DEED OF TRUST, SECURITY AGREEMENT

EXHIBIT 10.54





DEED OF TRUST, SECURITY AGREEMENT,

ASSIGNMENT OF LEASES, RENTS AND PROFITS,

FINANCING STATEMENT AND FIXTURE FILING





made by





COINMACH CORPORATION,



as Grantor,





CHICAGO TITLE INSURANCE COMPANY,



as Trustee,



for the benefit of





BANKERS TRUST COMPANY,



as Collateral Agent,



as Beneficiary



THIS DEED OF TRUST SECURES FUTURE ADVANCES





PREPARED BY AND WHEN RECORDED RETURN TO:



CHICAGO TITLE

INSURANCE CO.

350 N. St. Paul Ste. 250 Main Office

Dallas, Texas 75201 214/720-4000

TABLE OF CONTENTS

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RECITALS................................................. 1 GRANTING CLAUSES......................................... 2

ARTICLE I CERTAIN DEFINITIONS........................... 4

ARTICLE II PARTICULAR COVENANTS OF THE GRANTOR.......... 6



2.1 Payment of Obligations......................... 6

2.2 Warranty of Title.............................. 6

2.3 Due Authorization and Binding Effect........... 7

2.4 To Pay Impositions............................. 7

2.5 To Insure...................................... 11

2.6 To Comply with Laws............................ 12

2.7 Limitation on Disposition of the Mortgaged

Premises....................................... 13

2.8 To Maintain Priority of Liens.................. 13

2.9 Maintenance of Mortgaged Premises;

Covenant Against Waste......................... 14

2.10 After-Acquired Property........................ 14

2.11 Further Assurances............................. 14

2.12 Recorded Instruments........................... 15

2.13 Hazardous Material............................. 15

2.14 Asbestos....................................... 17

ARTICLE III LEASES; ASSIGNMENT AS FURTHER SECURITY, ETC. 18



3.1 Assignment of Leases, Rents, Issues and

Profits........................................ 18

3.2 Entry upon Default............................. 18

3.3 The Grantor's Covenants Regarding Leases....... 19

ARTICLE IV SECURITY AGREEMENT UNDER THE UNIFORM

COMMERCIAL CODE.............................. 20



4.1 Security Agreement............................. 20

4.2 Assignment of Non-Code Collateral.............. 22

4.3 Conflict with the Security Agreement........... 22

4.4 Termination.................................... 22

ARTICLE V EVENTS OF DEFAULT AND REMEDIES 22



5.1 "Events of Default"............................ 22

5.2 Remedies....................................... 22

5.3 Sale; No Marshalling of Assets;

Appointment of Receiver........................ 25



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5.4 Indemnification by the Grantor................. 27

5.5 Remedies Cumulative; No Waiver; Etc............ 28

5.6 No Merger...................................... 28

ARTICLE VI PROVISIONS OF GENERAL APPLICATION 29



6.1 Waiver; Amendment.............................. 29

6.2 Notices........................................ 29

6.3 Additional Sums Payable by the Grantor......... 30

6.4 Captions....................................... 30

6.5 Successors and Assigns......................... 30

6.6 Gender and Number.............................. 30

6.7 Severability................................... 30

6.8 Subrogation.................................... 30

6.9 Usury.......................................... 31

6.10 Counterparts................................... 31

6.11 Controlling Law................................ 31

6.12 Entire Agreement............................... 31

6.13 Release........................................ 31

6.14 Additional Advances............................ 32

6.15 Fixture Filing................................. 32

6.16 Financing Statement............................ 32

6.17 Actions of Beneficiary......................... 33

6.18 Deed of Trust Secures Line of Credit........... 33

6.19 Date and Maturity of Obligations............... 33

6.20 Concerning Trustee............................. 33

6.21 Beneficiary's Authority........................ 33



Schedule I - Permitted Encumbrances



Exhibit A - Description of Premises



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DEED OF TRUST, SECURITY AGREEMENT,

ASSIGNMENT OF LEASES, RENTS AND PROFITS,

FINANCING STATEMENT AND FIXTURE FILING

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THIS DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF LEASES, RENTS AND PROFITS, FINANCING STATEMENT AND FIXTURE FILING (this "Deed of Trust"), made as of this ____ day of _________, 1997 by COINMACH CORPORATION, a corporation organized and existing under the laws of the State of Delaware and having an office at 55 Lumber Road, Roslyn, New York 11576, as grantor (the "Grantor"), in favor of CHICAGO TITLE INSURANCE COMPANY (the "Trustee"), having an address at 350 N. St. Paul, Suite 250, Dallas, Texas 75201, for the use and benefit of BANKERS TRUST COMPANY, having an office and post office address at 130 Liberty Street, New York City, New York County, New York 10006, as beneficiary, in its capacity as Collateral Agent (the "Beneficiary") for its benefit and the benefit of the Secured Creditors (as defined below). Except as otherwise defined herein, terms used herein and defined in the Credit Agreement (as defined below) shall be used herein as therein defined.



R E C I T A L S :

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1. Coinmach Laundry Corporation, the Grantor and various financial institutions listed in Annex I attached thereto (the "Banks") , Bankers Trust Company, as Administrative Agent (together with any successors, the "Administrative Agent"), First Union National Bank of North Carolina, as Syndication Agent (together with any successors, the "Syndication Agent") and Lehman Commercial Paper, Inc., as Documentation Agent (together with any successors, the "Documentation Agent") have entered into a Credit Agreement, dated as of the date hereof providing for the making of Loans and the issuance of, and participation in, Letters of Credit, as contemplated therein (such agreement, as amended, modified, extended, renewed, replaced, restated or supplemented from time to time, and including any agreement extending the maturity of, or restructuring all or any portion of the Indebtedness under such agreement or any successor agreement, the "Credit Agreement").



2. The Grantor may from time to time be party to one or more interest rate agreements, interest rate cap agreements, interest rate collar agreements or other similar agreements or arrangements (each such agreement or arrangement with an Interest Rate Protection Creditor (as hereinafter defined), an "Interest Rate Protection Agreement"), with a Bank or an affiliate of a Bank (each such Bank or affiliate, even if the respective Bank subsequently ceases to be a Bank under the Credit Agreement for any reason, together with such Bank's or affiliate's successors and assigns, collectively, the "Interest Rate Protection Creditors", and the Interest Rate Protection Creditors together with the Bank Creditors, hereinafter collectively being called the "Secured Creditors").



3. The Grantor is the owner of the fee simple interest in and to the Premises and the Improvements (each as hereinafter defined).



4. It is a condition precedent to each of the above-described extensions of credit that the Grantor shall have executed and delivered this Deed of Trust to the Beneficiary.



5. The Grantor desires to execute this Deed of Trust to satisfy the conditions described in the preceding paragraph.



6. This Deed of Trust is given pursuant to the Credit Agreement.





A G R E E M E N T :

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NOW, THEREFORE, in consideration of the benefits accruing to the Grantor, the receipt and sufficiency of which are hereby acknowledged, and to secure the prompt and complete payment and performance when due of all of the Obligations (as hereinafter defined),



THE GRANTOR HEREBY GIVES, GRANTS, BARGAINS, SELLS, TRANSFERS, CONVEYS AND ASSIGNS TO THE TRUSTEE, in trust, with powers of sale, for the use and benefit of beneficiary IN FEE SIMPLE all of its right, title and interest, whether now owned or hereafter acquired, in the hereinafter described property, whether now owned or hereafter acquired, and, insofar as such property consists of equipment, accounts, accounts receivable, contract rights, general intangibles, inventory, fixtures, proceeds of collateral or any other personal property of a kind or character defined in or subject to the applicable provisions of the Uniform Commercial Code (as in effect in the State of Texas), the Grantor hereby grants to the Beneficiary a security interest in all of the Grantor's right, title and interest therein, namely:



I. All those certain lots, pieces or parcels of land described in

Exhibit A annexed hereto and hereby made a part hereof, including all and - --------- singular easements, rights, privileges, tenements, hereditaments and appurtenances thereunto belonging or in any way appertaining thereto, and the reversion and remainder thereof (herein collectively called the "Land"); and all of the estate, right, title, interest, claim or demand whatsoever of the Grantor therein and in and to any land lying in the bed of any street, road or avenue, open or proposed, in front of or adjoining or adjacent to the Land, to the center line thereof, either in law or in possession or expectancy, now or hereafter acquired (all of the foregoing collectively herein called the "Premises");



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II. All right, title and interest of the Grantor in and to (i) all buildings and other improvements and additions thereto now erected or hereafter constructed or placed upon the Premises or any part thereof, including but not limited to site improvements and infrastructure improvements (collectively, the "Improvements"); (ii) except as otherwise provided herein or in the Credit Agreement, all machinery, devices, fixtures, apparatus, interior improvements, appurtenances and equipment of every kind and nature whatsoever (other than rolling stock and motor vehicles) owned by the Grantor and now or hereafter attached to or placed in or upon the Premises or the Improvements, or any part thereof, and used or procured for use in connection with the operation of the Premises or any business conducted thereon (collectively, the "Equipment");



III. All right, title and interest of the Grantor in and to all insurance or other proceeds for damage done to the Improvements or the Equipment and all awards hereafter to be made to or for the account of the Grantor for the permanent or temporary taking by eminent domain of the whole or any part of the Premises, the Improvements or the Equipment, or any lesser estate therein, or easement appurtenant thereto (including, without limitation, any awards for change of grade of streets), all of which proceeds and awards are hereby assigned to the Beneficiary, subject to the further provisions of this Deed of Trust;



IV. Except as otherwise provided herein or in the Credit Agreement, all right, title and interest of the Grantor in and to all of the rents, income, receipts, revenues, issues, benefits and profits of the Premises, including all Leases (as hereinafter defined) now or hereafter entered into covering any part of the Premises, all renewals, extensions, subleases or assignments thereof, all other occupancy agreements, by concession, license or otherwise, all guaranties of the obligations of any tenant thereunder and all amendments, extensions, renewals and modifications of the foregoing, including all interest of the Grantor as landlord in and to the same, all of which are hereby assigned to the Beneficiary, subject, however, to the right of the Grantor to receive and use the same to the extent hereinafter set forth; and



V. All right, title and interest of the Grantor in and to all water, water rights, mineral rights, oil, gas, ditches, ditch rights, reservoirs and reservoir rights, if any, appurtenant to, located on or used in connection with the Premises or the Improvements, whether existing now or hereafter acquired (all of the foregoing Premises, Improvements, Equipment, appurtenances, estates, rights, privileges, interests and franchises hereby mortgaged, or intended so to be, being hereinafter collectively referred to as the "Mortgaged Premises").



TO HAVE AND TO HOLD the Mortgaged Premises now or hereafter owned by the Grantor, unto (i) the Trustee, his



- 3 - substitutes or successors, forever, to the extent the same constitutes real property or an interest therein and (ii) Beneficiary, to the extent the same does not constitute real property or an interest therein, in either case for the benefit of Beneficiary and Beneficiary's successors and assigns forever, for the purposes set forth herein.





ARTICLE I



CERTAIN DEFINITIONS

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In addition to other definitions contained herein, the following terms shall have the meanings set forth below, unless the context of this Deed of Trust otherwise requires.



1.1 "due and payable" when used with reference to any and all sums secured by this Deed of Trust shall mean due and payable, whether at the date of payment or at the date of maturity specified in the Credit Agreement or other Credit Documents after giving effect in all cases to applicable grace periods; or by acceleration or call for payment as provided in the Credit Agreement or other Credit Documents or this Deed of Trust; or, in the case of Impositions, the last day upon which any charge may be paid without penalty and/or interest.



1.2 "Events of Default" shall mean any Event of Default under, and as defined in, the Credit Agreement, and in any event shall include any payment default on any of the Obligations after the expiration of any applicable grace period provided in the Credit Agreement.



1.3 "Governmental Authorities" shall mean all federal, state, county, municipal and local governments and all departments, commissions, boards, bureaus and offices thereof, having or claiming jurisdiction over the Mortgaged Premises or any part thereof.



1.4 "Impositions" shall mean all duties, taxes, water and sewer rents, rates and charges, assessments (including, but not limited to, all assessments for public improvements or benefits), charges for public utilities, excises, levies, license and permit fees and other charges, ordinary or extraordinary, whether foreseen or unforeseen, of any kind and nature whatsoever, which prior to or during the term of this Deed of Trust will have been or may be laid, levied, assessed or imposed upon or become due and payable out of or in respect of, or become a lien on the Premises, the Improvements, the Equipment or any other property or rights included in the Mortgaged Premises, or any part thereof or appurtenances thereto, or which are levied or assessed against the rent and income received by the Grantor therefrom, by virtue of any present or future law, order or ordinance of the United States of



- 4 - America or of any state, county or local government or of any department, office or bureau thereof or of any other Governmental Authority, but shall expressly not include income or franchise taxes or similar taxes based upon or measured by income, assessed by any Governmental Authority and imposed on the Trustee, Beneficiary or their respective successors or assigns by reason of the ownership of this Deed of Trust or the obligations or the receipt of interest.



1.5 "Involuntary Rate" shall mean the rate of interest described in Section 1.08(c) of the Credit Agreement.



1.6 "Legal Requirements" shall mean all present and future laws, ordinances, rules, regulations and requirements of all Governmental Authorities, and all orders, rules and regulations of any national or local board of fire underwriters or other body exercising similar functions, foreseen or unforeseen, ordinary or extraordinary, which are applicable to the Mortgaged Premises or any part thereof, or to the sidewalks, alleyways, passageways, curbs and vaults adjoining the same, or to the use or manner of use of any of the foregoing, or to the owners, tenants, or occupants thereof, whether or not any such law, ordinance, rule, regulation or requirement shall necessitate structural changes or improvements or shall interfere with the use or enjoyment of any of the foregoing, and shall also mean and include all requirements of the policies of public liability, fire and all other insurance at any time in force with respect to any of the foregoing.



1.7 "Deed of Trust" shall mean this instrument as originally executed or, if hereafter amended, modified or supplemented, as so amended, modified or supplemented.



1.8 "Beneficiary" shall mean at any given time the Beneficiary herein named and its successors and assigns.



1.9 "Grantor" shall mean at any given time the Grantor herein named and any subsequent owner or owners of the Mortgaged Premises, and its or their respective heirs, executors, administrators, successors and assigns.



1.10 "Obligations" shall mean (a) (x) the principal of and interest on the Notes issued, including all renewals and extensions thereof, and Loans made to the Grantor under the Credit Agreement, and (y) all other obligations and indebtedness (including, without limitation, Indemnities, fees and interest thereon) of the Grantor to the Bank Creditors now existing or hereafter incurred under or arising out of or in connection with the Credit Agreement, the other Credit Documents and the due performance and compliance by the Grantor with all of the terms, conditions and agreements contained in the Credit Agreement and the other Credit Documents (all such principal, interest, obligations and liabilities being herein collectively called the "Credit Agreement Obligations"); (b)



- 5 - all obligations and liabilities owing by the Grantor to the Interest Rate Protection Creditors under, or with respect to, any Interest Rate Protection or Other Hedging Agreement, whether such Interest Rate Protection or Other Hedging Agreement is now in existence or hereafter arising, and the due performance and compliance by the Grantor with all of the terms, conditions and agreements contained therein (all such obligations and liabilities described in this clause (b) being herein collectively called the "Interest Rate Protection Agreement Obligations"); (c) any and all sums reasonably advanced by the Beneficiary in order to preserve the Mortgaged Premises or preserve its security interest or priority thereof in the Mortgaged Premises pursuant to the terms and provisions of this Deed of Trust; (d) in the event of any proceeding for the collection or enforcement of any indebtedness, obligations, or liabilities referred to in clauses (a) and (b) after an Event of Default shall have occurred and be continuing, the reasonable expenses of re-taking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Mortgaged Premises, or of any exercise by the Beneficiary of its rights hereunder, together with reasonable attorneys' fees and court costs; and (e) all amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement under Section 5.4 of this Deed of Trust. It is acknowledged and agreed that the "Obligations" shall include extensions of credit of the types described above, whether outstanding on the date of this Deed of Trust or extended from time to time after the date of this Deed of Trust.



1.11 "State" shall mean the State of Texas.



1.12 "Trustee shall mean at any given time the Trustee herein named and its successors and assigns.





ARTICLE II



PARTICULAR COVENANTS OF THE GRANTOR

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The Grantor represents, warrants, covenants and agrees as follows:



2.1 Payment of Obligations. The Grantor shall pay and perform all of the

---------------------- Obligations as and when due and payable and without offset or counterclaim, and shall observe and comply (including, where applicable, after notice and the expiration of any grace period) in all respects with all of the terms, provisions, conditions, covenants and agreements to be observed and performed by it under this Deed of Trust and any other Credit Document to which it is a party.



2.2 Warranty of Title. The Grantor warrants that as of the date hereof

----------------- (a) (i) it is the lawful owner of and has fee simple



- 6 - title to the Land and the Improvements and (ii) it is the lawful owner of and has good and merchantable title to all of the Equipment, except that Equipment which is leased by the Grantor, in which instance it is the lawful owner of a valid leasehold interest in such Equipment, in each instance subject only to Permitted Encumbrances and Permitted Liens; (b) the Mortgaged Premises are as of the date hereof free and clear of all liens and encumbrances other than Permitted Encumbrances and, with respect to the Equipment, Permitted Liens; (c) this Deed of Trust is and will remain a valid and enforceable first mortgage lien on the Mortgaged Premises, subject only to Permitted Encumbrances; (d) the Grantor has all necessary right, power and lawful authority to mortgage and convey the Mortgaged Premises in the manner and form herein provided; (e) there are no defenses or offsets to this Deed of Trust or to the Obligations which it secures; and (f) the Grantor does now and will forever warrant and defend unto the Trustee and Beneficiary the title to the Mortgaged Premises and the validity and priority of the lien hereof thereon against all claims and demands whatsoever other than Permitted Encumbrances and Permitted Liens.



2.3 Due Authorization and Binding Effect. The execution and delivery by

------------------------------------ the Grantor of this Deed of Trust and its performance hereunder have been duly authorized by all necessary legal action and will not, to Grantor's knowledge, (a) require any consent or approval of any other party which has not already been obtained; (b) violate any applicable provision of any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award presently in effect having applicability to the Grantor; or (c) result in a breach of or constitute a default under any material indenture, mortgage, deed of trust, credit agreement, loan agreement or any other material agreement or instrument to which the Grantor is a party or by which it or its properties (including, without limitation, the Mortgaged Premises) may be bound or affected. This Deed of Trust constitutes the legal, valid and binding obligations of the Grantor, enforceable against the Grantor in accordance with its terms, except as the enforceability hereof may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting creditors' rights generally and by general equitable principles (regardless of whether the issue of enforceability is considered in a proceeding in equity or at law).



2.4 To Pay Impositions.

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2.4.1 The Grantor will pay or cause to be paid, as and when due and payable, all Impositions levied upon the Mortgaged Premises or any part thereof. Notwithstanding the foregoing, if any Imposition may at the option of the payer be paid in installments (whether or not interest shall accrue on the unpaid balance thereof), the Grantor shall have the right, provided that no Event of Default shall have occurred and be continuing, to exercise such option and to cause to be paid or to pay the same



- 7 - (and any accrued interest on the unpaid balance of such Imposition) in installments prior to the imposition of any fine, penalty or cost. The Grantor will not claim any deduction from the Obligations nor shall any deduction be made from the Obligations secured hereby by reason of the payment of taxes assessed against the Mortgaged Premises.



2.4.2 Upon the occurrence and during the continuance of an Event of Default upon demand of the Beneficiary, the Grantor shall deposit with the Beneficiary a sum which bears the same relation to the insurance premiums for all insurance required by the terms hereof in respect of the Mortgaged Premises and/or real estate taxes and assessments assessed against the Mortgaged Premises for the insurance period or tax year then in effect, as the case may be, as the number of months elapsed as of the date of such demand since the last preceding installment of said premiums or taxes or assessments shall have become due and payable bears to 12. For the purpose of this computation, the month in which such last preceding installment of premiums or real estate taxes or assessments became due and payable and the month in which such demand is given shall be included and deemed to have elapsed. On the first day of the month next succeeding the month in which such demand is given, and thereafter on the first day of each and every month during the term of this Deed of Trust, at Beneficiary's option after the occurrence and during the continuance of an Event of Default, the Grantor shall deposit with the Beneficiary a sum equal to one- twelfth of such insurance premiums and/or such taxes and assessments for the then-current insurance period and tax year, so that as each installment of such premiums and taxes and assessments shall become due and payable, the Grantor shall have deposited with the Beneficiary a sum ...