When Recorded, Return To: BANK OF AMERICA TEXAS, N.A. 1925 W. John Carpenter Freeway Irving, Texas 75063 Attn: Robert J. Carroll
DEED OF TRUST, SECURITY AGREEMENT AND
ASSIGNMENT OF RENTS AND LEASES
STATE OF TEXAS )
) KNOW ALL MEN BY THESE PRESENTS: COUNTIES OF BRAZORIA, ) DALLAS, COLLIN, FORT BEND, ) GALVESTON, HARRIS, TRAVIS ) WILLIAMSON AND TARRANT )
THAT, NEWMARK HOMES, L.P., a Texas limited partnership ("GRANTOR"), whose address is 10435 Greenbough, Suite 101, Stafford, Texas 77477 for and in consideration of the sum of TEN DOLLARS ($10.00) to Grantor in hand paid by Chris A. Peirson, Trustee, of Dallas County, Texas ("TRUSTEE"), in order to secure the payment of the Indebtedness (as hereinafter defined) 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 Trustee the real estate (the "LAND") described on Exhibit "A" attached to each Supplemental Deed of Trust, Security Agreement and Assignment of Rents and Leases now or hereafter executed by Grantor and incorporating by its terms this Deed of Trust (a "Supplemental Deed of Trust"), TOGETHER WITH the following, whether now owned or hereafter acquired by Grantor:
(a) all buildings and other improvements now or hereafter
attached to or placed, erected, constructed or developed on the Land
(the "IMPROVEMENTS") during the existence of this lien;
(b) all materials, equipment, fixtures, furnishings,
inventory and articles of personal property (the "PERSONAL PROPERTY")
whatsoever now or hereafter delivered to, attached to, installed in,
or used in or about the Improvements or which are necessary or useful
for the complete and comfortable use and occupancy of the Improvements
for the purposes for which they were or are to be attached, placed,
erected, constructed or developed, or which Personal Property is or
may be used in the development of the
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Improvements, and all renewals of or replacements or substitutions for
any of the foregoing whether or not the same shall be attached to the
Land or Improvements;
(c) all water and water rights, timber, crops, and
minerals and equipment now of hereafter delivered to and intended to
be installed in or on the Land or Improvements;
(d) all building materials and equipment now or hereafter
delivered to and intended to be installed in or on the Land or
Improvements;
(e) all security deposits and advance rentals under any
lease agreements now or at any time hereafter arising from or by
virtue of any transactions related to the Land, Improvements or the
Personal Property and held by or for the benefit of Grantor;
(f) all monetary deposits which Grantor has been required
to give to any public or private utility with respect to utility
services furnished to the Land or Improvements;
(g) all rents, issues, profits, revenues, royalties,
bonuses or other benefits of the Land, the Improvements or the
Personal Property, including, without limitation, cash or securities
deposited pursuant to leases of all or any part of the Land,
Improvements or Personal Property;
(h) all proceeds (including premium refunds) of each
policy of insurance relating to the Land, Improvements or Personal
Property;
(i) all proceeds from the taking of the Land,
Improvements, Personal Property or any part thereof or any interest or
right or estate appurtenant thereto by eminent domain or by purchase
in lieu thereof;
(j) all Grantor's rights (but not its obligations) under
any contracts related to the Land or Improvements;
(k) all Grantor's rights (but not its obligations) under
any documents, contract rights, commitments, accounts, general
intangibles (including trademarks, trade names and symbols used in
connection therewith) arising by virtue of any transactions related to
the Land, Improvements or Personal Property;
(l) all deposits, bank accounts, funds, instruments,
notes or chattel paper arising from or related to the Land,
Improvements or Personal Property;
(m) all permits, licenses, franchises, certificates and
other rights and privileges obtained in connection with the Land,
Improvements or Personal Property;
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(n) all plans, specifications, maps, surveys, reports,
architectural, engineering and construction contracts, books of
account, insurance policies and other documents, of whatever kind or
character, relating to the use, construction upon, occupancy, leasing,
sale or operation of the Land or Improvements;
(o) all oil, gas and other hydrocarbons and other
minerals produced from or allocated to the Land or Improvements and
all products processed or obtained therefrom, the proceeds thereof,
and all accounts and general intangibles under which such proceeds may
arise and all proceeds of the Personal Property;
(p) all easements and rights of way used in connection
with the Land or Improvements or as a means of ingress to or egress
from said Land or Improvements;
(q) all right, title and interest of Grantor in and to
all streets, roads, ways, alleys, public places, easements and
rights-of-way, existing or proposed, public or private, adjacent to or
used in connection with, belonging or pertaining to the Land or any
part thereof; and
(r) all rights, estates, powers, privileges and interests
of whatever kind or character appurtenant or incident to the
foregoing. If the estate of Grantor in any of the above-described
property is a leasehold estate (the "LEASEHOLD ESTATE"), this
conveyance shall include and the lien and security interest created
hereby shall encumber all additional title, estate, interest, and
other rights that may hereafter be acquired by Grantor in the property
demised under the Leasehold Estate. The above-described property is
collectively herein referred to as the "MORTGAGED PROPERTY."
TO HAVE AND TO HOLD the Mortgaged Property, together with the rights, privileges and appurtenances thereto belonging unto the Trustee and his successors or substitutes, forever in this trust and to his or their successors and assigns, IN TRUST, however, upon the terms, provisions and conditions herein set forth.
ARTICLE I
SECURED INDEBTEDNESS
1.1 SECURED INDEBTEDNESS. This Deed of Trust, Security Agreement and Assignment of Rents and Leases (the "MORTGAGE") is made to secure and enforce the payment of the following note, obligations, indebtedness and liabilities:
(a) one certain promissory note dated November 29, 1996
in the original principal amount of FIFTEEN MILLION AND NO/100 DOLLARS
($15,000,000.00), made by Grantor and payable to the order of BANK OF
AMERICA TEXAS, N.A., whose
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address is 1925 W. John Carpenter Freeway, Irving, Texas, Attention:
Real Estate Group, with interest at the rate or rates therein
provided, both principal and interest being payable as therein
provided, and containing a provision for the payment of a reasonable
additional amount as attorneys' fees, and all modifications,
increases, renewals or extensions thereof, in whole or in part, and
all other notes given in substitution therefor or in modification,
increase, renewal or extension thereof, in whole or in part,
hereinafter referred to as the "NOTE" (said payee and all subsequent
holders of the Note or any part thereof or any of the Indebtedness [as
hereinafter defined] are hereinafter referred to as "NOTEHOLDER");
(b) that certain Loan Agreement dated November 29, 1996
between Grantor and Bank of America Texas, N.A., as the same may be
amended or modified from time to time (the "LOAN AGREEMENT"); and
(c) all future loans and advances made by Noteholder to
Grantor and all other debts, obligations and liabilities of every kind
and character of Grantor now or hereafter existing in favor of
Noteholder incurred or arising pursuant to the provisions of this
Mortgage or the Loan Agreement, whether such debts, obligations or
liabilities be direct or indirect, primary or secondary, joint or
several, fixed or contingent, and whether originally payable to
Noteholder or to a third party and subsequently acquired by Noteholder
and whether such debts, obligations and liabilities are evidenced by
note, open account, overdraft, endorsement, surety agreement, guaranty
or otherwise, it being contemplated that Grantor may hereafter become
indebted to Noteholder in further sum or sums.
The indebtedness referred to in this Article I is hereinafter collectively referred to as the "INDEBTEDNESS." This Mortgage, the Note, the Loan Agreement (as hereinafter defined) and any other instruments now or hereafter evidencing, securing, governing, guaranteeing and/or, pertaining to the Indebtedness or any part hereof are hereinafter collectively referred to as the "LOAN DOCUMENTS."
ARTICLE II
REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS
OF GRANTOR
2.1 REPRESENTATIONS AND WARRANTIES. Grantor does hereby represent and warrant to Noteholder as follows:
(a) FINANCIAL MATTERS. Grantor is solvent, is not
bankrupt and has no outstanding liens, suits, garnishments,
bankruptcies or court actions which could render Grantor insolvent or
bankrupt. There has not been filed by or against Grantor a petition
in bankruptcy or a petition or answer seeking an assignment for the
benefit of creditors, the appointment of a receiver, a trustee,
custodian or liquidator with respect to Grantor or
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any substantial portion of Grantor's property, reorganization,
arrangement, rearrangement, composition, extension, liquidation or
dissolution or similar relief under the United States Bankruptcy Code
or any state law. All reports, statements and other data furnished by
Grantor to Noteholder in connection with the loan evidenced by the
Note are true and correct in all material respects and do not omit to
state any fact or circumstance necessary to make the statements
contained therein not misleading. No material adverse change has
occurred since the dates of such reports, statements and other data in
the financial condition of Grantor or of any tenant under leases
described in such reports, statements and other data. For the
purposes of this Paragraph, Grantor shall also include any
guarantor(s), surety(ies) and any joint venturer or general partner of
Grantor.
(b) TITLE AND AUTHORITY. Grantor is the lawful owner of
good, indefeasible and marketable title to the Land and Improvements
and has good right and authority to grant, bargain, sell, transfer,
assign and mortgage the Land and Improvements and to grant a security
interest in the Personal Property. Grantor does not do business with
respect to the Mortgaged Property under any trade name other than
"Fredrick - Harris Estate Homes".
(c) PERMITTED ENCUMBRANCES. The Mortgaged Property is
free and clear from all liens, security interests and encumbrances
except the lien and security interest evidenced hereby and the
Permitted Encumbrances (as defined in the Loan Agreement). There are
no mechanic's or materialmen's liens, lienable bills or other claims
constituting or that may constitute a lien on the Mortgaged Property,
or any part thereof.
(d) NO FINANCING STATEMENTS. There is no financing
statement covering all or any part of the Mortgaged Property or its
proceeds on file in any public office, which has not been terminated
or assigned to Noteholder.
(e) LOCATION OF PERSONAL PROPERTY. All tangible Personal
Property is located on the Land.
(f) NO HOMESTEAD. No portion of the Mortgaged Property
is being used as Grantor's business or residential homestead.
(g) NO DEFAULT OR VIOLATION. The execution, delivery and
performance of this Mortgage, the Note and all other Loan Documents do
not contravene, result in a breach of or constitute a default under
any mortgage, deed of trust, lease, promissory note, loan agreement or
other contract or agreement to which Grantor is a party or by which
Grantor or any of its properties may be bound or affected and do not
violate or contravene any law, order, decree, rule or regulation to
which Grantor is subject.
(h) COMPLIANCE WITH COVENANTS AND LAWS. The Mortgaged
Property and the intended use thereof by Grantor comply with all
applicable restrictive covenants, zoning
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ordinances and building codes, flood disaster laws, applicable health
and environmental laws and regulations and all other applicable laws,
statutes, ordinances, rules, regulations, orders, determinations and
court decisions, including, without limitation, the Americans With
Disabilities Act of 1990 and TEX. REV. CIV. STAT. ANN. art. 9102, as
amended, (all of the foregoing hereinafter sometimes collectively
referred to as "APPLICABLE LAWS") without reliance upon grandfather
provisions or adjacent or other properties. Grantor has obtained all
requisite zoning, utility, building, health and operating permits from
the governmental authority or municipality having jurisdiction over
the Mortgaged Property. All engineering specifications with respect
to the Mortgaged Property are within applicable environmental
standards.
(i) ENVIRONMENTAL. To the best knowledge of Grantor,
without investigation, no asbestos, material containing asbestos which
is or may become friable or material containing asbestos deemed
hazardous by Applicable Laws has been installed in the Mortgaged
Property. Grantor is not in violation of or subject to any existing,
pending or, to the best knowledge of Grantor, threatened investigation
or inquiry by any governmental authority or to any remedial
obligations under any Applicable Laws pertaining to health or the
environment (such Applicable Laws as they now exist or are hereafter
enacted and/or amended hereinafter sometimes collectively referred to
as "APPLICABLE ENVIRONMENTAL LAWS") , including without limitation,
the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986 (collectively, together with any
subsequent amendments hereinafter referred to as "CERCLA"), the
Resource Conservation and Recovery Act of 1976, as amended by the Used
Oil Recycling Act of 1980, the Solid Waste Disposal Act Amendments of
1980, and the Hazardous and Solid Waste Amendments of 1984
(collectively, together with any subsequent amendments hereinafter
called "RCRA"), the Texas Water Code and the Texas Solid Waste
Disposal Act, and, to the best knowledge of Grantor, without
investigation, this representation would continue to be true and
correct following disclosure to the applicable governmental
authorities of all relevant facts, conditions and circumstances, if
any, pertaining to the Mortgaged Property and Grantor. Grantor has
not obtained and, to the best knowledge of Grantor, without
investigation, is not required to obtain any permits, licenses or
similar authorizations to construct, occupy, operate or use any
buildings, improvements, fixtures or equipment forming a part of the
Mortgaged Property by reason of any Applicable Environmental Laws.
The use which Grantor makes and intends to make of the Mortgaged
Property will not result in the disposal or other release of any
hazardous substance or solid waste on or to the Mortgaged Property.
The terms "HAZARDOUS SUBSTANCE" and "RELEASE" as used in this Mortgage
shall have the meanings specified in CERCLA, and the terms "SOLID
WASTE" and "DISPOSAL" (or "DISPOSED") shall have the meanings
specified in RCRA; provided, in the event either CERCLA or RCRA is
amended so as to broaden the meaning of any term defined thereby, such
broader meaning shall apply subsequent to the effective date of such
amendment and provided further, to the extent that the laws of the
State of Texas establish a meaning for the terms "HAZARDOUS
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SUBSTANCE," "RELEASE," "SOLID WASTE," or "DISPOSAL," (or "DISPOSED")
which is broader than that specified in either CERCLA or RCRA, such
broader meaning shall apply.
(j) NO SUITS. There are no judicial or administrative
actions, suits or proceedings pending or, to the best of Grantor's
knowledge, threatened against or affecting Grantor, any other person
liable, directly or indirectly, for the Indebtedness, or the Mortgaged
Property or involving the validity, enforceability or priority of any
of the Loan Documents.
(k) CONDITION OF PROPERTY. The Mortgaged Property is
served by electric, storm and sanitary sewers, sanitary water supply,
telephone and other utilities required for the use thereof as
represented by Grantor at or within the boundary lines of the
Mortgaged Property. All streets, alleys and easements necessary to
serve the Mortgaged Property for the use represented by Grantor have
been completed and are serviceable and such streets have been
dedicated and accepted by applicable governmental entities. The
Mortgaged Property is in good condition and repair with no deferred
maintenance and is free from damage caused by fire or other casualty.
Grantor is aware of no latent or patent structural or other
significant defect or deficiency in the Mortgaged Property. Design
and as-built conditions of the Mortgaged Property are such that no
drainage or surface or other water will drain across or rest upon
either the Mortgaged Property or land of others. None of the
Mortgaged Property is within a flood plain. 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.
(l) ORGANIZATION. Grantor is a limited partnership duly
organized and validly existing under the laws of the State of Texas.
Grantor has all requisite power and all governmental certificates of
authority, licenses, permits, qualifications and other documentation
to own, lease and operate its properties and to carry on its business
as now conducted and as contemplated to be conducted.
(m) ENFORCEABILITY. The Note, this Mortgage and all
other Loan Documents constitute the legal, valid and binding
obligations of Grantor enforceable in accordance with their terms.
The execution and delivery of, and performance under, the Note, this
Mortgage and all other Loan Documents are within Grantor's powers and
have been duly authorized by all requisite action and are not in
contravention of the powers of Grantor's charter, bylaws or other
corporate papers if Grantor is a corporation, or of Grantor's
partnership or joint venture agreement if Grantor is a partnership or
joint venture, or of Grantor's limited partnership agreement if
Grantor is a limited partnership.
(n) NOT A FOREIGN PERSON. Grantor is not a "FOREIGN
PERSON" within the meaning of the Internal Revenue Code of 1986, as
amended (hereinafter called the "CODE"), Sections 1445 and 7701 (i.e.,
Grantor is not a non-resident alien, foreign
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corporation, foreign partnership, foreign trust or foreign estate, as
those terms are defined in the Code and regulations promulgated
thereunder).
2.2 COVENANTS AND AGREEMENTS. So long as the Indebtedness or any part thereof remains unpaid, Grantor covenants and agrees with Noteholder as follows:
(a) PAYMENT AND PERFORMANCE. Grantor will make prompt
payment, as the same becomes due, of the Indebtedness and shall
punctually and properly perform all of Grantor's covenants,
obligations and liabilities under the Loan Documents.
(b) EXISTENCE. Grantor will continuously maintain its
existence and its right to do business in the State of Texas together
with its franchises and trade names.
(c) TAXES ON NOTE AND OTHER TAXES. Grantor will promptly
pay all income, franchise and other taxes owing by Grantor and any
stamp taxes which may be required to be paid with respect to the Note,
this Mortgage or any other Loan Documents.
(d) OPERATION OF MORTGAGED PROPERTY. Grantor will
construct and maintain the Mortgaged Property in a good and
workmanlike manner and in accordance with all Applicable Laws and will
pay all fees or charges of any kind in connection therewith. Grantor
will keep the Mortgaged Property occupied so as not to impair the
insurance carried thereon. Grantor will not use or occupy, or allow
the use or occupancy of, the Mortgaged Property in any manner which
violates any Applicable Law or which constitutes a public or private
nuisance or which makes void, voidable or cancelable, or increases the
premium of, any insurance then in force with respect thereto. Grantor
will not initiate or permit any zoning reclassification of the
Mortgaged Property or seek any variance under existing zoning
ordinances applicable to the Mortgaged Property or use or permit the
use of the Mortgaged Property in such a manner which would result in
such use becoming a nonconforming use under applicable zoning
ordinances or other Applicable Laws. Grantor will not impose any
restrictive covenants or encumbrances upon the Mortgaged Property,
execute or file any subdivision plat affecting the Mortgaged Property
or consent to the annexation of the Mortgaged Property to any
municipality, without the prior written consent of Noteholder.
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 Mortgaged Property. Grantor will not do or suffer
to be done any act whereby the value of any part of the Mortgaged
Property may be lessened. Grantor will allow Noteholder or its
authorized representative to enter the Mortgaged Property at any
reasonable time to inspect the Mortgaged Property and Grantor's books
and records pertaining thereto and Grantor will assist Noteholder or
said representative in whatever way necessary to make such inspection.
If Grantor receives a notice or claim from any federal, state or other
governmental entity pertaining to the Mortgaged Property, including,
without limitation, a notice that the Mortgaged Property is not in
compliance
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with any Applicable Law, Grantor will promptly furnish a copy of such
notice or claim to Noteholder.
(e) 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 Mortgaged Property, incurred
in the construction, maintenance, operation and development of the
Mortgaged Property to be promptly paid.
(f) AD VALOREM TAXES. Grantor will cause to be paid
prior to delinquency all taxes and assessments heretofore or hereafter
levied or assessed against the Mortgaged Property, or any part
thereof, or against Trustee or Noteholder for or on account of the
Note or any other Indebtedness or the interest created by this
Mortgage and will furnish Noteholder with receipts showing payment of
such taxes and assessments at least ten (10) days prior to the
applicable default date therefor; provided that Grantor may in good
faith, by appropriate proceedings, contest the validity,
applicability, or amount of any asserted tax or assessment, and
pending such contest Grantor shall not be deemed in default hereunder
if:
(i) Grantor shall diligently prosecute such
contest in a manner not prejudicial to the rights, liens and
security interests of Noteholder;
