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DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING FOR COMMERCIAL PURPOSES
by
CHECKS IN THE MAIL, INC.
as Grantor
to
W.Z. FAIRBANKS, JR.
as Trustee
for the benefit of
BEAR STEARNS CORPORATE LENDING INC.
as Beneficiary
Dated as of: December 15, 2005
Property Address:
2435 Goodwin Lane
New Braunfels, Texas
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THIS INSTRUMENT WAS PREPARED BY AND
RECORD AND RETURN TO:
JONATHAN BAUMSTARK, ESQ.
LATHAM & WATKINS LLP
885 THIRD AVENUE, SUITE 1000
NEW YORK, NY 10022
TABLE OF CONTENTS
1.
DEFINITIONS...........................................................
1
GRANT.................................................................
3
2.
WARRANTIES, REPRESENTATIONS AND
COVENANTS.............................
3
2.1
Title to Mortgaged Property and Lien of this Instrument........
3
2.2
First Lien Status..............................................
3
2.3
Payment and Performance........................................
3
2.4
Replacement of Fixtures and Personalty.........................
3
2.5
Maintenance of Rights of Way, Easements and Licenses...........
4
2.6
Inspection.....................................................
4
2.7
Other Covenants................................................
4
2.8
Condemnation Awards and Insurance Proceeds.....................
4
2.9
Transfer or Encumbrance of the Mortgaged Property..............
4
3.
DEFAULT AND
FORECLOSURE...............................................
5
3.1
Remedies.......................................................
5
3.2
Separate Sales.................................................
6
3.3
Remedies Cumulative, Concurrent and Nonexclusive...............
6
3.4
Release of and Resort to Collateral............................
7
3.5
Waiver of Redemption, Notice and Marshalling of Assets.........
7
3.6
Discontinuance of Proceedings..................................
7
3.7
Application of Proceeds........................................
7
3.8
Occupancy After Foreclosure....................................
8
3.9
Protective Advances and Disbursements; Costs of Enforcement....
8
3.10
No Mortgagee in Possession.....................................
8
4.
ASSIGNMENT OF RENTS AND
LEASES........................................
8
4.1
Assignment.....................................................
8
4.2
No Obligation..................................................
9
4.3
Right to Apply Rents...........................................
9
4.4
No Merger of Estates...........................................
9
5.
SECURITY
AGREEMENT....................................................
9
5.1
Security Interest..............................................
9
5.2
Financing Statements...........................................
10
5.3
Fixture Filing.................................................
10
6.
MISCELLANEOUS.........................................................
10
6.1
Notices........................................................
10
6.2
Covenants Running with the Land................................
11
6.3
Attorney-in-Fact...............................................
11
6.4
Successors and Assigns.........................................
11
6.5
No Waiver......................................................
12
6.6
Subrogation....................................................
12
6.7
Credit Agreement...............................................
12
6.8
Release........................................................
12
6.9
Waiver of Stay, Moratorium and Similar Rights..................
12
6.10
Obligations of Grantor, Joint and Several......................
12
6.11
Governing Law..................................................
12
6.12
Headings.......................................................
12
6.13
Entire Agreement...............................................
12
6.14
Future Advances................................................
12
7.
RIGHTS AND RESPONSIBILITIES OF TRUSTEE; OTHER PROVISIONS RELATING
TO
TRUSTEE...............................................................
13
7.1
Exercise of Remedies by Trustee................................
13
7.2
Rights and Privileges of Trustee...............................
13
7.3
Authority of Beneficiary.......................................
13
7.4
Effect of Appointment of Successor Trustee.....................
13
7.5
Confirmation of Transfer and Succession........................
14
7.6
Exculpation....................................................
14
7.7
Endorsement and Execution of Documents.........................
14
7.8
Multiple Trustees..............................................
14
7.9
No Required Action.............................................
14
7.10
Terms of Trustee's Acceptance..................................
15
8.
Recordation...........................................................
15
Exhibit A: legal description
INDEX OF DEFINED TERMS
Covenants...................................................................
1
Credit
Agreement............................................................
1
Fixtures....................................................................
1
Improvements................................................................
1
Land........................................................................
1
Leases......................................................................
2
Loan
Documents..............................................................
1
Mortgage....................................................................
1
Mortgaged
Property..........................................................
1
Mortgagor...................................................................
1
Obligations.................................................................
2
Permitted
Encumbrances......................................................
2
Personalty..................................................................
2
Plans.......................................................................
2
Property
Agreements.........................................................
2
Rents.......................................................................
2
UCC.........................................................................
3
ii
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING FOR COMMERCIAL PURPOSES
This Deed of Trust, Assignment of Leases and Rents, Security
Agreement and
Fixture Filing for Commercial Purposes (this "Deed of Trust") is
executed as of
December 15, 2005, by and from CHECKS IN THE MAIL, INC., a Delaware
corporation
("Grantor"), whose address is 2435 Goodwin Lane, New Braunfels,
Texas 78135, to
W.Z. Fairbanks, Jr., an individual, whose address is c/o
LandAmerica, 7557
Rambler Road, Suite 1200, Dallas, Texas 75231, as trustee (together
with its
successors and assigns, collectively, "Trustee"), in favor of BEAR
STEARNS
CORPORATE LENDING, INC., (together with its successors and assigns,
collectively, "Beneficiary"), a Delaware corporation, as
Administrative Agent
and Beneficiary for the Lenders under the Credit Agreement more
fully described
below, whose address is 383 Madison Avenue, New York, New York
10179.
1.
DEFINITIONS
As used herein, the following terms shall have the following
meanings:
"Covenants": All of the agreements, covenants, conditions,
warranties,
representations and other obligations made or undertaken by Grantor
or any other
person or entity to Beneficiary or others as set forth in the Loan
Documents.
"Loan Documents": The (1) Credit Agreement dated as of December 15,
2005 among
Clarke American Corp., as borrower; CA Acquisition Holdings, Inc.,
a Delaware
corporation, the Lenders from time to time party thereto; Bear,
Stearns & Co.
Inc. and J.P. Morgan Securities, Inc., as joint lead arrangers and
joint book
running managers; JPMorgan Chase Bank, N.A., as syndication agent;
and Bear
Stearns Corporate Lending Inc., as administrative agent (the
"Credit
Agreement"), (2) the Security Documents, and the Notes, each as
defined in the
Credit Agreement, (3) this Deed of Trust, (4) the Intercompany
Note, as defined
in the Credit Agreement, (5) all other documents now or hereafter
executed by
Grantor or any other person or entity to evidence or secure the
payment and
performance of the Obligations and (6) all modifications,
restatements,
consolidations, extensions, renewals and replacements of any of the
foregoing.
"Mortgaged Property": All of Grantor's right title and interest in
or to (1) the
real property described in Exhibit A, together with any greater
estate therein
as hereafter may be acquired by Grantor (the "Land"), (2)
buildings, structures
and other improvements, now or at any time situated, placed or
constructed upon
the Land (the "Improvements"), (3) fixtures, materials, supplies,
equipment,
apparatus and other items of personal property now owned or
hereafter acquired
by Grantor and now or hereafter attached to, installed in or used
in connection
with any of the Improvements or the Land, and all water, gas,
electrical, storm
and sanitary sewer facilities and all other utilities whether or
not situated in
easements (the "Fixtures"), (4) all goods, instruments, documents,
chattel paper
and all other personal property of any kind or character, including
such items
of personal property as defined in the UCC, now owned or
hereafter acquired by Grantor and now or hereafter affixed to,
placed upon, used
in connection with, arising from or otherwise related to the Land
and
Improvements or that may be used in or relating to the planning,
development,
financing or operation of the Mortgaged Property, including,
without limitation,
furniture, furnishings, equipment, machinery, money, insurance
proceeds,
accounts, contract rights, goodwill, chattel paper, documents,
property licenses
and/or franchise agreements, rights of Grantor under leases of
Fixtures or other
personal property or equipment, inventory, all refundable,
returnable or
reimbursable fees, deposits or other funds or evidences of credit
or
indebtedness deposited by or on behalf of Grantor with any
governmental
authorities, boards, corporations, providers of utility services,
public or
private, including specifically, but without limitation, all
refundable,
returnable or reimbursable tap fees, utility deposits, commitment
fees and
development costs but only to the extent assignable (the
"Personalty"), (5)
reserves, escrows or impounds required under the Credit Agreement
and all
deposit accounts maintained by Grantor with respect to the
Mortgaged Property,
(6) plans, specifications, shop drawings and other technical
descriptions
prepared for construction, repair or alteration of the
Improvements, and all
amendments and modifications thereof (the "Plans"), (7) all leases,
subleases,
licenses, concessions, occupancy agreements or other agreements
(written or
oral, now or at any time in effect) which grant a possessory
interest in, or the
right to use, all or any part of the Mortgaged Property (the
"Leases"), together
with all related security and other deposits, (8) all of the rents,
revenues,
income, proceeds, profits, security and other types of deposits,
and other
benefits paid or payable by parties to the Leases other than
Grantor for using,
leasing, licensing, possessing, operating from, residing in,
selling or
otherwise enjoying the Mortgaged Property (the "Rents"), (9) to the
extent
assignable, all other agreements, such as construction contracts,
architects'
agreements, engineers' contracts, utility contracts, maintenance
agreements,
management agreements, service contracts, permits, licenses,
certificates and
entitlements in any way relating to the development, construction,
use,
occupancy, operation, maintenance, enjoyment, acquisition or
ownership of the
Mortgaged Property (the "Property Agreements"), (10) all rights,
privileges,
tenements, hereditaments, rights-of-way, easements, appendages and
appurtenances
appertaining to the foregoing, and all right, title and interest,
if any, of
Grantor in and to any streets, ways, alleys, strips or gores of
land adjoining
the Land or any part thereof, (11) accessions, replacements and
substitutions
for any of the foregoing and all proceeds thereof, (12) insurance
policies,
unearned premiums therefor and proceeds from such policies covering
any of the
above property now or hereafter acquired by Grantor, (13) all
mineral, water,
oil and gas rights now or hereafter acquired and relating to all or
any part of
the Mortgaged Property and (14) any awards, remunerations,
reimbursements,
settlements or compensation heretofore made or hereafter to be made
by any
governmental authority pertaining to the Land, Improvements,
Fixtures or
Personalty. As used in this Deed of Trust, the term "Mortgaged
Property" shall
mean all or, where the context permits or requires, any portion of
the above or
any interest therein.
"Obligations": As defined in the Credit Agreement, as well as all
obligations
arising under the Guarantee and Collateral Agreement (as defined in
the Credit
Agreement) and including, without limitation, all other
indebtedness,
obligations and liabilities now or hereafter existing of any kind
of Grantor to
Beneficiary under documents that recite that they are intended to
be secured by
this Deed of Trust.
"Permitted Encumbrances": The outstanding liens, easements,
restrictions,
security interests and other exceptions to title set forth in the
policy of
title insurance insuring the lien of this Deed of
2
Trust issued on the date hereof, together with the liens and
security interests
in favor of Beneficiary created or permitted by the Loan Documents.
"UCC": The Uniform Commercial Code of the State of Texas.
Capital terms used herein but not otherwise defined shall have the
meanings set
forth for such terms in the Credit Agreement.
GRANT. For good and valuable consideration, the receipt and legal
sufficiency of
which are hereby acknowledged, the Grantor has GRANTED, BARGAINED,
ASSIGNED,
SOLD, TRANSFERRED and CONVEYED and by these presents does GRANT,
BARGAIN,
ASSIGN, SELL, TRANSFER and CONVEY unto the Trustee, or his
substitutes,
successors and assigns as hereinafter permitted, the Mortgaged
Property, in
trust, for the use and benefit of the Beneficiary, subject,
however, to the
Permitted Encumbrances and the Permitted Liens. The maturity date
of the secured
debt is December 15, 2011.
2. WARRANTIES, REPRESENTATIONS AND COVENANTS. Grantor warrants,
represents and
covenants to Trustee and Beneficiary as follows:
2.1 Title to Mortgaged Property and Lien of this Instrument.
Grantor owns the
Mortgaged Property free and clear of any liens, claims or
interests, except the
Permitted Encumbrances and the Permitted Liens. This Deed of Trust
creates a
valid, enforceable first priority lien and security interest
against the
Mortgaged Property, subject only to the Permitted Encumbrances.
2.2 First Lien Status. Grantor shall preserve and protect the first
lien and
security interest status of this Deed of Trust and the other Loan
Documents. If
any lien or security interest other than a Permitted Encumbrance or
a Permitted
Lien is asserted against the Mortgaged Property, Grantor shall
promptly, and at
its expense, (a) give Beneficiary a detailed written notice of such
lien or
security interest (including origin, amount and other terms), and
(b) pay the
underlying claim in full or take such other action so as to cause
it to be
released or contest the same in compliance with the requirements of
the Credit
Agreement (including the requirement of providing a bond or other
security
satisfactory to Beneficiary to the extent required by the Credit
Agreement).
2.3 Payment and Performance. Grantor shall pay and perform the
Obligations when
due under the Loan Documents to which it is a party and shall
perform the
Covenants under the Loan Documents to which it is a party in full
when they are
required to be performed.
2.4 Replacement of Fixtures and Personalty. Except as permitted by
the Credit
Agreement, Grantor shall not, without the prior written consent of
Beneficiary,
not to be unreasonably withheld, permit any of the Fixtures or
Personalty to be
removed at any time from the Land or Improvements, unless the
removed item is
removed temporarily for maintenance and repair or, if removed
permanently, is
immaterial or is obsolete and in either case, is replaced by an
article of equal
or better suitability and value, owned by Grantor subject to the
liens and
security interests of this Deed of Trust and the other Loan
Documents, and free
and clear of any other lien or security interest except such as may
be first
approved in writing by Beneficiary.
3
2.5 Maintenance of Rights of Way, Easements and Licenses. Grantor
shall maintain
all rights of way, easements, grants, privileges, licenses,
certificates,
permits, entitlements and franchises necessary for the use of the
Mortgaged
Property and will not, without the prior consent of Beneficiary,
not to be
unreasonably withheld or delayed, consent to any public restriction
(including
any zoning ordinance) or private restriction as to the use of the
Mortgaged
Property which restriction is reasonably likely to materially and
adversely
effect the current use of the Mortgaged Property. Grantor shall
comply in all
material respects with all restrictive covenants affecting the
Mortgaged
Property, and all zoning ordinances and other public or private
restrictions as
to the use of the Mortgaged Property.
2.6 Inspection. Grantor shall permit Beneficiary, and Beneficiary's
respective
agents, representatives and employees, to inspect the Mortgaged
Property to the
extent permitted in Section 6.6 of the Credit Agreement.
2.7 Other Covenants. All of the covenants in the Credit Agreement
are
incorporated herein by reference. All property-related covenants in
the Credit
Agreement are incorporated as though Grantor were the "Borrower"
thereunder.
2.8 Condemnation Awards and Insurance Proceeds.
2.8.1 Condemnation Awards. Grantor assigns all awards and
compensation for
any condemnation or other taking, or any purchase in lieu thereof,
to
Beneficiary and authorizes Beneficiary to collect and receive such
awards and
compensation and to give proper receipts and acquaintances
therefor, subject to
the terms of the Credit Agreement.
2.8.2 Insurance Proceeds. Grantor assigns to Beneficiary all
proceeds of
any insurance policies insuring against loss or damage to the
Mortgaged
Property. Grantor authorizes and directs the issuer of each of such
insurance
policies to make payment for all such losses to Beneficiary, to be
released by
Beneficiary or applied in accordance with the terms of the Credit
Agreement.
Notwithstanding the foregoing, Beneficiary shall make available to
Grantor the
foregoing awards, compensation and proceeds of condemnation and
insurance, for
the purpose of restoration and rebuilding the Mortgaged Property,
to the same
extent that Grantor or the borrowers would be entitled to retain
Net Cash
Proceeds in connection with a Recovery Event (as both of those
terms are defined
in the Credit Agreement), under the terms of the Credit Agreement.
2.9 Transfer or Encumbrance of the Mortgaged Property. Grantor
shall not, except
as and to the extent permitted in the Credit Agreement, sell,
convey, alienate,
mortgage, encumber, pledge or otherwise transfer the Mortgaged
Property or any
part thereof, or permit the Mortgaged Property or any part thereof
to be sold,
conveyed, alienated, mortgaged, encumbered, pledged or otherwise
transferred.
4
3.
DEFAULT AND FORECLOSURE
3.1 Remedies. During the occurrence and continuance of an Event of
Default (as
defined in the Credit Agreement), Beneficiary may, at Beneficiary's
election and
by or through Beneficiary or otherwise, exercise any or all of the
following
rights, remedies and recourses:
3.1.1 Acceleration. To the extent permitted by the Credit
Agreement,
declare the Obligations to be immediately due and payable, without
further
notice, presentment, protest, notice of intent to accelerate,
notice of
acceleration, demand or action of any nature whatsoever (each of
which hereby is
expressly waived by Grantor), whereupon the same shall become
immediately due
and payable.
3.1.2 Entry on Mortgaged Property. Enter the Mortgaged Property and
take
exclusive possession thereof and obtain possession of all books,
records and
accounts relating thereto. If Grantor remains in possession of the
Mortgaged
Property after an Event of Default and without Beneficiary's prior
written
consent, Beneficiary may invoke any legal remedies to dispossess
Grantor.
3.1.3 Operation of Mortgaged Property. Hold, lease, develop,
manage,
operate or otherwise use the Mortgaged Property upon such terms and
conditions
as Beneficiary may deem reasonable under the circumstances (making
such repairs,
alterations, additions and improvements and taking other actions,
from time to
time, as Beneficiary deems necessary or desirable), and apply all
Rents and
other amounts collected by Trustee or Beneficiary in connection
therewith in
accordance with the provisions of the Credit Agreement.
3.1.4 Foreclosure and Sale. Sell or offer for sale the Mortgaged
Property
in such portions, orders and parcels as the Beneficiary may
determine, with or
without having first taken possession of same, to the highest
bidder for cash at
public auction. Such sale shall be made after giving adequate legal
notice of
the time and place thereof and in all other respects in accordance
with the
provisions of Section 51.002 of the Texas Property Code, as now
written or as
hereafter amended or succeeded, relating to the sale of real estate
or (with
respect to the Personalty) by Chapter 9 of the UCC relating to the
sale of
collateral after default by a debtor or by other applicable present
or
subsequent laws. At such sale:
3.1.4.1 The Trustee shall not be required to be physically present
or
have constructive possession of the Mortgaged Property, the Grantor
hereby
promising to deliver to the Trustee any portion of the Mortgaged
Property not
actually or constructively possessed by the Trustee, immediately
upon demand by
the Trustee, and the title to and right of possession of any such
property shall
pass to the purchaser thereof as completely as if same had been
actually present
and delivered to the purchaser at such sale.
3.1.4.2 Each instrument of conveyance executed by the Trustee shall
contain a special warranty of title binding upon the Grantor.
3.1.4.3 Each and every recital contained in any instrument of
conveyance made by the Trustee shall presumptively establish the
truth and
accuracy of the matters recited therein, including, without
limitation,
non-payment of the Indebtedness, advertisement and conduct of
5
such sale in the manner provided herein, and otherwise by law, and
by
appointment of any substitute or successor trustee hereunder.
3.1.4.4 Any and all prerequisites to the validity of such sale
shall
be presumed to have been performed.
3.1.4.5 The receipt of the Trustee or of any other party making the
sale shall be a sufficient discharge to the purchaser for his
purchase price and
no such purchaser or his assigns or personal representatives shall
thereafter be
obligated to see to the application of such purchase money or be in
any way
answerable for any loss, misapplication or non-application of the
proceeds.
3.1.4.6 The Grantor shall be completely and irrevocably divested of
all right, title and interest, claim and demand whatsoever, either
at law or in
equity, in an
