Exhibit 10.4
NOTICE TO CLERK: This instrument encumbers property located within and without the Commonwealth of Virginia, and the proportion of the debt secured by Virginia real property is 11.98% or $10,273,449.00. Recordation taxes have been paid in connection with the deeds of trust being modified herein on debt in the principal amount of $10,755,000.00. As a result, this instrument is exempt from recordation taxes pursuant to Sections 58.1-803 (B), 58.1-803 (D) and 58.1-809 of the Code of Virginia (1950), as amended, and Section 630-14-803 (B) of the Virginia Recordation Tax Regulations (September 19, 1984).
THIS IS A CREDIT LINE DEED OF TRUST within the meaning of Section 55-58.2 of the Code of Virginia (1950), as amended. For the purposes of, and to the extent required by, such section, (i) the name of the noteholder secured by the Deed of Trust is First Union National Bank, (ii) the address of such noteholder is set forth below, and (iii) the maximum aggregate amount of principal to be secured hereunder at any one time is $85,755,000.
Tax Map Parcel #s Frederick County: 63-A-87, 63-A-110, 63-A-110A and 63-1-110C
City of Winchester: 371-01-1
MODIFIED DEED OF TRUST,
SECURITY AGREEMENT
AND
ASSIGNMENT OF LEASES AND RENTS
Granted By
TREX COMPANY, LLC
-----------------
a Delaware limited liability company
(for purposes of recording, the "Grantor")
To
TRSTE, INC.
A Virginia corporation
(for purposes of recording, the "Grantee")
Trustee
Securing
FIRST UNION NATIONAL BANK,
-------------------------
A National Banking Association
(for purposes of recording, the "Grantee")
This Document was Prepared By: Dated September 30, 2001 Fiona M. Tower Kutak Rock LLP 1111 East Main Street, Suite 800 Richmond, Virginia 23219
TO FILING OFFICER, AFTER RECORDATION RETURN TO:
Fiona M. Tower
KUTAK ROCK LLP
1111 East Main Street, Suite 800
Richmond, Virginia 23219
To Be Recorded In the Land Records Offices of the City Of Winchester, Virginia and Frederick County, Virginia.
MODIFIED DEED OF TRUST,
SECURITY AGREEMENT
AND
ASSIGNMENT OF LEASES AND RENTS
Granted By
TREX COMPANY, LLC,
A DELAWARE LIMITED LIABILITY COMPANY
To
TRSTE, INC.
A VIRGINIA CORPORATION
Trustee
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DEFINITIONS
As used throughout this Deed of Trust, the following terms shall have the following meanings:
"Act" shall have the meaning as set forth in Section 1.16 of this Deed of Trust;
"Beneficiary" shall mean First Union National Bank, a National Banking Association, its successors and assigns;
"Clerk's Office" shall mean collectively the Office of the Clerk of the Circuit Court for Winchester, Virginia and Frederick County, Virginia;
"Code" shall mean the Code of Virginia of 1950, as amended and now enacted;
"Credit Agreement" shall mean that certain Second Amended and Restated Credit Agreement between Grantor, Trex Company, Inc. and Beneficiary dated as of the date hereof;
"Deed of Trust" shall mean this deed of trust, security agreement and assignment of leases and rents granted by the Grantor to the Trustees;
"Easement" shall have the meaning as set forth in Section 7.1 of this Deed of Trust;
"Event of Default" shall mean, individually, and "Events of Default" shall mean, collectively, those items as listed in Article III of this Deed of Trust, which shall entitle the Trustees or the Beneficiary to exercise all rights and remedies provided in Article IV of this Deed of Trust;
"Grantor" shall mean Trex Company, LLC;
"Hazard" shall have the meaning as set forth in Section 1.16 of this Deed of Trust;
"Improvements" shall mean all buildings, structures, improvements and replacements, now or hereafter existing on or to be erected upon the Land and any and all landscaping and related amenities and facilities;
"Land" shall mean all those certain parcels of land situated in the City of Winchester, and Frederick County, Virginia, as more particularly described on Exhibit "A" attached to this Deed of Trust and made a part thereof;
"Leases" shall have the meaning as set forth in Section 6.1 of this Deed of Trust;
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"Loan" shall mean the financing extended by the Beneficiary to the Grantor and Trex Company, Inc. as more particularly described in the Credit Agreement and evidenced by the Promissory Note;
"Loan Documents" shall mean the Promissory Note, the Deed of Trust, the Credit Agreement and such other documents and writings executed and delivered by Grantor and such other signatory parties to the Beneficiary, evidencing, securing or otherwise documenting the terms and conditions of the Loan, as the Promissory Note, the Deed of Trust, and such other documents may be amended, modified, replaced or amended and restated in their entirety in the future;
"Obligations" shall have the meaning as set forth in the granting clause of this Deed of Trust;
"Personalty" shall have the meaning as set forth in the granting clause of this Deed of Trust;
"Promissory Note" shall mean collectively, the term note in the original principal amount of $3,780,000, the term note in the original principal amount of $1,035,000, the term note in the original principal amount of $5,940,000; the term note in the original principal amount of $58,000,000 and the revolving note in the maximum principal amount of $17,000,000 between Grantor and Trex Company, Inc., as Borrower, and Beneficiary, all dated as of the date hereof;
"Real Property" shall mean the Land and the Improvements;
"Rent" shall have the meaning as set forth in Section 6.1 of this Deed of Trust;
"Secured Property" shall have the meaning as set forth in the granting clause of this Deed of Trust;
"Trustees" shall mean TRSTE, Inc., a Virginia corporation.
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MODIFIED DEED OF TRUST,
SECURITY AGREEMENT
AND
ASSIGNMENT OF LEASES AND RENTS
THIS MODIFIED DEED OF TRUST, SECURITY AGREEMENT AND ASSIGNMENT OF LEASES AND RENTS (the "Deed of Trust") is made and granted as of the 30th day of September, 2001, by TREX COMPANY, LLC, a Delaware limited liability company, with an address of 160 Exeter Drive, Winchester, Virginia 22603-8605 (the "Grantor"), to TRSTE, INC., a Virginia corporation with an address of 201 South Jefferson Street, Roanoke, Virginia 24011 ("Trustee").
RECITALS
A. By the following Deeds of Trust (collectively, the "Original Deed of Trust"), Grantor has granted the Land to Beneficiary:
1. Deed of Trust and Absolute Assignment of Rents dated June 15, 1998
and recorded in the Clerk's Office of the Circuit Court of Frederick
County, Virginia in Deed Book 907 Page 1044 securing debt in the
original principal amount of $3,780,000.00;
2. Deed of Trust and Absolute Assignment of Rents dated November 20,
1998 and recorded in the Circuit Court Clerk's Office of Frederick
County, Virginia, in Deed Book 921, Page 1235, securing debt in the
original principal amount of $1,035,000.00;
3. Deed of Trust and Absolute Assignment of Leases dated August 15,
2000 and recorded in the Circuit Court Clerk's Offices of the City
of Winchester, Virginia at Deed Book 305, Page 1445, and Frederick
County, Virginia at Deed Book 973, Page 477, securing debt in the
original principal amount of $5,940,000.00.
B. Grantor, Trustee and Beneficiary wish to modify the Original Deed of Trust to secure payment and performance of the Obligations, as defined herein.
C. The Grantor holds fee simple title to the Land and conveys its fee simple interest in the Land and other Secured Property, as provided further herein as security for the payment and performance of all obligations of the Grantor secured by this Deed of Trust.
D. In addition to the Notes and this Deed of Trust, the Loan is further evidenced by the other Loan Documents, as such Loan Documents may be amended, modified, replaced or amended and restated in their entirety in the future.
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NOW THEREFORE, the parties hereto do hereby agree that the Original Deed of Trust is hereby modified to read in its entirety as follows:
GRANT
NOW, THEREFORE, in consideration of the premises, and to secure: (a) the payment of the principal, interest, and other sums due on the Promissory Note, this Deed of Trust, and any other Loan Document, and any and all other indebtedness of the Grantor to the Beneficiary, whether now existing or hereinafter incurred, as well as all future advances, as and when due, (b) the observance and performance of all of the terms, conditions, agreements, and provisions of the Promissory Note, this Deed of Trust, and all other Loan Documents, including the repayment of all sums advanced, to be advanced, or which may be advanced by the Beneficiary pursuant to or under authorizations contained in this Deed of Trust, even if and to the extent such sums may exceed the face amount of the Promissory Note, this Deed of Trust and any other Loan Document, and (c) any and all other future indebtedness of Grantor to Beneficiary (collectively, the "Obligations"), the Grantor grants, pledges, assigns, transfers, and conveys to the Trustees, in fee simple, all that lot of ground situated and lying in the City of Winchester and Frederick County, Virginia and more particularly described on Exhibit "A" attached hereto and made a part hereof;
TOGETHER WITH any additional or other interest in the Land that the Grantor may hereafter acquire; and
TOGETHER WITH all of the Grantor's right, title and interest in and to all Improvements; and
TOGETHER WITH all of the Grantor's right, title and interest in and to all plant, equipment, apparatus, machinery, fittings, appliances, furniture, furnishings, fixtures and other chattels and personal property and replacements thereof, owned by the Grantor and now or at any time hereafter affixed or attached to, incorporated in, placed upon, or in any way used in connection with the current or future utilization, enjoyment, occupation, or operation of the Real Property including by way of example and not by way of limitation, all lighting, heating, ventilating, air conditioning, incinerating, sprinkling, laundry, lifting and plumbing fixtures and equipment, water and power systems, loading and unloading equipment, burglar alarms and security systems, fire prevention and fire extinguishing systems and equipment, engines, boilers, ranges, refrigerators, stoves, furnaces, oil burners or units, communication systems and equipment, dynamos, transformers, motors, tanks, electrical equipment, elevators, escalators, cabinets, partitions, ducts, compressors, switchboards, storm and screen windows and doors, pictures, awnings and shades, sign and shrubbery as well as all building and construction materials and supplies of every kind, nature and description owned by the Grantor and located on, at, or about the Real Property, whether or not yet incorporated into any building, structure, or improvement, or located elsewhere and not as yet delivered to the Real Property, which are intended to be used for the purpose of erecting, renovating, restoring, or repairing any building, structure, or improvement on the Real Property, including by way of example and not by way of
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limitation, all steel, iron, concrete, sheet rock and plaster board, screws, paint, plaster, plastics, insulation, fiberglass, wood and wood products, glass, bricks, mortar, masonry, pipes, wiring, linoleum and tile and other floor and wall coverings, roofing and roofing materials, framing and molding (collectively, the "Personalty"), as to all of which the Grantor grants and conveys to the Beneficiary a continuing security interest under the Virginia Uniform Commercial Code, as amended, as well as in any and all proceeds and products thereof and all substitutions, renewals and replacements thereof, whether now owned or hereafter acquired, for so long as such items are or remain personal property and not fixtures and permanent additions to the Real Property; and
TOGETHER WITH all contracts, plans, and specifications, surveys and surveyor's reports, engineer's reports, diagrams and drawings, all licenses, permits and approvals and applications therefor from governmental authorities, deposits, service contracts, books, records, reports, accounting records, invoices, change orders, correspondence, diagrams, drawings, schematics, sales and promotional literature and forms, advertising materials and the like, wherever located and whenever created, compiled, or made with respect to the construction of the Improvements upon the Land and the leasing of space in the completed Improvements, and the Grantor hereby grants to the Beneficiary a continuing security interest under the Virginia Uniform Commercial Code in and to all of the same, and the proceeds, including insurance proceeds, and products thereof, and in all substitutions, renewals, and replacements thereof, now existing or hereafter acquired; and
TOGETHER WITH a security interest, which is hereby granted by the Grantor, in all amounts that may be owing at any time and from time to time by the Beneficiary to the Grantor in any capacity, including, but not limited to, any balance or share belonging to the Grantor in any deposit or other account with the Beneficiary, which accounts shall specifically include the escrow accounts that may be established in accordance with the terms of this Deed of Trust with regard to real property taxes, insurance payments, security deposits, and the like; and
TOGETHER WITH all easements, rights, privileges, and appurtenances thereunto belonging or in any way appertaining, and all of the right, title, interest, estate, or claim of the Grantor in or to the streets, ways, alleys, and waters adjoining or adjacent to the Real Property, whether now existing or hereafter acquired; and
TOGETHER WITH all mineral rights, and mining rights, as well as all minerals, dirt, sand, gravel, pebbles, stones, rocks, soil and the like (including oil and gas) which have not been extracted from the Land; and
TOGETHER WITH all rights, benefits, profits, rents, and monies payable under, by reason of, or with respect to any restrictive covenants, easements, agreements applicable to adjoining lands, or contracts of sale with respect thereto with the right to collect any sums of money at any time payable to the Grantor in consequence of such rights and benefits, including the release, modification, or amendment thereof, for application to sums then due and owing the Beneficiary under the Promissory Note, this Deed of Trust or any other Loan Document and to utilize any collection or enforcement rights or remedies to collect the same available to the
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Grantor under law, as to all of which, and the proceeds and products thereof, the Grantor hereby grants a continuing security interest therein and thereto unto the Beneficiary; and
TOGETHER WITH: (a) all of the proceeds of the voluntary or involuntary conversion of the aforementioned property or any part of the aforementioned property into cash or liquidated claims, whether by way of condemnation, insured casualty, judgment or otherwise, as well as a security interest which is hereby granted to the Beneficiary in the same; (b) all rents, profits, and benefits, including any deposits of tenants to secure payment of the same and performance of the terms and conditions of any oral or written lease, with respect to the leasing of all or any portion of the Real Property, with the right to collect such rents, profits, and benefits at any time for application to sums then due and owing the Beneficiary under the Promissory Note, this Deed of Trust or any other Loan Document, and to utilize any collection or enforcement rights or remedies available to the Grantor under law or any written lease, but without any duty or obligation to perform on behalf of the Grantor any of the Grantor's duties or obligations to any lessee; and (c) a security interest in all revenues and profits, accounts receivable and contract rights, including any deposits of purchasers to secure payment of the contract price and performance of the terms and conditions of any contract of sale for the Real Property, with the right to collect the same at any time for application to sums then due and owing the Beneficiary under the Promissory Note, this Deed of Trust or any other Loan Document and to utilize any collection or enforcement rights or remedies available to the Grantor under law or any contract of sale, but without any duty or obligation, to perform on behalf of the Grantor any of the Grantor's duties or obligations to any purchase of the Real Property;
TO HAVE AND TO HOLD all of the aforementioned property (collectively, the "Secured Property") to the Trustees, and the Trustees' successors and assigns, in fee simple, in trust to the Trustees to secure the Obligations provided that, so long as no Event of Default shall have occurred, the Grantor shall have the license to possess and enjoy the Secured Property, and to receive the rents, issues and profits therefrom, subject, however, to the provisions of the Loan Documents; and further provided, that if all of the Obligations are fully paid and satisfied and performed and/or observed, then the lien of this Deed of Trust shall be released by the Beneficiary and the Trustees, and the Trustees shall then, upon the written request of the Grantor, release, terminate, and reconvey the Secured Property to the Grantor at the sole cost and expense of the Grantor.
EXCEPT as otherwise specifically provided herein, this Deed of Trust is expressly made, executed and delivered pursuant and subject to, and shall be construed in accordance with the provisions of Sections 55-59, 55-59.1, 55-59.2, 55-59.3, 55-59.4, 55-60 and 55-63 of the Code of Virginia of 1950, as amended and now enacted. All obligations and duties imposed upon Grantor and the Trustees by such Code provisions and all rights and remedies conferred upon the Beneficiary thereby are hereby expressly affirmed. All of the terms, covenants, agreements and conditions hereinafter contained, to the extent the same may differ from or supplement the Code provisions, shall be construed as providing the Beneficiary with rights and remedies additional and cumulative to those specified in the Code provisions and shall not be construed in any way as excluding the Code provisions or depriving the Beneficiary of any of its rights, privileges or remedies thereunder.
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ARTICLE I
COVENANTS AND AGREEMENTS OF THE GRANTOR
1.1. Repayment. The Grantor shall pay all indebtedness secured by this Deed of Trust, together with interest thereon and any penalty, fee, charge, deposit, escrow or assessment, at the times and in the manner and amounts set forth in the Promissory Note and other Loan Documents.
1.2. Performance. The Grantor shall perform and observe all duties, obligations, and requirements and shall comply in all respects with the terms, covenants, conditions, representations and warranties of the Promissory Note, this Deed of Trust and all other Loan Documents.
1.3. Taxes and Expenses. The Grantor shall pay and discharge, when and as the same come due, before penalty or premium attaches, all taxes of every kind and nature, real and personal, all general and special assessments and levies, all water, sewer and other utility charges, rents, and assessments and any and all other public charges, dues, levies, impositions, or assessments of a like or different nature, imposed upon or assessed against the Secured Property or the rents, issues, income or profits thereof, which are or may become liens against the same, as well as any ground rent to which the Real Property may be subject, and the Grantor will not permit to exist any lien or security interest therefor other than: (a) liens for taxes, assessments, levies, fees, rents, ground rents, and public charges not yet delinquent or which are being contested in good faith; and (b) liens and security interests which the Beneficiary has specifically and in writing consented to the existence of and with respect to which the Grantor has paid currently all sums secured thereby. The Grantor will, upon the request of the Trustees or the Beneficiary, deliver to the Trustees or the Beneficiary receipts evidencing the payment of all such taxes, assessments, levies, fees, rents, ground rents, and public charges imposed upon or assessed against the Secured Property (provided, however, that Grantor may withhold any such payment if Grantor contests in good faith the validity of such payment, and may continue to withhold such payment pending the resolution of the dispute so long as Beneficiary is provided with adequate security, as reasonably determined by Beneficiary, for the payment of the withheld amount and any potentially applicable interest and penalties and such contest does not in the reasonable opinion of Beneficiary put the Secured Property or any portion thereof at risk of any tax lien foreclosure), or the revenues, rents, issues, income, or profits thereof, as well as the payment of all superior liens and security interests with respect to which the Beneficiary may have consented.
1.4. Insurance. The Grantor shall obtain and shall at all times during the term hereof maintain the following insurance coverages:
1.4.1. Casualty Insurance. The Grantor shall keep any Improvements constructed on the Land and Personalty thereon insured against loss by fire casualty, and such other hazards and contingencies, including but not limited to lightning, hail, windstorm, explosion, malicious
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mischief and vandalism, as are covered by extended coverage policies in effect in the area where the Land is located and such other risks as may be reasonably specified by the Beneficiary from time to time, all for the benefit of the Beneficiary; provided that, during any period of construction, restoration or reconstruction of the Improvements, the Grantor shall provide in lieu of such insurance, builders' risk or a similar type of insurance in the amount of the full replacement cost of the Improvements and the equipment. Such insurance shall be written on policy forms and by Lloyds of London or an insurance company lawfully operating in the jurisdiction in which the Real Property is located with a rating of "A-" or better according to A.M. Best Co. Insurance Guide and reasonably satisfactory to the Beneficiary, shall be in an amount equal to the lesser of the outstanding principal balance of the Obligations or the full insurable replacement cost of any such Improvements and Personalty, but in any event shall be in an amount sufficient to prevent co-insurance liability, shall name the Beneficiary as a mortgagee and sole loss payee and shall be endorsed such that the losses thereunder shall be payable to the Beneficiary and not to the Grantor and the Beneficiary or the Trustees, jointly. The policy or policies of such insurance shall include a replacement cost or restoration endorsement and a waiver of subrogation endorsement reasonably satisfactory to the Beneficiary. Original certificates or at Beneficiary's request, originals or certified true copies, of the policy or policies of such insurance and all renewals thereof shall be delivered to and retained by the Beneficiary, and the Grantor shall provide the Beneficiary with receipts evidencing the payment of all premiums due on such policies and the renewals thereof on or prior to the renewal or expiration date thereof. All policies required hereby shall provide and shall bear an endorsement that the insurer shall endeavor to notify Beneficiary not less than ten (10) days prior to any cancellation, termination, endorsement or material amendment (i.e. reduction in coverage). The Grantor shall give the Beneficiary prompt notice of any loss covered by such insurance, and, the Beneficiary shall have the right to adjust and compromise such loss, to collect, receive and receipt the proceeds of insurance for such loss and to endorse the Grantor's name upon any check in payment thereof and, for such purposes the Grantor hereby constitutes and appoints the Beneficiary as its attorney in fact with the power of attorney granted hereby deemed to be coupled with an interest and irrevocable. All monies received as payment for a loss covered by an insurance policy shall be paid over to the Beneficiary, as its interests may appear. The Beneficiary shall, after deducting the reasonable expenses incurred in the collection of the proceeds of any insurance, make the remainder of such proceeds available to the Grantor for the payment of charges or expenses actually incurred by the Grantor in the restoration, reconstruction, repair, renovation or replacement of the affected Improvements and Personalty, provided that: (i) the Beneficiary has approved the plans and specifications for the repair or restoration of the damaged portion of the Improvements and Personalty, the contract for such repair or restoration and the contractor that will perform the same, (ii) the Grantor has deposited with the Beneficiary (or if permitted by the Beneficiary, has made provision satisfactory to the Beneficiary for the payment of) any amounts required for such repair or restoration which exceed the available insurance proceeds, (iii) no Event of Default, or event that with the passage of time would constitute an Event of Default, has occurred and is continuing under the Loan Documents, (iv) the repair or restoration of the Improvements and Personalty reasonably can be completed before the maturity date of the Loan, and (v) the tenants will continue to pay rent without abatement (or the proceeds of business interruption insurance will be adequate in the Beneficiary's judgment to offset any such abatement of rent), otherwise, such proceeds shall be applied in payment of the Obligations.
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1.4.2. Liability and Worker's Compensation Insurance. The Grantor shall obtain and maintain public liability and property damage insurance in such amounts, with such insurance companies, and upon policy forms acceptable to and reasonably approved by the Beneficiary, naming the Beneficiary as an additional insured. Additionally, if Grantor has any employees, the Grantor shall obtain and maintain worker's compensation insurance in such amounts, with an insurance company, and in a form acceptable to and approved by t
