Deed Of Trust

EXHIBIT 10.7


EXECUTION COUNTERPART


DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FINANCING STATEMENT


STATE OF TEXAS (S)
(S) KNOW ALL MEN BY THESE PRESENTS: COUNTY OF DALLAS (S)


THAT, COMPUCOM SYSTEMS, INC., a Delaware corporation (hereinafter called "Grantor"), in order to secure the payment of the indebtedness hereinafter ------- referred to and the performance of the obligations, covenants, agreements and undertakings of Grantor hereinafter described, does hereby GRANT, BARGAIN, SELL, CONVEY, TRANSFER, ASSIGN and SET OVER to MICHAEL F. HORD, Trustee, of Dallas County, Texas (hereinafter called the "Trustee") for the benefit of NATIONSBANK
------- OF TEXAS, N.A., a national banking association (hereinafter called "NationsBank"), having its principal office at 901 Main Street, Suite 6700, ----------- Dallas, Texas 75202, as the administrative agent (hereinafter in such capacity NationsBank is called the "Administrative Agent") on behalf of NationsBank and
-------------------- each other lender a party to the Credit Agreement described below (hereinafter collectively called "Banks"), all of the real estate situated in the State of
----- Texas in the Counties set forth in Exhibit "A" attached hereto and described in
----------- Exhibit "A" attached hereto and made a part hereof (the "Land"), together with - ----------- ---- (i) all the buildings and other improvements now on or that may be hereafter placed on said Land; (ii) Grantor's interest in all materials, equipment, fixtures or other property whatsoever, now or hereafter attached to, installed in, or used in connection with the buildings and other improvements now erected or hereafter to be erected on said Land, including, but not limited to, all heating, plumbing, lighting, water heating, cooking, laundry, refrigerating, incinerating, ventilating and air conditioning equipment, disposals, dishwashers, refrigerators and ranges, utility lines and equipment (whether owned individually or jointly with others), sprinkler systems, fire extinguishing apparatus and equipment, tanks, engines, pipes, fittings, dynamos, generators, machines, elevators, motors, cabinets, shades, blinds, partitions, window screens, screen doors, storm windows, awnings, drapes, and rugs and other floor coverings, and all fixtures, accessions and appurtenances thereto, and all renewals or replacements of or substitutions for any of the foregoing, all of which property and things are hereby declared to be permanent fixtures and accessions to the freehold and part of the realty conveyed herein as security for the indebtedness herein mentioned; (iii) Grantor's interest in all easements and rights of way now or hereafter used in connection with any of the foregoing real estate or as a means of ingress to or egress from said real estate; (iv) Grantor's interest, now or hereafter acquired, in and to any streets, ways, alleys and/or strips and gores of land adjoining said Land or any part thereof; and (v) Grantor's interest in and to all rights, estates, hereditaments, powers and privileges appurtenant or incident to the foregoing.


TO HAVE AND TO HOLD the foregoing property (herein called the "Mortgaged Property") unto the Trustee and his successors or substitutes in this - ------------------- trust and to his or their successors and assigns, IN TRUST, however, upon the terms, provisions and conditions herein set forth.


In order to secure the payment of the indebtedness hereinafter referred to and the performance of the obligations, covenants, agreements and undertakings of Grantor hereinafter described, Grantor further grants (to the extent not prohibited by Applicable Law) to the Administrative Agent a security interest and lien in Grantor's right, title and interest in and to all present and future (i) goods, equipment, furnishings, fixtures, furniture, chattels owned by Grantor now or hereafter attached or affixed to or used in or about the building or buildings now erected or hereafter to be erected on the Mortgaged Property or otherwise located on the Mortgaged Property, (ii) fixtures, accessions and appurtenances to any of the foregoing or following, (iii) renewals or replacements of or substitutions for any of the foregoing or following, (iv) building materials and equipment now or hereafter delivered to said premises and intended to be installed therein, (v) occupancy agreements, leases, rents (including security and other deposits and advance rentals under occupancy agreements and lease agreements now or at any time hereafter covering or affecting any of the Mortgaged Property and all property described in this paragraph and held by or for the benefit of Grantor), fees, royalties, bonuses, issues, profits, revenues or other income or benefits of whatever nature received or due in connection with the Mortgaged Property and all property described in this paragraph, (vi) monetary deposits which Grantor has been required to give to any public or private utility with respect to utility services furnished to the Mortgaged Property, (vii) permits, licenses, franchises, certificates, and agreements relating to any of the foregoing or following, and all other rights and privileges obtained in connection with the Mortgaged Property and all property described in this paragraph, (viii) plans, specifications, maps, surveys, reports, operating and management contracts, architectural, engineering, construction and development contracts, books of account, insurance policies, guarantees, warranties and other documents, of whatever kind or character, relating to the ownership, use, construction upon, occupancy, leasing, sale or operation of the Mortgaged Property and all property described in this paragraph, (ix) oil, gas and other hydrocarbons and other minerals produced from or allocated to the Mortgaged Property and all products processed or obtained therefrom, the proceeds thereof, and all accounts and general intangibles under which such proceeds may arise, (x) all proceeds from the taking of any of the Mortgaged Property and any property described in this paragraph or any rights appurtenant thereto by right of eminent domain or by private or other purchase in lieu thereof, (xi) all proceeds (including premium refunds) of each policy of insurance relating to the Mortgaged Property and any property described in this paragraph, (xii) all guarantees, sureties and other agreements assuring performance of any obligation of any tenant of the Mortgaged Property and all property described in this paragraph, and (xiii) all proceeds arising from or by virtue of the sale, lease or other disposition of the Mortgaged Property and any property described in this paragraph (all of the property described in this paragraph hereinafter collectively called the Personal Property") and all proceeds and products of the Personal Property. - ------------------ (The Mortgaged Property and the Personal Property are hereinafter sometimes collectively called the "Property").
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ARTICLE I.


Secured Indebtedness
--------------------


1.1. Secured Indebtedness. This Deed of Trust, Assignment of Leases and
-------------------- Rents, Security Agreement and Financing Statement (hereinafter called this "Deed
---- of Trust") is made to secure and enforce the payment of the following, - -------- agreements, documents, obligations, indebtedness and liabilities: (a) all present and future obligations, indebtedness and liabilities, and all renewals and extensions of all or any part thereof of Grantor to Banks or any Bank arising from, by virtue of, or pursuant to the Credit Agreement dated as of September 26, 1996 among Grantor, Administrative Agent and Banks (said Credit Agreement, as amended, modified, renewed, extended or restated from time to time, the "Credit Agreement"), the Notes (as defined in the Credit Agreement),
---------------- the other Loan Documents (as defined in the Credit Agreement), including, without limitation, interest, fees and other charges that would accrue or become owing both prior to and subsequent to and but for the commencement of any proceeding against or with respect to Grantor under any chapter of the Bankruptcy Code of 1978, 11 U.S.C. (S) 101 et. seq. whether or not a claim is
-- --- allowed for the same in any such proceeding, and (b) all indebtedness and obligations incurred or arising pursuant to the provisions of this Deed of Trust. The indebtedness referred to in this Paragraph 1.1 is hereinafter sometimes called the "Secured Indebtedness". This Deed of Trust, the Credit
-------------------- Agreement, the Notes, the other Loan Documents as defined in the Credit Agreement, and all other instruments, certificates, affidavits or documents evidencing, governing, securing, guaranteeing, or relating to the Secured Indebtedness all as amended, modified, renewed, extended or restated from time to time, are hereinafter called the "Financing Documents".
-------------------


ARTICLE II.


Representations and Warranties
------------------------------


2.1. Representations and Warranties. Grantor represents and warrants to the
------------------------------ Trustee, the Administrative Agent and the Banks as follows:


(a) Title and Authority. Grantor is the lawful owner of good and
-------------------
indefeasible fee simple title to the Property, subject only to the matters
described in Exhibit "B" attached hereto and made a part hereof (the
-----------
"Permitted Encumbrances") and has good right and authority to grant,
-----------------------
bargain, sell, transfer, assign and mortgage the Mortgaged Property and to
grant a security interest in the Personal Property.


(b) Compliance with Covenants and Laws. To the best of Grantor's
----------------------------------
knowledge after reasonable investigation, the construction, occupancy,
operation and use of the Property and the intended use thereof by Grantor
subject to the provisions of Article V below complies with all laws,
statutes, ordinances, rules, regulations, orders and determinations of any
governmental authority and any board of fire underwriters (or


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any body exercising similar functions) and any restrictive covenants or
deed restrictions (whether recorded or otherwise), including, without
limitation, all applicable zoning, subdivision, platting, licensing,
building, flood disaster, statutes, ordinances, rules, regulations, orders
and determinations of any governmental authority (hereinafter sometimes
collectively called "Applicable Laws"), except where the failure to so
---------------
comply could not have a material adverse effect on (i) the financial
condition or prospects of Grantor, (ii) the value of the Property taken as
a whole, (iii) Grantor's use of, and business operations of, the Property
taken as a whole, or (iv) the validity or enforceability of this Deed of
Trust or the liens and security interests granted hereunder (hereinafter
collectively called "Material Adverse Effect"). To the best of Grantor's
-----------------------
knowledge after reasonable investigation, Grantor has obtained all
requisite zoning, utility, building, health, operating and occupancy
permits from the governmental authorities having jurisdiction over the
Property, except where the failure to obtain such zoning and permits would
not have a Material Adverse Effect.


(c) No Suits. There are no judicial or administrative actions, suits
--------
or proceedings pending or, to the best of Grantor's knowledge threatened,
affecting the Property which, if adversely determined, would be reasonably
likely to have a Material Adverse Effect, or involving the validity,
enforceability or priority of this Deed of Trust.


(d) Condition of Property. To the best of Grantor's knowledge after
---------------------
reasonable investigation, the Mortgaged Property is served by electric,
gas, storm and sanitary sewers, sanitary water supply, telephone and other
utilities required for the Grantor's current and anticipated uses thereof
on the date hereof at or within the boundary lines of the Mortgaged
Property. To the best of Grantor's knowledge after reasonable
investigation, all streets, alleys and easements (including without
limitation easements for ingress and egress, easements for vehicular
traffic and parking and for pedestrian traffic, easements for utilities,
and easements for reciprocal uses) necessary to serve Grantor's current and
anticipated uses of the Mortgaged Property have been completed and are
serviceable, such streets, alleys and easements have been dedicated and
accepted by applicable governmental entities, and/or all agreements
creating such easements have been filed of record in the real property
records of the County set forth on Exhibit "A" attached hereto. The
---------------------------
Mortgaged Property is in reasonably good condition and repair and proper
working order, and is free from damage caused by fire or other casualty.
Grantor has no actual knowledge of any latent or patent structural or other
significant defect or deficiency in the Mortgaged Property that (i) would
materially and adversely affect Grantor's intended use of the Mortgaged
Property or (ii) have a Material Adverse Effect. None of the Mortgaged
Property not covered by flood insurance is within a flood plain. To the
best of Grantor's knowledge after reasonable investigation, none of the
improvements on the Mortgaged Property create an encroachment over, across
or upon any of the Mortgaged Property boundary lines, rights of way or
easements, and no buildings or other improvements on adjoining land create
such an encroachment, except as disclosed on the survey of the Land
delivered to the


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Administrative Agent. There is, to the actual knowledge of Grantor, no
condemnation proceeding pending or threatened that would affect the
Mortgaged Property.


(e) Warranty. Grantor will warrant and forever defend the title to
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the Mortgaged Property against the claims of all persons whomsoever
claiming or to claim the same or any part thereof, subject to the Permitted
Encumbrances.


2.2. Covenants and Agreements. So long as the Secured Indebtedness or any
------------------------ part thereof remains unpaid, Grantor covenants and agrees with the Administrative Agent and the Banks as follows:


(a) Taxes on Lien.
-------------


In the event of the enactment after the date hereof of any law of the
State of Texas or of any other governmental entity deducting from the value
of property for the purpose of taxation any lien or security interest
thereon, or imposing upon the Trustee, the Administrative Agent or any Bank
the payment of the whole or any part of the taxes (other than taxes imposed
on the overall income of Banks, the Trustee or the Administrative Agent) or
assessments or charges or liens herein required to be paid by Grantor, or
changing in any way the laws relating to the taxation of deeds of trust or
mortgages or security agreements or debts secured by deeds of trust or
mortgages or security agreements or the interest of the trustee or
beneficiary or mortgagee or secured party in the property covered thereby,
or the manner of collection of such taxes, so as to affect this Deed of
Trust or any of the Secured Indebtedness or the Trustee, the Administrative
Agent or any Bank, then, and in any such event, Grantor, upon demand by the
Trustee, the Administrative Agent or any Bank, shall to the extent not
prohibited by Applicable Law, pay such taxes, assessments, charges or
liens, or reimburse the Trustee, the Administrative Agent or such Bank
therefor.


(b) Ad Valorem Taxes. Grantor will cause to be paid prior to
----------------
delinquency all taxes and assessments heretofore or hereafter levied or
assessed against the Property, or any part thereof, and upon request of the
Administrative Agent will furnish the Administrative Agent with receipts
showing payment of such taxes and assessments prior to the applicable
delinquency date therefor; except that Grantor in good faith may contest,
by appropriate proceedings, the validity, applicability or amount of any
asserted tax or assessment, and, pending such contest, Grantor shall not be
deemed in Default hereunder if, prior to delinquency of the asserted tax or
assessment, Grantor establishes an escrow, or provides security reasonably
acceptable to the Administrative Agent, or reserves have been established
adequate to cover the payment of such tax or assessment with costs,
interest and penalties and a reasonable additional sum to cover possible
costs, interest and penalties (which escrow and/or security shall be
returned to Grantor upon payment of all such taxes, assessments, costs,
interest and penalties), and if Grantor promptly causes to be paid any
amount adjudged by a court of competent jurisdiction to be due, with all
costs, interest and penalties thereon, promptly after such judgment


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becomes final; provided, however, that in any event each such contest shall
be concluded and the tax assessment, costs, interest and penalties shall be
paid prior to the date any writ or order is issued under which the
Property, or any part thereof, may be sold. No reserve (or security
required in (d) below) is required until such time that the aggregate of
alleged unpaid ad valorem taxes on all properties of Grantor and all unpaid
debts described in (d) below shall exceed $10,000.


(c) Operation of Property. Grantor will operate, and will cause the
---------------------
operation of, the Property in a reasonably good and workmanlike manner and
in accordance with all Applicable Laws and will pay all fees or charges of
any kind in connection therewith, except where the failure to so operate
and pay such fees or charges would not have a Material Adverse Effect.
Grantor will keep, and will cause the keeping of, the Property occupied to
the extent necessary not to impair the insurance carried thereon. Grantor
will not use or occupy, or allow the use or occupancy of, the Property in
any manner which violates any Applicable Law, or except where the failure
to so occupy would not have a Material Adverse Effect, which constitutes a
public or private nuisance or which makes void, voidable or cancelable, any
insurance then in force with respect thereto. Grantor will not, without
the prior written consent of the Administrative Agent (which consent shall
not be unreasonably withheld), initiate or consent to any zoning
reclassification of the Property or seek or consent to any variance under
existing zoning ordinances applicable to the Property or use or permit the
use of the Property in such a manner as would result in such use becoming a
nonconforming use under applicable zoning ordinances or other Applicable
Laws. Grantor will not, without the prior written consent of the
Administrative Agent (which consent shall not be unreasonably withheld),
impose any restrictive covenant or any encumbrance upon the Property which
does not constitute a Permitted Encumbrance, execute or file any
subdivision plat affecting the Property or consent to the annexation of the
Property to any municipality. Grantor shall not cause or permit any
drilling or exploration for, or extraction, removal or production of,
minerals from the surface or subsurface of the Property. Grantor will not
do anything to cause the value of the Property to be materially lessened.
If Grantor receives a written notice or claim from any federal, state or
other governmental entity pertaining to the Property, including,
specifically but without limitation, a notice that the Property is not in
compliance with any Applicable Law, Grantor promptly will furnish a copy of
such notice or claim to the Administrative Agent.


(d) Debts for Construction. Grantor will cause all debts and
----------------------
liabilities of any character, including without limitation all debts and
liabilities for labor, material and equipment and all debts and charges for
utilities servicing the Property, incurred in the construction,
maintenance, operation or development of the Property to be paid before the
same become delinquent. Notwithstanding the foregoing, Grantor in good
faith may contest, by appropriate proceedings, the validity, applicability
or amount of any asserted mechanics' or materialmen's liens, and, pending
such contest, Grantor shall not be deemed in Default hereunder if Grantor
provides the Administrative Agent with security reasonably satisfactory to
the Administrative Agent and if Grantor promptly causes to be


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paid any amount adjudged by a court of competent jurisdiction to be due,
with all costs and interest thereon, promptly after such judgment becomes
final; provided, however, that in any event each such contest shall be
concluded and the lien, interest and costs shall be paid, bonded around or
otherwise removed prior to the date any writ or order is issued under which
the Property, or any part thereof, may be sold. No security (or reserve
required in (b) above) is required until such time that the aggregate of
alleged unpaid ad valorem taxes on all properties and all unpaid debts
described in this clause (d) shall exceed $10,000.


(e) Repair and Maintenance. Grantor will keep the Property
----------------------
reasonably in good order, repair, operating condition and appearance,
causing all reasonably necessary repairs and replacements, promptly to be
made, and will not allow any of the Property to be misused, abused or
wasted or to deteriorate, normal wear and tear and casualty excepted.
Grantor promptly will replace all worn-out or obsolete fixtures or personal
property covered by this Deed of Trust that are reasonably necessary in the
operation of the Property with fixtures or personal property comparable to
the replaced fixtures or personal property, and will repaint the Property
when reasonably needed. Notwithstanding the foregoing, Grantor will not,
without the prior written consent of the Administrative Agent do or permit
to be done anything to the Property that materially may impair its value,
including but not limited to (i) removing from the Property any fixtures or
personal property covered by this Deed of Trust (but not including any
personal property in which Grantor is the lessee thereof) which are
necessary or desirable in the operation of the Property, except such as is
replaced by Grantor by an article of equal suitability and value, owned by
Grantor, free and clear of any lien or security interest (except that (i)
created by this Deed of Trust or any other Financing Document, (ii)
otherwise permitted in the Loan Documents or (iii) in respect of
capitalized leases) or such as is permitted to be removed by a tenant
pursuant to such tenant's lease or (ii) making any structural or other
alteration to the Property that materially impairs the value thereof.
Nothing contained herein will prevent tenants of the Property from making
alterations and improvements expressly permitted under their leases of any
part of the Mortgaged Property. Upon request of the Administrative Agent,
Grantor will deliver to the Administrative Agent an inventory describing
and showing the make, model, serial number and location of all fixtures and
personal property used in the management, maintenance and operation of the
Property, with a certification by Grantor that said inventory is a true and
complete schedule of all such fixtures and personal property used in the
management, maintenance and operation of the Property, that such items
specified in the inventory constitute all of the fixtures and personal
property required in the management, maintenance and operation of the
Property, and that all such items are owned by Grantor free and clear of
any lien or security interest (except the Permitted Encumbrances).


(f) Insurance and Casualty. Grantor will keep the Property insured
----------------------
against loss or damage by fire, explosion, windstorm, hail, flood (as to
any portion of the Property which shall at any time be located in an
identified "flood prone" area in which


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flood insurance has been made available pursuant to the Flood Disaster
Protection Act of 1973, and then in the amount of the outstanding balance
of the Notes or the maximum amount of coverage available, whichever is
less), tornado and such other hazards as required by the Administrative
Agent and consistent with industry standards. Notwithstanding the
foregoing, Grantor further covenants and agrees to keep the property
insured by policies of fire, extended coverage and other insurance in such
company or companies reasonably acceptable to the Administrative Agent and
upon such terms and provisions, and with such endorsements, all as
reasonably may be acceptable to the Administrative Agent and consistent
with industry standards. Grantor further agrees that Grantor will deliver
to the Administrative Agent receipts evidencing the payment of all
premiums, and certificates of insurance addressed to the Administrativ ...