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
================================================================================
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING FOR COMMERCIAL PURPOSES
by
B2DIRECT, INC.
as Grantor
to
Mid-South Title Corporation
as Trustee
for the benefit of
BEAR STEARNS CORPORATE LENDING INC.
as Beneficiary
Dated as of: December 15, 2005
Property Address:
5205 North National Drive
Knoxville, Tennessee
================================================================================
THIS INSTRUMENT IS ALSO A UNIFORM COMMERCIAL CODE FINANCING
STATEMENT WHICH IS
BEING FILED AS A FIXTURE FILING IN ACCORDANCE WITH TENNESSEE CODE
ANNOTATED
SECTION 47-9-501. THE COLLATERAL IS DESCRIBED IN THIS DEED OF
TRUST, AND SOME OF
THE COLLATERAL DESCRIBED HEREIN IS OR IS TO BECOME FIXTURES ON THE
REAL ESTATE
DESCRIBED HEREIN. THE SECURED PARTY MAY BE CONTACTED AT THE ADDRESS
SHOWN HEREIN
FOR INFORMATION REGARDING THE SECURITY INTEREST. THE SECURED
PARTIES AND
BENEFICIARY DESIRE THIS FIXTURE FILING TO BE INDEXED AGAINST THE
RECORD OWNER OF
THE REAL ESTATE HEREIN DESCRIBED.
PURUSANT TO TENNESSEE CODE ANNOTATED SECTION 47-28-104, NOTICE IS
HEREBY GIVEN
THAT THIS DEED OF TRUST SECURES OBLIGATORY ADVANCES AND IS FOR
COMMERCIAL
PURPOSES. THIS DEED OF TRUST ALSO SECURES OPTIONAL ADVANCES, WHICH
ARE
NON-OBLIGATORY. THE TERMS "OBLIGATORY ADVANCE" AND "OPTIONAL
ADVANCE" SHALL HAVE
THE SAME MEANING AS USED IN TENNESSEE CODE ANNOTATED SECTION
47-28-101.
THE MAXIMUM PRINCIPAL INDEBTEDNESS FOR TENNESSEE RECORDING TAX
PURPOSES IS
$1,042,000.00.
TABLE OF CONTENTS
1.
DEFINITIONS...........................................................
1
2.
WARRANTIES, REPRESENTATIONS AND COVENANTS.GRANTOR WARRANTS,
REPRESENTS AND COVENANTS TO TRUSTEE AND BENEFICIARY AS
FOLLOWS:.......
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............................
6
3.5
Waiver of Redemption, Notice and Marshalling of Assets.........
6
3.6
Discontinuance of Proceedings..................................
6
3.7
Application of Proceeds........................................
7
3.8
Occupancy After Foreclosure....................................
7
3.9
Protective Advances and Disbursements; Costs of
Enforcement....................................................
7
3.10
No Mortgagee in Possession.....................................
8
4.
ASSIGNMENT OF RENTS AND
LEASES........................................
8
4.1
Assignment.....................................................
8
4.2
No Obligation..................................................
8
4.3
Right to Apply Rents...........................................
8
4.4
No Merger of Estates...........................................
9
5.
SECURITY
AGREEMENT....................................................
9
5.1
Security Interest..............................................
9
5.2
Financing Statements...........................................
9
5.3
Fixture Filing.................................................
9
6.
MISCELLANEOUS.........................................................
9
6.1
Notices........................................................
9
6.2
Covenants Running with the Land................................
10
6.3
Attorney-in-Fact...............................................
10
6.4
Successors and Assigns.........................................
11
6.5
No Waiver......................................................
11
6.6
Subrogation....................................................
11
6.7
Credit Agreement...............................................
11
6.8
Release........................................................
11
6.9
Waiver of Stay, Moratorium and Similar Rights..................
11
6.10
Obligations of Grantor, Joint and Several......................
12
i
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...............................................................
12
7.1
Exercise of Remedies by Trustee................................
12
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........................
13
7.6
Exculpation....................................................
13
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..................................
14
8.
LOCAL LAW
PROVISIONS..................................................
15
THE TERMS OF THIS LOCAL LAW PROVISION SHALL PREVAIL OVER ANY
CONFLICTS OF
THE TERMS OF THE OTHER PROVISIONS OF THIS DEED OF
TRUST...............
15
8.1
Foreclosure Under Power Of Sale................................
15
8.2
Trustee Provisions.............................................
15
Exhibit A: legal description
INDEX OF DEFINED TERMS
Covenants..................................................................
1
Credit
Agreement...........................................................
1
Fixtures...................................................................
1
Hedging
Agreements.........................................................
1
Improvements...............................................................
1
Land.......................................................................
1
Leases.....................................................................
2
Loan
Documents.............................................................
1
Deed of
Trust..............................................................
1
Mortgaged
Property.........................................................
1
Beneficiary................................................................
1
Grantor....................................................................
1
Obligations................................................................
2
Permitted
Encumbrances.....................................................
2
Personalty.................................................................
2
Plans......................................................................
2
Property
Agreements........................................................
2
Rents......................................................................
2
UCC........................................................................
3
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 B2DIRECT, INC., a Delaware
corporation
("Grantor"), whose address is 2435 Goodwin Lane, New Braunfels,
Texas 78135, to
MID-SOUTH TITLE CORPORATION, a Tennessee corporation, whose address
is 6363
Poplar Avenue, Suite 203, Memphis, Tennessee 38119, 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 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 New York or, if
the creation,
perfection and enforcement of any security interest herein granted
is governed
by the laws of a state other than New York, then, as to the matter
in question,
the Uniform Commercial Code in effect in that state.
Capital terms used herein but not otherwise defined shall have the
meanings set
forth for such terms in the Credit Agreement.
GRANT. To secure the full and timely payment and performance of the
Obligations,
Grantor MORTGAGES, GRANTS, BARGAINS, SELLS, TRANSFERS, ASSIGNS and
HYPOTHECATES
and CONVEYS the Mortgaged Property to Trustee for the benefit and
security 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.
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.
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. Institute proceedings for the complete
judicial
or, to the extent permitted by applicable law, non-judicial
foreclosure of this
Deed of Trust, in which case the Mortgaged Property may be sold for
cash or
credit in one or more parcels. With respect to any notices required
or permitted
under the UCC, Grantor agrees that ten (10) days prior written
notice shall be
deemed commercially reasonable. At any such sale by virtue of any
judicial
proceedings or any other legal right, remedy or recourse, the title
to and right
of possession of any such property shall pass to the purchaser
thereof, and to
the fullest extent permitted by law, Grantor shall be completely
and irrevocably
divested of all of its right, title, interest, claim and demand
whatsoever,
either at law or in equity, in and to the property sold and such
sale shall be a
perpetual bar both at law and in equity against Grantor, and
against all other
persons claiming or to claim the property sold or any part thereof,
by, through
or under Grantor. Beneficiary may be a purchaser at such sale and
if Beneficiary
is the highest bidder, may credit the portion of the purchase price
that would
be distributed to Beneficiary against the Obligations in lieu of
paying cash.
3.1.5 Receiver. Make application to a court of competent
jurisdiction for,
and obtain from such court as a matter of strict right and without
notice to
Grantor or regard to the adequacy of the Mortgaged Property for the
repayment of
the Obligations, the appointment of a receiver of the Mortgaged
Property, and
Grantor irrevocably consents to such appointment. Any such receiver
shall have
all the usual powers and duties of receivers in similar cases,
including the
full power to rent, maintain and otherwise operate the Mortgaged
Property upon
such terms as may
be approved by the court, and shall apply such Rents in accordance
with the
provisions of the Credit Agreement.
3.1.6 Other. Exercise all other rights, remedies and recourses
granted
under the Loan Documents or otherwise available at law or in equity
and under
the UCC (including an action for specific performance of any
covenant contained
in the Loan Documents, or a judgment on the Note either before,
during or after
any proceeding to enforce this Deed of Trust).
3.2 Separate Sales. The Mortgaged Property may be sold in one or
more parcels
and in such manner and order as Beneficiary in its sole discretion
may elect;
the right of sale arising out of any Event of Default shall not be
exhausted by
any one or more sales.
3.3 Remedies Cumulative, Concurrent and Nonexclusive. Trustee and
Beneficiary
shall have all rights, remedies and recourses granted in the Loan
Documents and
available at law or equity (including the UCC), which rights (a)
shall be
cumulative and concurrent, (b) may be pursued separately,
successively or
concurrently against Grantor or others obligated under the Note and
the other
Loan Documents, or against the Mortgaged Property, or against any
one or more of
them, at the sole discretion of Beneficiary, (c) may be exercised
as often as
occasion therefor shall arise, and the exercise or failure to
exercise any of
them shall not be construed as a waiver or release thereof or of
any other
right, remedy or recourse, and (d) are intended to be, and shall
be,
nonexclusive. No action by Trustee or Beneficiary in the
enforcement of any
rights, remedies or recourses under the Loan Documents or otherwise
at law or
equity shall be deemed to cure any Event of Default.
3.4 Release of and Resort to Collateral. Beneficiary may release,
regardless of
consideration and without the necessity for any notice to or
consent by the
holder of any subordinate lien on the Mortgaged Property, any part
of the
Mortgaged Property without, as to the remainder, in any way
impairing,
affecting, subordinating or releasing the lien or security
interests created in
or evidenced by the Loan Documents or their stature as a first and
prior lien
and security interest in and to the remaining Mortgaged Property.
For payment of
the Obligations, Beneficiary may resort to any other security in
such order and
manner as Beneficiary may elect.
3.5 Waiver of Redemption, Notice and Marshalling of Assets. To the
fullest
extent permitted by law, Grantor hereby irrevocably and
unconditionally waives
and releases (a) all benefit that might accrue to Grantor by virtue
of any
present or future statute of limitations or law or judicial
decision exempting
the Mortgaged Property from attachment, levy or sale on execution
or providing
for any appraisement, valuation, stay of execution, exemption from
civil
process, redemption or extension of time for payment, (b
