust Estate; (9 shall not allow changes in the use for which all
or any part of the Property or Improvements was intended; (9) shall not initiate or acquiesce in a change
in the zoning classification of the Property without Beneficiary’s prior written consent; and (h) if
requested by Beneficiary, shall provide for professional management of the Property by a property
manager satisfactory to Beneficiary pursuant to a management contract approved by Beneficiary in
writing.
1.03. Required Insurance. Trustor shall at all times provide, maintain and keep in force or
cause to be provided, maintained and kept in force, at no expense to Trustee or Beneficiary, policies of
insurance in accordance with the terms of the Loan Agreement in form and amounts, providing for
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deductibles, and issued by companies, associations or organizations covering such casualties, risks,
perils, liabilities and other hazards as required by the Loan Agreement.
1.04. Delivery of Policies, Payment of Premiums.
(a) At Beneficiary’s option all policies of insurance shall either have attached thereto a lender’s loss payable endorsement for the benefit of Beneficiary in form satisfactory to Beneficiary or shall name
Beneficiary as an additional insured. At Beneficiary’s option Trustor shall furnish Beneficiary with an
original of all policies of insurance required under Section 1.03 above or evidence of insurance issued by
the applicable insurance company for each required policy setting forth the coverage, the limits of
liability, the name of the carrier, the policy number and the period of coverage, and otherwise in form
and substance satisfactory to Beneficiary. At least ten (10) days prior to the expiration of each required
policy, Trustor shall deliver to Beneficiary evidence reasonably satisfactory to Beneficiary of the payment
of premium and the renewal or replacement of such policy continuing insurance in form as required by
this Deed of Trust. All such policies shall contain a provision that, notwithstanding any contrary
agreement between Trustor and the insurance company, such policies will not be cancelled, allowed to
lapse without renewal, surrendered or materially amended, which term shall include any reduction in the
scope or limits of coverage, without at least ten (10) days’ prior written notice to Beneficiary.
(b) In the event Trustor fails to provide, maintain, keep in force or deliver to Beneficiary the policies of insurance required by this Deed of Trust or by any Loan Document, Beneficiary may (but
shall have no obligation to) procure such insurance or single-interest insurance for such risks covering
Beneficiary’s interest, and Trustor will pay all premiums thereon and reimburse Beneficiary for all
amounts paid or incurred by it in connection therewith promptly upon demand by Beneficiary, and, until
such payment is made by Trustor, the amount of all such premiums shall be added to the principal
amount of the Loan and shall bear interest at the Default Rate. Upon request by Beneficiary, Trustor
shall deposit with Beneficiary in monthly installments, an amount equal to one-twelfth (1/12) of the
estimated aggregate annual insurance premiums on all policies of insurance required by the Loan
Agreement or this Deed of Trust. In such event Trustor further agrees to cause all bills, statements or
other documents relating to the foregoing insurance premiums to be sent or mailed directly to
Beneficiary. Upon receipt of such bills, statements or other documents evidencing that a premium for a
required policy is then payable, and providing Trustor has deposited sufficient funds with Beneficiary
pursuant to this Section 1.04, Beneficiary shall timely pay such amounts as may be due thereunder out
of the funds so deposited with Beneficiary. If at any time and for any reason the funds deposited with
Beneficiary are or will be insufficient to pay such amounts as may be then or subsequently due,
Beneficiary shall notify Trustor and Trustor shall immediately deposit an amount equal to such deficiency
with Beneficiary. Notwithstanding the foregoing, nothing contained herein shall cause Beneficiary to be
deemed a trustee of said funds or to be obligated to pay any amounts in excess of the amount of funds
deposited with Beneficiary pursuant to this Section 1.04, nor shall anything contained herein modify the
obligation of Trustor set forth in Section 1.03 hereof to maintain and keep such insurance in force at all
times. Beneficiary may commingle said reserve with its own funds and Trustor shall be entitled to no
interest thereon.
1.05. Casualties; Insurance Proceeds. Trustor shall give prompt written notice thereof to
Beneficiary after the happening of any casualty to or in connection with the Trust Estate or any part
thereof, whether or not covered by insurance. In the event of such casualty, all proceeds of insurance
shall be payable to Beneficiary, and Trustor hereby authorizes and directs any affected insurance
company to make payment of such proceeds directly to Beneficiary. If Trustor receives any proceeds of
insurance resulting from such casualty, Trustor shall promptly pay over such proceeds to Beneficiary.
Beneficiary is hereby authorized and empowered by Trustor to settle, adjust or compromise any and all
claims for loss, damage or destruction under any policy or policies of insurance. In the event of any
damage or destruction of the Property or the Improvements, Beneficiary shall apply all loss proceeds
remaining after deduction of all expenses of collection and settlement thereof, including, without
limitation, attorneys’ and adjustors’ fees and expenses, to the restoration of the Improvements but only
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as repairs or replacements are effected and continuing expenses becomes due and payable and
provided all applicable conditions specified in the Loan Agreement with respect thereto have been
satisfied. If any one or more of such conditions in the Loan Agreement have not been met, Beneficiary
shall not be obligated to make any further disbursements pursuant to the Loan Agreement and
Beneficiary shall apply all loss proceeds, after deductions as herein provided, to the repayment of the
outstanding balance of the Note, together with all accrued interest thereon, notwithstanding that the
outstanding balance may not be due and payable. Nothing herein contained shall be deemed to excuse
Trustor from repairing or maintaining the Trust Estate as provided in Section 1.02 hereof or restoring all
damage or destruction to the Trust Estate, regardless of whether or not there are insurance proceeds
available to Trustor or whether any such proceeds are sufficient in amount, and the application or
release by Beneficiary of any insurance proceeds shall not cure or waive any Potential Default, Potential
Balancing Default (as those terms are defined in the Loan Agreement), nor any Event of Default or notice
of default under this Deed of Trust or invalidate any act done pursuant to such notice.
1.06. Assignment of Policies Upon Foreclosure. In the event of foreclosure of this Deed of
Trust or other transfer of title or assignment of the Trust Estate in extinguishment, in whole or in part, of
the debt secured hereby, all right, title and interest of Trustor in and to all policies of insurance required
by Section 1.03 shall inure to the benefit of and pass to the successor in interest to Trustor or the
purchaser or grantee of the Trust Estate.
1.07. Indemnification; Subrogation; Waiver of Offset.
(a) If Beneficiary is made a party to any litigation concerning the Loan, this Deed of Trust,
any of the Loan Documents, the Trust Estate or any part thereof or interest therein, or the occupancy of
the Trust Estate by Trustor, then Trustor shall indemnify, defend and hold Beneficiary harmless from all
liability by reason of said litigation, including reasonable attorneys’ fees and expenses incurred by
Beneficiary as a result of any such litigation, whether or not any such litigation is prosecuted to
judgment. Beneficiary may employ an attorney or attorneys selected by it to protect its rights
hereunder, and Trustor shall pay to Beneficiary reasonable attorneys’ fees and costs incurred by Benefi-
ciary, whether or not an action is actually commenced against Trustor by reason of its breach.
(b) Trustor waives any and all right to claim or recover against Trustee, Beneficiary, or
their respective officers, employees, agents and representatives, for loss of or damage to Trustor, the
Trust Estate, Trustor’s property or the property of others under Trustor’s control from any cause insured
against or required to be insured against by the provisions of this Deed of Trust.
(c) All sums payable by Trustor pursuant to this Deed of Trust or with respect to the
Loan shall be paid without notice, demand, counterclaim, setoff, deduction or defense and without
abatement, suspension, deferment, diminution or reduction, and the obligations and liabilities of Trustor
hereunder shall in no way be released, discharged’or otherwise affected (except as expressly provided
herein) by reason of: (i) any damage to or destruction of or any condemnation or similar taking of the
Trust Estate or any part thereof; (ii) any restriction or prevention of or interference by any third party with
any use of the Trust Estate or any part thereof; (iii) any title defect or encumbrance or any eviction from
the Property or Improvements or any part thereof by title paramount or otherwise; (iv) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding
relating to Beneficiary, or any action taken with respect to this Deed of Trust by any trustee or receiver
of Beneficiary, or by any court, in any such proceeding; (v) any claim which Trustor has or might have
against Beneficiary; (vi) any default or failure on the part of Beneficiary to perform or comply with any of
the terms hereof or of any other agreement with Trustor; or (vii) any other occurrence whatsoever,
whether similar or dissimilar to the foregoing: whether or not Trustor shall have notice or knowledge of
any of the foregoing. Except as expressly provided herein, Trustor waives all rights now or hereafter
conferred by statute or otherwise to any abatement, suspension, deferment, diminution or reduction of
any sum secured hereby and payable by Trustor.
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1.08. Taxes and Impositions.
(a) As used herein, "Impositions" shall mean all real property taxes and assessments,
general and special, and all other taxes and assessments of any kind or nature whatsoever, including,
without limitation, nongovernmental levies or assessments such as maintenance charges, levies or
charges resulting from covenants, conditions and restrictions affecting the Trust Estate, which are
assessed or imposed upon the Trust Estate or any portion of it, or become due and payable, and which
create, may create or appear to create a lien upon the Trust Estate, or any part thereof, or upon any
person, property, equipment or other facility used in the operation or maintenance thereof, or any tax or
assessment on the Trust Estate, or any portion of it, in lieu thereof or in addition thereto, or any license
fee, tax or assessment imposed on Beneficiary and measured by or based in whole or in part upon the
amount of the outstanding obligations secured hereby. Trustor shall pay at least thirty (30) days prior to
delinquency all Impositions. Trustor shall deliver to Beneficiary proof of the payment of the Impositions
within thirty (30) days after such Impositions are due.
(b) Upon request by Beneficiary, Trustor shall pay to Beneficiary an initial cash reserve in
an amount adequate to pay all Impositions for the ensuing tax fiscal year and shall thereafter continue to
deposit with Beneficiary, in monthly installments, an amount equal to one-twelfth (1/12) of the sum of the
annual Impositions reasonably estimated by Beneficiary, for the purpose of paying the installment of
Impositions next due on the Trust Estate (funds deposited for this purpose shall hereinafter be referred
to as "Impounds"). In such event Trustor further agrees to cause all bills, statements or other
documents relating to Impositions to be sent or mailed directly to Beneficiary. Upon receipt of such
bills, statements or other documents, and providing Trustor has deposited sufficient Impounds with
Beneficiary pursuant to this Section 1.08lb1, Beneficiary shall timely pay such amounts as may be due
thereunder out of the Impounds so deposited with Beneficiary. If at any time and for any reason the
Impounds deposited with Beneficiary are or will be insufficient to pay such amounts as may then or
subsequently be due, Beneficiary may notify Trustor and upon such notice Trustor shall deposit
immediately an amount equal to such deficiency with Beneficiary. If after the payment of the Impositions
there shall be an excess amount held by Beneficiary, such excess amount shall be refunded to Trustor
in any manner and in such amount as Beneficiary may elect. Beneficiary may commingle Impounds with
its own funds and shall not be obligated to pay or allow any interest on any Impounds held by Benefi-
ciary pending disbursement or application hereunder. Beneficiary may reserve for future payment of
Impositions such portion of the Impounds as Beneficiary may in its absolute discretion deem proper.
(c) Upon an Event of Default under any of the Loan Documents or this Deed of Trust, Beneficiary may apply the balance of the Impounds upon any indebtedness or obligation secured hereby
in such order as Beneficiary may determine, notwithstanding that said indebtedness or the performance
of said obligation may not yet be due according to the terms thereof. Should Trustor fail to deposit with
Beneficiary (exclusive of that portion of said payments which has been applied by Beneficiary upon any
indebtedness or obligation secured hereby) sums sufficient to fully pay such Impositions at least fifteen
(1 5) days before delinquency thereof, Beneficiary may, at Beneficiary's election, but without any
obligation so to do, advance any amounts required to make up the deficiency, which advances, if any,
shall bear interest at the Default Rate, shall be secured hereby and shall be repayable to Beneficiary as
herein elsewhere provided, or at the option of Beneficiary the latter may, without making any advance
whatever, apply any Impounds held by it upon any indebtedness or obligation secured hereby in such
order as Beneficiary may determine, notwithstanding that said indebtedness or the performance of said
obligation may not yet be due according to the terms thereof. Should any Event of Default occur or
exist on the part of the Trustor in the payment or performance of any of Trustor's obligations under the
terms of the Loan Documents, Beneficiary may, at any time at Beneficiary's option, apply any sums or
amounts in its possession received pursuant to Sections 1.04lb1 and 1.081b) hereof, or as Rents of the
Trust Estate or otherwise, to any indebtedness or obligation of the Trustor secured hereby in such
manner and order as Beneficiary may elect, notwithstanding said indebtedness or the performance of
said obligation may not yet be due according to the terms thereof. The receipt, use or application of
any such Impounds paid by Trustor to Beneficiary hereunder shall not be construed to affect the
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maturii of any indebtedness secured by this Deed of Trust or any of the rights or powers of Beneficiary
or Trustee under the terms of the Loan Documents or any of the obligations of Trustor or any guarantor
under the Loan Documents.
(4 Trustor shall not suffer, permit or initiate the joint assessment of any real and personal
property which may constitute all or a portion of the Trust Estate or suffer, permit or initiate any other
procedure whereby the lien of the real property taxes and the lien of the personal property taxes shall be
assessed, levied or charged to the Trust Estate, or any portion thereof, as a single lien.
(e) If requested by Beneficiary, Trustor shall cause to be furnished to Beneficiary a tax reporting service covering the Trust Estate of the type, duration and with a company satisfactory to
Beneficiary.
1.09. Utilities. Trustor shall pay or shall cause to be paid when due all utility charges which
are incurred by Trustor for the benefit of the Trust Estate and all other assessments or charges of a
similar nature, whether or not such charges are or may become liens thereon.
1.10. Actions Affecting Trust Estate. Trustor shall promptly give Beneficiary written notice of
and shall appear in and contest any action or proceeding purporting to affect the Property or the securi-
ty hereof or the rights or powers of Beneficiary or Trustee; and shall pay all costs and expenses,
including the cost of evidence of title and attorneys’ fees, in any such action or proceeding in which
Beneficiary or Trustee may appear.
1.11. Actions By Trustee or Beneficiary to Preserve Trust Estate. If Trustor fails to make
any payment or to do any act as and in the manner provided in any of the Loan Documents, Beneficiary
and/or Trustee, each in its own discretion, without obligation so to do, without releasing Trustor from
any obligation, and without notice to or demand upon Trustor, may make or do the same in such
manner and to such extent as either may deem necessary to protect the securii hereof. In connection
therewith (without limiting their general powers, whether conferred herein, in any other Loan Documents
or by law), Beneficiary and Trustee shall have and are hereby given the right, but not the obligation,
(i) to enter upon and take possession of the Trust Estate; (ii) to make additions, alterations, repairs and
improvements to the Trust Estate which they or either of them may consider necessary or proper to
keep the Trust Estate in good condition and repair; (iii) to appear and participate in any action or
proceeding affecting or which may affect the security hereof or the rights or powers of Beneficiary or
Trustee; (iv) to pay, purchase, contest or compromise any encumbrance, claim, charge, lien or debt
which in the judgment of either may affect or appears to affect the securii of this Deed of Trust or be
prior or superior hereto; and (v) in exercising such powers, to pay necessary expenses, including
attorneys’ fees and costs or other necessary or desirable consultants. Trustor shall, immediately upon
demand therefor by Beneficiary and Trustee or either of them, pay to Beneficiary and Trustee an amount
equal to all respective costs and expenses incurred by such party in connection with the exercise of the
foregoing rights, including, without limitation, costs of evidence of title, court costs, appraisals, surveys
and receiver’s, trustee’s and attorneys’ fees, together with interest thereon from the date of such
expenditures at the Default Rate.
1.12. Transfer of Trust Estate by Trustor. In order to induce Beneficiary to make the loan
secured hereby, Trustor agrees that, in the event of any transfer of the Trust Estate or any portion
thereof without the prior written consent of Beneficiary or not in accordance with a rider to this Deed of
Trust regarding the release of portions of the Trust Estate from this Deed of Trust, such transfer shall
constitute an Event of Default hereunder without the need for notice or an opportunity to cure and
Beneficiary shall have the absolute right at its option, without prior demand or notice, to declare all sums
secured hereby immediately due and payable. Consent to one such transaction shall not be deemed to
be a waiver of the right to require consent to future or successive transactions. Beneficiary may grant or
deny such consent in its sole discretion and, if consent should be given, any such transfer shall be
subject to this Deed of Trust, and any such transferee shall assume all obligations hereunder and agree
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to be bound by all provisions contained herein. Such assumption shall not, however, release Trustor or
any payor or guarantor of the Loan from any liability thereunder without the prior wriien consent of
Beneficiary. As used herein, "Transfer" includes the direct or indirect sale, transfer, conveyance,
assignment, mortgage, encumbrance, hypothecation or other alienation of the Trust Estate, or any
portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, the
execution of any installment land sale contract, sales agreement or similar instrument affecting all or a
portion of the Trust Estate, granting of an option to purchase any portion of or interest in the Trust
Estate, the creation of a lien or other encumbrance on the Trust Estate or any part thereof or interest
therein, or the lease of all or substantially all of the Trust Estate. "Transfer" shall also include the direct
or indirect transfer, assignment, hypothecation or conveyance of legal or beneficial ownership of (i) if
Trustor is a partnership, (x) any partnership interest in Trustor, (y) any partnership interest in any general
partner in Trustor that is a partnership, (2) an aggregate of twenty-five percent (25%) or more of the
stock of any corporation which is a general partner in Trustor or the beneficial interest in any other legal
entity which is a general partner (whether in one transaction or a series of transactions); or (ii) if Trustor
is a corporation, twenty-five percent (25%) or more of the stock of Trustor (whether in one transaction or
in a series of transactions). "Transfer" shall not include the leasing of individual office or commercial
units, or other rentable area constructed by Trustor on the Property so long as Trustor complies with the
provisions of the Loan Agreement relating to such leasing activity.
1.13. Survival of Warranties. All representations, warranties and covenants of Trustor
contained in any loan application or made to Beneficiary in connection with the loan secured hereby or
contained in the Loan Documents or incorporated by reference therein, shall survive the execution and
delivery of this Deed of Trust and shall remain continuing obligations, warranties and representations of
Trustor so long as any portion of the obligations secured by this Deed of Trust remains outstanding.
1.14. Eminent Domain.
(a) In the event that any proceeding or action be commenced for the taking of the Trust
Estate, or any part thereof or interest therein, for public or quasi-public use under the power of eminent
domain, condemnation or otherwise, or if the same be taken or damaged by reason of any public
improvement or condemnation proceeding, or in any other manner, or should Trustor receive any notice
or other information regarding such proceeding, action, taking or damage, Trustor shall give prompt
written notice thereof to Beneficiary. Beneficiary shall be entitled at its option, without regard to the
adequacy of its security, to commence, appear in and prosecute in its own name any such action or
proceeding. Beneficiary shall also be entitled to make any compromise or settlement in connection with
such taking or damage. All compensation, awards, damages, rights of action and proceeds awarded to
Trustor by reason of any such taking or damage (the "Condemnation Proceeds") are hereby assigned
to Beneficiary and Trustor agrees to execute such further assignments of the Condemnation Proceeds
as Beneficiary or Trustee may require. After deducting therefrom all costs and expenses (regardless of
the particular nature thereof and whether incurred with or without suit), including attorneys' fees,
incurred by it in connection with any such action or proceeding, subject to the terms of the Loan
Agreement, Beneficiary shall apply all such Condemnation Proceeds to the restoration of the
Improvements, provided that (i) the taking or damage will not, in Beneficiary's reasonable judgment,
materially and adversely affect the contemplated use and operation of the Property or Improvements;
and (ii) all applicable conditions set forth in the Loan Agreement are met. If all of the above conditions
are met, Beneficiary shall disburse the Condemnation Proceeds in accordance with the Loan Agreement
and only as repairs or replacements are effected and continuing expenses become due and payable.
(b) If any one or more of such conditions are not met, Beneficiary shall apply all of the
Condemnation Proceeds, after deductions as herein provided, to the repayment of the outstanding
balance of the Note, together with all accrued interest thereon, notwithstanding that said outstanding
balance may not be due and payable; and Beneficiary shall have no further obligation to make
disbursements pursuant to the Loan Agreement or the other Loan Documents. If the Condemnation
Proceeds are not sufficient to repay the Loan in full, Trustor shall immediately pay any remaining
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balance, together with all accrued interest thereon. Application or release of the Condemnation
Proceeds as provided herein shall not cure or waive any Potential Default, Potential Balancing Default,
nor any Event of Default or notice of default hereunder or under any other Loan Document or invalidate
any act done pursuant to such notice.
1.15. Additional Security. No other security now existing, or hereafter taken, to secure the
obligations secured hereby shall be impaired or affected by the execution of this Deed of Trust and all
additional security shall be taken, considered and held as cumulative. The taking of additional security,
execution of partial releases of the security, or any extension of the time of payment of the indebtedness
shall not diminish the force, effect or lien of this Deed of Trust and shall not affect or impair the liability
of any maker, surety or endorser for the payment of said indebtedness. In the event Beneficiary at any
time holds additional securii for any of the obligations secured hereby, it may enforce the sale thereof
or otherwise realize upon the same, at its option, either before, concurrently, or after a sale is made
hereunder.
1.16. Appointment of Successor Trustee. Beneficiary may, from time to time, by a written
instrument executed and acknowledged by Beneficiary, mailed to Trustor and recorded in the county in
which the Trust Estate is located and by otherwise complying with the provisions of applicable law,
substitute a successor or successors to any Trustee named herein or acting hereunder. Such successor
shall, without conveyance from the Trustee predecessor, succeed to all title, estate, rights, powers and
duties of said predecessor.
1.17. Successors and Assigns. This Deed of Trust applies to, inures to the benefit of and
binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and
assigns. The term "Beneficiary" shall mean the owner and holder of the Note, whether or not named as
Beneficiary herein. In exercising any rights hereunder or taking any actions provided for herein,
Beneficiary may act through its employees, agents or independent contractors authorized by Beneficiary.
1.18. Inspections. Beneficiary, or its agents, representatives or workers, are authorized to
enter at any reasonable time upon or in any part of the Trust Estate for the purpose of inspecting the
same and for the purpose of performing any of the acts it is authorized to perform hereunder or under
the terms of any of the Loan Documents. Without limiting the generality of the foregoing, Trustor agrees
that Lender will have the same right, power and authority to enter and inspect the Project as is granted
to a secured lender under Section 2929.5 of the California Civil Code, and that Lender will have the right
to appoint a receiver to enforce this right to enter and inspect the Project to the extent such authority is
provided under California law, including the authority given to a secured lender under Section 564(c) of
the California Code of Civil Procedure.
1.19. Liens. Trustor shall pay and promptly discharge, at Trustor's cost and expense, all
liens, encumbrances and charges upon the Trust Estate, or any part thereof or interest therein; provided,
however, that Trustor shall have the right to contest in good faith the validity of any such lien,
encumbrance or charge in accordance with the Loan Agreement. If Trustor shall fail to remove and
discharge any such lien, encumbrance or charge within fiieen (15) days, then, in addition to any other
right or remedy of Beneficiary, Beneficiary may, but shall not be obligated to, discharge the same, either
by paying the amount claimed to be due, or by procuring the discharge of such lien, encumbrance or
charge by depositing in a court a bond for the amount claimed or otherwise giving security for such
claim, or by procuring such discharge in such manner as is or may be prescribed by law. Trustor shall,
immediately upon demand therefor by Beneficiary, pay to Beneficiary an amount equal to all costs and
expenses incurred by Beneficiary in connection with the exercise by Beneficiary of the foregoing right to
discharge any such lien, encumbrance or charge, together with interest thereon from the date of such
expenditure at the Default Rate.
1.20. Trustee's Powers. At any time, or from time to time, without liability therefor and
without notice, upon written request of Beneficiary and presentation of this Deed of Trust and without
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affecting the personal liability of any person for payment of the indebtedness secured hereby or the
effect of this Deed of Trust upon the remainder of said Trust Estate, Trustee may (i) reconvey any part of
said Trust Estate, (ii) consent in wriiing to the making of any map or plat thereof, (iii) join in granting any
easement thereon, or (iv) join in any extension agreement or any agreement subordinating the lien or
charge hereof.
1.21. Beneficiary’s Powers. Without affecting the liability of any other person liable for the
payment of any obligation herein mentioned, and without affecting the lien or charge of this Deed of
Trust upon any portion of the Trust Estate not then or theretofore released as security for the full amount
of all unpaid obligations, Beneficiary may, from time to time and without notice (i) release any person so
liable, (ii) extend the maturity or alter any of the terms of any such obligation, (iii) grant other
indulgences, (ii) release or reconvey, or cause to be released or reconveyed at any time at Beneficiary’s
option any parcel, portion or all of the Trust Estate, (v) take or release any other or additional security
for any obligation herein mentioned, or (vi) make compositions or other arrangements with debtors in
relation thereto.
1.22. Financial Statements. Trustor shall deliver to Beneficiary copies of financial statements
in accordance with the Loan Agreement. All such statements shall be prepared in accordance with the
requirements of the Loan Agreement and Beneficiary shall have the right to audit and inspect all books
and records relating thereto. Beneficiary or its representatives shall have the right to examine and make
copies of such books and records and all supporting vouchers and invoices at Trustor’s principal place
of business during regular business hours.
1.23. Trade Names. At the request of Beneficiary, Trustor shall execute a certificate in form
satisfactory to Beneficiary listing the trade-names or fictitious business names under which Trustor
intends to operate the Trust Estate or any business located thereon and representing and warranting
that Trustor does business under no other trade names or fictitious business names with respect to the
Trust Estate. Trustor shall immediately notify Beneficiary in writing of any change in said trade names or
fictitious business names, and will, upon request of Beneficiary, execute any additional financing
statements and other certificates necessary to reflect the change in trade names or fictitious business
names.
1.24. Leasehold.
(a) If a leasehold estate constitutes a portion of the Trust Estate, Trustor agrees not to
amend, change, terminate or modify such leasehold estate or any interest therein without the prior
written consent of Beneficiary. Consent to one amendment, change, agreement or modification shall not
be deemed to be a waiver of the right to require consent to other, future or successive amendments,
changes, agreements or modifications. Trustor agrees to perform all obligations and agreements under
said leasehold and shall not take any action or omit to take any action which would effect or permit the
termination of said leasehold. Trustor agrees to promptly notify Beneficiary in writing with respect to any
default or alleged default by any party thereto and to deliver to Beneficiary copies of all notices,
demands, complaints or other communications received or given by Trustor with respect to any such
default or alleged default. Beneficiary shall have the option to cure any such default and to perform any
or all of Trustor’s obligations thereunder. All sums expended by Beneficiary in curing any such default
shall be secured hereby and shall be immediately due and payable without demand or notice and shall
bear interest from date of expenditure at the Default Rate.
(b) Trustor shall deliver to Beneficiary Trustor’s signed copy of all leases or executed
counterparts thereof, now existing or hereafter made from time to time, affecting all or any part of the
Trust Estate, and all leases now or hereafter entered into shall be in form and substance subject to the
approval of Beneficiary. Trustor shall not, without Beneficiary’s prior written consent, execute, modify,
surrender or terminate any lease now existing or hereafter made affecting all or any part of the Trust
Estate.
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1.25. Indemnity. In addition to any other indemnities to Beneficiary specifically provided for in
this Deed of Trust, Trustor hereby indemnifies and saves Beneficiary and its authorized representative
harmless from and against any and all losses, liabilities, suits, obligations, fines, damages, penalties,
claims, costs, charges and expenses, including, without limitation, architects’, engineers’ and attorneys’
fees and all disbursements which may be imposed upon, incurred or asserted against Beneficiary and its
authorized representative by reason of: (i) the construction of any improvements on the Property,
(ii) any capital improvements, other work or things done in, on or about the Property or any part thereof,
(iii) any use, nonuse, misuse, possession, occupation, alteration, operation, maintenance or management
of the Property or any part thereof or any street, drive, sidewalk, curb, passageway or space comprising
a part thereof or adjacent thereto, (iv) any negligence or willful act or omission on the part of Trustor
and its agents, contractors, servants, employees, licensees or invitees, (v) any accident, injury (including
death) or damage to any person or property occurring in, on or about the Property or any part thereof,
(vi) any lien or claim which may be alleged to have arisen on or against the Property or any part thereof
under the laws of the local or state government or any other governmental or quasi-governmental
authority or any liability asserted against Beneficiary with respect thereto, (vii) any tax attributable to the
execution, delivery, filing or recording of this Deed of Trust or the Loan Agreement, (viii) any contest due
to Trustor’s actions or failure to act, permitted pursuant to the provisions of this Deed of Trust, (ix) any
default under the Note, this Deed of Trust or the Loan Agreement, or (x) any claim by or liability to any
contractor or subcontractor performing work or any party supplying materials in connection with the
Property.
ARTICLE II.
ASSIGNMENT OF RENTS, ISSUES AND PROFITS
2.01. Assignment. Trustor hereby irrevocably, absolutely, presently and unconditionally
assigns and transfers to Beneficiary all the Rents of the Trust Estate, and hereby gives to and confers
upon Beneficiary the right, power and authority to collect such Rents. Trustor irrevocably appoints
Beneficiary its true and lawful attorney-in-fact, at the option of Beneficiary at any time and from time to
time, to demand, receive and enforce payment, to give receipts, releases and satisfactions, and to sue,
in the name of Trustor, Trustee or Beneficiary, for all such Rents, and apply the same to the indebted-
ness secured hereby; provided, however, that so long as an Event of Default shall not have occurred
hereunder and be continuing, Trustor shall have the right to collect such Rents. Upon the request of
Beneficiary, Trustor shall execute and deliver to Beneficiary, in recordable form, a specific assignment of
any lease now or hereafter affecting the Trust Estate or any portion thereof to evidence further the
assignment hereby made. The assignment of Rents in this Article II is intended to be an absolute
assignment from Trustor to Beneficiary and not merely an assignment for security only.
2.02. Election of Remedies. Subject to Trustor’s right to collect the Rents pursuant to
Section 2.01, upon the occurrence of an Event of Default, Beneficiary may, at any time without notice,
either in person, by agent or by a receiver appointed by a court, enter upon and take possession of all
or any portion of the Trust Estate, enforce all Leases, in its own name sue for or collect all Rents,
including those past due and unpaid, and apply the same to the costs and expenses of operation and
collection, including, without limitation, attorneys’ fees, and to any indebtedness then secured hereby, in
such order as Beneficiary may determine. The collection of such Rents, or the entering upon and taking
possession of the Trust Estate, or the application thereof as aforesaid, shall not cure or waive any
Potential Default, Potential Balancing Default, nor any Event of Default or notice of default hereunder or
invalidate any act done in response to such Potential Default, Potential Balancing Default or Event of
Default or pursuant to such notice of default.
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ARTICLE 111.
REMEDIES UPON DEFAULT
3.01. Events of Default. The occurrence of any of the following events shall be an Event of
Default hereunder (an "Event of Default"):
(a) Trustor's failure to pay any principal, interest or other monies due under the Loan
Agreement or other Loan Documents within fieen (15) calendar days after any such amount is due; or
(b) the occurrence of any other "Event of Default" under any of the Loan Documents (as
defined therein).
3.02. Acceleration Upon Default, Additional Remedies. Upon the occurrence of an Event of
Default, Beneficiary may, at its option, declare all indebtedness secured hereby to be immediately due
and payable without any presentment, demand, protest or notice of any kind. Thereafter Beneficiary
may:
(a) Either in person or by agent, with or without bringing any action or proceeding, or by
a receiver appointed by a court and without regard to the adequacy of its security, enter upon and take
possession of the Trust Estate, or any part thereof, in its own name or in the name of Trustee, and do
any acts which it deems necessary or desirable to preserve the value, marketability or rentability of the
Trust Estate, including, without limitation (i) taking possession of Trustor's books and records, (ii)
completing the construction of the Improvements, (iii) maintaining or repairing the Improvements or the
Property, (i) increasing the income from the Project, with or without taking possession of the Trust
Estate, (v) entering into, mod'tying, or enforcing Leases, (vi) suing for or otherwise collecting the Rents
or other amounts owing to Trustor, including those past due and unpaid, and (vii) applying the same,
less costs and expenses of operation and collection including, without limitation, attorneys' fees, upon
any indebtedness secured hereby, all in such order as Beneficiary may determine. The entering upon
and taking possession of the Trust Estate, the collection of such Rents and the application thereof as
aforesaid, shall not cure or waive any default or notice of default hereunder;
(b) Commence an action to foreclose this Deed of Trust as a mortgage, appoint a
receiver, or specifically enforce any of the covenants hereof;
(c) Deliver to Trustee a written declaration of default and demand for sale and a written
notice of default and election to cause Trustor's interest in the Trust Estate to be sold, which notice
Trustee or Beneficiary shall cause to be duly filed for record in the Official Records of the County in
which the Trust Estate is located; or
(4 Exercise all other rights and remedies provided herein, in any Loan Document or
other document or agreement now or hereafter securing all or any portion of the obligations secured
hereby, or by law.
3.03. Foreclosure by Power of Sale. Should Beneficiary elect to foreclose by exercise of the
power of sale herein contained, Beneficiary shall notify Trustee and shall deposit with Trustee this Deed
of Trust and such receipts and evidence of expenditures made and secured hereby as Trustee may
require.
(a) Beneficiary or Trustee shall give such notice of default and election to sell as is then
required by applicable law. Trustee shall, without demand on Trustor, after lapse of such time as may
then be required by law and after recordation of such notice of default and after notice of sale having
been given as required by law, sell the Trust Estate at the time and place of sale fixed by it in said notice
of sale, either as a whole, or in separate lots or parcels or items as Beneficiary shall deem expedient,
and in such order as it may determine, at public auction to the highest bidder for cash in lawful money
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of the United States payable at the time of sale. Trustee shall deliver to such purchaser or purchasers
thereof a trustee’s deed conveying the property so sold, which shall not contain any covenant or
warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof
of the truthfulness thereof. Any person, including, without limitation, Trustor, Trustee or Beneficiary, may
purchase at such sale and Beneficiary shall be entitled to pay the purchase price by crediting the
purchase price of the property against the obligations secured hereby. Trustor hereby covenants to
warrant and defend the title of such purchaser or purchasers.
(b) After deducting all costs, fees and expenses of Trustee and of this Trust, including
costs of evidence of title in connection with sale, Trustee shall apply the proceeds of sale in the following
priority, to payment of: (i) first, all sums expended under the terms hereof, not then repaid, with accrued
interest at the Default Rate; (ii) second, all other sums then secured hereby; and (iii) the remainder, if
any, to the person or persons legally entitled thereto.
(c) Subject to California Civil Code 0 2924g, Trustee may postpone sale of all or any
portion of the Trust Estate by public announcement at such time and place of sale, and from time to
time thereafter may postpone such sale by public announcement or subsequently noticed sale, and
without further notice make such sale at the time fixed by the last postponement, or may, in its
discretion, give a new notice of sale.
3.04. Personal Property. Concurrently herewith, Trustor has executed and delivered to
Beneficiary a Securii Agreement with respect to certain Collateral described therein. Upon the
occurrence of an Event of Default, Beneficiary may proceed at its election, in any sequence: (i) to
dispose of any Collateral separately from the sale of real property in accordance with Division 9 of the
California Commercial Code or other applicable law; and (ii) to dispose of some or all of the Trust Estate
and the Collateral in any combination consisting of both real and personal property together in one or
more sales to be held in accordance with the provisions of Section 9501 (4) of the California Commercial
Code.
3.05. Appointment of Receiver. Upon the occurrence of an Event of Default hereunder,
Beneficiary, as a matter of right and without notice to Trustor or anyone claiming under Trustor, and
without regard to the then value of the Trust Estate or the adequacy for any security for the obligations
then secured hereby, shall have the right to apply to any court having jurisdiction to appoint a receiver
or receivers of the Trust Estate, and Trustor hereby irrevocably consents to such appointment and
waives notice of any application therefor. Any such receiver or receivers shall have all the usual powers
and duties of receivers in like or similar cases and all the powers and duties of Beneficiary in case of
entry as provided herein.
3.06. Remedies Not Exclusive. Trustee and Beneficiary, and each of them, shall be entitled
to enforce payment and performance of any indebtedness or obligations secured hereby and to exercise
all rights and powers under this Deed of Trust or under any Loan Document or other agreement or any
laws now or hereafter in force, notwithstanding some or all of the said indebtedness and obligations
secured hereby may now or hereafter be otherwise secured, whether by mortgage, deed of trust,
pledge, lien, assignment or otherwise. Neither the acceptance of this Deed of Trust nor its enforcement
whether by court action or pursuant to the power of sale or other powers herein contained, shall
prejudice or in any manner affect Trustee’s or Beneficiary’s right to realize upon or enforce any other
security now or hereafter held by Trustee or Beneficiary, it being agreed that Trustee and Beneficiary,
and each of them, shall be entitled to enforce this Deed of Trust and any other security now or hereafter
held by Beneficiary or Trustee in such order and manner as they or either of them may in their absolute
discretion determine. No remedy herein conferred upon or reserved to Trustee or Beneficiary is
intended to be exclusive of any other remedy herein or by law provided or permitted, but each shall be
cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing
at law or in equity or by statute. Every power or remedy given by any of the Loan Documents to
Trustee or Beneficiary or to which either of them may be otherwise entitled, may be exercised,
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concurrently or independently, from time to time and as often as may be deemed expedient by Trustee
or Beneficiary and either of them may pursue inconsistent remedies.
3.07. Request for Notice. Trustor hereby requests a copy of any notice of default and that
any notice of sale hereunder be mailed to it at the address set forth in Section 4.05 of this Deed of Trust.
3.08. Forbearance by Lender Not a Waiver. Any forbearance by Beneficiary in exercising
any right or remedy hereunder, or otherwise afforded by applicable law, shall not be a waiver of or
preclude the exercise of any right or remedy. The acceptance by Beneficiary of payment of any sum
secured by this Deed of Trust after the due date of such payment shall not be a waiver of Beneficiary’s
right either to require prompt payment when due of all other sums so secured or to declare a Potential
Default, Potential Balancing Default or Event of Default for failure to make prompt payment. The
procurement of insurance or the payment of taxes or other liens or charges by Beneficiary shall not be a
waiver of Beneficiary’s right to accelerate the maturity of the indebtedness secured by this Deed of Trust
nor shall Beneficiary’s receipt of any awards, proceeds or damages under this Deed of Trust operate to
cure or waive Trustor’s default in payment of sums secured by this Deed of Trust.
3.09. Environmental Provisions. Without limiting any of the remedies provided in the Loan
Documents, Trustor acknowledges and agrees that Sections 5.3, 5.13, 6.2 and 6.14 of the Loan
Agreement and Section 1.02 of this Deed of Trust are environmental provisions (as defined in Section
736(f)(2) of the California Code of Civil Procedure) made by the Trustor relating to the real property
security (the “Environmental Provisions”), and that Trustor’s failure to comply with the Environmental
Provisions is a breach of contract such that Lender shall have the remedies provided under Section 736
of the California Code of Civil Procedure (“Section 736”) for the recovery of damages and for the
enforcement of the Environmental Provisions. Pursuant to Section 736, Lender’s action for recovery of
damages or enforcement of the Environmental Provisions shall not constitute an action within the
meaning of Section 726(a) of the California Code of Civil Procedure or constitute a money judgment for
a deficiency or a deficiency ludgment within the meaning of Sections 580a, 580b, 580d, or 726(b) of the
California Code of Civil Procedure. Other than the remedy provided under Section 736, all remedies
provided for by the Loan Documents are separate and distinct causes of action that are not abrogated,
modified, limited or otherwise affected by the remedies provided under Section 736(a) of the California
Code of Civil Procedures.
1.10. Costs and Expenses. Trustor shall pay to Beneficiary, upon demand, all expenses
(including, without limitation, fees, costs and expenses of attorneys, engineers, accountants and agents)
of obtaining a judgment, order or decree or otherwise seeking to enforce its rights or exercise its
remedies under the Note, this Deed of Trust or any other documents executed in connection herewith,
and all such expenses shall, until paid, be secured by this Deed of Trust and shall bear interest at the
Default Rate provided under the Note.
ARTICLE IV.
MISCELLANEOUS
4.01, Amendments. This instrument cannot be waived, changed, discharged or terminated
orally, but only by an instrument in writing signed by the party against whom enforcement of any waiver,
change, discharge or termination is sought.
4.02. Trustor Waiver of Rights. Trustor waives to the extent permitted by law, (i) the benefit
of all laws now existing or that may hereafter be enacted providing for any appraisement before sale of
any portion of the Trust Estate, (ii) all rights of redemption, valuation, appraisement, stay of execution,
notice of election to mature or declare due the whole of the secured indebtedness and marshalling in
the event of foreclosure of the liens hereby created, (iii) all rights and remedies which Trustor may have
or be able to assert by reason of the laws of the State of California pertaining to the rights and remedies
lAol\79279.2
6/ 1 /95 14
of sureties, (i) the right to assert any statute of limitations as a bar to the enforcement of the lien of this
Deed of Trust or to any action brought to enforce the Loan Agreement or any other obligation secured
by this Deed of Trust, and (v) any rights, legal or equitable, to require marshalling of assets or to require
upon foreclosure sales in a particular order, including any rights under California Civil Code Sections
2899 and 3433. Beneficiary shall have the right to determine the order in which any or all of the
Property shall be subjected to the remedies provided herein. Beneficiary shall have the right to
determine the order in which any or all portions of the indebtedness secured hereby are satisfied from
the proceeds realized upon the exercise of the remedies provided herein. Nothing contained herein
shall be deemed to be a waiver of Trustor’s rights under Section 2924c of the California Civil Code.
4.03. Statements by Trustor. Trustor shall, within ten (10) days after written notice thereof
from Beneficiary, deliver to Beneficiary a written statement, fully acknowledged, stating the unpaid
principal of and interest of the Loan and any other amounts secured by this Deed of Trust and stating
whether any offset, counterclaim or defense exists against such sums and the obligations of the Deed of
Trust.
4.04. Loan Statement Fees. Trustor shall pay the amount demanded by Beneficiary or its
authorized loan servicing agent for any statement regarding the obligations secured hereby; provided,
however, that such amount may not exceed the maximum amount allowed by law at the time request for
the statement is made.
4.05. Notices. Whenever Trustor or Beneficiary shall desire to give or serve any notice,
demand, request or other communication with respect to this Deed of Trust, each such notice, demand,
request or communication shall be given in writing (at the address set forth below) by any of the
following means: (a) personal service (including service by overnight courier service); (b) electronic
communication, whether by telex, telegram or telecopying (i confirmed in wriiing sent by personal
service or by registered or certified, first class mail, return receipt requested); or (c) registered or
certified, first class mail, return receipt requested. Such addresses may be changed by notice to the
other parties given in the same manner as provided above. Any notice, demand or request sent
pursuant to either subsection (a) or &J hereof shall be deemed received upon such personal service or
upon dispatch by electronic means, and, if sent pursuant to subsection (cr shall be deemed received five
(5) days following deposit in the mail.
To Beneficiary: First Interstate Bank of California
707 Wilshire Boulevard, Wll-1
Los Angeles, California 9001 7
Attn: Corporate Trust Department
To Trustor: CIP LIMITED, L.P., a California Limited
Partnership
475 W. Bradley Avenue
El Cajon, California 92020
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To Trustee: First Interstate Bank of California
401 B Street, #304
San Diego, CA 92101
4.06. Acceptance by Trustee. Trustee accepts this Trust when this Deed of Trust, duly
executed and acknowledged, is made a public record as provided by law.
4.07. Captions. The captions or headings at the beginning of each Section hereof are for
the convenience of the parties and are not a part of this Deed of Trust.
4.08. Invalidity of Certain Provisions. Every provision of this Deed of Trust is intended to
be severable. In the event any term or provision hereof is declared to be illegal, invalid or unenforceable
for any reason whatsoever by a court of competent jurisdiction, such illegality or invalidity shall not affect
the balance of the terms and provisions hereof, which terms and provisions shall remain binding and
enforceable.
4.09. Subrogation. To the extent that proceeds of the Loan are used to pay any
outstanding lien, charge or prior encumbrance against the Trust Estate, such proceeds have been or will
be advanced by Beneficiary at Trustor's request and Beneficiary shall be subrogated to any and all rights
and liens held by any owner or holder of such outstanding liens, charges and prior encumbrances,
irrespective of whether said liens, charges or encumbrances are released.
4.10. Attorneys' Fees. If the Loan is not paid when due or if any Event of Default occurs,
Trustor promises to pay all costs of enforcement and collection, including but not limited to, reasonable
attorneys' fees, whether or not such enforcement and collection includes the filing of a lawsuit. As used
herein, the terms "attorneys' fees" or "attorneys' fees and costs" shall have the meanings given such
terms in the Loan Agreement.
4.11. No Merger of Lease. If both the lessor's and lessee's estate under any lease or any
portion thereof which constitutes a part of the Trust Estate shall at any time become vested in one
owner, this Deed of Trust and the lien created hereby shall not be destroyed or terminated by
application of the doctrine of merger unless Beneficiary so elects as evidenced by recording a wrkten
declaration so stating, and, unless and until Beneficiary so elects, Beneficiary shall continue to have and
enjoy all of the rights and privileges of Beneficiary as to the separate estates. In addition, upon the
foreclosure of the lien created by this Deed of Trust on the Trust Estate pursuant to the provisions
hereof, any leases or subleases then existing and affecting all or any portion of the Trust Estate shall not
be destroyed or terminated by application of the law of merger or as a matter of law or as a result of
such foreclosure unless Beneficiary or any purchaser at such foreclosure sale shall so elect. No act by
or on behalf of Beneficiary or any such purchaser shall constitute a termination of any lease or sublease
unless Beneficiary or such purchaser shall give written notice thereof to such tenant or subtenant.
4.12. Governing Law. THIS DEED OF TRUST SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.
4.13. Joint and Several Obligations. Should this Deed of Trust be signed by more than
one party, all obligations herein contained shall be deemed to be the joint and several obligations of
each party executing this Deed of Trust. Any married person signing this Deed of Trust agrees that
recourse may be had against community assets and against his or her separate property for the
satisfaction of all obligations contained herein.
4.14. Interpretation. In this Deed of Trust the singular shall include the plural and the
masculine shall include the feminine and neuter and vice versa, if the context so requires.
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4.15. Completion of Construction. This Deed of Trust is a construction deed of trust within
the meaning of California Commercial Code 0 9313. For purposes of subdivision (6) of said statute,
"completion of construction" shall not be deemed to occur prior to completion of all work, and
installation or incorporation into the Improvements of all materials, for which sums secured hereby are
disbursed by Beneficiary.
4.16. Reconveyance by Trustee. Upon written request of Beneficiary stating that all sums
secured hereby have been paid, and upon surrender of this Deed of Trust to Trustee for cancellation and
retention and upon payment by Trustor of Trustee's fees, Trustee shall reconvey to Trustor, or to the
person or persons legally entitled thereto, without warranty, any portion of the Trust Estate then held
hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the
truthfulness thereof. The grantee in any reconveyance may be described as "the person or persons
legally entitled thereto." Such grantee shall pay Trustee a reasonable fee and Trustee's costs incurred
in so reconveying the Trust Estate.
4.17. Counterparts. This document may be executed and acknowledged in counterparts, all
of which executed and acknowledged counterparts shall together constitute a single document.
Signature and acknowledgment pages may be detached from the counterparts and attached to a single
copy of this document to physically form one document, which may be recorded.
4.18. Nonforeign Entity. Section 1445 of the Internal Revenue Code of 1986, as amended
(the "Internal Revenue Code") provides that a transferee of a U.S. real property interest must withhold
tax if the transferor is a foreign person. To inform Beneficiary that the withholding of tax will not be
required in the event of the disposition of the Property or Improvements pursuant to the terms of this
Deed of Trust, Trustor hereby certifies, under penalty of perjury, that: (a) Trustor is not a foreign
corporation, foreign partnership, foreign trust or foreign estate, as those terms are defined in the Internal
Revenue Code and the regulations promulgated thereunder; and (b) Trustor's U.S. employer
identification number is ; and (c) Trustor's principal place of business is 475 W. Bradley
Avenue, El Cajon, California 92020. It is understood that Beneficiary may disclose the contents of this
certification to the Internal Revenue Service and that any false statement contained herein could be
punished by fine, imprisonment or both. Trustor covenants and agrees to execute such further
certificates, which shall be signed under penalty of perjury, as Beneficiary shall reasonably require. The
covenant set forth herein shall survive the foreclosure of the lien of this Deed of Trust or acceptance of a
deed in lieu thereof.
4.19. Substitute Trustee. Beneficiary at any time and from time to time, by instrument in
writing, may substitute and appoint a successor Trustee (either corporate or individual) to any Trustee
named herein or previously substituted hereunder, which instrument when executed, acknowledged, and
recorded in the Official Records of the Office of the Recorder of the county or counties where the
Property is located shall be conclusive proof of the proper substitution and appointment of each
successor trustee or trustees, who shall then have all the title, powers, duties and rights of the
predecessor Trustee, without the necessity of any conveyance from such predecessor. Trustee shall not
be obligated to notify any party hereto of pending sale under any other Deed of Trust, or, unless brought
by Trustee, or any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party.
4.20. Fixture Filing. This Deed of Trust constitutes a financing statement filed as a fixture
filing in the Official Records of the County Recorder in the county in which the Property is located with
respect to any and all fixtures included within the term "Property" as used herein and with respect to any
goods or other personal property that may now be or hereafter become such fixtures.
4.21. Spouse's Separate Property. Any Trustor who is a married person expressly agrees
that recourse may be had against his or her separate property.
LAO1\79279.2
6/1/95 17
IN WITNESS WHEREOF, the undersigned has executed this Assignment of Rents, Leases,
Income and Profits as of the date first above wriien.
CIP LIMITED, L.P.,
A California Limited Partnership
By its General Partner:
Whammy, Inc. A California corporation
By:
By:
By:
By:
By:
By:
Jeffrey C. Hamann,
President
Daniel M. Whitaker,
Secretary
Jeffrey C. Hamann, as an
individual and as Trustee
of the J.C. Hamann Family
Trust, UTD 4/25/86
Gregg Hamann, as an
individual and as Trustee
of the Gregg Hamann Family
Trust, UTD 4/25/86
Daniel M. Whitaker as an
individual
Daniel M. Whitaker and/or Dona C.
Whitaker, Co-Trustees of the Whitaker
Family Trust, UTD 10/22/79, as Amended
and Restated 12/22/83
LAO1 \79279.2
6/1/95 18
STATE OF 1
COUNTY OF 1 1 ss
On I19- , before me, , a Notary Public in and for said State, personally
appeared , personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person@) 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@), or the
entity upon behalf of which the person@) acted, executed the instrument.
WITNESS my hand and official seal.
[SEAL]
STATE OF ) 1 ss
COUNTY OF )
On , 19-, before me, , a Notary Public in and for said State, personally
appeared , personally known to me (or proved to
me 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.
[SEAL]
STATE OF 1
COUNTY OF 1 1 ss
On , 19-, before me,
, a Notary Public in and for said State, personally
appeared , personally known to me (or proved to
me 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.
STATE OF
COUNTY OF ss
On 819- , before me,
, a Notary Public in and for said State, personally
appeared
me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the
, personally known to me (or proved to
-- . 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.
[SEAL]
COUNTY OF )
On , 19-, before me,
, a Notary Public in and for said State, personally
appeared
me on the basis of satisfactory evidence) to be the person@) 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(& or the
entity upon behalf of which the person(@ acted, executed the instrument.
, personally known to me (or proved to
WITNESS my hand and official seal.
STATE OF 1
COUNTY OF 1 1 ss
On , 19-, before me,
, a Notary Public in and for said State, personally
appeared
me on the basis of satisfactory evidence) to be the person(s) whose name(s) Ware subscribed to the
, personally known to me (or proved to
.. . within instrument and acknodedged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature@) on the instrument the person@), or the
entity upon behalf of which the person(@ acted, executed the instrument.
WITNESS my hand and official seal.
[SEAL]
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
Name r FIRST INTERSTATE BANK
Address 401 B Street, #304
City & San Diego, CA 92101 State
1
_I
SPACE ABOVE THIS LINE FOR RECORDERS USE
Loan No.
SUBORDINATION, NON-DISTURBANCE,
AND ATORNMENT AGREEMENT
THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT is made this 1st
day of July, 1995, by and between CIP LIMITED, L.P., a California Limited Partnership, owner of the land
hereinafter described and hereinafter referred to as ("Owner"), AALTO SCIENTIFIC, LTD., a California
corporation, present owner and holder of the leasehold estate created by the lease hereinafter described
and hereinafter referred to as ("Lessee"), and FIRST INTERSTATE BANK OF CALIFORNIA, a California
corporation, acting as trustee under that certain Indenture dated as of July 1, 1995 (the "Indenture")
between the Industrial Development Authority of the City of Carlsbad, California ("Issuer") and First Interstate
Bank of California, herein referred to as ("Lender"), with reference to the following Recitals:
Recitals
A. CIP Limited, L.P., a California Limited Partnership (as assignee of Hamann Investment, A California
General Partnership), lessor and Aalto Scientific, Ltd., as lessee entered into a lease agreement, dated
November 3, 1994, ("Lease") covering that real property described in Exhibit "A attached hereto and made
a part hereof (the "Premises"), which lease was unrecorded.
B. Lender is about to record or has recorded a deed of trust (the "Deed of Trust") on property which
includes the Premises (the "Property"). The Deed of Trust will secure a loan to Owner in the amount of Two
Million Seventy Thousand Dollars ($1,102,500.00) (the "Loan") made by the Issuer to Owner pursuant to
a Loan Agreement dated as of July 1, 1995 (the "Loan Agreement"). The rights of the Issuer under the Loan
Agreement were assigned to the Lender pursuant to the Indenture.
C. As a condition for making the Loan to Owner, Issuer has requested that Owner and Lessee execute
a subordination agreement providing for the Lease to be subordinate and inferior to the lien of the Deed of
Trust.
D. Lender and Lessee desire hereby to establish certain rights, safeguards, obligations and priorities
regarding their respective interests by means of this Agreement.
LA01\80271.1 1
NOW, THEREFORE, the parties hereto covenant and agree as follows:
1. Provided the Lease is in full force and effect and there are no defaults thereunder, then:
(a) The right of possession of Lessee to the Premises and the Lessee’s rights arising out of the Lease shall not be affected or disturbed by Lender in the exercise of any of its rights under the Deed
of Trust as Beneficiary or the promissory note secured thereby.
(b) Lessee shall not be joined as an adverse party or defendant in any action or proceeding
which may be instituted or commenced by Lender or its successor to foreclose or enforce the Deed of Trust,
unless such joinder shall be necessary to foreclose the Deed of Trust.
(c) In the event that Lender, or any other person, acquires title to the Property pursuant to
the exercise of any remedy provided for in the Deed of Trust or under the laws of California, the Lease shall
not be terminated or affected by said foreclosure or sale resulting from any such proceeding, and Lender
hereby covenants that any sale by it of the Property pursuant to the exercise of any rights and remedies
under the Deed of Trust, or otherwise, shall be made subject to the Lease and the rights of the Lessee
thereunder; and the Lessee covenants and agrees to attorn to Lender or such person as its new Owner, and
the Lease shall continue in full force and effect as a direct lease between Lessee and Lender, or such other
person, upon all the terms, covenants, conditions and agreements in the Lease between Lessee and Owner.
However, in no event shall Lender or other such person be:
(i) Liable for any act or omission of the Owner, or
(ii) Bound by any payment of rent, additional rent, or advance rental made by the
Lessee to the Owner covering an aggregate period of more than one (1) month; or
(iii) Bound by an amendment or modification of the Lease made without the written consent of Lender or its successors in interest; or
(iv) Subject to any offsets or defenses which Lessee might have against any prior Owner
(including Owner); or
(v) Bound by any securii deposit which Lessee may have paid to any prior Owner
(including Owner) unless such deposit has been provided to Lender or to such other person (as the case
may be).
Notwithstanding the foregoing, the respective rights and obligations of Lessee and Lender upon
such attornment (i) shall, to the extent of the then remaining balance of the term of the Lease, including any
renewals or extensions thereof, be the same as now set forth in the Lease and (ii) by this reference are
incorporated herein as a part of this Agreement.
2. The Lease and all of Lessee’s rights thereunder (including, but not limited to, all rights of first
refusal and purchase options, if any) shall be subject and subordinate to the lien of the Deed of Trust and
to all the terms, conditions and provisions thereof, to all advances made or to be made thereunder, and to
any renewals, extensions, modifications or replacements thereof.
3. Lessee agrees and acknowledges that Lender, in making disbursements of the proceeds of
the Loan pursuant to any agreement with Owner, shall be under no obligation or duty to, nor has Lender
represented that it will, see to the application of such proceeds by the person or persons to whom Lender
disburses such proceeds, and any application or use of such proceeds for purposes other than those
provided for in such agreement or agreements shall not defeat the subordination herein in whole or in part.
4. The foregoing provisions shall be self-operative and effective without the execution of any
LA01\80271.1 2
further instruments on the part of any party hereto. Lessee agrees, however, upon the written demand by
any successor to Owner’s interest in the Premises within sixty (SO) days after such successor receives title
to the Property, to execute an instrument in confirmation of this Agreement satisfactory to such successor,
in which Lessee shall acknowledge the attornment set forth in this Agreement and which shall set forth the
terms and conditions of its tenancy.
5. This Agreement may not be modified other than by an agreement in writing signed by the
parties hereto or by their respective successors in interest.
6. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their
successors and assigns.
7. This Agreement shall take effect upon its execution by all of the parties hereto.
FIRST INTERSTATE BANK OF CALIFORNIA
a California corporation (“Lender“)
By:
Title:
AALTO SCIENTIFIC, LTD.
a California corporation (“Lessee”)
By:
Title:
[signatures continued on next page]
LA01\80271.1 3
CIP LIMITED, L.P.
A California Limited Partnership
Bv its General Partner:
Whammy, Inc. A California corporation
By:
Jeffrey C. Hamann,
President
By:
Daniel M. Whitaker,
Secretary
By:
Jeffrey C. Hamann, as an
individual and as Trustee
of the J.C. Hamann Family
Trust, UTD 4/25/86
By:
Gregg Hamann, as an
individual and as Trustee
of the Gregg Hamann Family
Trust, UTD 4/25/86
By:
Daniel M. Whitaker as an
individual
By:
Daniel M. Whitaker and/or Dona
C. Whitaker, Co-Trustees of
the Whitaker Family Trust,
UTD 10/22/79, as Amended
and Restated 12/22/83
LA01\80271.1 4
STATE OF 1 1 ss
COUNTY OF )
On , 19-, before me,
a Notary Public in and for said State, personally appeared
, personally known to me (or proved to me 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.
[SEAL]
STATE OF )
COUNTY OF )
1 ss
On , 19-, before me, a
Notary Public in and for said State, personally appeared
, personally known to me (or proved to me 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.
[SEAL]