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Exhibit 4.16  

 
 

PROMISSORY NOTE    
  

	Borrower:	 	Water Pik, Inc.

Laars, Inc.

23 Corporate Plaza

Suite 246

Newport Beach, CA 92660	 	Lender:	 	U.S. Bank National Association

4100 Newport Place, Suite 120

Newport Beach, CA 92660
	

	Principal Amount: $                  	 	Date of Note: October 22, 2001

        PROMISE TO PAY.    WATER PIK, INC. and LAARS, INC. (referred to in this Note individually and collectively as
"Borrower") jointly and severally promise to pay to U.S. Bank National Association ("Lender"), or order, in lawful money of the United States of America, the principal amount
of                        Dollars
($                        ) or so much as may be outstanding, together with interest on the unpaid outstanding principal balance
thereof. Interest shall be calculated from the date of the disbursement. 

        PAYMENT.    Principal and interest on the Loan shall be due and payable in eighty-four payments based upon a
twenty-five (25) year amortization upon the dates and in the manner as follows: 

Commencing
on October 31, 2001, and continuing on the same day of each month thereafter, Borrower shall pay to Lender all accrued and unpaid interest on the outstanding principal amount of the
Loan. 

Commencing
on October 31, 2001, and continuing on the same day of each month thereafter, up to and including that day of September, 2008, Borrower shall make monthly payments of principal in an
amount equal to 1/300th of the initial principal balance of the Loan. 

On
September 30, 2008, Borrower shall pay to Lender all of the unpaid principal balance hereof remaining unpaid on such date, together with any and all accrued and unpaid interest hereunder. 

        INTEREST RATE.    Interest on the amount of the Loan shall accrue at the annual rate equal to the Applicable Margin (as defined
below) plus the one-month LIBO rate, two-month LIBO rate or three-month LIBO rate (as selected by Borrower) quoted by Lender from Telerate Page 3750 or any successor thereto,
which shall be the LIBO rate in effect two Banking Days prior to the commencement of an Interest Period (as defined below). The initial LIBO rate applicable hereto shall be the one-month
LIBO rate in effect two Banking Days prior to the date of the disbursement of the Loan, which rate plus the Applicable Margin shall be in effect for the remainder of the initial Interest Period; such
LIBO rate to be reset at the beginning of the next Interest Period. Lender's internal records of applicable interest rates shall be determinative in the absence of manifest error. For determining
payment dates for this Loan, the Banking Day shall be the standard convention. If after the date of initial funding any governmental authority subjects Lender to any new or additional charge, fee,
withholding or tax of any kind with respect to the Loan or changes the method of taxation of the Loan or changes the reserve or deposit requirements applicable to the Loan, the Borrower shall pay to
Lender such additional amounts as will compensate Lender for such costs or lost income resulting therefrom as reasonably determined by Lender. 

        Borrower
shall select the one-month LIBO rate, two-month LIBO rate or three-month LIBO rate (the "LIBO rates") at which the outstanding principal amount of the
Loan will accrue interest (effective on the first day of an Interest Period), by giving Lender notice in writing, or by telephone promptly confirmed in writing, given so as to be received by Lender
not later than 10:00 a.m., Eastern Time, two Banking Days prior to the end of the existing Interest Period. Absent timely notice of 

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Borrower's selection of a rate or in the event of the unavailability of a LIBO rate selected by Borrower, (a) Lender may at any time thereafter convert the rate of interest on the Loan to the
Prime Rate, and the Loan shall accrue interest at the Prime Rate, and shall fluctuate with the Prime Rate, but until such conversion, the outstanding amounts of the Loan shall continue to accrue
interest at the expired LIBO-based rate and (b) at any time after Borrower's failure to provide such timely notice or such unavailability of such a LIBO rate, regardless of whether
Lender has converted the interest rate to the Prime Rate, Borrower may cause the Loan to accrue interest at one of the LIBO rates (if such rate is then available) by providing notice of such election
not later than 10:00 a.m., Eastern Time, two Banking Days prior to the date on which Borrower desires for such LIBO rate to be in effect. 

        "Banking
Day" means any day on which commercial banks are open for business in New York, New York on which dealings in U.S. Dollars may be carried on by such banks in the interbank
eurodollar market. 

        "Interest
Period" means a one-month, two-month or three month period, commencing on the date of the continuation of the Loan, that corresponds to the LIBO rate
selected by Borrower for such Interest Period. For example, if Borrower selects a two-month LIBO rate, such rate will remain in effect for a two-month Interest Period. Each
Interest Period that would otherwise end on a day which is not a Banking Day shall end on the next following Banking Day. 

        "Applicable
Margin" means: (a) from the date of disbursement of the Loan until the first adjustment pursuant to clause (b) of this paragraph below, 1.50%; and
(b) commencing on the first day of the first month following the delivery of financial statements pursuant to the applicable subsections of the section of the Loan Agreement (as defined below)
entitled AFFIRMATIVE COVENANTS, the margin as provided below based upon the Borrowers' Leverage Ratio (as defined in the Loan Agreement) calculated for
the four fiscal quarter period of Borrower ended with the most recent fiscal quarter of Borrower in such financial statements. 

	Leverage Ratio:
 
	 	Applicable Margin:
	 
	Greater than 2.00:1:00	 	2.50	%
	1.76:1.00 to 2.00:1.00	 	2.25	%
	1.51:1.00 to 1.75:1.00	 	2.00	%
	1.25:1.00 to 1.50:1.00	 	1.75	%
	Less than 1.25:1.00	 	1.50	%

Notwithstanding
anything in this definition to the contrary, in the event that Lender shall fail to receive any required financial statements and the related Compliance Certificate for any fiscal
quarter of Borrower within 45 days following the end of such fiscal quarter, as required by the Loan Agreement, then the Applicable Margin shall, at the end of such 45 day period,
immediately and without notice or further action be the highest Applicable Margin provided above (such Applicable Margin to be in effect until the first day of the first calendar month after Lender
receives the quarterly financial statements of Borrower required by the Loan Agreement and the related Compliance Certificate) and in the event that, with respect to any four fiscal quarter period of
Borrower which shall be Borrower's fiscal year, the audited financial statements of Borrower required under the Loan Agreement for such fiscal year shall indicate a Leverage Ratio for such four fiscal
quarter period higher or lower than that reflected in the financial statements and Compliance Certificates previously delivered to Lender for such four fiscal quarter period (and the difference is not
attributable to a change in accounting methodology), and if the Applicable Margin would have been different during such four fiscal quarter period if the ratio of Leverage Ratio had been properly
calculated, then the Applicable Margin shall be corrected retroactively to the effective date the incorrect Applicable Margin which was first determined, and Borrower or Lender, as applicable, shall
make immediate payment to the other of the amount necessary to make the correction. 

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The
annual interest rate for this Note is computed on the basis of actual days elapsed and the actual number of days in a year. Borrower will pay Lender at Lender's address shown above or at such
other place as Lender may designate in writing. 

"Prime
Rate" shall mean the prime rate of interest announced by Lender, from time to time, plus a margin of 0%. 

NOTICE: Under no circumstances will the interest rate on this Note be more than the maximum rate allowed by applicable law.

        "Loan
Agreement" means that certain Loan Agreement dated October 22, 2001 by and between Borrower and Lender. 

        PREPAYMENT.    If the Loan is prepaid at any time that a LIBO rate is in effect other than the end of an Interest Period,
whether by Borrower, as a result of acceleration upon default or otherwise, Borrower agrees to pay all of Lender's costs, expenses and Interest Differential (as determined by Lender) incurred as a
result of such prepayment. The term "Interest Differential" shall mean the sum equal to the greater of 0 or the financial loss incurred by Lender resulting from prepayment, calculated as the
difference between the amount of interest Lender would have earned (from like investments in the Money Markets as of the first day of the Interest Period) had prepayment not occurred and the interest
Lender will actually earn (from like investments in the Money Markets as of the date of prepayment) as a result of the redeployment of funds from the prepayment. Because of the short-term
nature of this measurement, Borrower agrees that the Interest Differential shall not be discounted to its present value. The term "Money Markets" refers to one or more wholesale funding markets
available to Lender, including negotiable certificates of deposit, commercial paper, eurodollar deposits, bank notes, federal funds and others. Except for the foregoing, Borrower may pay all or a
portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payment of accrued
unpaid interest. Rather, they will reduce the principal balance due. 

        LOAN FEES AND FINANCE CHARGES.    Borrower agrees that all loan fees and other prepaid finance charges are earned fully as of
the date of the Loan and will not be subject to refund upon early payment (whether voluntary or as a result of default), except as otherwise required by law. 

        EVENTS OF DEFAULT.    Each of the following shall constitute an Event of Default under this Note: (a) Borrower fails to
make any payment when due. (b) Borrower fails to comply with or to perform when due any other term, obligation, covenant, or condition contained in this Note or any agreement related to this
Note, or in any other agreement or loan Borrower has with Lender (and such failure shall not constitute an Event of Default under any of the other provisions of this section entitled
"EVENTS OF DEFAULT") and such failure to comply shall continue for 30 calendar days after notice thereof to Borrower by Lender; provided, however, that
in the event that such failure to comply is not capable of being cured (as determined by Lender in its reasonable discretion) within 30 calendar days, then Borrower shall have such longer period of
time as Borrower reasonably requires to cure such failure to comply so long as Borrower commences cure within the 30 day period and thereafter diligently pursues cure to completion; and
provided, further, that such longer period of time shall in no event exceed 60 calendar days. (c) Borrower defaults under any of the following in connection with a transaction the total value
of which is equal to or greater than $1,000,000.00: any loan, extension of credit, or agreement executed in connection with security for a loan or extension of credit, in favor of any other creditor
or person that may materially affect any of Borrower's property or Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the Related Documents.
(d) Any representation or statement made or furnished to Lender by Borrower or on
Borrower's behalf is false or misleading in any material respect either now or at the time made or furnished. (e) The dissolution or termination of, or the insolvency of, Borrower, the
appointment of a 

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receiver for any part of Borrower's property, any general assignment for the benefit of creditors or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.
(f) Borrower is in default under any other note, security agreement, lease agreement or lease schedule, loan agreement or other agreement, whether new existing or hereafter made, between
Borrower and Lender or any direct or indirect subsidiary of U.S. Bancorp. (g) Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower, any creditor of any Grantor against any collateral securing the Indebtedness, or by any governmental agency. (h) This Note or any
of the Related Documents (as defined in the Loan Agreement) ceases to be in full force and effect (except upon repayment, but including failure of any Security Agreement (as defined in the Loan
Agreement) to create a valid and perfected Security Interest (as defined in the Loan Agreement)) at any time and for any reason. 

        LENDER'S RIGHTS.    Upon default, Lender may declare the entire unpaid principal balance on this Note and all accrued unpaid
interest immediately due, without notice, and then Borrower will pay that amount. Upon Borrower's failure to pay all amounts declared due pursuant to this section, including failure to pay upon final
maturity, Lender, at its option, may also, if permitted under applicable law, increase the variable interest rate on this Note to 2.000 percentage points over the Prime Rate. Lender may hire or
pay someone else to help collect this Note if Borrower does not pay. Borrower also will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and
Lender's legal expenses whether or not there is a lawsuit, including attorneys; fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection services. Borrower also will pay any court costs, in addition to all other sums provided by law. This Note has been
delivered to Lender and accepted by Lender in the State of California. This Note is secured, however, by the lien of a (Deed of Trust or Mortgage, as
applicable), Security Agreement, Financing Statement and Assignment of Rents encumbering real property in the State
of                        . If there is a lawsuit, Borrower agrees
upon Lender's request to submit to the jurisdiction of the courts of Los Angeles County, the State of California. Lender and Borrower hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by either Lender or Borrower against the other. This Note shall be governed by and construed in accordance with the laws of the State of California, except to the
extent that the laws of the State of                        govern the exercise of Lender's foreclosure and other real property
remedies. 

        COLLATERAL.    Borrower acknowledges this Note is secured by, in addition to any other collateral, a  (Deed of Trust
or Mortgage, as applicable), Security Agreement, Financing Statement and Assignment of Rents dated October 22, 2001 (the
"                        "),
by                        , Inc. to a trustee is favor of Lender on certain real property commonly known
as                        .
The                        contains the following due on sale
provision: "It is expressly acknowledged, covenanted and agreed that except as may be permitted in
this                        that there may be no sale, lease, exchange, assignment, conveyance, encumbrance,
mortgage, alienation, transfer or other disposition (herein collectively called a "Disposition") of (a) all or any portion of the Property or any lease thereof (or any interest therein) which
gives the lessee any option to purchase the Property or any part thereof, or (b) all or any part of the legal or beneficial ownership interest or management control in Borrower, unless Lender
has provided its prior written consent thereto. In the event there occurs a Disposition without Lender's written consent, then Lender may, at Lender's option, accelerate the maturity of the Note and
enforce any and all of Lender's rights, remedies and recourses set forth in this                        upon the occurrence of an
Event of Default. It is acknowledged and agreed that the Lender may withhold,
at its
sole option, its consent to any Disposition as described above. Lender's failure to respond or otherwise consent within such thirty (30) day period shall be deemed a denial of the request for
approval. Lender's failure to exercise its remedies hereunder for a disapproved Disposition shall not be construed as a waiver of Lender's right to subsequently exercise such remedies, and Lender's
approval of a Disposition shall not be construed as a waiver of the provisions hereof with respect to 

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any subsequent Disposition. The rights and options herein granted to Lender may be exercised at Lender's sole option and discretion, need not be based upon an increased business risk or any other
risk, and are an integral and valuable part of the security given to Lender. Notwithstanding the provisions of this section, Borrower may sell or otherwise convey the Property, or any interest
therein, without the consent of Lender provided that all outstanding and unpaid amounts of the Secured Obligations [as defined in
the                        ] are fully repaid at the
time of such sale or conveyance." 

        TERM LOAN.    This Note evidences a straight term loan. Once the total amount of principal has been advanced, Borrower is not
entitled to further loan advances. Advances under this Note, as well as directions for payment from Borrower's accounts, may be requested orally or in writing by Borrower or by an authorized person.
Lender may, but need not, require that all oral requests be confirmed in writing. Borrower agrees to be liable for all sums either: (a) advanced in accordance with the instructions of an
authorized person or (b) credited to any of Borrower's accounts with Lender. The unpaid principal balance owing on this Note at any time may be evidenced by endorsements on this Note or by
Lender's internal records, including daily computer print-outs. Lender will have no obligation to advance funds under this Note if: (a) Borrower is in default under the terms of
this Note or any agreement that Borrower or any guarantor has with Lender, including any agreement made in connection with the signing of this Note; (b) Borrower ceases doing business or is
insolvent; or (c) Borrower has applied funds provided pursuant to this Note for purposes other than these authorized by Lender. 

        GENERAL PROVISIONS.    Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them.
Each Borrower understands and agrees that, with or without notice to Borrower, Lender may with respect to any other borrower (a) make one or more additional secured or unsecured loans or
otherwise extend additional credit; (b) alter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment or other terms any indebtedness, including
increases and decreases of the rate of interest on the indebtedness; (c) exchange, enforce, waive, subordinate, fail or decide not to perfect, and release any security, with or without the
substitution of new collateral; (d) apply such security and direct the order or manner of sale thereof, including without limitation, any nonjudicial sale permitted by the terms of the
controlling security agreements, as Lender in its discretion may determine; (e) release, substitute, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or other
guarantors on any terms or in any manner Lender may choose; and (f) determine how, when and what application of payments and credits shall be made on any other indebtedness owing by such other
borrower. Borrower and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive any applicable statute of limitations, presentment, demand for payment, protest
and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan, or release any party or guarantor or collateral;
or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such
parties also agree that Lender may modify this
loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. 

______ Note

5

 

        PRIOR TO SIGNING THIS NOTE, EACH BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. EACH BORROWER
AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.

DATED:
OCTOBER 22, 2001 

	BORROWER:	 	 
	

Water Pik, Inc., a Delaware corporation	
 	

 
	

By:	
 	

/s/  SIGNATURE ON FILE      
 Victor C. Streufert

Vice President—Finance,

Chief Financial Officer, and

Treasurer	
 	

 
	

Laars, Inc., a Delaware corporation	
 	

 
	

By:	
 	

/s/  SIGNATURE ON FILE      
 Victor C. Streufert

Vice President—Finance,

Chief Financial Officer, and

Treasurer	
 	

 
	

LENDER:	
 	

 
	

U.S. Bank National Association	
 	

 
	

By:	
 	

/s/  SIGNATURE ON FILE      
 Richard M. McNiven, Vice President	
 	

 

______ Note

6

 
Schedule to Form of Promissory Note
  (Schedule to Exhibit 4.16 to Form 10K filed 3/21/02) 

Borrowers:
Water Pik, Inc. and Laars, Inc.

Lender: U.S. Bank National Association 

	Reference
 
	 	Principal Amount
	 	Collateral (real estate security for note)
	 	Owner of Collateral
	 	Security Instrument (type)

	1. Moorpark Note	 	$	8,850,000.00	 	6000 Condor Drive, Moorpark, CA	 	Laars, Inc.	 	Deed of Trust
	2. Ft. Collins Note	 	$	5,980,000.00	 	1730 E. Prospect Rd., Ft. Collins, CO	 	Water Pik, Inc.	 	Deed of Trust
	3. Loveland Note	 	$	3,510,000.00	 	609 14th Street SW, Loveland, CO	 	Water Pik, Inc.	 	Deed of Trust
	4. Rochester Note	 	$	2,250,000.00	 	20 Industrial Way, Rochester, NH	 	Laars, Inc.	 	Mortgage

______ Note

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Exhibit 4.17  

	

Part A:	
 	

Form of Deed of Trust used for property located at 1730 E. Prospect Rd., Ft. Collins, CO
	

Part B:	
 	

Form of Deed of Trust used for property located at 609 14th Street SW, Loveland, CO
	

Part C:	
 	

Form of Deed of Trust used for property located at 6000 Condor Drive, Moorpark, CA
	

Part D:	
 	

Form of Mortgage used for property located at 20 Industrial Way, Rochester, NH

1

 
Exhibit 4.17

(Part A)  

 
 

DEED OF TRUST, SECURITY AGREEMENT,
  FINANCING STATEMENT AND
  
    ASSIGNMENT OF RENTS    
  

        THIS DEED OF TRUST, SECURITY AGREEMENT, FINANCING STATEMENT, AND ASSIGNMENT OF RENTS (this "Deed of Trust") is given as of the 22nd day of October, 2001, by the
Borrower named below to the Trustee named below, for the use and benefit of the Lender named below. 

 
 

PARTIES, PROPERTY, AND DEFINITIONS    
  

        The following terms and references shall have the meanings indicated: 

        1.1    Borrower:    Water Pik, Inc., a Delaware corporation and Laars, Inc., a Delaware corporation,
individually and collectively, the legal address of each of which is 23 Corporate Plaza, Suite 246, Newport Beach, CA 92660, together with any future owner of the Property or any part thereof or
interest therein. 

        1.2    Lender:    U.S. Bank National Association, whose legal address is 4100 Newport Place, Suite 120, Newport Beach,
CA 92660, together with any legal holder of the Note. 

        1.3    Trustee:    The Public Trustee of Larimer County, Colorado. 

        1.4    Note:    The Promissory Note of even date herewith, executed by Borrower and payable to the order of Lender in
the principal face amount of $5,980,000.00, the last payment under which is due on September 30, 2008, unless such due date is extended or accelerated, together with all renewals, extensions,
and modifications of the Note. All terms and provisions of the Note are incorporated by this reference in this Deed of Trust. 

        1.5    Loan Agreement:    The Loan Agreement dated October 22, 2001 executed by Borrower and the Lender, and
all renewals, extensions, and modifications thereof. All capitalized terms not otherwise defined herein shall bear the meaning given to them in the Loan Agreement. 

        1.6    Existing Credit Agreement:    The Restated Credit Agreement dated as of November 29, 1999 among
Borrower, certain guarantors named therein, certain lenders named therein and The Chase Manhattan Bank, as agent, as amended, modified or supplemented from time to time, and any successor revolving
credit or loan agreement to the current Existing Credit Agreement. 

        1.7    Real Property:    The real property described in Exhibit A, attached hereto and by this reference
incorporated herein, together with all right, title and interest of Borrower in the following with respect to the real property, whether now owned or hereafter acquired by Borrower: 

        (a)  All
improvements now or hereafter located on such real property and all easements and appurtenances thereto; 

        (b)  The
land lying within any street or roadway adjoining the real property; any vacated or hereafter vacated street or alley adjoining the real property; and any strips and
gores adjoining the real property; 

        (c)  All
and singular the passages, waters, water rights (whether tributary or non-tributary or not non-tributary), water courses, riparian rights,
wells, well permits, water stock, other rights, liberties and privileges thereof or in any way now or hereafter appertaining to the real property, 

2

 

including homestead and any other claim at law or in equity, as well as any after-acquired title, franchise or license, and the reversion and reversions and remainder and remainders thereof; and 

        1.8    Fixtures:    All "fixtures," as such term is defined in the Uniform Commercial Code of Colorado (whether
actually or constructively attached or incorporated, and including all trade, domestic, and ornamental fixtures) now or hereafter located in, upon, or under such real property or improvements and used
or usable in connection with any present or future operation thereof but excluding all fixtures that are equipment and are used specifically for the operation and conduct of the business of Borrower
on the Real Property. 

        1.9    Intangible Personalty:    All right, title and interest of the Borrower in and to the following, with respect
to the Real Property: 

        (a)  all
of the rents of and from the use, operation, or enjoyment of such real property and improvements (collectively, the "Rent Income"), whether such Income is
attributable to the period, or is collected, prior to or subsequent to any default by Borrower, but excluding all revenues that arise from the operation and conduct of the
business of Borrower on the Real Property; 

        (b)  all
plans and specifications for the improvements on the real property; soil, environmental, engineering, land planning maps, surveys and other studies and reports
concerning the real property or prepared for the orderly planning and development of the real property, including all plans, drawings and studies concerning the platting or replatting of the real
property; all contracts and subcontracts relating to the improvements on the real property, or any thereof; 

        (c)  all
awards and payments, including interest thereon, resulting from the exercise of any right of eminent domain or any other public or private taking of, casualty or
injury to, or decrease in the value of, any of such real property, including without limitation all property insurance payments, proceeds and policies related to such real property; 

        (d)  all
of the licenses, permits, franchises, and other entitlements to use and all rights thereto which have been issued by or which are pending before any governmental or
quasi-governmental agency which are necessary or appropriate for the Real Property but excluding all such items that are used specifically for the operation and conduct of the business of Borrower on
the Real Property; 

        (e)  all
water taps, sewer taps, building permits, curb cut permits, storm water discharge permits; and 

        (f)    all
of Borrower's rights in and to contract rights, leases, concessions, operating systems, warranties, licenses, plans, drawings and other items of intangible personal
property solely relating to the ownership or operation of the Real Property but excluding all such items that are used specifically for the operation and conduct of the business of Borrower on the
Real Property. 

        1.10    Property:    The Real Property, the Fixtures and the Intangible Personalty are sometimes collectively called
the "Property." All of the Real Property, Fixtures and Intangible Personalty, whether affixed or annexed or not, and all rights hereby conveyed and mortgaged are intended to be as a unit and are
hereby understood and agreed and declared to be appropriated to the use of the real estate, and shall for the purposes of this Deed of Trust be deemed to be real estate and conveyed and mortgaged
hereby. 

        1.11    Any capitalized terms not otherwise defined in this Deed of Trust and not defined in the Loan Agreement, shall bear the
meaning given to them in Article 9 of the Code (as defined below). 

        1.12    Secured Obligations:    The Property is granted and shall be held for the purpose of securing the following
(the "Secured Obligations"): 

        (a)  The
payment of the indebtedness as evidenced in the Note; 

3

 

        (b)  The
performance and observance of all terms, covenants, conditions, and provisions to be performed or observed by the Borrower pursuant to the terms of: 

          (i)  this
Deed of Trust, 

        (ii)  UCC-1
financing statements required to perfect the Lender's security interest in the Intangible Personalty and Fixtures as granted by this Deed of Trust
(the "Financing Statement"), 

        (iii)  the
Certificate and Indemnity Regarding Hazardous Substances (the "Environmental Indemnity") of even date herewith relating to the Real Property executed by Borrower, 

        (iv)  the
Loan Agreement as such agreement relates to the loan evidenced by the Note and to the Property, and 

        (v)  any
and all pledge or other security agreements, loan agreements, disbursement agreements, supplemental agreements, assignments (both present and collateral), and side
letters related to the loan evidenced by the Note and to the Property, as the same may be amended, modified or supplemented from time to time (collectively, the "Related Agreements"). 

        The
Note, this Deed of Trust, Financing Statement, Environmental Indemnity, Related Agreements, Loan Agreement, and any and all other documents or instruments executed in connection with
the foregoing to evidence or secure the Note shall be hereinafter collectively called the "Loan Documents". 

        (c)  The
payment of all sums expended or advanced by Lender pursuant to the terms hereof. 

        1.13    Intercreditor Agreement:    That certain Intercreditor Agreement of even date herewith by and between Lender
and The Chase Manhattan Bank, as Agent under the Existing Credit Agreement. 

 
 

ARTICLE 2
  GRANTING CLAUSE    
  

        2.1    Grant to Trustee.    As security for the Secured Obligations, Borrower hereby grants, bargains, sells, and
conveys the Real Property to Trustee, in trust forever, with power of sale, for the use and benefit of Lender, and subject to all provisions hereof. 

        2.2    Security Interest to Lender.    As additional security for the Secured Obligations, Borrower hereby grants to
Lender a security interest in the Fixtures and in the Intangible Personalty (collectively, the "Collateral"). To the extent any of the Collateral may be
or has been acquired with funds advanced by Lender under the Loan Documents, this security interest is a purchase money security interest. This Deed of Trust constitutes a Security Agreement under the
Uniform Commercial Code of Colorado (the "Code") with respect to any part of the Collateral that may or might now or hereafter be or be deemed to be personal property; all of the terms, provisions,
conditions and agreements contained in this Deed of Trust pertain and apply to the Collateral as fully and to the same extent as to any other property comprising the Property, and the following
provisions of this section shall not limit the generality or applicability of any other provision of this Deed of Trust but shall be in addition thereto: 

        (a)  The
Collateral shall be used by Borrower solely for business purposes, being installed upon or owned in connection with the Real Property for Borrower's own use or as
the equipment and furnishings furnished by Borrower, as owner, to tenants of the Real Property; 

        (b)  No
financing statement covering any of the Collateral or any proceeds thereof is on file in any public office except financing statements filed in connection with the
Existing Credit Agreement (the effect of which shall be modified pursuant to the Intercreditor Agreement); and Borrower will, at its cost and expense, upon demand, furnish to Lender such further
information 

4

 

and will execute and deliver to Lender such financing statements and other documents in form satisfactory to Lender and will do all such acts and things as Lender may at any time or from time to time
reasonably request or as may be necessary or appropriate to establish and maintain a perfected security interest in the Collateral as security for the Secured Obligations, subject to no adverse liens
or encumbrances; and Borrower will pay the cost of filing the same or filing or recording such financing statements or other documents and this instrument in all public offices wherever filing or
recording is deemed by Lender to be necessary or desirable; 

        (c)  The
terms and provisions contained in this section and in Section 3.1 (Enforcement of Security Interests) of this Deed of Trust shall, unless the context
otherwise requires, have the meanings and be construed as provided in the Code; and 

        (d)  This
Deed of Trust constitutes a security agreement and financing statement under the Code with respect to the Collateral. As such, this Deed of Trust covers all items
of the Collateral including all items which are to become fixtures. Borrower is the "Debtor" and Lender is the "Secured Party" (as those terms are defined and used in the Code) insofar as this Deed of
Trust constitutes a financing statement. 

        2.3    The Borrower agrees that Lender may, to the extent permitted by applicable law, prepare and file financing statements,
amendments thereto, and continuation statements without the signature of the Borrower and file any financing statement, amendment thereto or continuation statement electronically. 

 
 

ARTICLE 3
  BORROWER'S TITLE AND AUTHORITY    
  

        3.1    Warranty of Title.    Borrower represents and warrants to Lender that Borrower has good and marketable title to
the Real Property in fee simple absolute, subject only to the lien of general taxes for the current year, a lien due and payable, but not yet delinquent, and those additional matters, if any, set
forth in Exhibit B, attached hereto and by this reference incorporated herein ("Permitted Exceptions"). Borrower further represents and warrants to Lender that Borrower is the absolute owner of
the Collateral, free of any liens, encumbrances, security interests, and other claims whatsoever, except insofar as the Collateral may be encumbered by the lien of general taxes for the current year,
a lien due and payable, but not yet delinquent and except for liens granted to the lenders under the Existing Credit Agreement as in effect on the date of this Deed of Trust. Borrower, for itself and
its successors and assigns, hereby agrees to warrant and forever defend, all and singular, all of the Property and property interest granted and conveyed in trust pursuant to this Deed of Trust,
against every person whomsoever lawfully claiming, or to claim, the same or any part thereof, subject to the Permitted Exceptions and other exceptions described in this section. The warranties
contained in this section shall survive foreclosure of this Deed of Trust, and shall inure to the benefit of and be enforceable by any person who may acquire title to the Real Property or the
Collateral pursuant to any such foreclosure. 

        3.2    Waiver of Homestead and Other Exemptions.    To the extent permitted by law, Borrower hereby waives all rights
to any homestead or other exemption to which Borrower would otherwise be entitled under any present or future constitutional, statutory, or other provision of applicable state or federal law. 

        3.3    Due Authorization.    If Borrower is other than a natural person, then each individual who executes this
document on behalf of Borrower represents and warrants to Lender that such execution has been duly authorized by all necessary corporate, partnership, or other action on the part of Borrower. 

5

 

 
 

ARTICLE 4
  BORROWER'S AFFIRMATIVE COVENANTS    
  

        4.1    Payment of Note.    Borrower will pay all principal, interest, and other sums payable under the Note, the Loan
Agreement or this Deed of Trust or the Loan Documents, on the date when such payments are due, without notice or demand. 

        4.2    Performance of Other Obligations.    Borrower will promptly and strictly perform and comply with all other
covenants, conditions, and prohibitions required of Borrower by the terms of the Loan Documents. 

        4.3    Other Encumbrances.    Borrower will promptly and strictly perform and comply with all covenants, conditions,
and prohibitions required of Borrower in connection with any other encumbrance affecting the Real Property or the Collateral, or any part thereof, or any interest therein, regardless of whether such
other encumbrance is superior or subordinate to the lien hereof. This paragraph does not authorize any lien or encumbrance against the Real Property or the Collateral except as permitted by
Section 3.1 or with the prior written consent of the Lender as provided in this Deed of Trust. 

        4.4    Payment of Taxes.    

        (a)  Property Taxes. Borrower will pay, before delinquency, all taxes and assessments, including without limitation, general,
special and metropolitan district taxes, water charges, sewer service charges (collectively, the "Impositions"), which may be levied or imposed at any time against Borrower's interest and estate in
the Real Property or the Collateral. Within 10 days after request by Lender, Borrower will deliver to Lender an official receipt for such payment or other evidence that such payment has been
made. 

        (b)  Intangible Taxes. If by reason of any statutory or constitutional amendment or judicial decision adopted or rendered
after the date hereof, any tax, assessment, or similar charge is imposed against the Note, against Lender arising directly from Lender's interests in the Loan Documents (other than a tax based on
Lender's income), or against any security interest of Lender in the Property, Borrower will pay such tax, assessment, or other charge before delinquency and will indemnify Lender against all loss,
expense, or diminution of income in connection therewith. In the event Borrower is unable to do so,
either for economic reasons or because the legal provisions or decisions creating such tax, assessment or charge forbid Borrower from doing so, then the Note will, at Lender's option, become due and
payable in full upon thirty (30) days' notice to Borrower. 

        (c)  Right to Contest. Notwithstanding any other provision of this section, Borrower will not be deemed to be in default
solely by reason of Borrower's failure to pay any Impositions so long as, in Lender's judgment, each of the following conditions is satisfied: 

          (i)  Borrower
is engaged in and diligently pursuing in good faith administrative or judicial proceedings appropriate to contest the validity or amount of such Impositions;
and 

        (ii)  Nonpayment
of such Impositions will not result in the loss or forfeiture of any Property encumbered hereby or any interest of Lender therein. 

        If
Lender determines that any one or more of such conditions is not satisfied or is no longer satisfied, Borrower will pay the Impositions in question, together with any interest and
penalties thereon, within ten (10) days after Lender gives notice of such determination. 

        4.5    Maintenance of Insurance.    Borrower shall provide and maintain policies of insurance on the Property in
accordance with the Loan Agreement. 

6

  

        4.6    Lease Obligations.    Borrower represents and warrants to Lender that none of the Property is leased by
Borrower to any tenant. In the event there are at any time in the future any leases of all or any part of the Property, Borrower shall perform promptly all of Borrower's obligations under or in
connection with each such lease of all or any part of the Property (collectively called the "Leases"). If Borrower receives at any time any written communication from any tenant under any Lease
asserting a default by Borrower under any Lease, or purporting to terminate or cancel any Lease, Borrower will promptly forward a copy of such communication (and any subsequent communications relating
thereto) to Lender. 

        4.7    Recertified Appraisal.    If at any time (a) an Event of Default (as defined below) has occurred, or
(b) the Lender is required by law or regulation to obtain a new appraisal, the Lender may require a new appraisal of the Real Property. 

        4.8    Management.    Borrower shall obtain Lender's advance written approval of any outside management services
provided, and of any contract therefor or assignment thereof, which written approval shall not be unreasonably withheld. 

        4.9    Condemnation.    Borrower hereby assigns, transfers and sets over unto Lender the entire proceeds of any award
or any claim for damages for any of the Real Property taken or damaged under the power of eminent domain or by condemnation. Lender may elect, in its discretion, to apply the proceeds of the award
upon or in reduction of the Secured Obligations, whether due or not. 

        4.10    Mechanics' Liens.    Borrower will keep the Real Property free and clear of all liens and claims of liens by
contractors, subcontractors, mechanics, laborers, material men, and other such persons in the manner provided in the Loan Agreement. 

        4.11    Defense of Actions.    Borrower will defend, at Borrower's expense, any action, proceeding or claim which
affects any Property encumbered hereby or any interest of Lender in such Property or in the Secured Obligations, and will indemnify and hold Lender harmless from all loss, damage, cost, or expense,
including attorneys' fees, which Lender may incur in connection therewith. 

        4.12    Further Assurances; Estoppel Certificates.    Borrower will execute and deliver to Lender upon demand, and pay
the costs of preparation and recording thereof, any further documents which Lender may request to confirm or perfect the liens and security interests created or intended to be created hereby, or to
confirm or perfect any evidence of the Secured Obligations. Borrower will also, within ten (10) days after any request by Lender, deliver to Lender a signed and acknowledged statement
certifying to Lender, or to any proposed transferee of the Secured Obligations, (a) the balance of principal, interest, and other sums then outstanding under the Note, and (b) whether
Borrower claims to have any offsets or defenses with respect to the Secured Obligations and, if so, the nature of such offsets or defenses. 

        4.13    Parking Requirements.    Borrower shall maintain at all times sufficient parking spaces to comply with the
parking requirements of all Leases, zoning and other regulations affecting the Property. 

        4.14    Financial Statements and Inspection of Records.    Borrower, at Borrower's expense, shall furnish to Lender
the financial and other reports required by the Loan Agreement. 

        4.15    Environmental Representations and Warranties.    Borrower has executed for the benefit of the Lender the
Environmental Indemnity, the provisions of which are included herein by reference. Borrower shall comply with, observe and perform each of the terms and provisions of the Environmental Indemnity. 

        4.16    Change in Name, Location of Collateral, Etc.    Without giving at least thirty (30) days' prior written
notice to Lender, the Borrower shall not: (a) change its name, federal employer's identification number, jurisdiction of organization or form of business association; (b) change the
location of its place 

7

 

of business (or chief executive office if more than one place of business); or (c) add to or change any location at which any of the Fixtures is stored, held or located. 

 
 

ARTICLE 5
  BORROWER'S NEGATIVE COVENANTS    
  

        5.1    Waste.    Borrower will not commit or permit any waste with respect to the Real Property or the Collateral. 

        5.2    Zoning and Private Covenants.    Except as specifically provided in the Loan Agreement, if at all, Borrower
will not initiate, join in, or consent to any change in any zoning ordinance or classification, any change in the "zone lot" or "zone lots" (or similar zoning unit or units) presently comprising the
Real Property, any change in any private restrictive covenant, or any change in any other public or private restriction limiting or defining the uses which may be made of the Real Property or any part
thereof, without the express written consent of Lender. If under applicable zoning provisions the use of all or any part of the Real Property is or becomes a nonconforming use, Borrower will not cause
such use to be discontinued or abandoned without the express written consent of Lender. 

        5.3    Disposition of Mortgaged Property, Leases, or Beneficial Interest in Borrower.    It is expressly acknowledged,
covenanted and agreed that except as may be permitted in this Deed of Trust that there may be no sale, lease, exchange, assignment, conveyance, encumbrance, mortgage, alienation, transfer or other
disposition (herein collectively called a "Disposition") of (a) all or any portion of the Property or any lease thereof (or any interest therein) which gives the lessee any option to purchase
the Property or any part thereof, or (b) all or any part of the legal or beneficial ownership interest or management control in Borrower, unless Lender has provided its prior written consent
thereto. In the event there occurs a Disposition without Lender's written consent, then Lender may, at Lender's option, accelerate the maturity of the Note and enforce any and all of Lender's rights,
remedies and recourses set forth in this Deed of Trust upon the occurrence of an Event of Default. It is acknowledged and agreed that the Lender may withhold, at its sole option, its consent to any
Disposition as described above. Lender's failure to respond or otherwise consent within such thirty (30) day period shall be deemed a denial of the request for approval. Lender's failure to
exercise its remedies hereunder for a disapproved Disposition shall not be construed as a waiver of Lender's right to subsequently exercise such remedies, and Lender's approval of a Disposition shall
not be construed as a waiver of the provisions hereof with respect to any subsequent Disposition. The rights and options herein granted to Lender may be exercised at Lender's sole option and
discretion, need not be based upon an increased business risk or any other risk, and are an integral and valuable part of the security given to Lender. Notwithstanding the provisions of this section,
Borrower may sell or otherwise convey the Property, or any interest therein, without the consent of Lender provided that all outstanding and unpaid amounts of the Secured Obligations are fully repaid
at the time of such sale or conveyance. 

        5.4    Further Encumbrance of Property.    Borrower will not create, place or permit to be created or placed or allow
to remain against the Real Property or the Fixtures any mortgage or deed of trust, regardless of whether the same is expressly subordinate to the liens and security interests imposed hereby or by any
other instruments securing the Secured Obligations and Borrower shall not encumber the Property without the prior written consent of Lender. 

        5.5    Transfer or Removal of Fixtures.    Borrower will not sell, transfer or remove from the Real Property all or
any material part of the Fixtures, unless the items sold, transferred, or removed are simultaneously replaced with similar items of equal or greater value. 

        5.6    Further Encumbrance of Collateral.    Borrower will not create or permit any junior lien, security interest or
other encumbrance against the Collateral (except pursuant to the Existing Credit Agreement, as in effect on the date of this Deed of Trust) without the prior written consent of Lender. 

8

 

        5.7    Improper Use of Property or Collateral.    Borrower will not use the Real Property or the Collateral for any
purpose or in any manner, or take any action with respect to the Real Property or the Collateral which violates any applicable law, ordinance, or other governmental requirement, the requirements or
conditions of any insurance policy, or any private covenant. 

 
 

ARTICLE 6
  EVENTS OF DEFAULT    
  

        Each of the following events will constitute a default (an "Event of Default") under this Deed of Trust and under each of the other Loan Documents: 

        6.1    Failure to Pay.    Default shall be made in the payment of any installment of principal or interest on the Note
or any other sum under the Loan Documents when due (after giving consideration to any grace period which may be applicable under such document). 

        6.2    Insolvency.    The dissolution or termination of, or the insolvency of, Borrower, the appointment of a receiver
for any part of Borrower's property, any general assignment for the benefit of creditors or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. 

        6.3    Creditor or Forfeiture Proceedings.    Commencement of foreclosure or forfeiture proceedings, whether by
judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower, any creditor of any Grantor against any collateral securing the Secured Obligations, or by
any governmental agency. 

        6.4    Judgment.    A writ of execution or attachment or any similar process shall be issued or levied against all or
any part of or interest in the Real Property or a material part of the Collateral, or any judgment involving monetary damages shall be entered against Borrower which shall become a lien on the Real
Property or the Collateral or any portion thereof or interest therein and such execution, attachment, or similar process or judgment is not released, bonded, satisfied, vacated, or stayed within sixty
(60) days after its entry or levy. 

        6.5    Superior Lien Against the Property.    The assertion of any claim of priority over this Deed of Trust, by
title, lien, or otherwise in any legal, administrative, or equitable proceeding, unless such assertion be
withdrawn, or effective action satisfactory to Lender commenced (and thereafter diligently prosecuted) and Lender is secured against any loss or damage therefrom, within thirty (30) days of the
assertion of such claim. 

        6.6    Abandonment.    The actual or constructive abandonment of all or a substantial portion of the Real Property or
the Collateral (such abandonment constituting an assignment to Lender, at Lender's option, of Borrower's interest in any lease or contract now or hereafter affecting the abandoned property). 

        6.7    Valid First Lien.    The failure of Lender to have a valid first lien against the entire Real Property and
Collateral as to all advances made now or at any time in the future pursuant to the Note, this Deed of Trust, or any other Loan Documents or the Note, the Deed of Trust or any of the Loan Documents
ceases to be in full force and effect (including failure of any security agreement to create a valid and perfected security interest) at any time and for any reason. 

        6.8    Breach of Lease.    Borrower shall be in default under any Lease and such default shall continue for 30
calendar days after notice thereof by Lender to the Borrower and the lender or agent for the lenders, as applicable, under the Existing Credit Agreement; provided, however, that in the event that such
default is not capable of being cured (as determined by Lender in its reasonable discretion) within 30 calendar days, then Borrower shall have such longer period of time as Borrower reasonably
requires to cure such default so long as Borrower commences cure within the 30 day period 

9

 

and thereafter diligently pursues cure to completion; and provided, further, that such longer period of time shall in no event exceed 60 calendar days. 

        6.9    Other Defaults.    Failure of Borrower to comply with or to perform when due any other term, obligation,
covenant or condition contained in the Note, this Deed of Trust or any other Loan Documents (and such failure shall not constitute an Event of Default under any of the other provisions of this section
entitled "EVENTS OF DEFAULT") and such failure to comply shall continue for 30 calendar days after notice thereof to the Borrower by the Lender;
provided, however, that in the event that such failure to comply is not capable of being cured (as determined by Lender in its reasonable discretion) within 30 calendar days, then Borrower shall have
such longer period of time as Borrower reasonably requires to cure such failure to comply so long as Borrower commences cure within the 30 day period and thereafter diligently pursues cure to
completion; and provided, further, that such longer period of time shall in no event exceed 60 calendar days. 

        6.10    Default in Favor of Third Parties.    Should Borrower default under any of the following in connection with a
transaction the total value of which is equal to or greater than $1,000,000.00: any loan, extension of credit, agreement executed in connection with security for a loan or extension of credit, or in
favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability to repay the Secured Obligations or perform its obligations under the Note, this Deed
of Trust or any of the Loan Documents. 

        6.11    False Statements.    Any warranty, representation or statement made or furnished to Lender by or on behalf of
Borrower or any Grantor under this Agreement or the Related Documents is false or misleading in any material respect at the time made or furnished, or becomes false or misleading in any material
respect at any time thereafter. 

 
 

ARTICLE 7
  BANK'S REMEDIES    
  

        Immediately upon or any time after the occurrence of any Event of Default hereunder, Lender may exercise any remedy available at law or in equity, including but
not limited to those listed below and those listed in the other Loan Documents, in such sequence or combination as Lender may determine in Lender's sole discretion: 

        7.1    Performance of Defaulted Obligations.    Lender may make any payment or perform any other obligation under the
Loan Documents which Borrower has failed to make or perform, and Borrower hereby irrevocably appoints Lender as the true and lawful attorney-in-fact for Borrower to make any
such payment and perform any such obligation in the name of Borrower, which appointment is coupled with Lender's interest in the Real Property and the Collateral. All payments made and expenses
(including attorneys' fees and legal assistant's fees) incurred by Lender in this connection, together with interest thereon at the Default Rate, as set forth in the Note, from the date paid or
incurred until repaid, will be part of the Secured Obligations and will be immediately due and payable by Borrower to Lender. 

        7.2    Specific Performance and Injunctive Relief.    Notwithstanding the availability of legal remedies, Lender will
be entitled to obtain specific performance, mandatory or prohibitory injunctive relief, or other equitable relief requiring Borrower to cure or refrain from repeating any default. 

        7.3    Acceleration of Secured Obligations.    Lender may, without notice or demand, declare all of the Secured
Obligations immediately due and payable in full. 

        7.4    Possession of Property.    Lender may enter and take possession of the Real Property and the Collateral without
seeking or obtaining the appointment of a receiver, may employ a managing agent for the Real Property and the Collateral, and may complete the development and construction 

10

 

described in the Loan Agreement with respect to all or any part of the Real Property or the Collateral, either in Lender's name or in the name of Borrower. 

        7.5    Enforcement of Security Interests.    Lender may exercise all rights of a secured party under the Code with
respect to the Collateral. Any requirement for reasonable notice of the time and place of any public sale, or of the time after which any private sale or other disposition is to be made, will be
satisfied by Lender's giving of such notice to Borrower at least fifteen (15) days prior to the time of any public sale or the time after which any private sale or other intended disposition is
to be made. If permitted by statute or court decision, the Collateral may be sold by the Trustee as part of the foreclosure sale of the Real Property. 

        7.6    Foreclosure Against Property.    Lender may foreclose this Deed of Trust, insofar as it encumbers the Property,
either by judicial action or through a public trustee foreclosure sale through the Trustee in the manner provided by statute. 

        (a)  If
this Deed of Trust encumbers more than one parcel of real estate, foreclosure may be by separate parcel or lot or en masse, as Lender may elect in its sole
discretion. Foreclosure through Trustee will be initiated by Lender's filing of its notice of election and demand for sale with Trustee. Upon the filing of such notice of election and demand for sale,
Trustee shall promptly comply with all notice and other requirements of the laws of Colorado then in force with respect to such sales, and shall give four weeks' public notice of the time and place of
such sale by advertisement weekly five times in some newspaper of general circulation then published in the County in which the Property is located. 

        (b)  All
fees, costs and expenses of any kind incurred by the Trustee or Lender in connection with, or preparation for, foreclosure of this Deed of Trust, including, without
limitation, the costs of any appraisals, engineering or environmental testing and evaluations of the Property obtained by Lender, all costs of any receivership for the Property advanced by Lender, and
all attorneys', legal assistants' and consultants' fees, expert's evidence, stenographer's charges, publication costs, (which may be estimated as to items to be expended after foreclosure sale or
entry of the decree) costs of procuring all such abstracts of title, title searches, title insurance policies, and similar data with respect to title as Lender may deem reasonably necessary either to
prosecute such suit or to evidence to bidders at any sale the true condition of title to or value of the Property, incurred by Lender, shall constitute a part of the Secured Obligations and may be
included as part of the amount owing from Borrower to Lender at any foreclosure sale. All expenditures and expenses of the nature in this paragraph mentioned, and such expenses and fees as may be
incurred in the protection of the Property and the maintenance of the lien of this Deed of Trust, including the reasonable fees of any attorney employed by Lender in any litigation or proceeding
affecting this Deed of Trust, the Note or the Property, including probate, bankruptcy proceedings, proceedings to obtain a receiver, or in preparation for the commencement or defense of any proceeding
or threatened suit or proceeding, shall be immediately due and payable by Borrower, with interest thereon at the Default Rate, as more particularly defined in the Note and shall be secured by this
Deed of Trust. 

        (c)  The
proceeds of any sale under this section shall be applied first to the fees and expenses of the officer conducting the sale, and then to the reduction or discharge of
the Secured Obligations; any surplus remaining shall be paid over to Borrower or to such other person or persons as may be lawfully entitled to such surplus. 

        (d)  At
the conclusion of any foreclosure sale, the officer conducting the sale shall execute and deliver to the purchaser at the sale a certificate of purchase which shall
describe the property sold to such purchaser and shall state that upon the expiration of the applicable periods for redemption, the holder of such certificate will be entitled to a deed to the
property described in the certificate. After the expiration of all applicable periods of redemption, unless the property 

11

 

sold has been redeemed by Borrower, the officer who conducted such sale shall, upon request, execute and deliver an appropriate deed to the holder of the certificate of purchase or the last
certificate of redemption, as the case may be. 

        (e)  Nothing
in this section dealing with foreclosure procedures or specifying particular actions to be taken by Lender or by Trustee or any officer conducting the
foreclosure sale shall be deemed to contradict or add to the requirements and procedures now or hereafter specified by Colorado law, and any such inconsistency shall be resolved in favor of Colorado
law applicable at the time of foreclosure. 

        7.7    Appointment of Receiver.    Lender shall be entitled, as a matter of absolute right and without regard to the
value of any security for the Secured Obligations or the solvency of any person liable therefore, to the appointment of a receiver for the Property, the Leases, and the Rents upon  ex parte application
to any court of competent jurisdiction. Borrower waives any right to any hearing or notice of hearing prior to the appointment of a
receiver. 

        7.8    Right to Make Repairs, Improvements.    Should any part of the Property come into the possession of Lender or a
receiver, whether before or after an Event of Default, Lender or the receiver and receiver's agents shall be empowered: 

        (a)  To
take possession of the Property, Leases, Rents and any business conducted by Borrower or any other person thereon and any business assets used in connection therewith
and any Property in which Lender has a security interest granted by Borrower and, if the receiver deems it appropriate, to operate the same; 

        (b)  To
exclude Borrower and Borrower's agents, servants, and employees from the Real Property; 

        (c)  With
or without taking possession of the Real Property, to collect the Rents, including those past due and unpaid and security deposits; 

        (d)  To
rent, lease or let all or any portion of the Property to any party or parties at such rental and upon such terms as the Lender shall, and to pay any leasing or rental
commissions associated therewith in its discretion, determine; 

        (e)  To
continue the development, marketing and sale of the Property or any portion thereof; 

        (f)    To
complete any construction or development which may be in progress; 

        (g)  To
do such maintenance and make such repairs and alterations as the receiver deems necessary; 

        (h)  To
use all stores of materials, supplies and maintenance equipment on the Real Property and to replace and replenish such items at the expense of the receivership
estate; 

        (i)    To
pay the operating expenses of the Property, including costs of management and leasing or marketing thereof (which shall include lease commissions, sale commissions),
payments under contracts and agreements for development and construction; 

        (j)    To
pay all taxes and assessments against the Property and any property which is collateral for the Secured Obligations, all premiums for insurance thereon, all utility
and other operating expenses, and all sums due under any prior or subsequent encumbrance; 

        (k)  To
borrow from the Lender such funds as may be reasonably necessary to the effective exercise of the receiver's powers, on such terms as may be agreed upon by the
receiver and the Lender, but not in excess of the Default Rate under the Note; and 

12

  

        (l)    Generally
do anything which Borrower could legally do if Borrower were in possession of the Property. 

        (m)  All
expenses incurred by the receiver or the receiver's agent shall constitute part of the Secured Obligations. Any Rents collected by the receiver shall be applied
first to the expenses of the receivership (including attorneys' fees incurred by the receiver and by Lender), to expenses of the Property, and to preserve, protect, maintain and operate the Property
and any other collateral which is security for the Secured Obligations, and the balance shall be applied toward the Secured Obligations or any deficiency which may result from any foreclosure sale,
and then in such other manner as the court may direct. Unless sooner terminated with the express consent of the Lender, any such receivership will continue until all amounts remaining due under the
Note have been discharged in full, or until title to the Property has passed after foreclosure sale and all applicable periods of redemption have expired, and in either case, the court has discharged
the receiver. Borrower covenants to promptly reimburse and pay to Lender or such receiver, at the place where the Note is payable, or at such other place as may be designated in writing, the amount of
all reasonable expenses (including the cost of any insurance, taxes, or other charges) incurred by Lender or such receiver in connection with its custody, preservation, use or operation of the
Property, together with interest thereon from the date incurred by Lender or such receiver at the Default Rate, as set forth in the Note, and all such expenses, costs, taxes, interest, and other
charges shall be part of the Secured Obligations. It is agreed, however, that the risk of accidental loss or damage to the Property is undertaken by Borrower and, except for Lender's or such
receiver's willful misconduct or gross negligence, Lender or such receiver shall have no liability whatsoever for decline in value of the Property, for failure to obtain or maintain insurance, or for
failure to determine whether any insurance ever in force is adequate as to amount or as to the risks insured, or to complete development. 

        7.9    Further Assurances.    Upon issuance of a deed or deeds pursuant to foreclosure of this Deed of Trust, all
right, title, and interest of the Borrower in and to any Leases shall, by virtue of this instrument, thereupon vest in and become the absolute property of the grantee or grantees in such deed or deeds
without any further act or assignment by the Borrower. Borrower hereby agrees to execute all instruments of assignment or further assurance in favor of such grantee or grantees in such deed or deeds,
as may be necessary or desirable for such purpose. But nothing contained herein shall prevent Lender from terminating any subordinated Lease not approved by the Lender through such foreclosure. 

        7.10    Intercreditor Agreement.    The rights and remedies of the Lender hereunder are subject to the provisions of
the Intercreditor Agreement. 

 
 

ARTICLE 8
  ASSIGNMENT OF RENTS    
  

        8.1    Assignment of Rents.    To further secure the Secured Obligations, Borrower does hereby sell, assign and
transfer unto the Lender all rents, now due and which may hereafter become due under or by virtue of any Leases or tenancies (collectively "Rents"), whether written or verbal, or any letting of, or of
any agreement for the sale, or occupancy of the Real Property or any part thereof, and all proceeds thereof, now or hereafter existing, whether or not with the Lender's approval. The Borrower does
hereby appoint irrevocably the Lender its true and lawful attorney in its name and stead (with or without taking possession of the Property) to collect all of said Rents arising from or accruing at
any time hereafter, and all now due or that may hereafter become due under each and every of the Leases, or other similar agreements, written or verbal, which may hereafter exist on the Property, on
the condition that Lender hereby grants to Borrower a license to collect and retain such Rents (but expressly not including the right to collect any rents more than one (1) month in advance or
any amount to prepay, terminate, or "buy out" any Leases prior to the occurrence of any Event of Default 

13

 

under the Loan Documents. Borrower expressly covenants to apply the Rents received, after application for operating expenses permitted hereunder, to payment of the Secured Obligations as and when the
same become due and in compliance with the Loan Documents. Such license shall be revocable by Lender without notice to Borrower at any time upon or after an Event of Default under the Loan Documents,
and immediately upon any such revocation, Lender shall be entitled to receive, and Borrower shall deliver to Lender, any and all Rents theretofore collected by Borrower which remain in the possession
or control of Borrower and all Leases, and other such agreements. It is the intention of the Borrower to create and grant, and it is the intention of Lender to create and receive, a present and
absolute assignment of all of the Leases, similar agreements, Rents now due or which may hereafter become due, but it is agreed that the Lender's right to collect the Rents is conditioned upon the
existence of an Event of Default under the Loan Documents. Failure of Lender at any time or from time to time to enforce its rights under this ARTICLE 8 shall not in any manner prevent its subsequent
enforcement, and Lender is not obligated to collect anything hereunder, but is accountable only for sums collected. Nothing contained herein shall be construed as constituting the Lender a mortgagee
in possession in the absence of the taking of actual possession of the Property by the Lender pursuant to Section 8.7 (Lender's Right of Possession In Case of Default) hereof. In the exercise
of the powers herein granted to the Lender, no liability shall be asserted or enforced against the Lender, all such liability being expressly waived and released by Borrower. Notwithstanding any of
the provisions of this section, none of the provisions hereof shall cause or affect the sale, transfer and assignment of revenues arising from the conduct of Borrower's business on the Real Property. 

        8.2    Covenants Regarding Leases.    Borrower agrees: 

	(a)
	Not
to execute any Leases affecting the Property or any part thereof without the prior written consent of Lender;

	(b)
	Not
to collect any of the Rents for more than one (1) month in advance of the time when the same become due under the terms thereof;

	(c)
	Not
to discount any future accruing Rents;

	(d)
	Not
to execute any other assignments of any Leases or any interest therein or any of the Rents there under;

	(e)
	That
notwithstanding any variation of the terms of the Deed of Trust or any extension of time for payment there under or any release of part or parts of the Property, the Leases,
Rents hereby assigned, insofar as they relate to the unreleased Property, shall continue as additional security in accordance with the terms hereof;

	(f)
	To
hold and account for all down payment or earnest money deposits in the manner provided for under any state or local laws or ordinances applicable to the Property or under the Loan
Documents; and

	(g)
	To
perform all of the Borrower's covenants and agreements under the Leases and not to suffer or permit to occur any release of liability of the lessees or purchasers. 

        8.3    Representations Regarding Leases.    Borrower represents and warrants that at the time of the execution of this
Deed of Trust by Borrower, there are no Leases and Borrower has no present intention of entering into any Leases. 

        8.4    Further Assignments.    Borrower shall give Lender at any time upon demand any further or additional forms of
assignment of transfer of Rents, leases and security as may be reasonably requested by Lender, and shall deliver to Lender executed copies of all such leases and security. 

        8.5    Authority of Lender.    Any tenants or occupants of any part of the Real Property pursuant to any Leases that
may come into existence are hereby authorized to recognize the claims of Lender 

14

 

hereunder without investigating the reason for any action taken by Lender, or the validity or the amount of indebtedness owing to Lender, or the existence of a Default or Event of Default under any
Loan Document, or the application to be made by Lender of any amounts to be paid to Lender. The
sole signature of Lender or a receiver shall be sufficient for the exercise of any rights under this ARTICLE 8 and the sole receipt of Lender or a receiver for any sums received shall be a full
discharge and release therefore to any such tenant or occupant of the Real Property; and Borrower hereby releases each such tenant and occupant or purchaser which makes payments to Lender under this
ARTICLE 8 from any liability under the applicable Lease or occupancy agreement. Checks for all or any part of the rentals collected under this ARTICLE 8 shall be drawn to the exclusive order of Lender
or such receiver. 

        8.6    Indemnification of Lender.    Nothing herein contained shall be deemed to obligate Lender to perform or
discharge any obligation, duty, or liability of lessor under any Lease of the Real Property, and Borrower shall and does hereby indemnify and hold Lender harmless from any and all liability, loss, or
damage which Lender may or might incur under any Lease of the Real Property or by reason of this assignment; and any and all such liability, loss, or damage incurred by Lender, together with the costs
and expenses, including reasonable attorneys' fees, incurred by Lender in defense of any claims or demands therefore (whether successful or not), shall be additional Secured Obligations, and Borrower
shall reimburse Lender therefore on demand. 

        8.7    Lender's Right of Possession in Case of Default.    In any case in which under the provision of this Deed of
Trust, the Lender has a right to institute foreclosure proceedings, whether before or after the whole principal sum secured hereby is declared to be immediately due, or whether before or after the
institution of legal proceedings to foreclose the lien hereof or before or after sale thereunder, promptly upon demand of Lender, Borrower shall surrender to Lender and Lender shall be entitled to
take actual possession of the Property or any part thereof personally, or by its agents or attorneys, as for condition broken, and Lender in its discretion may, with or without force and with or
without process of law, enter upon and take and maintain possession of all or any part of the Real Property, together with all documents, books, records, papers and accounts of the Borrower or then
owners of the Real Property relating thereto, and may exclude the Borrower, its agents or servants, wholly therefrom and may, as attorney-in-fact or agent of the Borrower, or
in its own name as Lender and under the powers herein granted, hold, operate, manage and control the Property and conduct the business, if any, thereof, either personally or by its agents, and with
full power to use such measures, legal or equitable, as in its discretion or in the discretion of its successors or assigns may be deemed proper or necessary to enforce the payment or security of the
rents, of the Real Property. 

        8.8    Severability and Survival.    The provisions of this ARTICLE 8 shall survive the foreclosure of the lien of
this Deed of Trust and the exercise of the power of sale granted under this Deed of Trust until the expiration of all periods of redemption following any such foreclosure or sale and thereafter with
respect to all Rents arising prior to or attributable to the period prior to the expiration of all such redemption periods. 

 
 

ARTICLE 9
  ACCOMMODATION DEED OF TRUST    
  

        With respect to Water Pik, to the extent it has provided security for the benefit of Laars pursuant to its grant of this Deed of Trust and to the extent
applicable California law with respect to guaranties and
suretyship may be held to apply hereto (notwithstanding the choice of law provision contained herein), Water Pik agrees that until all indebtedness secured by this Deed of Trust shall have been paid
in full, and no commitment on the part of the Lender to make future advances or extend credit either to Laars or Water Pik exists, Water Pik shall have no right of subrogation, and waives any right to
enforce any remedy which Lender now has or may hereafter have against any person liable for the Indebtedness secured by this Deed of Trust, and waives any benefit of, any right to participate in any 

15

 

security now or hereafter held by Lender and without limiting the generality of the foregoing, Water Pik specifically waives and relinquishes as against Lender any defense or benefit otherwise
available to Water Pik should Lender make an election of remedies as against any person liable for the Indebtedness (and irrespective of the circumstances or manner in which or whereby such election
is made) which destroys or impairs Water Pik's subrogation rights or rights to proceed against any person liable for the indebtedness secured hereby for reimbursement and, further, to the extent Water
Pik may be deemed a guarantor hereunder, such "guarantor" waives all rights and defenses arising out of an election of remedies by the creditor, even though that election of remedies, such as
non-judicial foreclosure with respect to security for a "guaranteed" obligation, has destroyed the "guarantor's" rights of subrogation and reimbursement against Laars by the operation of
Section 580d of the California Code of Civil Procedure or otherwise. This is an unconditional waiver of any rights and defenses Water Pik may
have because Laars' obligation is secured by real property. These rights and defenses include, but are not limited to, any rights and defenses based upon Section 580a, 580b, 580d, or 726 of the
Code of Civil Procedure. Water Pik assumes the responsibility for being and keeping itself informed of the financial condition of Laars and of all other circumstances bearing upon the risk of
nonpayment of the indebtedness secured hereby which diligent inquiry would reveal, and agrees that Lender shall have no duty to advise Water Pik of information known to it regarding such condition or
circumstances. 

 
 

ARTICLE 10
  MISCELLANEOUS PROVISIONS    
  

        10.1    Time of the Essence.    Time is of the essence with respect to all provisions of this Deed of Trust. 

        10.2    Rights and Remedies Cumulative.    Lender's rights and remedies under each of the Loan Documents are
cumulative of the rights and remedies available to Lender under each of the other Loan Documents and those otherwise available to Lender at law or in equity. No act of Lender shall be construed as an
election to proceed under any particular provision of any Loan Document to the exclusion of any other provision in the same or any other Loan Document, or as an election of remedies to the exclusion
of any other remedy which may then or thereafter be available to Lender. 

        10.3    No Implied Waivers.    Lender shall not be deemed to have waived any provision of this Deed of Trust unless
such waiver is in writing and is signed by Lender. Without limiting the generality of the preceding sentence, neither Lender's acceptance of any payment with knowledge of a default by
Borrower, nor any failure by Lender to exercise any remedy following a default by Borrower shall be deemed a waiver of such default, and no waiver by Lender of any particular default on the part of
Borrower shall be deemed a waiver of any other default or of any similar default in the future. 

        10.4    No Third Party Rights.    No person shall be a third party beneficiary of any provision of this Deed of Trust.
All provisions of this Deed of Trust favoring Lender are intended solely for the benefit of Lender, and no third party shall be entitled to assume or expect that Lender will or will not waive or
consent to modification of any such provision in Lender's sole discretion. 

        10.5    Preservation of Liability and Priority.    Without affecting the liability of Borrower or of any other person
(except a person expressly released in writing) for payment and performance of all of the Secured Obligations, and without affecting the rights of Lender with respect to any security not expressly
released in writing, and without impairing in any way the priority of this Deed of Trust over the interests of any person acquired or first evidenced by recording subsequent to the recording hereof,
Lender may, either before or after the maturity of the Note, and without notice or consent: (a) release any person liable for payment or performance of all or any part of the Secured
Obligations; (b) make any agreement altering the terms of payment or performance of all or any of the Secured Obligations; (c) exercise or refrain from exercising, or waive, any right or
remedy which Lender may have under any 

16

 

of the Loan Documents; (d) accept additional security of any kind for any of the Secured Obligations; or (e) release or otherwise deal with any real property or Collateral securing the
Secured Obligations. Any person acquiring or recording evidence of any interest of any nature in the Real Property or the Collateral shall be deemed, by acquiring such interest or recording any
evidence thereof, to have agreed and consented to any or all such actions by Lender. 

        10.6    Subrogation of Lender.    Lender shall be subrogated to the lien of any previous encumbrance discharged with
funds advanced by Lender under the Loan Documents, regardless of whether such previous encumbrance has been released of record. 

        10.7    Notices.    Any notice required or permitted to be given by Borrower or Lender under this Deed of Trust shall
be in writing and will be deemed given (a) upon personal delivery or upon confirmed transmission by telecopier or similar facsimile transmission device, (b) on the first business day
after receipted delivery to a courier service which guarantees next-business-day delivery, or (c) on the third business day 

 
 

[Deed of Trust continues on following page]    
  

17

 

after
mailing, by registered or certified United States mail, postage prepaid, in any case to the appropriate party at its address set forth below: 

If
to Borrower: 

Water
Pik, Inc. and Laars, Inc.

23 Corporate Plaza, Suite 246

Newport Beach, CA 92660

Attn: Chief Financial Officer

Telephone: (949) 719-3700

Telecopier: (949) 719-6472 

With
a copy to: 

Water
Pik, Inc. and Laars, Inc.

23 Corporate Plaza, Suite 246

Newport Beach, CA 92660

Attn: General Counsel

Telephone: (949) 719-3700

Telecopier: (949) 719-6472 

If
to Lender: 

U.S.
Bank National Association

4100 Newport Place, Suite 120

Newport Beach, CA 92660

Attn: Richard M. McNiven

Telephone: (949) 863-2307

Telecopier: (949) 863-2335 

With
a copy to: 

Law
Offices of Douglas L. Collins

8491 Sunset Blvd., Suite 360

Los Angeles, CA 90069

Attn: Douglas L. Collins, Esq.

Telephone: (323) 650-2088

Telecopier: (323) 650-2092 

        Any
person may change such person's address for notices or copies of notices by giving notice to the other party in accordance with this section. 

        10.8    Defeasance.    Upon payment and performance in full of all the Secured Obligations and all costs of releasing
this Deed of Trust, Lender will execute and deliver to Borrower such documents as may be required to release this Deed of Trust of record. 

        10.9    Illegality.    If any provision of this Deed of Trust is held to be illegal, invalid, or unenforceable under
present or future laws effective during the term of this Deed of Trust, the legality, validity, and enforceability of the remaining provisions of this Deed of Trust shall not be affected thereby, and
in lieu of each such illegal, invalid or unenforceable provision there shall be added automatically as a part of this Deed of Trust a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and be legal, valid, and enforceable. If the rights and liens created by this Deed of Trust shall be invalid or unenforceable as to any part of the Secured
Obligations, then the unsecured portion of the Secured Obligations shall be completely paid prior to the payment of the remaining and secured portion of the Secured Obligations, and all payments made 

18

 

on the Secured Obligations shall be considered to have been paid on and applied first to the complete payment of the unsecured portion of the Secured Obligations. 

        10.10    Obligations Binding Upon Borrower's Successors.    This Deed of Trust is binding upon Borrower and Borrower's
successors and assigns, including all grantees and remote grantees of any interest of Borrower in the Property, and shall inure to the benefit of Lender, and its successors and assigns, and the
provisions hereof shall likewise be covenants running with the land. The duties, covenants, conditions, obligations, and warranties of Borrower in this Deed of Trust shall be joint and several
obligations of Borrower and Borrower's successors and assigns. 

        10.11    Governing Law.    The laws of the State of Colorado shall govern the validity, construction, enforcement, and
interpretation of this Deed of Trust, without regard to principles of conflicts of laws. 

        10.12    Survival.    This Deed of Trust shall survive foreclosure of the liens created hereby, to the extent
necessary to fulfill its purposes. 

        10.13    Multiple Parties.    All obligations of Borrower hereunder shall be joint and several and all references to
"Borrower" shall mean each and every Borrower. That means that each and every entity or person executing this Deed of Trust below as a Borrower is responsible for all of Borrower's obligations in this
Deed of Trust. 

Signed
and delivered as of the date first mentioned above. 

Water Pik, Inc., a Delaware corporation  

	By:	 	 	 	 
	 	 	
 Victor C. Streufert

Vice President—Finance,

Chief Financial Officer, and

Treasurer	 	 

19

  

Exhibit 4.17

(Part B)  

 
 

DEED OF TRUST, SECURITY AGREEMENT,
  FINANCING STATEMENT AND
  ASSIGNMENT OF RENTS    
  

        THIS DEED OF TRUST, SECURITY AGREEMENT, FINANCING STATEMENT, AND ASSIGNMENT OF RENTS (this "Deed of Trust") is given as of the 22nd day of October, 2001, by the
Borrower named below to the Trustee named below, for the use and benefit of the Lender named below. 

 
 

ARTICLE 1
  PARTIES, PROPERTY, AND DEFINITIONS    
  

        The following terms and references shall have the meanings indicated: 

        1.1    Borrower:    Water Pik, Inc., a Delaware corporation and Laars, Inc., a Delaware corporation,
individually and collectively, the legal address of each of which is 23 Corporate Plaza, Suite 246, Newport Beach, CA 92660, together with any future owner of the Property or any part thereof or
interest therein. 

        1.2    Lender:    U.S. Bank National Association, whose legal address is 4100 Newport Place, Suite 120, Newport Beach,
CA 92660, together with any legal holder of the Note. 

        1.3    Trustee:    The Public Trustee of Larimer County, Colorado. 

        1.4    Note:    The Promissory Note of even date herewith, executed by Borrower and payable to the order of Lender in
the principal face amount of $3,510,000.00, the last payment under which is due on September 30, 2008, unless such due date is extended or accelerated, together with all renewals, extensions,
and modifications of the Note. All terms and provisions of the Note are incorporated by this reference in this Deed of Trust. 

        1.5    Loan Agreement:    The Loan Agreement dated October 22, 2001 executed by Borrower and the Lender, and
all renewals, extensions, and modifications thereof. All capitalized terms not otherwise defined herein shall bear the meaning given to them in the Loan Agreement. 

        1.6    Existing Credit Agreement:    The Restated Credit Agreement dated as of November 29, 1999 among
Borrower, certain guarantors named therein, certain lenders named therein and The Chase Manhattan Bank, as agent, as amended, modified or supplemented from time to time, and any successor revolving
credit or loan agreement to the current Existing Credit Agreement. 

        1.7    Real Property:    The real property described in Exhibit A, attached hereto and by this reference
incorporated herein, together with all right, title and interest of Borrower in the following with respect to the real property, whether now owned or hereafter acquired by Borrower: 

        (a)  All
improvements now or hereafter located on such real property and all easements and appurtenances thereto; 

        (b)  The
land lying within any street or roadway adjoining the real property; any vacated or hereafter vacated street or alley adjoining the real property; and any strips and
gores adjoining the real property; 

        (c)  ll
and singular the passages, waters, water rights (whether tributary or non-tributary or not non-tributary), water courses, riparian rights,
wells, well permits, water stock, other rights, liberties and privileges thereof or in any way now or hereafter appertaining to the real property, 

20

 

including homestead and any other claim at law or in equity, as well as any after-acquired title, franchise or license, and the reversion and reversions and remainder and remainders thereof; and 

        1.8    Fixtures:    All "fixtures," as such term is defined in the Uniform Commercial Code of Colorado (whether
actually or constructively attached or incorporated, and including all trade, domestic, and
ornamental fixtures) now or hereafter located in, upon, or under such real property or improvements and used or usable in connection with any present or future operation thereof but excluding all
fixtures that are equipment and are used specifically for the operation and conduct of the business of Borrower on the Real Property. 

        1.9    Intangible Personalty:    All right, title and interest of the Borrower in and to the following, with respect
to the Real Property: 

        (a)  All
of the rents of and from the use, operation, or enjoyment of such real property and improvements (collectively, the "Rent Income"), whether such Income is
attributable to the period, or is collected, prior to or subsequent to any default by Borrower, but excluding all revenues that arise from the operation and conduct of the
business of Borrower on the Real Property; 

        (b)  All
plans and specifications for the improvements on the real property; soil, environmental, engineering, land planning maps, surveys and other studies and reports
concerning the real property or prepared for the orderly planning and development of the real property, including all plans, drawings and studies concerning the platting or replatting of the real
property; all contracts and subcontracts relating to the improvements on the real property, or any thereof; 

        (c)  All
awards and payments, including interest thereon, resulting from the exercise of any right of eminent domain or any other public or private taking of, casualty or
injury to, or decrease in the value of, any of such real property, including without limitation all property insurance payments, proceeds and policies related to such real property; 

        (d)  All
of the licenses, permits, franchises, and other entitlements to use and all rights thereto which have been issued by or which are pending before any governmental or
quasi-governmental agency which are necessary or appropriate for the Real Property but excluding all such items that are used specifically for the operation and conduct of the business of Borrower on
the Real Property; 

        (e)  All
water taps, sewer taps, building permits, curb cut permits, storm water discharge permits; and 

        (f)    All
of Borrower's rights in and to contract rights, leases, concessions, operating systems, warranties, licenses, plans, drawings and other items of intangible personal
property solely relating to the ownership or operation of the Real Property but excluding all such items that are used specifically for the operation and conduct of the business of Borrower on the
Real Property. 

        1.10    Property:    The Real Property, the Fixtures and the Intangible Personalty are sometimes collectively called
the "Property." All of the Real Property, Fixtures and Intangible Personalty, whether affixed or annexed or not, and all rights hereby conveyed and mortgaged are intended to be as a unit and are
hereby understood and agreed and declared to be appropriated to the use of the real estate, and shall for the purposes of this Deed of Trust be deemed to be real estate and conveyed and mortgaged
hereby. 

        1.11    Any capitalized terms not otherwise defined in this Deed of Trust and not defined in the Loan Agreement, shall bear the
meaning given to them in Article 9 of the Code (as defined below). 

        1.12    Secured Obligations:    The Property is granted and shall be held for the purpose of securing the following
(the "Secured Obligations"): 

        (a)  The
payment of the indebtedness as evidenced in the Note; 

21

 

        (b)  The
performance and observance of all terms, covenants, conditions, and provisions to be performed or observed by the Borrower pursuant to the terms of: 

          (i)  this
Deed of Trust, 

        (ii)  UCC-1
financing statements required to perfect the Lender's security interest in the Intangible Personalty and Fixtures as granted by this Deed of Trust
(the "Financing Statement"), 

        (iii)  the
Certificate and Indemnity Regarding Hazardous Substances (the "Environmental Indemnity") of even date herewith relating to the Real Property executed by Borrower, 

        (iv)  the
Loan Agreement as such agreement relates to the loan evidenced by the Note and to the Property, and 

        (v)  any
and all pledge or other security agreements, loan agreements, disbursement agreements, supplemental agreements, assignments (both present and collateral), and side
letters related to the loan evidenced by the Note and to the Property, as the same may be amended, modified or supplemented from time to time (collectively, the "Related Agreements"). 

The
Note, this Deed of Trust, Financing Statement, Environmental Indemnity, Related Agreements, Loan Agreement, and any and all other documents or instruments executed in connection with the foregoing
to evidence or secure the Note shall be hereinafter collectively called the "Loan Documents". 

        (c)  The
payment of all sums expended or advanced by Lender pursuant to the terms hereof. 

        1.13    Intercreditor Agreement:    That certain Intercreditor Agreement of even date herewith by and between Lender
and The Chase Manhattan Bank, as Agent under the Existing Credit Agreement. 

 
 

ARTICLE 2
  GRANTING CLAUSE    
  

        2.1    Grant to Trustee.    As security for the Secured Obligations, Borrower hereby grants, bargains, sells, and
conveys the Real Property to Trustee, in trust forever, with power of sale, for the use and benefit of Lender, and subject to all provisions hereof. 

        2.2    Security Interest to Lender.    As additional security for the Secured Obligations, Borrower hereby grants to
Lender a security interest in the Fixtures and in the Intangible Personalty (collectively, the "Collateral"). To the extent any of the Collateral may be
or has been acquired with funds advanced by Lender under the Loan Documents, this security interest is a purchase money security interest. This Deed of Trust constitutes a Security Agreement under the
Uniform Commercial Code of Colorado (the "Code") with respect to any part of the Collateral that may or might now or hereafter be or be deemed to be personal property; all of the terms, provisions,
conditions and agreements contained in this Deed of Trust pertain and apply to the Collateral as fully and to the same extent as to any other property comprising the Property, and the following
provisions of this section shall not limit the generality or applicability of any other provision of this Deed of Trust but shall be in addition thereto: 

        (a)  The
Collateral shall be used by Borrower solely for business purposes, being installed upon or owned in connection with the Real Property for Borrower's own use or as
the equipment and furnishings furnished by Borrower, as owner, to tenants of the Real Property; 

        (b)  No
financing statement covering any of the Collateral or any proceeds thereof is on file in any public office except financing statements filed in connection with the
Existing Credit Agreement (the effect of which shall be modified pursuant to the Intercreditor Agreement); and Borrower will, at its
cost and expense, upon demand, furnish to Lender such further information and will execute and deliver to Lender such financing statements and other documents in form 

22

 

satisfactory to Lender and will do all such acts and things as Lender may at any time or from time to time reasonably request or as may be necessary or appropriate to establish and maintain a
perfected security interest in the Collateral as security for the Secured Obligations, subject to no adverse liens or encumbrances; and Borrower will pay the cost of filing the same or filing or
recording such financing statements or other documents and this instrument in all public offices wherever filing or recording is deemed by Lender to be necessary or desirable; 

        (c)  The
terms and provisions contained in this section and in Section 7.5 (Enforcement of Security Interests) of this Deed of Trust shall, unless the context
otherwise requires, have the meanings and be construed as provided in the Code; and 

        (d)  This
Deed of Trust constitutes a security agreement and financing statement under the Code with respect to the Collateral. As such, this Deed of Trust covers all items
of the Collateral including all items which are to become fixtures. Borrower is the "Debtor" and Lender is the "Secured Party" (as those terms are defined and used in the Code) insofar as this Deed of
Trust constitutes a financing statement. 

        2.3    The Borrower agrees that Lender may, to the extent permitted by applicable law, prepare and file financing statements,
amendments thereto, and continuation statements without the signature of the Borrower and file any financing statement, amendment thereto or continuation statement electronically. 

 
 

ARTICLE 3
  BORROWER'S TITLE AND AUTHORITY    
  

        3.1    Warranty of Title.    Borrower represents and warrants to Lender that Borrower has good and marketable title to
the Real Property in fee simple absolute, subject only to the lien of general taxes for the current year, a lien due and payable, but not yet delinquent, and those additional matters, if any, set
forth in Exhibit B, attached hereto and by this reference incorporated herein ("Permitted Exceptions"). Borrower further represents and warrants to Lender that Borrower is the absolute owner of
the Collateral, free of any liens, encumbrances, security interests, and other claims whatsoever, except insofar as the Collateral may be encumbered by the lien of general taxes for the current year,
a lien due and payable, but not yet delinquent and except for liens granted to the lenders under the Existing Credit Agreement as in effect on the date of this Deed of Trust. Borrower, for itself and
its successors and assigns, hereby agrees to warrant and forever defend, all and singular, all of the Property and property interest granted and conveyed in trust pursuant to this Deed of Trust,
against every person whomsoever lawfully claiming, or to claim, the same or any part thereof, subject to the
Permitted Exceptions and other exceptions described in this section. The warranties contained in this section shall survive foreclosure of this Deed of Trust, and shall inure to the benefit of and be
enforceable by any person who may acquire title to the Real Property or the Collateral pursuant to any such foreclosure. 

        3.2    Waiver of Homestead and Other Exemptions.    To the extent permitted by law, Borrower hereby waives all rights
to any homestead or other exemption to which Borrower would otherwise be entitled under any present or future constitutional, statutory, or other provision of applicable state or federal law. 

        3.3    Due Authorization.    If Borrower is other than a natural person, then each individual who executes this
document on behalf of Borrower represents and warrants to Lender that such execution has been duly authorized by all necessary corporate, partnership, or other action on the part of Borrower. 

23

 

 
 

ARTICLE 4
  BORROWER'S AFFIRMATIVE COVENANTS    
  

        4.1    Payment of Note.    Borrower will pay all principal, interest, and other sums payable under the Note, the Loan
Agreement or this Deed of Trust or the Loan Documents, on the date when such payments are due, without notice or demand. 

        4.2    Performance of Other Obligations.    Borrower will promptly and strictly perform and comply with all other
covenants, conditions, and prohibitions required of Borrower by the terms of the Loan Documents. 

        4.3    Other Encumbrances.    Borrower will promptly and strictly perform and comply with all covenants, conditions,
and prohibitions required of Borrower in connection with any other encumbrance affecting the Real Property or the Collateral, or any part thereof, or any interest therein, regardless of whether such
other encumbrance is superior or subordinate to the lien hereof. This paragraph does not authorize any lien or encumbrance against the Real Property or the Collateral except as permitted by
Section 3.1 or with the prior written consent of the Lender as provided in this Deed of Trust. 

        4.4    Payment of Taxes.    

        (a)  Property Taxes. Borrower will pay, before delinquency, all taxes and assessments, including without limitation, general,
special and metropolitan district taxes, water charges, sewer service charges (collectively, the "Impositions"), which may be levied or imposed at any time against Borrower's interest and estate in
the Real Property or the Collateral. Within 10 days after request by Lender, Borrower will deliver to Lender an official receipt for such payment or other evidence that such payment has been
made. 

        (b)  Intangible Taxes. If by reason of any statutory or constitutional amendment or judicial decision adopted or rendered
after the date hereof, any tax, assessment, or similar charge is imposed against the Note, against Lender arising directly from Lender's interests in the Loan Documents (other than a tax based on
Lender's income), or against any security interest of Lender in the Property, Borrower will pay such tax, assessment, or other charge before delinquency and will indemnify Lender against all loss,
expense, or diminution of income in connection therewith. In the event Borrower is unable to do so, either for economic reasons or because the legal provisions or decisions creating such tax,
assessment or charge forbid Borrower from doing so, then the Note will, at Lender's option, become due and payable in full upon thirty (30) days' notice to Borrower. 

        (c)  Right to Contest. Notwithstanding any other provision of this section, Borrower will not be deemed to be in default
solely by reason of Borrower's failure to pay any Impositions so long as, in Lender's judgment, each of the following conditions is satisfied: 

          (i)  Borrower
is engaged in and diligently pursuing in good faith administrative or judicial proceedings appropriate to contest the validity or amount of such Impositions;
and 

        (ii)  Nonpayment
of such Impositions will not result in the loss or forfeiture of any Property encumbered hereby or any interest of Lender therein. 

If
Lender determines that any one or more of such conditions is not satisfied or is no longer satisfied, Borrower will pay the Impositions in question, together with any interest and penalties
thereon, within ten (10) days after Lender gives notice of such determination. 

        4.5    Maintenance of Insurance.    Borrower shall provide and maintain policies of insurance on the Property in
accordance with the Loan Agreement. 

24

 

        4.6    Lease Obligations.    Borrower represents and warrants to Lender that none of the Property is leased by
Borrower to any tenant. In the event there are at any time in the future any leases of all or any part of the Property, Borrower shall perform promptly all of Borrower's obligations under or in
connection with each such lease of all or any part of the Property (collectively called the "Leases"). If Borrower receives at any time any written communication from any tenant under any Lease
asserting a default by Borrower under any Lease, or purporting to terminate or cancel any Lease, Borrower will promptly forward a copy of such communication (and any subsequent communications relating
thereto) to Lender. 

        4.7    Recertified Appraisal.    If at any time (a) an Event of Default (as defined below) has occurred, or
(b) the Lender is required by law or regulation to obtain a new appraisal, the Lender may require a new appraisal of the Real Property. 

        4.8    Management.    Borrower shall obtain Lender's advance written approval of any outside management services
provided, and of any contract therefore or assignment thereof, which written approval shall not be unreasonably withheld. 

        4.9    Condemnation.    Borrower hereby assigns, transfers and sets over unto Lender the entire proceeds of any award
or any claim for damages for any of the Real Property taken or damaged under the power of eminent domain or by condemnation. Lender may elect, in its discretion, to apply the proceeds of the award
upon or in reduction of the Secured Obligations, whether due or not. 

        4.10    Mechanics' Liens.    Borrower will keep the Real Property free and clear of all liens and claims of liens by
contractors, subcontractors, mechanics, laborers, material men, and other such persons in the manner provided in the Loan Agreement. 

        4.11    Defense of Actions.    Borrower will defend, at Borrower's expense, any action, proceeding or claim which
affects any Property encumbered hereby or any interest of Lender in such Property or in the Secured Obligations, and will indemnify and hold Lender harmless from all loss, damage, cost, or expense,
including attorneys' fees, which Lender may incur in connection therewith. 

        4.12    Further Assurances; Estoppel Certificates.    Borrower will execute and deliver to Lender upon demand, and pay
the costs of preparation and recording thereof, any further documents which Lender may request to confirm or perfect the liens and security interests created or intended to be created hereby, or to
confirm or perfect any evidence of the Secured Obligations. Borrower will also, within ten (10) days after any request by Lender, deliver to Lender a signed and acknowledged statement
certifying to Lender, or to any proposed transferee of the Secured Obligations, (a) the balance of principal, interest, and other sums then outstanding under the Note, and (b) whether
Borrower claims to have any offsets or defenses with respect to the Secured Obligations and, if so, the nature of such offsets or defenses. 

        4.13    Parking Requirements.    Borrower shall maintain at all times sufficient parking spaces to comply with the
parking requirements of all Leases, zoning and other regulations affecting the Property. 

        4.14    Financial Statements and Inspection of Records.    Borrower, at Borrower's expense, shall furnish to Lender
the financial and other reports required by the Loan Agreement. 

        4.15    Environmental Representations and Warranties.    Borrower has executed for the benefit of the Lender the
Environmental Indemnity, the provisions of which are included herein by reference. Borrower shall comply with, observe and perform each of the terms and provisions of the Environmental Indemnity. 

        4.16    Change in Name, Location of Collateral, Etc.    Without giving at least thirty (30) days' prior written
notice to Lender, the Borrower shall not: (a) change its name, federal employer's identification number, jurisdiction of organization or form of business association; (b) change the
location of its place of business (or chief executive office if more than one place of business); or (c) add to or change any location at which any of the Fixtures is stored, held or located. 

25

  

 
 

ARTICLE 5
  BORROWER'S NEGATIVE COVENANTS    
  

        5.1    Waste.    Borrower will not commit or permit any waste with respect to the Real Property or the Collateral. 

        5.2    Zoning and Private Covenants.    Except as specifically provided in the Loan Agreement, if at all, Borrower
will not initiate, join in, or consent to any change in any zoning ordinance or classification, any change in the "zone lot" or "zone lots" (or similar zoning unit or units) presently comprising the
Real Property, any change in any private restrictive covenant, or any change in any other public or private restriction limiting or defining the uses which may be made of the Real Property or any part
thereof, without the express written consent of Lender. If under applicable zoning provisions the use of all or any part of the Real Property is or becomes a nonconforming use, Borrower will not cause
such use to be discontinued or abandoned without the express written consent of Lender. 

        5.3    Disposition of Mortgaged Property, Leases, or Beneficial Interest in Borrower.    It is expressly acknowledged,
covenanted and agreed that except as may be permitted in this Deed of Trust that there may be no sale, lease, exchange, assignment, conveyance, encumbrance, mortgage, alienation, transfer or other
disposition (herein collectively called a "Disposition") of (a) all or any portion of the Property or any lease thereof (or any interest therein) which gives the lessee any option to purchase
the Property or any part thereof, or (b) all or any part of the legal or beneficial ownership interest or management control in Borrower, unless Lender has provided its prior written consent
thereto. In the event there occurs a Disposition without Lender's written consent, then Lender may, at Lender's option, accelerate the maturity of the Note and enforce any and all of Lender's rights,
remedies and recourses set forth in this Deed of Trust upon the occurrence of an Event of Default. It is acknowledged and agreed that the Lender may withhold, at its sole option, its consent to any
Disposition as described above. Lender's failure to respond or otherwise consent within such thirty (30) day period shall be deemed a denial of the request for approval. Lender's failure to
exercise its remedies hereunder for a disapproved Disposition shall not be construed as a waiver of Lender's right to subsequently exercise such remedies, and Lender's approval of a Disposition shall
not be construed as a waiver of the provisions hereof with respect to any subsequent Disposition. The rights and options herein granted to Lender may be exercised at Lender's sole option and
discretion, need not be based upon an increased business risk or any other risk, and are an integral and valuable part of the security given to Lender. Notwithstanding the provisions of this section,
Borrower may sell or otherwise convey
the Property, or any interest therein, without the consent of Lender provided that all outstanding and unpaid amounts of the Secured Obligations are fully repaid at the time of such sale or
conveyance. 

        5.4    Further Encumbrance of Property.    Borrower will not create, place or permit to be created or placed or allow
to remain against the Real Property or the Fixtures any mortgage or deed of trust, regardless of whether the same is expressly subordinate to the liens and security interests imposed hereby or by any
other instruments securing the Secured Obligations and Borrower shall not encumber the Property without the prior written consent of Lender. 

        5.5    Transfer or Removal of Fixtures.    Borrower will not sell, transfer or remove from the Real Property all or
any material part of the Fixtures, unless the items sold, transferred, or removed are simultaneously replaced with similar items of equal or greater value. 

        5.6    Further Encumbrance of Collateral.    Borrower will not create or permit any junior lien, security interest or
other encumbrance against the Collateral (except pursuant to the Existing Credit Agreement, as in effect on the date of this Deed of Trust) without the prior written consent of Lender. 

        5.7    Improper Use of Property or Collateral.    Borrower will not use the Real Property or the Collateral for any
purpose or in any manner, or take any action with respect to the Real Property or 

26

 

the Collateral which violates any applicable law, ordinance, or other governmental requirement, the requirements or conditions of any insurance policy, or any private covenant. 

 
 

ARTICLE 6
  EVENTS OF DEFAULT    
  

        Each of the following events will constitute a default (an "Event of Default") under this Deed of Trust and under each of the other Loan Documents: 

        6.1    Failure to Pay.    Default shall be made in the payment of any installment of principal or interest on the Note
or any other sum under the Loan Documents when due (after giving consideration to any grace period which may be applicable under such document). 

        6.2    Insolvency.    The dissolution or termination of, or the insolvency of, Borrower, the appointment of a receiver
for any part of Borrower's property, any general assignment for the benefit of creditors or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. 

        6.3    Creditor or Forfeiture Proceedings.    Commencement of foreclosure or forfeiture proceedings, whether by
judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower, any creditor of any Grantor against any collateral securing the Secured Obligations, or by
any governmental agency. 

        6.4    Judgment.    A writ of execution or attachment or any similar process shall be issued or levied against all or
any part of or interest in the Real Property or a material part of the Collateral, or any judgment involving monetary damages shall be entered against Borrower which shall become a lien on the Real
Property or the Collateral or any portion thereof or interest therein and such execution, attachment, or similar process or judgment is not released, bonded, satisfied, vacated, or stayed within sixty
(60) days after its entry or levy. 

        6.5    Superior Lien Against the Property.    The assertion of any claim of priority over this Deed of Trust, by
title, lien, or otherwise in any legal, administrative, or equitable proceeding, unless such assertion be withdrawn, or effective action satisfactory to Lender commenced (and thereafter diligently
prosecuted) and Lender is secured against any loss or damage there from, within thirty (30) days of the assertion of such claim. 

        6.6    Abandonment.    The actual or constructive abandonment of all or a substantial portion of the Real Property or
the Collateral (such abandonment constituting an assignment to Lender, at Lender's option, of Borrower's interest in any lease or contract now or hereafter affecting the abandoned property). 

        6.7    Valid First Lien.    The failure of Lender to have a valid first lien against the entire Real Property and
Collateral as to all advances made now or at any time in the future pursuant to the Note, this Deed of Trust, or any other Loan Documents or the Note, the Deed of Trust or any of the Loan Documents
ceases to be in full force and effect (including failure of any security agreement to create a valid and perfected security interest) at any time and for any reason. 

        6.8    Breach of Lease.    Borrower shall be in default under any Lease and such default shall continue for 30
calendar days after notice thereof by Lender to the Borrower and the lender or agent for the lenders, as applicable, under the Existing Credit Agreement; provided, however, that in the event that such
default is not capable of being cured (as determined by Lender in its reasonable discretion) within 30 calendar days, then Borrower shall have such longer period of time as Borrower reasonably
requires to cure such default so long as Borrower commences cure within the 30 day period and thereafter diligently pursues cure to completion; and provided, further, that such longer period of
time shall in no event exceed 60 calendar days. 

27

 

        6.9    Other Defaults.    Failure of Borrower to comply with or to perform when due any other term, obligation,
covenant or condition contained in the Note, this Deed of Trust or any other Loan Documents (and such failure shall not constitute an Event of Default under any of the other provisions of this section
entitled "EVENTS OF DEFAULT") and such failure to comply shall continue for 30 calendar days after notice thereof to the Borrower by the Lender;
provided, however, that in the event that such failure to comply is not capable of being cured (as determined by Lender in its reasonable discretion) within 30 calendar days, then Borrower shall have
such longer period of time as Borrower reasonably requires to cure such failure to comply so long as Borrower commences cure within the 30 day period and thereafter diligently pursues cure to
completion; and provided, further, that such longer period of time shall in no event exceed 60 calendar days. 

        6.10    Default in Favor of Third Parties.    Should Borrower default under any of the following in connection with a
transaction the total value of which is equal to or greater than $1,000,000.00: any loan, extension of credit, agreement executed in connection with security for a loan or extension of credit, or in
favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability to repay the Secured Obligations or perform its obligations under the Note, this Deed
of Trust or any of the Loan Documents. 

        6.11    False Statements.    Any warranty, representation or statement made or furnished to Lender by or on behalf of
Borrower or any Grantor under this Agreement or the Related Documents is false or misleading in any material respect at the time made or furnished, or becomes false or misleading in any material
respect at any time thereafter. 

 
 

ARTICLE 7
  LENDER'S REMEDIES    
  

        Immediately upon or any time after the occurrence of any Event of Default hereunder, Lender may exercise any remedy available at law or in equity, including but
not limited to those listed below and those listed in the other Loan Documents, in such sequence or combination as Lender may determine in Lender's sole discretion: 

        7.1    Performance of Defaulted Obligations.    Lender may make any payment or perform any other obligation under the
Loan Documents which Borrower has failed to make or perform, and Borrower hereby irrevocably appoints Lender as the true and lawful attorney-in-fact for Borrower to make any
such payment and perform any such obligation in the name of Borrower, which appointment is coupled with Lender's interest in the Real Property and the Collateral. All payments made and expenses
(including attorneys' fees and legal assistant's fees) incurred by Lender in this connection, together with interest thereon at the Default Rate, as set forth in the Note, from the date paid or
incurred until repaid, will be part of the Secured Obligations and will be immediately due and payable by Borrower to Lender. 

        7.2    Specific Performance and Injunctive Relief.    Notwithstanding the availability of legal remedies, Lender will
be entitled to obtain specific performance, mandatory or prohibitory injunctive relief, or other equitable relief requiring Borrower to cure or refrain from repeating any default. 

        7.3    Acceleration of Secured Obligations.    Lender may, without notice or demand, declare all of the Secured
Obligations immediately due and payable in full. 

        7.4    Possession of Property.    Lender may enter and take possession of the Real Property and the Collateral without
seeking or obtaining the appointment of a receiver, may employ a managing agent for the Real Property and the Collateral, and may complete the development and construction described in the Loan
Agreement with respect to all or any part of the Real Property or the Collateral, either in Lender's name or in the name of Borrower. 

28

 

        7.5    Enforcement of Security Interests.    Lender may exercise all rights of a secured party under the Code with
respect to the Collateral. Any requirement for reasonable notice of the time and place of any public sale, or of the time after which any private sale or other disposition is to be made, will be
satisfied by Lender's giving of such notice to Borrower at least fifteen (15) days prior to the time of any public sale or the time after which any private sale or other intended disposition is
to be made. If permitted by statute or court decision, the Collateral may be sold by the Trustee as part of the foreclosure sale of the Real Property. 

        7.6    Foreclosure Against Property.    Lender may foreclose this Deed of Trust, insofar as it encumbers the Property,
either by judicial action or through a public trustee foreclosure sale through the Trustee in the manner provided by statute. 

        (a)  If
this Deed of Trust encumbers more than one parcel of real estate, foreclosure may be by separate parcel or lot or en masse, as Lender may elect in its sole
discretion. Foreclosure through Trustee will be initiated by Lender's filing of its notice of election and demand for sale with Trustee. Upon the filing of such notice of election and demand for sale,
Trustee shall promptly comply with all notice and other requirements of the laws of Colorado then in force with respect to such sales, and shall give four weeks' public notice of the time and place of
such sale by advertisement weekly five times in some newspaper of general circulation then published in the County in which the Property is located. 

        (b)  All
fees, costs and expenses of any kind incurred by the Trustee or Lender in connection with, or preparation for, foreclosure of this Deed of Trust, including, without
limitation, the costs of any appraisals, engineering or environmental testing and evaluations of the Property obtained by Lender, all costs of any receivership for the Property advanced by Lender, and
all attorneys', legal assistants' and
consultants' fees, expert's evidence, stenographer's charges, publication costs, (which may be estimated as to items to be expended after foreclosure sale or entry of the decree) costs of procuring
all such abstracts of title, title searches, title insurance policies, and similar data with respect to title as Lender may deem reasonably necessary either to prosecute such suit or to evidence to
bidders at any sale the true condition of title to or value of the Property, incurred by Lender, shall constitute a part of the Secured Obligations and may be included as part of the amount owing from
Borrower to Lender at any foreclosure sale. All expenditures and expenses of the nature in this paragraph mentioned, and such expenses and fees as may be incurred in the protection of the Property and
the maintenance of the lien of this Deed of Trust, including the reasonable fees of any attorney employed by Lender in any litigation or proceeding affecting this Deed of Trust, the Note or the
Property, including probate, bankruptcy proceedings, proceedings to obtain a receiver, or in preparation for the commencement or defense of any proceeding or threatened suit or proceeding, shall be
immediately due and payable by Borrower, with interest thereon at the Default Rate, as more particularly defined in the Note and shall be secured by this Deed of Trust. 

        (c)  The
proceeds of any sale under this section shall be applied first to the fees and expenses of the officer conducting the sale, and then to the reduction or discharge of
the Secured Obligations; any surplus remaining shall be paid over to Borrower or to such other person or persons as may be lawfully entitled to such surplus. 

        (d)  At
the conclusion of any foreclosure sale, the officer conducting the sale shall execute and deliver to the purchaser at the sale a certificate of purchase which shall
describe the property sold to such purchaser and shall state that upon the expiration of the applicable periods for redemption, the holder of such certificate will be entitled to a deed to the
property described in the certificate. After the expiration of all applicable periods of redemption, unless the property sold has been redeemed by Borrower, the officer who conducted such sale shall,
upon request, 

29

 

execute and deliver an appropriate deed to the holder of the certificate of purchase or the last certificate of redemption, as the case may be. 

        (e)  Nothing
in this section dealing with foreclosure procedures or specifying particular actions to be taken by Lender or by Trustee or any officer conducting the
foreclosure sale shall be deemed to contradict or add to the requirements and procedures now or hereafter specified by Colorado law, and any such inconsistency shall be resolved in favor of Colorado
law applicable at the time of foreclosure. 

        7.7    Appointment of Receiver.    Lender shall be entitled, as a matter of absolute right and without regard to the
value of any security for the Secured Obligations or the solvency of any person liable therefore, to the appointment of a receiver for the Property, the Leases, and the Rents upon  ex parte application
to any court of competent jurisdiction. Borrower waives any right to any hearing or notice of hearing prior to the appointment of a
receiver. 

        7.8    Right to Make Repairs, Improvements.    Should any part of the Property come into the possession of Lender or a
receiver, whether before or after an Event of Default, Lender or the receiver and receiver's agents shall be empowered: 

        (a)  To
take possession of the Property, Leases, Rents and any business conducted by Borrower or any other person thereon and any business assets used in connection therewith
and any Property in which Lender has a security interest granted by Borrower and, if the receiver deems it appropriate, to operate the same; 

        (b)  To
exclude Borrower and Borrower's agents, servants, and employees from the Real Property; 

        (c)  With
or without taking possession of the Real Property, to collect the Rents, including those past due and unpaid and security deposits; 

        (d)  To
rent, lease or let all or any portion of the Property to any party or parties at such rental and upon such terms as the Lender shall, and to pay any leasing or rental
commissions associated therewith in its discretion, determine; 

        (e)  To
continue the development, marketing and sale of the Property or any portion thereof; 

        (f)    To
complete any construction or development which may be in progress; 

        (g)  To
do such maintenance and make such repairs and alterations as the receiver deems necessary; 

        (h)  To
use all stores of materials, supplies and maintenance equipment on the Real Property and to replace and replenish such items at the expense of the receivership
estate; 

        (i)    To
pay the operating expenses of the Property, including costs of management and leasing or marketing thereof (which shall include lease commissions, sale commissions),
payments under contracts and agreements for development and construction; 

        (j)    To
pay all taxes and assessments against the Property and any property which is collateral for the Secured Obligations, all premiums for insurance thereon, all utility
and other operating expenses, and all sums due under any prior or subsequent encumbrance; 

        (k)  To
borrow from the Lender such funds as may be reasonably necessary to the effective exercise of the receiver's powers, on such terms as may be agreed upon by the
receiver and the Lender, but not in excess of the Default Rate under the Note; and 

        (l)    Generally
do anything which Borrower could legally do if Borrower were in possession of the Property. 

30

 

        (m)  All
expenses incurred by the receiver or the receiver's agent shall constitute part of the Secured Obligations. Any Rents collected by the receiver shall be applied
first to the expenses of the receivership (including attorneys' fees incurred by the receiver and by Lender), to expenses of the Property, and to preserve, protect, maintain and operate the Property
and any other collateral which is security for the Secured Obligations, and the balance shall be applied toward the Secured Obligations or any deficiency which may result from any foreclosure sale,
and then in such other manner as the court may direct. Unless sooner terminated with the express consent of the Lender, any such receivership will continue until all amounts remaining due under the
Note have been discharged in full, or until title to the Property has passed after foreclosure sale and all applicable periods of redemption have expired, and in either case, the court has discharged
the receiver. Borrower covenants to promptly reimburse and pay to Lender or such receiver, at the place where the Note is payable, or at such other place as may be designated in writing, the amount of
all reasonable expenses (including the cost of any insurance, taxes, or other charges) incurred by Lender or such receiver in connection with its custody, preservation, use or operation of the
Property, together with interest thereon from the date incurred by Lender or such receiver at the Default Rate, as set forth in the Note, and all such expenses, costs, taxes, interest, and other
charges shall be part of the Secured Obligations. It is agreed, however, that the risk of accidental loss or damage to the Property is undertaken by Borrower and, except for Lender's or such
receiver's willful misconduct or gross negligence, Lender or such receiver shall have no liability whatsoever for decline in value of the Property, for failure to obtain or maintain insurance, or for
failure to determine whether any insurance ever in force is adequate as to amount or as to the risks insured, or to complete development. 

        7.9    Further Assurances.    Upon issuance of a deed or deeds pursuant to foreclosure of this Deed of Trust, all
right, title, and interest of the Borrower in and to any Leases shall, by virtue of this instrument, thereupon vest in and become the absolute property of the grantee or grantees in such deed or deeds
without any further act or assignment by the Borrower. Borrower hereby agrees to execute all instruments of assignment or further assurance in favor of such grantee or grantees in such deed or deeds,
as may be necessary or desirable for such purpose. But nothing contained herein shall prevent Lender from terminating any subordinated Lease not approved by the Lender through such foreclosure. 

        7.10    Intercreditor Agreement.    The rights and remedies of the Lender hereunder are subject to the provisions of
the Intercreditor Agreement. 

31

  

 
 

ARTICLE 8
  ASSIGNMENT OF RENTS    
  

        8.1    Assignment of Rents.    To further secure the Secured Obligations, Borrower does hereby sell, assign and
transfer unto the Lender all rents, now due and which may hereafter become due under or by virtue of any Leases or tenancies (collectively "Rents "), whether written or verbal, or any letting of, or
of any agreement for the sale, or occupancy of the Real Property or any part thereof, and all proceeds thereof, now or hereafter existing, whether or not with the Lender's approval. The Borrower does
hereby appoint irrevocably the Lender its true and lawful attorney in its name and stead (with or without taking possession of the Property) to collect all of said Rents arising from or accruing at
any time hereafter, and all now due or that may hereafter become due under each and every of the Leases, or other similar agreements, written or verbal, which may hereafter exist on the Property, on
the condition that Lender hereby grants to Borrower a license to collect and retain such Rents (but expressly not including the right to collect any rents more than one (1) month in advance or
any amount to prepay, terminate, or "buy out" any Leases prior to the occurrence of any Event of Default under the Loan Documents. Borrower expressly covenants to apply the Rents received, after
application for operating expenses permitted hereunder, to payment of the Secured Obligations as and when the same become due and in compliance with the Loan Documents. Such license shall be revocable
by Lender without notice to Borrower at any time upon or after an Event of Default under the Loan Documents, and immediately upon any such revocation, Lender shall be entitled to receive, and Borrower
shall deliver to Lender, any and all Rents theretofore collected by Borrower which remain in the possession or control of Borrower and all Leases, and other such agreements. It is the intention of the
Borrower to create and grant, and it is the intention of Lender to create and receive, a present and absolute assignment of all of the Leases, similar agreements, Rents now due or which may hereafter
become due, but it is agreed that the Lender's right to collect the Rents is conditioned upon the existence of an Event of Default under the Loan Documents. Failure of Lender at any time or from time
to time to enforce its rights under this ARTICLE 8 shall not in any manner prevent its subsequent enforcement, and Lender is not obligated to collect anything hereunder, but is accountable only for
sums collected. Nothing contained herein shall be construed as constituting the Lender a mortgagee in possession in the absence of the taking of actual possession of the Property by the Lender
pursuant to Section 8.7 (Lender's Right of Possession In Case of Default) hereof. In the exercise of the powers herein granted to the Lender, no liability shall be asserted or enforced against
the Lender, all such liability being expressly waived and released by Borrower. Notwithstanding any of the provisions of this section, none of the provisions hereof shall cause or effect the sale,
transfer and assignment of revenues arising from the conduct of Borrower's business on the Real Property. 

        8.2    Covenants Regarding Leases.    Borrower agrees: 

        (a)  Not
to execute any Leases affecting the Property or any part thereof without the prior written consent of Lender; 

        (b)  Not
to collect any of the Rents for more than one (1) month in advance of the time when the same become due under the terms thereof; 

        (c)  Not
to discount any future accruing Rents; 

        (d)  Not
to execute any other assignments of any Leases or any interest therein or any of the Rents there under; 

        (e)  That
notwithstanding any variation of the terms of the Deed of Trust or any extension of time for payment there under or any release of part or parts of the Property,
the Leases, Rents hereby assigned, insofar as they relate to the unreleased Property, shall continue as additional security in accordance with the terms hereof; 

32

 

          (f)  To
hold and account for all down payment or earnest money deposits in the manner provided for under any state or local laws or ordinances applicable to the Property or
under the Loan Documents; and 

        (g)  To
perform all of the Borrower's covenants and agreements under the Leases and not to suffer or permit to occur any release of liability of the lessees or purchasers. 

        8.3    Representations Regarding Leases.    Borrower represents and warrants that at the time of the execution of this
Deed of Trust by Borrower, there are no Leases and Borrower has no present intention of entering into any Leases. 

        8.4    Further Assignments.    Borrower shall give Lender at any time upon demand any further or additional forms of
assignment of transfer of Rents, leases and security as may be reasonably requested by Lender, and shall deliver to Lender executed copies of all such leases and security. 

        8.5    Authority of Lender.    Any tenants or occupants of any part of the Real Property pursuant to any Leases that
may come into existence are hereby authorized to recognize the claims of Lender hereunder without investigating the reason for any action taken by Lender, or the validity or the amount of indebtedness
owing to Lender, or the existence of a Default or Event of Default under any Loan Document, or the application to be made by Lender of any amounts to be paid to Lender. The sole signature of Lender or
a receiver shall be sufficient for the exercise of any rights under this ARTICLE 8 and the sole receipt of Lender or a receiver for any sums received shall be a full discharge and release therefore to
any such tenant or occupant of the Real Property; and Borrower hereby releases each such tenant and occupant or purchaser which makes payments to Lender under this ARTICLE 8 from any liability under
the applicable Lease or occupancy agreement. Checks for all or any part of the rentals collected under this ARTICLE 8 shall be drawn to the exclusive order of Lender or such receiver. 

        8.6    Indemnification of Lender.    Nothing herein contained shall be deemed to obligate Lender to perform or
discharge any obligation, duty, or liability of lessor under any Lease of the Real Property, and Borrower shall and does hereby indemnify and hold Lender harmless from any and all liability, loss, or
damage which Lender may or might incur under any Lease of the Real Property or by reason of this assignment; and any and all such liability, loss, or damage incurred by Lender, together with the costs
and expenses, including reasonable attorneys' fees, incurred by Lender in defense of any claims or demands therefore (whether successful or not), shall be additional Secured Obligations, and Borrower
shall reimburse Lender therefore on demand. 

        8.7    Lender's Right of Possession in Case of Default.    In any case in which under the provision of this Deed of
Trust, the Lender has a right to institute foreclosure proceedings, whether before or after the whole principal sum secured hereby is declared to be immediately due, or whether before or after the
institution of legal proceedings to foreclose the lien hereof or before or after sale there under, promptly upon demand of Lender, Borrower shall surrender to Lender and Lender shall be entitled to
take actual possession of the Property or any part thereof personally, or by its agents or attorneys, as for condition broken, and Lender in its discretion may, with or without force and with or
without process of law, enter upon and take and maintain possession of all or any part of the Real Property, together with all documents, books, records, papers and accounts of the Borrower or then
owners of the Real Property relating thereto, and may exclude the Borrower, its agents or servants, wholly therefrom and may, as attorney-in-fact or agent of the Borrower, or
in its own name as Lender and under the powers herein granted, hold, operate, manage and control the Property and conduct the business, if any, thereof, either personally or by its agents, and with
full power to use such measures, legal or equitable, as in its discretion or in the discretion of its successors or assigns may be deemed proper or necessary to enforce the payment or security of the
rents, of the Real Property. 

33

 

        8.8    Severability and Survival.    The provisions of this ARTICLE 8 shall survive the foreclosure of the lien of
this Deed of Trust and the exercise of the power of sale granted under this Deed of Trust until the expiration of all periods of redemption following any such foreclosure or sale and thereafter with
respect to all Rents arising prior to or attributable to the period prior to the expiration of all such redemption periods. 

 
 

ARTICLE 9
  ACCOMMODATION DEED OF TRUST    
  

        With respect to Water Pik, to the extent it has provided security for the benefit of Laars pursuant to its grant of this Deed of Trust and to the extent
applicable California law with respect to guaranties and suretyship may be held to apply hereto (notwithstanding the choice of law provision contained herein), Water Pik agrees that until all
indebtedness secured by this Deed of Trust shall have been paid in full, and no commitment on the part of the Lender to make future advances or extend credit either to Laars or Water Pik exists, Water
Pik shall have no right of subrogation, and waives any right to enforce any remedy which Lender now has or may hereafter have against any person liable for the Indebtedness secured by this Deed of
Trust, and waives any benefit of, any right to participate in any security now or hereafter held by Lender and without limiting the generality of the foregoing, Water Pik specifically waives and
relinquishes as against Lender any defense or benefit otherwise available to Water Pik should Lender make an election of remedies as against any person liable for the Indebtedness (and irrespective of
the circumstances or manner in which or whereby such election is made) which destroys or impairs Water Pik's subrogation rights or rights to proceed against any person liable for the indebtedness
secured hereby for reimbursement and, further, to the extent Water Pik may be deemed a guarantor hereunder, such "guarantor" waives all rights and defenses arising out of an election of remedies by
the creditor, even though that election of remedies, such as non-judicial foreclosure with respect to security for a "guaranteed" obligation, has destroyed the "guarantor's" rights of
subrogation and reimbursement against Laars by the operation of Section 580d of the California Code of Civil Procedure or otherwise. This is an
unconditional waiver of any rights and defenses Water Pik may have because Laars' obligation is secured by real property. These rights and defenses include, but are not limited to, any rights and
defenses based upon Section 580a, 580b, 580d, or 726 of the Code of Civil Procedure. Water Pik assumes the responsibility for being and keeping itself informed of the financial condition of
Laars and of all other circumstances bearing upon the risk of nonpayment of the indebtedness secured hereby which diligent inquiry would reveal, and agrees that Lender shall have no duty to advise
Water Pik of information known to it regarding such condition or circumstances. 

 
 

ARTICLE 10
  MISCELLANEOUS PROVISIONS    
  

        10.1    Time of the Essence.    Time is of the essence with respect to all provisions of this Deed of Trust. 

        10.2    Rights and Remedies Cumulative.    Lender's rights and remedies under each of the Loan Documents are
cumulative of the rights and remedies available to Lender under each of the other Loan Documents and those otherwise available to Lender at law or in equity. No act of Lender shall be
construed as an election to proceed under any particular provision of any Loan Document to the exclusion of any other provision in the same or any other Loan Document, or as an election of remedies to
the exclusion of any other remedy which may then or thereafter be available to Lender. 

        10.3    No Implied Waivers.    Lender shall not be deemed to have waived any provision of this Deed of Trust unless
such waiver is in writing and is signed by Lender. Without limiting the generality of the preceding sentence, neither Lender's acceptance of any payment with knowledge of a default by Borrower, nor
any failure by Lender to exercise any remedy following a default by Borrower shall be 

34

 

deemed a waiver of such default, and no waiver by Lender of any particular default on the part of Borrower shall be deemed a waiver of any other default or of any similar default in the future. 

        10.4    No Third Party Rights.    No person shall be a third party beneficiary of any provision of this Deed of Trust.
All provisions of this Deed of Trust favoring Lender are intended solely for the benefit of Lender, and no third party shall be entitled to assume or expect that Lender will or will not waive or
consent to modification of any such provision in Lender's sole discretion. 

        10.5    Preservation of Liability and Priority.    Without affecting the liability of Borrower or of any other person
(except a person expressly released in writing) for payment and performance of all of the Secured Obligations, and without affecting the rights of Lender with respect to any security not expressly
released in writing, and without impairing in any way the priority of this Deed of Trust over the interests of any person acquired or first evidenced by recording subsequent to the recording hereof,
Lender may, either before or after the maturity of the Note, and without notice or consent: (a) release any person liable for payment or performance of all or any part of the Secured
Obligations; (b) make any agreement altering the terms of payment or performance of all or any of the Secured Obligations; (c) exercise or refrain from exercising, or waive, any right or
remedy which Lender may have under any of the Loan Documents; (d) accept additional security of any kind for any of the Secured Obligations; or (e) release or otherwise deal with any
real property or Collateral securing the Secured Obligations. Any person acquiring or recording evidence of any interest of any nature in the Real Property or the Collateral shall be deemed, by
acquiring such interest or recording any evidence thereof, to have agreed and consented to any or all such actions by Lender. 

        10.6    Subrogation of Lender.    Lender shall be subrogated to the lien of any previous encumbrance discharged with
funds advanced by Lender under the Loan Documents, regardless of whether such previous encumbrance has been released of record. 

        10.7    Notices.    Any notice required or permitted to be given by Borrower or Lender under this Deed of Trust shall
be in writing and will be deemed given (a) upon personal delivery or upon confirmed transmission by telecopier or similar facsimile transmission device, (b) on the first business day
after receipted delivery to a courier service which guarantees next-business-day delivery, or (c) on the third business day 

        [Deed
of Trust continues on following page] 

35

 

after
mailing, by registered or certified United States mail, postage prepaid, in any case to the appropriate party at its address set forth below: 

        If
to Borrower: 

Water
Pik, Inc. and Laars, Inc.

23 Corporate Plaza, Suite 246

Newport Beach, CA 92660

Attn: Chief Financial Officer

Telephone: (949) 719-3700

Telecopier: (949) 719-6472 

With
a copy to: 

Water
Pik, Inc. and Laars, Inc.

23 Corporate Plaza, Suite 246

Newport Beach, CA 92660

Attn: General Counsel

Telephone: (949) 719-3700

Telecopier: (949) 719-6472 

        If
to Lender: 

U.S.
Bank National Association

4100 Newport Place, Suite 120

Newport Beach, CA 92660

Attn: Richard M. McNiven

Telephone: (949) 863-2307

Telecopier: (949) 863-2335 

With
a copy to: 

Law
Offices of Douglas L. Collins

8491 Sunset Blvd., Suite 360

Los Angeles, CA 90069

Attn: Douglas L. Collins, Esq.

Telephone: (323) 650-2088

Telecopier: (323) 650-2092 

        Any
person may change such person's address for notices or copies of notices by giving notice to the other party in accordance with this section. 

        10.8    Defeasance.    Upon payment and performance in full of all the Secured Obligations and all costs of releasing
this Deed of Trust, Lender will execute and deliver to Borrower such documents as may be required to release this Deed of Trust of record. 

        10.9    Illegality.    If any provision of this Deed of Trust is held to be illegal, invalid, or unenforceable under
present or future laws effective during the term of this Deed of Trust, the legality, validity, and enforceability of the remaining provisions of this Deed of Trust shall not be affected thereby, and
in lieu of each such illegal, invalid or unenforceable provision there shall be added automatically as a part of this Deed of Trust a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and be legal, valid, and enforceable. If the rights and liens created by this Deed of Trust shall be invalid or unenforceable as to any part of the Secured
Obligations, then the unsecured portion of the Secured Obligations shall be completely paid prior to the payment of the remaining and secured portion of the Secured Obligations, and all payments made 

36

 

on the Secured Obligations shall be considered to have been paid on and applied first to the complete payment of the unsecured portion of the Secured Obligations. 

        10.10    Obligations Binding Upon Borrower's Successors.    This Deed of Trust is binding upon Borrower and Borrower's
successors and assigns, including all grantees and remote grantees of any interest of Borrower in the Property, and shall inure to the benefit of Lender, and its successors and assigns, and the
provisions hereof shall likewise be covenants running with the land. The duties, covenants, conditions, obligations, and warranties of Borrower in this Deed of Trust shall be joint and several
obligations of Borrower and Borrower's successors and assigns. 

        10.11    Governing Law.    The laws of the State of Colorado shall govern the validity, construction, enforcement, and
interpretation of this Deed of Trust, without regard to principles of conflicts of laws. 

        10.12    Survival.    This Deed of Trust shall survive foreclosure of the liens created hereby, to the extent
necessary to fulfill its purposes. 

        10.13    Multiple Parties    All obligations of Borrower hereunder shall be joint and several and all references to
"Borrower" shall mean each and every Borrower. That means that each and every entity or person executing this Deed of Trust below as a Borrower is responsible for all of Borrower's obligations in this
Deed of Trust. 

        Signed
and delivered as of the date first mentioned above. 

Water Pik, Inc., a Delaware corporation  

	
By:	
 	

 	
 	

 
	 	 	
 Victor C. Streufert

Vice President—Finance,

Chief Financial Officer, and

Treasurer	 	 

37

  

Exhibit 4.17

(Part C)  

 
 

DEED OF TRUST, SECURITY AGREEMENT,
  FINANCING STATEMENT AND
  ASSIGNMENT OF RENTS    
  

        THIS DEED OF TRUST, SECURITY AGREEMENT, FINANCING STATEMENT, AND ASSIGNMENT OF RENTS (this "Deed of Trust") is given as of the 18th day of October,
2001, by the Laars, Inc., a Delaware corporation, the Trustor named below, to the Trustee named below, for the use and benefit of the Lender named below. 

 
 

ARTICLE 1
  PARTIES, PROPERTY, AND DEFINITIONS    
  

        The following terms and references shall have the meanings indicated: 

        1.1    Borrower:    Trustor and Water Pik, Inc., a Delaware corporation ("Water Pik"), individually and
collectively, the legal address of each of which is 23 Corporate Plaza, Suite 246, Newport Beach, CA 92660, together with any future owner of the Property or any part thereof or interest therein. 

        1.2    Lender:    U.S. Bank National Association, whose legal address is 4100 Newport Place, Suite 120, Newport Beach,
CA 92660, together with any legal holder of the Note. 

        1.3    Trustee:    Chicago Title Company. 

        1.4    Trustor;    Laars, Inc., a Delaware corporation. 

        1.5    Note:    The Promissory Note of even date herewith, executed by Borrower and payable to the order of Lender in
the principal face amount of $8,850,000.00, the last payment under which is due on September 30, 2008, unless such due date is extended or accelerated, together with all renewals, extensions,
and modifications of the Note. All terms and provisions of the Note are incorporated by this reference in this Deed of Trust. 

        1.6    Loan Agreement:    The Loan Agreement dated October 18, 2001 executed by Borrower and the Lender, and
all renewals, extensions, and modifications thereof. All capitalized terms not otherwise defined herein shall bear the meaning given to them in the Loan Agreement. 

        1.7    Existing Credit Agreement:    The Restated Credit Agreement dated as of November 29, 1999 among
Borrower, certain guarantors named therein, certain lenders named therein and The Chase Manhattan Bank, as agent, as amended, modified or supplemented from time to time, and any successor revolving
credit or loan agreement to the current Existing Credit Agreement. 

        1.8    Real Property:    The real property described in Exhibit A, attached hereto and by this reference
incorporated herein, together with all right, title and interest of Trustor in the following with respect to the real property, whether now owned or hereafter acquired by Trustor: 

        (a)  All
improvements now or hereafter located on such real property and all easements and appurtenances thereto; 

        (b)  The
land lying within any street or roadway adjoining the real property; any vacated or hereafter vacated street or alley adjoining the real property; and any strips and
gores adjoining the real property; 

        (c)  All
and singular the passages, waters, water rights (whether tributary or non-tributary or not non-tributary), water courses, riparian rights,
wells, well permits, water stock, other rights, liberties and privileges thereof or in any way now or hereafter appertaining to the real property, 

38

 

including homestead and any other claim at law or in equity, as well as any after-acquired title, franchise or license, and the reversion and reversions and remainder and remainders thereof; and 

        1.9    Fixtures:    All "fixtures," as such term is defined in the Uniform Commercial Code of California (whether
actually or constructively attached or incorporated, and including all trade, domestic, and ornamental fixtures) now or hereafter located in, upon, or under such real property or improvements and used
or usable in connection with any present or future operation thereof but excluding all fixtures that are equipment and are used specifically for the operation and conduct of the business of Trustor on
the Real Property. 

        1.10    Intangible Personalty:    All right, title and interest of the Trustor in and to the following, with respect
to the Real Property: 

        (a)  all
of the rents of and from the use, operation, or enjoyment of such real property and improvements (collectively, the "Rent Income"), whether such Income is
attributable to the period, or is collected, prior to or subsequent to any default by Borrower, but excluding all revenues that arise from the operation and conduct of the
business of Borrower on the Real Property; 

        (b)  all
plans and specifications for the improvements on the real property; soil, environmental, engineering, land planning maps, surveys and other studies and reports
concerning the real property or prepared for the orderly planning and development of the real property, including all plans, drawings and studies concerning the platting or replatting of the real
property; all contracts and subcontracts relating to the improvements on the real property, or any thereof; 

        (c)  all
awards and payments, including interest thereon, resulting from the exercise of any right of eminent domain or any other public or private taking of, casualty or
injury to, or decrease in the value of, any of such real property, including without limitation all property insurance payments, proceeds and policies related to such real property; 

        (d)  all
of the licenses, permits, franchises, and other entitlements to use and all rights thereto which have been issued by or which are pending before any governmental or
quasi-governmental agency which are necessary or appropriate for the Real Property but excluding all such items that are used specifically for the operation and conduct of the business of Borrower on
the Real Property; 

        (e)  all
water taps, sewer taps, building permits, curb cut permits, storm water discharge permits; and 

        (f)    all
of Borrower's rights in and to contract rights, leases, concessions, operating systems, warranties, licenses, plans, drawings and other items of intangible personal
property solely relating to the ownership or operation of the Real Property but excluding all such items that are used specifically for the operation and conduct of the business of Borrower on the
Real Property. 

        1.11    Property:    The Real Property, the Fixtures and the Intangible Personalty are sometimes collectively called
the "Property." All of the Real Property, Fixtures and Intangible Personalty, whether affixed or annexed or not, and all rights hereby conveyed and mortgaged are intended to be as a unit and are
hereby understood and agreed and declared to be appropriated to the use of the real estate, and shall for the purposes of this Deed of Trust be deemed to be real estate and conveyed and mortgaged
hereby. 

        1.12    Any capitalized terms not otherwise defined in this Deed of Trust and not defined in the Loan Agreement, shall bear the
meaning given to them in Article 9 of the Code (as defined below). 

        1.13    Secured Obligations:    The Property is granted and shall be held for the purpose of securing the following
(the "Secured Obligations"): 

        (a)  The
payment of the indebtedness as evidenced in the Note; 

39

 

        (b)  The
performance and observance of all terms, covenants, conditions, and provisions to be performed or observed by the Borrower pursuant to the terms of: 

          (i)  this
Deed of Trust, 

        (ii)  UCC-1
financing statements required to perfect the Lender's security interest in the Intangible Personalty and Fixtures as granted by this Deed of Trust
(the "Financing Statement"), 

        (iii)  the
Certificate and Indemnity Regarding Hazardous Substances (the "Environmental Indemnity") of even date herewith relating to the Real Property executed by Trustor, 

        (iv)  the
Loan Agreement as such agreement relates to the loan evidenced by the Note and to the Property, and 

        (v)  any
and all pledge or other security agreements, loan agreements, disbursement agreements, supplemental agreements, assignments (both present and collateral), and side
letters related to the loan evidenced by the Note and to the Property, as the same may be amended, modified or supplemented from time to time (collectively, the "Related Agreements"). 

The
Note, this Deed of Trust, Financing Statement, Environmental Indemnity, Related Agreements, Loan Agreement, and any and all other documents or instruments executed in connection with the foregoing
to evidence or secure the Note shall be hereinafter collectively called the "Loan Documents". 

        (c)  The
payment of all sums expended or advanced by Lender pursuant to the terms hereof. 

        1.13    Intercreditor Agreement:    That certain Intercreditor Agreement of even date herewith by and between Lender
and The Chase Manhattan Bank, as Agent under the Existing Credit Agreement. 

 
 

ARTICLE 2
  GRANTING CLAUSE    
  

        2.1    Grant to Trustee.    As security for the Secured Obligations, Trustor hereby grants, bargains, sells, and
conveys the Real Property in trust to Trustee, in trust forever, with power of sale, for the use and benefit of Lender, and subject to all provisions hereof. 

        2.2    Security Interest to Lender.    As additional security for the Secured Obligations, Trustor hereby grants to
Lender a security interest in the Fixtures and in the Intangible Personalty (collectively, the "Collateral"). To the extent any of the Collateral may be
or has been acquired with funds advanced by Lender under the Loan Documents, this security interest is a purchase money security interest. This Deed of Trust constitutes a Security Agreement under the
Uniform Commercial Code of California (the "Code") with respect to any part of the Collateral that may or might now or hereafter be or be deemed to be personal property; all of the terms, provisions,
conditions and agreements contained in this Deed of Trust pertain and apply to the Collateral as fully and to the same extent as to any other property comprising the Property, and the following
provisions of this section shall not limit the generality or applicability of any other provision of this Deed of Trust but shall be in addition thereto: 

        (a)  The
Collateral shall be used by Trustor solely for business purposes, being installed upon or owned in connection with the Real Property for Trustor's own use or as the
equipment and furnishings furnished by Trustor, as owner, to tenants of the Real Property; 

        (b)  No
financing statement covering any of the Collateral or any proceeds thereof is on file in any public office except financing statements filed in connection with the
Existing Credit Agreement (the effect of which shall be modified pursuant to the Intercreditor Agreement); and Trustor will, at its cost and expense, upon demand, furnish to Lender such further
information and will execute and deliver to Lender such financing statements and other documents in form 

40

 

satisfactory to Lender and will do all such acts and things as Lender may at any time or from time to time reasonably request or as may be necessary or appropriate to establish and maintain a
perfected security interest in the Collateral as security for the Secured Obligations, subject to no adverse liens or encumbrances; and Trustor will pay the cost of filing the same or filing or
recording such financing statements or other documents and this instrument in all public offices wherever filing or recording is deemed by Lender to be necessary or desirable; 

        (c)  The
terms and provisions contained in this section and in Section 7.5 (Enforcement of Security Interests) of this Deed of Trust shall, unless the context
otherwise requires, have the meanings and be construed as provided in the Code; and 

        (d)  This
Deed of Trust constitutes a security agreement and financing statement under the Code with respect to the Collateral. As such, this Deed of Trust covers all items
of the Collateral including all items which are to become fixtures. Trustor is the "Debtor" and Lender is the "Secured Party" (as those terms are defined and used in the Code) insofar as this Deed of
Trust constitutes a financing statement. 

        2.3    The Trustor agrees that Lender may, to the extent permitted by applicable law, prepare and file financing statements,
amendments thereto, and continuation statements without the signature of the Trustor and file any financing statement, amendment thereto or continuation statement electronically. 

 
 

ARTICLE 3
  TRUSTOR'S TITLE AND AUTHORITY    
  

        3.1    Warranty of Title.    Trustor represents and warrants to Lender that Trustor has good and marketable title to
the Real Property in fee simple absolute, subject only to the lien of general taxes for the current year, a lien due and payable, but not yet delinquent, and those additional matters, if any, set
forth in Exhibit B, attached hereto and by this reference incorporated herein ("Permitted Exceptions"). Trustor further represents and warrants to Lender that Trustor is the absolute owner of
the Collateral, free of any liens, encumbrances, security interests, and other claims whatsoever, except insofar as the Collateral may be encumbered by the lien of general taxes for the current year,
a lien due and payable, but not yet delinquent and except for liens granted to the lenders under the Existing Credit Agreement as in
effect on the date of this Deed of Trust. Trustor, for itself and its successors and assigns, hereby agrees to warrant and forever defend, all and singular, all of the Property and property interest
granted and conveyed in trust pursuant to this Deed of Trust, against every person whomsoever lawfully claiming, or to claim, the same or any part thereof, subject to the Permitted Exceptions and
other exceptions described in this section. The warranties contained in this section shall survive foreclosure of this Deed of Trust, and shall inure to the benefit of and be enforceable by any person
who may acquire title to the Real Property or the Collateral pursuant to any such foreclosure. 

        3.2    Waiver of Homestead and Other Exemptions.    To the extent permitted by law, Trustor hereby waives all rights
to any homestead or other exemption to which Trustor would otherwise be entitled under any present or future constitutional, statutory, or other provision of applicable state or federal law. 

        3.3    Due Authorization.    If Trustor is other than a natural person, then each individual who executes this
document on behalf of Trustor represents and warrants to Lender that such execution has been duly authorized by all necessary corporate, partnership, or other action on the part of Trustor. 

41

 

 
 

ARTICLE 4
  TRUSTOR'S AFFIRMATIVE COVENANTS    
  

        4.1    Payment of Note.    Trustor will pay all principal, interest, and other sums payable under the Note, the Loan
Agreement or this Deed of Trust or the Loan Documents, on the date when such payments are due, without notice or demand. 

        4.2    Performance of Other Obligations.    Trustor will promptly and strictly perform and comply with all other
covenants, conditions, and prohibitions required of Borrower by the terms of the Loan Documents. 

        4.3    Other Encumbrances.    Trustor will promptly and strictly perform and comply with all covenants, conditions,
and prohibitions required of Trustor in connection with any other encumbrance affecting the Real Property or the Collateral, or any part thereof, or any interest therein, regardless of whether such
other encumbrance is superior or subordinate to the lien hereof. This paragraph does not authorize any lien or encumbrance against the Real Property or the Collateral except as permitted by
Section 3.1 or with the prior written consent of the Lender as provided in this Deed of Trust. 

        4.4    Payment of Taxes.    

        (a)  Property Taxes. Trustor will pay, before delinquency, all taxes and assessments, including without limitation, general,
special and metropolitan district taxes, water charges, sewer service charges (collectively, the "Impositions"), which may be levied or imposed at any time against Trustor's interest and estate in the
Real Property or the Collateral. Within 10 days after request by Lender, Trustor will deliver to Lender an official receipt for such payment or other evidence that such payment has been made. 

        (b)  Intangible Taxes. If by reason of any statutory or constitutional amendment or judicial decision adopted or rendered
after the date hereof, any tax, assessment, or similar charge is imposed against the Note, against Lender arising directly from Lender's interests in the Loan Documents (other than a tax based on
Lender's income), or against any security interest of Lender in the Property, Trustor will pay such tax, assessment, or other charge before delinquency and will indemnify Lender against all loss,
expense, or diminution of income in connection therewith. In the event Trustor is unable to do so, either for economic reasons or because the legal provisions or decisions creating such tax,
assessment or charge forbid Trustor from doing so, then the Note will, at Lender's option, become due and payable in full upon thirty (30) days' notice to Trustor. 

        (c)  Right to Contest. Notwithstanding any other provision of this section, Trustor will not be deemed to be in default solely
by reason of Trustor's failure to pay any Impositions so long as, in Lender's judgment, each of the following conditions is satisfied: 

          (i)  Trustor
is engaged in and diligently pursuing in good faith administrative or judicial proceedings appropriate to contest the validity or amount of such Impositions;
and 

        (ii)  Nonpayment
of such Impositions will not result in the loss or forfeiture of any Property encumbered hereby or any interest of Lender therein. 

If
Lender determines that any one or more of such conditions is not satisfied or is no longer satisfied, Trustor will pay the Impositions in question, together with any interest and penalties thereon,
within ten (10) days after Lender gives notice of such determination. 

        4.5    Maintenance of Insurance.    Trustor shall provide and maintain policies of insurance on the Property in
accordance with the Loan Agreement. 

        4.6    Lease Obligations.    Trustor represents and warrants to Lender that none of the Property is leased by Trustor
to any tenant. In the event there are at any time in the future any leases of all or any part of the Property, Trustor shall perform promptly all of Trustor's obligations under or in connection 

42

 

with each such lease of all or any part of the Property (collectively called the "Leases"). If Trustor receives at any time any written communication from any tenant under any Lease asserting a
default by Trustor under any Lease, or purporting to terminate or cancel any Lease, Trustor will promptly forward a copy of such communication (and any subsequent communications relating thereto) to
Lender. 

        4.7    Recertified Appraisal.    If at any time (a) an Event of Default (as defined below) has occurred, or
(b) the Lender is required by law or regulation to obtain a new appraisal, the Lender may require a new appraisal of the Real Property. 

        4.8    Management.    Trustor shall obtain Lender's advance written approval of any outside management services
provided, and of any contract therefore or assignment thereof, which written approval shall not be unreasonably withheld. 

        4.9    Condemnation.    Trustor hereby assigns, transfers and sets over unto Lender the entire proceeds of any award
or any claim for damages for any of the Real Property taken or damaged under the power of eminent domain or by condemnation. Lender may elect, in its discretion, to apply the proceeds of the award
upon or in reduction of the Secured Obligations, whether due or not. 

        4.10    Mechanics' Liens.    Trustor will keep the Real Property free and clear of all liens and claims of liens by
contractors, subcontractors, mechanics, laborers, material men, and other such persons in the manner provided in the Loan Agreement. 

        4.11    Defense of Actions.    Trustor will defend, at Trustor's expense, any action, proceeding or claim which
affects any Property encumbered hereby or any interest of Lender in such Property or in the Secured Obligations, and will indemnify and hold Lender harmless from all loss, damage, cost, or expense,
including attorneys' fees, which Lender may incur in connection therewith. 

        4.12    Further Assurances; Estoppel Certificates.    Trustor will execute and deliver to Lender upon demand, and pay
the costs of preparation and recording thereof, any further documents which Lender may request to confirm or perfect the liens and security interests created or intended to be created hereby, or to
confirm or perfect any evidence of the Secured Obligations. Trustor will also, within ten (10) days after any request by Lender, deliver to Lender a signed and acknowledged statement certifying
to Lender, or to any proposed transferee of the Secured Obligations, (a) the balance of principal, interest, and other sums then outstanding under the Note, and (b) whether Trustor
claims to have any offsets or defenses with respect to the Secured Obligations and, if so, the nature of such offsets or defenses. 

        4.13    Parking Requirements.    Trustor shall maintain at all times sufficient parking spaces to comply with the
parking requirements of all Leases, zoning and other regulations affecting the Property. 

        4.14    Financial Statements and Inspection of Records.    Trustor, at Trustor's expense, shall furnish to Lender the
financial and other reports required by the Loan Agreement. 

        4.15    Environmental Representations and Warranties.    Trustor has executed for the benefit of the Lender the
Environmental Indemnity, the provisions of which are included herein by reference. Trustor shall comply with, observe and perform each of the terms and provisions of the Environmental Indemnity. 

        4.16    Change in Name, Location of Collateral, Etc.    Without giving at least thirty (30) days' prior written
notice to Lender, the Trustor shall not: (a) change its name, federal employer's identification number, jurisdiction of organization or form of business association; (b) change the
location of its place of business (or chief executive office if more than one place of business); or (c) add to or change any location at which any of the Fixtures is stored, held or located. 

43

  

 
 

ARTICLE 5
  TRUSTOR'S NEGATIVE COVENANTS    
  

        5.1    Waste.    Trustor will not commit or permit any waste with respect to the Real Property or the Collateral. 

        5.2    Zoning and Private Covenants.    Except as specifically provided in the Loan Agreement, if at all, Trustor will
not initiate, join in, or consent to any change in any zoning ordinance or classification, any change in the "zone lot" or "zone lots" (or similar zoning unit or units) presently comprising the Real
Property, any change in any private restrictive covenant, or any change in any other public or private restriction limiting or defining the uses which may be made of the Real Property or any part
thereof, without the express written consent of Lender. If under applicable zoning provisions the use of all or any part of the Real Property is or becomes a nonconforming use, Trustor will not cause
such use to be discontinued or abandoned without the express written consent of Lender. 

        5.3    Disposition of Mortgaged Property, Leases, or Beneficial Interest in Trustor.    It is expressly acknowledged,
covenanted and agreed that except as may be permitted in this Deed of Trust that there may be no sale, lease, exchange, assignment, conveyance, encumbrance, mortgage, alienation, transfer or other
disposition (herein collectively called a "Disposition") of (a) all or any portion of the Property or any lease thereof (or any interest therein) which gives the lessee any option to purchase
the Property or any part thereof, or (b) all or any part of the legal or beneficial ownership interest or management control in Trustor, unless Lender has provided its prior written consent
thereto. In the event there occurs a Disposition without Lender's written consent, then Lender may, at Lender's option, accelerate the maturity of the Note and enforce any and all of Lender's rights,
remedies and recourses set forth in this Deed of Trust upon the occurrence of an Event of Default. It is acknowledged and agreed that the Lender may withhold, at its sole option, its consent to any
Disposition as described above. Lender's failure to respond or otherwise consent within such thirty (30) day period shall be deemed a denial of the request for approval. Lender's failure to
exercise its remedies hereunder for a disapproved Disposition shall not be construed as a waiver of Lender's right to subsequently exercise such remedies, and Lender's approval of a Disposition shall
not be construed as a waiver of the provisions hereof with respect to any subsequent Disposition. The rights and options herein granted to Lender may be exercised at Lender's sole option and
discretion, need not be based upon an increased business risk or any other risk, and are an integral and valuable part of the security given to Lender. Notwithstanding the provisions of this section,
Trustor may sell or otherwise convey
the Property, or any interest therein, without the consent of Lender provided that all outstanding and unpaid amounts of the Secured Obligations are fully repaid at the time of such sale or
conveyance. 

        5.4    Further Encumbrance of Property.    Trustor will not create, place or permit to be created or placed or allow
to remain against the Real Property or the Fixtures any mortgage or deed of trust, regardless of whether the same is expressly subordinate to the liens and security interests imposed hereby or by any
other instruments securing the Secured Obligations and Trustor shall not encumber the Property without the prior written consent of Lender. 

        5.5    Transfer or Removal of Fixtures.    Trustor will not sell, transfer or remove from the Real Property all or any
material part of the Fixtures, unless the items sold, transferred, or removed are simultaneously replaced with similar items of equal or greater value. 

        5.6    Further Encumbrance of Collateral.    Trustor will not create or permit any junior lien, security interest or
other encumbrance against the Collateral (except pursuant to the Existing Credit Agreement as in effect on the date of this Deed of Trust) without the prior written consent of Lender. 

        5.7    Improper Use of Property or Collateral.    Trustor will not use the Real Property or the Collateral for any
purpose or in any manner, or take any action with respect to the Real Property or 

44

 

the Collateral which violates any applicable law, ordinance, or other governmental requirement, the requirements or conditions of any insurance policy, or any private covenant. 

 
 

ARTICLE 6
  EVENTS OF DEFAULT    
  

        Each of the following events will constitute a default (an "Event of Default") under this Deed of Trust and under each of the other Loan Documents: 

        6.1    Failure to Pay.    Default shall be made in the payment of any installment of principal or interest on the Note
or any other sum under the Loan Documents when due (after giving consideration to any grace period which may be applicable under such document). 

        6.2    Insolvency.    The dissolution or termination of, or the insolvency of, Borrower, the appointment of a receiver
for any part of Borrower's property, any general assignment for the benefit of creditors or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. 

        6.3    Creditor or Forfeiture Proceedings.    Commencement of foreclosure or forfeiture proceedings, whether by
judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower, any creditor of any Grantor against any collateral securing the Secured Obligations, or by
any governmental agency 

        6.4    Judgment.    A writ of execution or attachment or any similar process shall be issued or levied against all or
any part of or interest in the Real Property or a material part of the Collateral, or any judgment involving monetary damages shall be entered against Borrower which shall become a lien on the Real
Property or the Collateral or any portion thereof or interest therein and such execution, attachment, or similar process or judgment is not released, bonded, satisfied, vacated, or stayed within sixty
(60) days after its entry or levy. 

        6.5    Superior Lien Against the Property.    The assertion of any claim of priority over this Deed of Trust, by
title, lien, or otherwise in any legal, administrative, or equitable proceeding, unless such assertion be withdrawn, or effective action satisfactory to Lender commenced (and thereafter diligently
prosecuted) and Lender is secured against any loss or damage therefrom, within thirty (30) days of the assertion of such claim. 

        6.6    Abandonment.    The actual or constructive abandonment of all or a substantial portion of the Real Property or
the Collateral (such abandonment constituting an assignment to Lender, at Lender's option, of Borrower's interest in any lease or contract now or hereafter affecting the abandoned property). 

        6.7    Valid First Lien.    The failure of Lender to have a valid first lien against the entire Real Property and
Collateral as to all advances made now or at any time in the future pursuant to the Note, this Deed of Trust, or any other Loan Documents or the Note, the Deed of Trust or any of the Loan Documents
ceases to be in full force and effect (including failure of any security agreement to create a valid and perfected security interest) at any time and for any reason. 

        6.8    Breach of Lease.    Trustor shall be in default under any Lease and such default shall continue for 30 calendar
days after notice thereof by Lender to the Trustor and the lender or agent for the lenders, as applicable, under the Existing Credit Agreement; provided, however, that in the event that such default
is not capable of being cured (as determined by Lender in its reasonable discretion) within 30 calendar days, then Trustor shall have such longer period of time as Trustor reasonably requires to cure
such default so long as Trustor commences cure within the 30 day period and thereafter diligently pursues cure to completion; and provided, further, that such longer period of time shall in no
event exceed 60 calendar days. 

45

 

        6.9    Other Defaults.    Failure of Borrower to comply with or to perform when due any other term, obligation,
covenant or condition contained in the Note, this Deed of Trust or any other Loan Documents (and such failure shall not constitute an Event of Default under any of the other provisions of this section
entitled "EVENTS OF DEFAULT") and such failure to comply shall continue for 30 calendar days after notice thereof to the Borrower by the Lender;
provided, however, that in the event that such failure to comply is not capable of being cured (as determined by Lender in its reasonable discretion) within 30 calendar days, then Borrower shall have
such longer period of time as Borrower reasonably requires to cure such failure to comply so long as Borrower commences cure within the 30 day period and thereafter diligently pursues cure to
completion; and provided, further, that such longer period of time shall in no event exceed 60 calendar days. 

        6.10    Default in Favor of Third Parties.    Should Borrower default under any of the following in connection with a
transaction the total value of which is equal to or greater than $1,000,000.00: any loan, extension of credit, or agreement executed in connection with security for a loan or extension of credit, in
favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability to repay the Secured Obligations or perform its obligations under the Note or any of
the Loan Documents or Trustor's ability to perform it obligations under this Deed of Trust. 

        6.11    False Statements.    Any warranty, representation or statement made or furnished to Lender by or on behalf of
Borrower or any Grantor under this Agreement or the Related Documents is false or misleading in any material respect at the time made or furnished, or becomes false or misleading in any material
respect at any time thereafter. 

 
 

ARTICLE 7
  BANK'S REMEDIES    
  

        Immediately upon or any time after the occurrence of any Event of Default hereunder, Lender may exercise any remedy available at law or in equity, including but
not limited to those listed below and those listed in the other Loan Documents, in such sequence or combination as Lender may determine in Lender's sole discretion: 

        7.1    Performance of Defaulted Obligations.    Lender may make any payment or perform any other obligation under the
Loan Documents which Trustor has failed to make or perform, and Trustor hereby irrevocably appoints Lender as the true and lawful attorney-in-fact for Trustor to make any such
payment and perform any such obligation in the name of Trustor, which appointment is coupled with Lender's interest in the Real Property and the Collateral. All payments made and expenses (including
attorneys' fees and legal assistant's fees) incurred by Lender in this connection, together with interest thereon at the Default Rate, as set forth in the Note, from the date paid or incurred until
repaid, will be part of the Secured Obligations and will be immediately due and payable by Trustor to Lender. 

        7.2    Specific Performance and Injunctive Relief.    Notwithstanding the availability of legal remedies, Lender will
be entitled to obtain specific performance, mandatory or prohibitory injunctive relief, or other equitable relief requiring Trustor to cure or refrain from repeating any default. 

        7.3    Acceleration of Secured Obligations.    Lender may, without notice or demand, declare all of the Secured
Obligations immediately due and payable in full. 

        7.4    Possession of Property.    Lender may enter and take possession of the Real Property and the Collateral without
seeking or obtaining the appointment of a receiver, may employ a managing agent for the Real Property and the Collateral, and may complete the development and construction described in the Loan
Agreement with respect to all or any part of the Real Property or the Collateral, either in Lender's name or in the name of Trustor. 

        7.5    Enforcement of Security Interests.    Lender may exercise all rights of a secured party under the Code with
respect to the Collateral, including without limitation the right to recover any deficiency 

46

 

in the manner and to the full extent provided by California law. Any requirement for reasonable notice of the time and place of any public sale, or of the time after which any private sale or other
disposition is to be made, will be satisfied by Lender's giving of such notice to Trustor at least fifteen (15) days prior to the time of any public sale or the time after which any private
sale or other intended disposition is to be made. If permitted by statute or court decision, the Collateral may be sold by the Trustee as part of the foreclosure sale of the Real Property. 

        7.6    Foreclosure by Sale.    Upon an Event of Default under this Deed of Trust, Lender may declare the entire
Indebtedness evidenced by the Note and secured by this Deed of Trust immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of
default and of election to cause to be sold the Property, which notice Trustee shall cause to be filed for record. Lender also shall deposit with Trustee this Deed of Trust, the Note, other documents
requested by Trustee, and all documents evidencing expenditures secured hereby. After the lapse of such time as may then be required by law following the recordation of the notice of default, and
notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in the notice of sale, either as a whole or in
separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of
all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the
preceding postponement in accordance with applicable law. Trustee shall deliver to such purchaser its deed conveying the Property so sold, but without any covenant or warranty, express or implied. The
recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Borrower, Trustee or Lender may purchase at such sale. After deducting all
costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the
terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons
legally entitled thereto. 

        7.7    Judicial Foreclosure.    With respect to all or any part of the Real Property, Lender shall have the right in
lieu of foreclosure by power of sale to foreclose by judicial foreclosure in accordance with and to the full extent provided by California law. 

        7.8    Collect Rents.    Lender shall have the rights described below in Article 8. 

        7.9    Tenancy at Sufferance.    If Trustor remains in possession of the Real Property after the Property is sold as
provided above or a Lender otherwise becomes entitled to possession of the Property upon default of Borrower, Trustor shall become a tenant at sufferance of Lender or the purchaser of the Property and
shall, at Lender's option, either (a) pay a reasonable rental for the use of the Property, or (b) vacate the Property immediately upon the demand of Lender. 

        7.10    Other Remedies.    Trustee or Lender shall have any other right or remedy provided in this Deed of Trust or
the Note or by law. 

        7.11    Sale of the Property.    To the extent permitted by applicable law, Trustor hereby waives any and all rights
to have the Property marshaled. In exercising its rights and remedies, the Trustee or Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate
sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. 

        7.12    No Contradiction of Law.    Nothing in this section dealing with foreclosure procedures or specifying
particular actions to be taken by Lender or by Trustee or any officer conducting the foreclosure sale shall be deemed to contradict or add to the requirements and procedures now or hereafter specified
by California law, and any such inconsistency shall be resolved in favor of California law applicable at the time of foreclosure. 

47

 

        7.13    Appointment of Receiver.    Lender shall be entitled, as a matter of absolute right and without regard to the
value of any security for the Secured Obligations or the solvency of any person liable therefor, to the appointment of a receiver for the Property, the Leases, and the Rents upon  ex parte application to
any court of competent jurisdiction. Trustor waives any right to any hearing or notice of hearing prior to the appointment of a
receiver. 

        7.14    Right to Make Repairs, Improvements.    Should any part of the Property come into the possession of Lender or
a receiver, whether before or after an Event of Default, Lender or the receiver and receiver's agents shall be empowered: 

        (a)  To
take possession of the Property, Leases, Rents and any business conducted by Trustor or any other person thereon and any business assets used in connection therewith
and any Property in which Lender has a security interest granted by Trustor and, if the receiver deems it appropriate, to operate the same; 

        (b)  To
exclude Trustor and Trustor's agents, servants, and employees from the Real Property; 

        (c)  With
or without taking possession of the Real Property, to collect the Rents, including those past due and unpaid and security deposits; 

        (d)  To
rent, lease or let all or any portion of the Property to any party or parties at such rental and upon such terms as the Lender shall, and to pay any leasing or rental
commissions associated therewith in its discretion, determine; 

        (e)  To
continue the development, marketing and sale of the Property or any portion thereof; 

        (f)    To
complete any construction or development which may be in progress; 

        (g)  To
do such maintenance and make such repairs and alterations as the receiver deems necessary; 

        (h)  To
use all stores of materials, supplies and maintenance equipment on the Real Property and to replace and replenish such items at the expense of the receivership
estate; 

        (i)    To
pay the operating expenses of the Property, including costs of management and leasing or marketing thereof (which shall include lease commissions, sale commissions),
payments under contracts and agreements for development and construction; 

        (j)    To
pay all taxes and assessments against the Property and any property which is collateral for the Secured Obligations, all premiums for insurance thereon, all utility
and other operating expenses, and all sums due under any prior or subsequent encumbrance; 

        (k)  To
borrow from the Lender such funds as may be reasonably necessary to the effective exercise of the receiver's powers, on such terms as may be agreed upon by the
receiver and the Lender, but not in excess of the Default Rate under the Note; and 

        (l)    Generally
do anything which Trustor could legally do if Trustor were in possession of the Property. 

        (m)  All
expenses incurred by the receiver or the receiver's agent shall constitute part of the Secured Obligations. Any Rents collected by the receiver shall be applied
first to the expenses of the receivership (including attorneys' fees incurred by the receiver and by Lender), to expenses of the Property, and to preserve, protect, maintain and operate the Property
and any other collateral which is security for the Secured Obligations, and the balance shall be applied toward the Secured Obligations or any deficiency which may result from any foreclosure sale,
and then in such other manner as the court may direct. Unless sooner terminated with the express consent of the Lender, any such receivership will continue until all amounts remaining due under the
Note have been discharged in full, or until title to the Property has passed after foreclosure sale and all applicable 

48

 

periods of redemption have expired, and in either case, the court has discharged the receiver. Trustor covenants to promptly reimburse and pay to Lender or such receiver, at the place where the Note
is payable, or at such other place as may be designated in writing, the amount of all reasonable expenses (including the cost of any insurance, taxes, or other charges) incurred by Lender or such
receiver in connection with its custody, preservation, use or operation of the Property, together with interest thereon from the date incurred by Lender or such receiver at the Default Rate, as set
forth in the Note, and all such expenses, costs, taxes, interest, and other charges shall be part of the Secured Obligations. It is agreed, however, that the risk of accidental loss or damage to the
Property is undertaken by Trustor and, except for Lender's or such receiver's willful misconduct or gross negligence, Lender or such receiver shall have no liability whatsoever for decline in value of
the Property, for failure to obtain or maintain insurance, or for failure to determine whether any insurance ever in force is adequate as to amount or as to the risks insured, or to complete
development. 

        7.15    Further Assurances.    Upon issuance of a deed or deeds pursuant to foreclosure of this Deed of Trust, all
right, title, and interest of the Trustor in and to any Leases shall, by virtue of this instrument, thereupon vest in and become the absolute property of the grantee or grantees in such deed or deeds
without any further act or assignment by the Trustor. Trustor hereby agrees to execute all instruments of assignment or further assurance in favor of such grantee or grantees in such deed or deeds, as
may be necessary or desirable for such purpose. But nothing contained herein shall prevent Lender from terminating any subordinated Lease not approved by the Lender through such foreclosure. 

        7.16    Intercreditor Agreement.    The rights and remedies of the Lender hereunder are subject to the provisions of
the Intercreditor Agreement. 

 
 

ARTICLE 8
  ASSIGNMENT OF RENTS    
  

        8.1    Assignment of Rents.    To further secure the Secured Obligations, Trustor does hereby sell, assign and
transfer unto the Lender all rents, now due and which may hereafter become due under or by virtue of any Leases or tenancies (collectively "Rents "), whether written or verbal, or any letting of, or
of any agreement for the sale, or occupancy of the Real Property or any part thereof, and all proceeds thereof, now or hereafter existing, whether or not with the Lender's approval. The Trustor does
hereby appoint irrevocably the Lender its true and lawful attorney in its name and stead (with or without taking possession of the Property) to collect all of said Rents arising from or accruing at
any time hereafter, and all now due or that may hereafter become due under each and every of the Leases, or other similar agreements, written or verbal, which may hereafter exist on the Property, on
the condition that Lender hereby grants to Trustor a license to collect and retain such Rents (but expressly not including the right to collect any rents more than one (1) month in advance or
any amount to prepay, terminate, or "buy out" any Leases prior to the occurrence of any Event of Default under the Loan Documents. Trustor expressly covenants to apply the Rents received, after
application for operating expenses permitted hereunder, to payment of the Secured Obligations as and when the same become due and in compliance with the Loan Documents. Such license shall be revocable
by Lender without notice to Trustor at any time upon or after an Event of Default under the Loan Documents, and immediately upon any such revocation, Lender shall be entitled to receive, and Trustor
shall deliver to Lender, any and all Rents theretofore collected by Trustor which remain in the possession or control of Trustor and all Leases, and other such agreements. It is the intention of the
Trustor to create and grant, and it is the intention of Lender to create and receive, a present and absolute assignment of all of the Leases, similar agreements, Rents now due or which may hereafter
become due, pursuant to California Civil Code Section 2938, but it is agreed that the Lender's right to collect the Rents is conditioned upon the existence of an Event of Default under the Loan
Documents. Failure of Lender 

49

 

at any time or from time to time to enforce its rights under this ARTICLE 8 shall not in any manner prevent its subsequent enforcement, and Lender is not obligated to collect anything hereunder, but
is accountable only for sums collected. Nothing contained herein shall be construed as constituting the Lender a mortgagee in possession in the absence of the taking of actual possession of the
Property by the Lender pursuant to Section 8.7 (Lender's Right of Possession In Case of Default) hereof. In the exercise of the powers herein granted to the Lender, no liability shall be
asserted or enforced against the Lender, all such liability being expressly waived and released by Trustor. Notwithstanding any of the provisions of this section, none of the provisions hereof shall
cause or effect the sale, transfer and assignment of revenues arising from the conduct of Trustor's business on the Real Property. 

        8.2    Covenants Regarding Leases.    Trustor agrees: 

        (a)  Not
to execute any Leases affecting the Property or any part thereof without the prior written consent of Lender; 

        (b)  Not
to collect any of the Rents for more than one (1) month in advance of the time when the same become due under the terms thereof; 

        (c)  Not
to discount any future accruing Rents; 

        (d)  Not
to execute any other assignments of any Leases or any interest therein or any of the Rents there under; 

        (e)  That
notwithstanding any variation of the terms of the Deed of Trust or any extension of time for payment there under or any release of part or parts of the Property,
the Leases, Rents hereby assigned, insofar as they relate to the unreleased Property, shall continue as additional security in accordance with the terms hereof; 

        (f)    To
hold and account for all down payment or earnest money deposits in the manner provided for under any state or local laws or ordinances applicable to the Property or
under the Loan Documents; and 

        (g)  To
perform all of the Trustor's covenants and agreements under the Leases and not to suffer or permit to occur any release of liability of the lessees or purchasers. 

        8.3    Representations Regarding Leases.    Trustor represents and warrants that at the time of the execution of this
Deed of Trust by Trustor, there are no Leases and Trustor has no present intention of entering into any Leases. 

        8.4    Further Assignments.    Trustor shall give Lender at any time upon demand any further or additional forms of
assignment of transfer of Rents, leases and security as may be reasonably requested by Lender, and shall deliver to Lender executed copies of all such leases and security. 

50

  

        8.5    Authority of Lender.    Any tenants or occupants of any part of the Real Property pursuant to any Leases
that
may come into existence are hereby authorized to recognize the claims of Lender hereunder without investigating the reason for any action taken by Lender, or the validity or the amount of indebtedness
owing to Lender, or the existence of a Default or Event of Default under any Loan Document, or the application to be made by Lender of any amounts to be paid to Lender. The sole signature of Lender or
a receiver shall be sufficient for the exercise of any rights under this ARTICLE 8 and the sole receipt of Lender or a receiver for any sums received shall be a full discharge and release therefore to
any such tenant or occupant of the Real Property; and Trustor hereby releases each such tenant and occupant or purchaser which makes payments to Lender under this ARTICLE 8 from any liability under
the applicable Lease or occupancy agreement. Checks for all or any part of the rentals collected under this ARTICLE 8 shall be drawn to the exclusive order of Lender or such receiver. 

        8.6    Indemnification of Lender.    Nothing herein contained shall be deemed to obligate Lender to perform or
discharge any obligation, duty, or liability of lessor under any Lease of the Real Property, and Trustor shall and does hereby indemnify and hold Lender harmless from any and all liability, loss, or
damage which Lender may or might incur under any Lease of the Real Property or by reason of this assignment; and any and all such liability, loss, or damage incurred by Lender, together with the costs
and expenses, including reasonable attorneys' fees, incurred by Lender in defense of any claims or demands therefore (whether successful or not), shall be additional Secured Obligations, and Trustor
shall reimburse Lender therefore on demand. 

        8.7    Lender's Right of Possession in Case of Default.    In any case in which under the provision of this Deed of
Trust, the Lender has a right to institute foreclosure proceedings, whether before or after the whole principal sum secured hereby is declared to be immediately due, or whether before or after the
institution of legal proceedings to foreclose the lien hereof or before or after sale there under, promptly upon demand of Lender, Trustor shall surrender to Lender and Lender shall be entitled to
take actual possession of the Property or any part thereof personally, or by its agents or attorneys, as for condition broken, and Lender in its discretion may, with or without force and with or
without process of law, enter upon and take and maintain possession of all or any part of the Real Property, together with all documents, books, records, papers and accounts of the Trustor or then
owners of the Real Property relating thereto, and may exclude the Trustor, its agents or servants, wholly therefrom and may, as attorney-in-fact or agent of the Trustor, or in
its own name as Lender and under the powers herein granted, hold, operate, manage and control the Property and conduct the business, if any, thereof, either personally or by its agents, and with full
power to use such measures, legal or equitable, as in its discretion or in the discretion of its successors or assigns may be deemed proper or necessary to enforce the payment or security of the
rents, of the Real Property. 

        8.8    Severability and Survival.    The provisions of this ARTICLE 8 shall survive the foreclosure of the lien of
this Deed of Trust and the exercise of the power of sale granted under this Deed of Trust until the expiration of all periods of redemption following any such foreclosure or sale and thereafter with
respect to all Rents arising prior to or attributable to the period prior to the expiration of all such redemption periods. 

 
 

ARTICLE 9
  TRUSTEE    
  

        9.1    Powers and Obligations of Trustee.    The following provisions relating to the powers and obligations of
Trustee are part of this Deed of Trust. 

        9.2    Powers of Trustee.    In addition to all powers of Trustee arising as a matter of law, Trustee shall have the
power to take the following actions with respect to the Property upon the written request of Lender and Trustor: (a) join in preparing and filing a map or plat of the Real Property, including 

51

 

the dedication of streets or other rights to the public; (b) join in granting any easement or creating any restriction on the Real Property; and (c) join in any subordination or other
agreement affecting this Deed of Trust or the interest of Lender under this Deed of Trust. 

        9.3    Obligations to Notify.    Trustee shall not be obligated to notify any other party of a pending sale under any
other trust deed or lien, or of any action or proceeding in which Borrower, Lender, or Trustee shall be a party, unless the action or proceeding is brought by Trustee. 

        9.4    Trustee.    Trustee shall meet all qualifications required for Trustee under applicable law. In addition to the
rights and remedies set forth above, with respect to all or any part of the Property, the Trustee shall have the right to foreclose by notice and sale, and Lender shall have the right to foreclose by
judicial foreclosure, in either case in accordance with and to the full extent provided by applicable law. 

        9.5    Successor Trustee.    Lender, at Lender's option, may from time to time appoint a successor Trustee to any
Trustee appointed hereunder by an instrument executed and acknowledged by Lender and recorded in the office of the recorder of LOS ANGELES County, California. The instrument shall contain, in addition
to all other matters required by state law, the names of the original Lender, Trustee, and Trustor, the book and page where this Deed of Trust is recorded, and the name and address of the successor
trustee, and the instrument shall be executed and acknowledged by Lender or its successors in interest. The successor trustee, without conveyance of the Property, shall succeed to all the title,
power, and duties conferred upon the Trustee in this Deed of Trust and by applicable law. This
procedure for substitution of trustee shall govern to the exclusion of all other provisions for substitution. 

        9.6    Notices to Trustor and other Parties.    Any notice under this Deed of Trust shall be in writing, may be sent
by telefacsimile (unless otherwise required by law), and shall be effective when deposited in the United States mail first class, certified or registered mail, postage prepaid, directed to the
addresses shown near the beginning of this Deed of Trust. Any party may change its address for notices under this Deed of Trust by giving formal written notice to the other parties, specifying that
the purpose of the notice is to change the party's address. All copies of notices of foreclosure from the holder of any lien which has priority over this Deed of Trust shall be sent to Lender's
address, as shown near the beginning of this Deed of Trust. For notice purposes, Trustor agrees to keep Lender and Trustee informed at all times of Trustor's current address. Each Trustor requests
that copies of any notices of default and sale be directed to Trustor's address shown near the beginning of this Deed of Trust. Unless otherwise provided or required by law, any notice given by Lender
to any Borrower is deemed to be notice given to all Borrowers. 

        9.7    Statement of Obligation.    Lender may collect a fee, in an amount not to exceed the statutory maximum, for
furnishing the statement of obligation as provided by Section 2943 of the Civil Code of California. 

 
 

ARTICLE 10
  ACCOMMODATION DEED OF TRUST    
  

        With respect to Laars, to the extent it has provided security for the benefit of Water Pik pursuant to its grant of this Deed of Trust, Laars agrees that until
all indebtedness secured by this Deed of Trust shall have been paid in full, and no commitment on the part of the Lender to make future advances or extend credit either to Laars or Water Pik exists,
Laars shall have no right of subrogation, and waives any right to enforce any remedy which Lender now has or may hereafter have against any person liable for the Indebtedness secured by this Deed of
Trust, and waives any benefit of, any right to participate in any security now or hereafter held by Lender and without limiting the generality of the foregoing, Laars specifically waives and
relinquishes as against Lender any defense or benefit otherwise available to Laars should Lender make an election of remedies as against any person liable for the Indebtedness 

52

 

(and irrespective of the circumstances or manner in which or whereby such election is made) which destroys or impairs Laars' subrogation rights or rights to proceed against any person liable for the
indebtedness secured hereby for reimbursement and, further, to the extent Laars may be deemed a guarantor hereunder, such "guarantor" waives all rights and defenses arising out of an election of
remedies by the creditor, even though that election of remedies, such as non-judicial foreclosure with respect to security for a "guaranteed" obligation, has destroyed the "guarantor's"
rights of subrogation and reimbursement against Water Pik by the operation of Section 580d of the California Code of Civil Procedure or
otherwise. This is an unconditional waiver of any rights and defenses Laars may have because Water Pik's obligation is secured by real property. These rights and defenses include, but are not limited
to, any rights and defenses based upon Section 580a, 580b, 580d, or 726 of the Code of Civil Procedure. Laars assumes the responsibility for being and keeping itself informed of the financial
condition of Water Pik and of all other circumstances bearing upon the risk of nonpayment of the indebtedness secured hereby which diligent inquiry would reveal, and agrees that Lender shall have no
duty to advise Laars of information known to it regarding such condition or circumstances. 

 
 

ARTICLE 1
  MISCELLANEOUS PROVISIONS    
  

        11.1    Time of the Essence.    Time is of the essence with respect to all provisions of this Deed of Trust. 

        11.2    Rights and Remedies Cumulative.    Lender's rights and remedies under each of the Loan Documents are
cumulative of the rights and remedies available to Lender under each of the other Loan Documents and those otherwise available to Lender at law or in equity. No act of Lender shall be construed as an
election to proceed under any particular provision of any Loan Document to the exclusion of any other provision in the same or any other Loan Document, or as an election of remedies to the exclusion
of any other remedy which may then or thereafter be available to Lender. 

        11.3    No Implied Waivers.    Lender shall not be deemed to have waived any provision of this Deed of Trust unless
such waiver is in writing and is signed by Lender. Without limiting the generality of the preceding sentence, neither Lender's acceptance of any payment with knowledge of a default by Borrower, nor
any failure by Lender to exercise any remedy following a default by Borrower shall be deemed a waiver of such default, and no waiver by Lender of any particular default on the part of Borrower shall
be deemed a waiver of any other default or of any similar default in the future. 

        11.4    No Third Party Rights.    No person shall be a third party beneficiary of any provision of this Deed of Trust.
All provisions of this Deed of Trust favoring Lender are intended solely for the benefit of Lender, and no third party shall be entitled to assume or expect that Lender will or will not waive or
consent to modification of any such provision in Lender's sole discretion. 

        11.5    Preservation of Liability and Priority.    Without affecting the liability of Borrower or of any other person
(except a person expressly released in writing) for payment and performance of all of the Secured Obligations, and without affecting the rights of Lender with respect to any security not expressly
released in writing, and without impairing in any way the priority of this Deed of Trust over the interests of any person acquired or first evidenced by recording subsequent to the recording hereof,
Lender may, either before or after the maturity of the Note, and without notice or consent: (a) release any person liable for payment or performance of all or any part of the Secured
Obligations; (b) make any agreement altering the terms of payment or performance of all or any of the Secured Obligations; (c) exercise or refrain from exercising, or waive, any right or
remedy which Lender may have under any of the Loan Documents; (d) accept additional security of any kind for any of the Secured Obligations;
or (e) release or otherwise deal with any real property or Collateral securing the Secured Obligations. Any person acquiring or recording evidence of any interest of any nature in the Real
Property or the 

53

 

Collateral shall be deemed, by acquiring such interest or recording any evidence thereof, to have agreed and consented to any or all such actions by Lender. 

        11.6    Subrogation of Lender.    Lender shall be subrogated to the lien of any previous encumbrance discharged with
funds advanced by Lender under the Loan Documents, regardless of whether such previous encumbrance has been released of record. 

        11.7    Notices.    Any notice required or permitted to be given by Trustor or Lender under this Deed of Trust shall
be in writing and will be deemed given (a) upon personal delivery or upon confirmed transmission by telecopier or similar facsimile transmission device, (b) on the first business day
after receipted delivery to a courier service which guarantees next-business-day delivery, or (c) on the third business day after mailing, by registered or certified
United States mail, postage prepaid, in any case to the appropriate party at its address set forth below: 

        If
to Trustor: 

Laars, Inc.

23 Corporate Plaza, Suite 246

Newport Beach, CA 92660

Attn: Chief Financial Officer

Telephone: (949) 719-3700

Telecopier: (949) 719-6472 

With
a copy to: 

Water
Pik, Inc. and Laars, Inc.

23 Corporate Plaza, Suite 246

Newport Beach, CA 92660

Attn: General Counsel

Telephone: (949) 719-3700

Telecopier: (949) 719-6472 

        [notice
provisions continue on following page] 

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        If
to Lender: 

U.S.
Bank National Association

4100 Newport Place, Suite 120

Newport Beach, CA 92660

Attn: Richard M. McNiven

Telephone: (949) 863-2307

Telecopier: (949) 863-2335 

With
a copy to: 

Law
Offices of Douglas L. Collins

8491 Sunset Blvd., Suite 360

Los Angeles, CA 90069

Attn: Douglas L. Collins, Esq.

Telephone: (323) 650-2088

Telecopier: (323) 650-2092 

        Any
person may change such person's address for notices or copies of notices by giving notice to the other party in accordance with this section. 

        11.8    Defeasance.    Upon payment and performance in full of all the Secured Obligations and all costs of releasing
this Deed of Trust, Lender will execute and deliver to Trustor such documents as may be required to release this Deed of Trust of record. 

        11.9    Illegality.    If any provision of this Deed of Trust is held to be illegal, invalid, or unenforceable under
present or future laws effective during the term of this Deed of Trust, the legality, validity, and enforceability of the remaining provisions of this Deed of Trust shall not be affected thereby, and
in lieu of each such illegal, invalid or unenforceable provision there shall be added automatically as a part of this Deed of Trust a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and be legal, valid, and enforceable. If the rights and liens created by this Deed of Trust shall be invalid or unenforceable as to any part of the Secured
Obligations, then the unsecured portion of the Secured Obligations shall be completely paid prior to the payment of the remaining and secured portion of the Secured Obligations, and all payments made
on the Secured Obligations shall be considered to have been paid on and applied first to the complete payment of the unsecured portion of the Secured Obligations. 

        11.10    Obligations Binding Upon Trustor's Successors.    This Deed of Trust is binding upon Trustor and Trustor's
successors and assigns, including all grantees and remote grantees of any interest of Trustor in the Property, and shall inure to the benefit of Lender, and its successors and assigns, and the
provisions hereof shall likewise be covenants running with the land. The duties, covenants, conditions, obligations, and warranties of Trustor in this Deed of Trust shall be joint and several
obligations of Trustor and Trustor's successors and assigns. 

        11.11    Governing Law.    The laws of the State of California shall govern the validity, construction, enforcement,
and interpretation of this Deed of Trust, without regard to principles of conflicts of laws. 

        11.12    Survival.    This Deed of Trust shall survive foreclosure of the liens created hereby, to the extent
necessary to fulfill its purposes. 

        11.13    Multiple Parties    All obligations of Borrower hereunder shall be joint and several and all references to
"Borrower" shall mean each and every Borrower. That means that each and every entity or person executing this Deed of Trust below as a Borrower is responsible for all of Borrower's obligations in this
Deed of Trust. 

55

 

Signed
and delivered as of the date first mentioned above. 

Laars, Inc., a Delaware corporation  

	

By:	
 	

 	
 	

 
	 	 	
 Victor C. Streufert

Vice President—Finance,

Chief Financial Officer, and

Treasurer	 	 

56

  

Exhibit 4.17

(Part D)  

 
 

MORTGAGE, SECURITY AGREEMENT,
  FINANCING STATEMENT AND
  ASSIGNMENT OF RENTS    
  

        THIS MORTGAGE, SECURITY AGREEMENT, FINANCING STATEMENT, AND ASSIGNMENT OF RENTS (this "Mortgage") is given as of the 22nd day of October, 2001, by
the Borrower, as mortgagor, named below to the Lender named below, as mortgagee. 

 
 

ARTICLE 1
  PARTIES, PROPERTY, AND DEFINITIONS    
  

        The following terms and references shall have the meanings indicated: 

        1.1    Borrower:    Water Pik, Inc., a Delaware corporation ("Water Pik") and Laars, Inc., a Delaware
corporation ("Laars"), individually and collectively, the legal address of each of which is 23 Corporate Plaza, Suite 246, Newport Beach, CA 92660, together with any future owner of the Property or
any part thereof or interest therein. 

        1.2    Lender:    U.S. Bank National Association, whose legal address is 4100 Newport Place, Suite 120, Newport Beach,
CA 92660, together with any legal holder of the Note. 

        1.3    Note:    The Promissory Note of even date herewith, executed by Borrower and payable to the order of Lender in
the principal face amount of $2,250,000.00, the last payment under which is due on
September 30, 2008, unless such due date is extended or accelerated, together with all renewals, extensions, and modifications of the Note. All terms and provisions of the Note are incorporated
by this reference in this Mortgage. 

        1.4    Loan Agreement:    The Loan Agreement dated October 22, 2001 executed by Borrower and the Lender, and
all renewals, extensions, and modifications thereof. All capitalized terms not otherwise defined herein shall bear the meaning given to them in the Loan Agreement. 

        1.5    Existing Credit Agreement:    The Restated Credit Agreement dated as of November 29, 1999 among
Borrower, certain guarantors named therein, certain lenders named therein and The Chase Manhattan Bank, as agent, as amended, modified or supplemented from time to time, and any successor revolving
credit or loan agreement to the current Existing Credit Agreement. 

        1.6    Real Property:    The real property described in Exhibit A, attached hereto and by this reference
incorporated herein, together with all right, title and interest of Borrower in the following with respect to the real property, whether now owned or hereafter acquired by Borrower: 

        (a)  All
improvements now or hereafter located on such real property and all easements and appurtenances thereto; 

        (b)  The
land lying within any street or roadway adjoining the real property; any vacated or hereafter vacated street or alley adjoining the real property; and any strips and
gores adjoining the real property; 

        (c)  All
and singular the passages, waters, water rights (whether tributary or non-tributary or not non-tributary), water courses, riparian rights,
wells, well permits, water stock, other rights, liberties and privileges thereof or in any way now or hereafter appertaining to the real property, including homestead and any other claim at law or in
equity, as well as any after-acquired title, franchise or license, and the reversion and reversions and remainder and remainders thereof; and 

57

 

        1.7    Fixtures:    All "fixtures," as such term is defined in the Uniform Commercial Code of New Hampshire (whether
actually or constructively attached or incorporated, and including all trade, domestic, and ornamental fixtures) now or hereafter located in, upon, or under such real property or improvements and used
or usable in connection with any present or future operation thereof but excluding all fixtures that are equipment and are used specifically for the operation and conduct of the business of Borrower
on the Real Property. 

        1.8    Intangible Personalty:    All right, title and interest of the Borrower in and to the following, with respect
to the Real Property: 

        (a)  all
of the rents of and from the use, operation, or enjoyment of such real property and improvements (collectively, the "Rent Income"), whether such Income is
attributable to the period, or is collected, prior to or subsequent to any default by Borrower, but excluding all revenues that arise from the operation and conduct of the
business of Borrower on the Real Property; 

        (b)  all
plans and specifications for the improvements on the real property; soil, environmental, engineering, land planning maps, surveys and other studies and reports
concerning the real property or prepared for the orderly planning and development of the real property, including all plans, drawings and studies concerning the platting or replatting of the real
property; all contracts and subcontracts relating to the improvements on the real property, or any thereof; 

        (c)  all
awards and payments, including interest thereon, resulting from the exercise of any right of eminent domain or any other public or private taking of, casualty or
injury to, or decrease in the value of, any of such real property, including without limitation all property insurance payments, proceeds and policies related to such real property; 

        (d)  all
of the licenses, permits, franchises, and other entitlements to use and all rights thereto which have been issued by or which are pending before any governmental or
quasi-governmental agency which are necessary or appropriate for the Real Property but excluding all such items that are used specifically for the operation and conduct of the business of Borrower on
the Real Property; 

        (e)  all
water taps, sewer taps, building permits, curb cut permits, storm water discharge permits; 

        (f)    all
of Borrower's rights in and to contract rights, leases, concessions, operating systems, warranties, licenses, plans, drawings and other items of intangible personal
property solely relating to the ownership or operation of the Real Property but excluding all such items that are used specifically for the operation and conduct of the business of Borrower on the
Real Property. 

        1.9    Property:    The Real Property, the Fixtures and the Intangible Personalty are sometimes collectively called
the "Property." All of the Real Property, Fixtures and Intangible Personalty, whether affixed or annexed or not, and all rights hereby conveyed and mortgaged are intended to be as a unit and are
hereby understood and agreed and declared to be appropriated to the use of the real estate, and shall for the purposes of this Mortgage be deemed to be real estate and conveyed and mortgaged hereby. 

        1.10    Any capitalized terms not otherwise defined in this Mortgage and not defined in the Loan Agreement, shall bear the
meaning given to them in Article 9 of the Code (as defined below). 

        1.11    Secured Obligations:    The Property is granted and shall be held for the purpose of securing the following
(the "Secured Obligations"): 

        (a)  The
payment of the indebtedness as evidenced in the Note; 

58

 

        (b)  The
performance and observance of all terms, covenants, conditions, and provisions to be performed or observed by the Borrower pursuant to the terms of: 

          (i)  this
Mortgage, 

        (ii)  UCC-1
financing statements required to perfect the Lender's security interest in the Intangible Personalty and Fixtures as granted by this Mortgage (the
"Financing Statement"), 

        (iii)  the
Certificate and Indemnity Regarding Hazardous Substances (the "Environmental Indemnity") of even date herewith relating to the Real Property executed by Borrower, 

        (iv)  the
Loan Agreement as such agreement relates to the loan evidenced by the Note and to the Property, and 

        (v)  any
and all pledge or other security agreements, loan agreements, disbursement agreements, supplemental agreements, assignments (both present and collateral), and side
letters related to the loan evidenced by the Note and to the Property, as the same may be amended, modified or supplemented from time to time (collectively, the "Related Agreements"). 

The
Note, this Mortgage, Financing Statement, Environmental Indemnity, Related Agreements, Loan Agreement, and any and all other documents or instruments executed in connection with the foregoing to
evidence or secure the Note shall be hereinafter collectively called the "Loan Documents". 

        The
payment of all sums expended or advanced by Lender pursuant to the terms hereof. 

        1.12    Intercreditor Agreement:    That certain Intercreditor Agreement of even date herewith by and between Lender
and The Chase Manhattan Bank, as Agent under the Existing Credit Agreement. 

 
 

ARTICLE 2
  GRANTING CLAUSE    
  

        2.1    Grant to Lender.    As security for the Secured Obligations, Borrower, as mortgagor, hereby grants the Real
Property to Lender, as mortgagee, with power of sale, subject to all provisions hereof for consideration paid by Lender, the receipt and sufficiency of which Borrower does hereby acknowledge. 

        2.2    Security Interest to Lender.    As additional security for the Secured Obligations, Borrower hereby grants to
Lender a security interest in the Fixtures and in the Intangible Personalty (collectively, the "Collateral"). To the extent any of the Collateral may be
or has been acquired with funds advanced by Lender under the Loan Documents, this security interest is a purchase money security interest. This Mortgage constitutes a Security Agreement under the
Uniform Commercial Code of New Hampshire (the "Code") with respect to any part of the Collateral that may or might now or hereafter be or be deemed to be personal property; all of the terms,
provisions, conditions and agreements contained in this Mortgage pertain and apply to the Collateral as fully and to the same extent as to any other property comprising the Property, and the following
provisions of this section shall not limit the generality or applicability of any other provision of this Mortgage but shall be in addition thereto: 

        (a)  The
Collateral shall be used by Borrower solely for business purposes, being installed upon or owned in connection with the Real Property for Borrower's own use or as
the equipment and furnishings furnished by Borrower, as owner, to tenants of the Real Property; 

        (b)  No
financing statement covering any of the Collateral or any proceeds thereof is on file in any public office except financing statements filed in connection with the
Existing Credit Agreement (the effect of which shall be modified pursuant to the Intercreditor Agreement); and Borrower will, at its cost and expense, upon demand, furnish to Lender such further
information and will execute and deliver to Lender such financing statements and other documents in form 

59

 

satisfactory to Lender and will do all such acts and things as Lender may at any time or from time to time reasonably request or as may be necessary or appropriate to establish and maintain a
perfected
security interest in the Collateral as security for the Secured Obligations, subject to no adverse liens or encumbrances; and Borrower will pay the cost of filing the same or filing or recording such
financing statements or other documents and this instrument in all public offices wherever filing or recording is deemed by Lender to be necessary or desirable; 

        (c)  The
terms and provisions contained in this section and in Section 7.5 (Enforcement of Security Interests) of this Mortgage shall, unless the context otherwise
requires, have the meanings and be construed as provided in the Code; and 

        (d)  This
Mortgage constitutes a security agreement and financing statement under the Code with respect to the Collateral. As such, this Mortgage covers all items of the
Collateral including all items which are to become fixtures. Borrower is the "Debtor" and Lender is the "Secured Party" (as those terms are defined and used in the Code) insofar as this Mortgage
constitutes a financing statement. 

        2.3    The Borrower agrees that Lender may, to the extent permitted by applicable law, prepare and file financing statements,
amendments thereto, and continuation statements without the signature of the Borrower and file any financing statement, amendment thereto or continuation statement electronically. 

 
 

ARTICLE 3
  BORROWER'S TITLE AND AUTHORITY    
  

        3.1    Warranty of Title.    Borrower represents and warrants to Lender that Borrower has good and marketable title to
the Real Property in fee simple absolute, subject only to the lien of general taxes for the current year, a lien due and payable, but not yet delinquent, and those additional matters, if any, set
forth in Exhibit B, attached hereto and by this reference incorporated herein ("Permitted Exceptions"). Borrower further represents and warrants to Lender that Borrower is the absolute owner of
the Collateral, free of any liens, encumbrances, security interests, and other claims whatsoever, except insofar as the Collateral may be encumbered by the lien of general taxes for the current year,
a lien due and payable, but not yet delinquent and except for liens granted to the lenders under the Existing Credit Agreement as in effect on the date of this Deed of Trust. Borrower, for itself and
its successors and assigns, hereby agrees to warrant and forever defend, all and singular, all of the Property and property interest granted and conveyed in trust pursuant to this Mortgage, against
every person whomsoever lawfully claiming, or to claim, the same or any part thereof, subject to the Permitted Exceptions and other exceptions described in this section. The warranties contained in
this section shall survive foreclosure of this Mortgage, and shall inure to the benefit of and be enforceable by any person who may acquire title to the Real Property or the Collateral pursuant to any
such foreclosure. 

        3.2    Waiver of Homestead and Other Exemptions.    To the extent permitted by law, Borrower hereby waives all rights
to any homestead or other exemption to which Borrower would otherwise be entitled under any present or future constitutional, statutory, or other provision of applicable state or federal law. 

        3.3    Due Authorization.    If Borrower is other than a natural person, then each individual who executes this
document on behalf of Borrower represents and warrants to Lender that such execution has been duly authorized by all necessary corporate, partnership, or other action on the part of Borrower. 

60

 

 
 

ARTICLE 4
  BORROWER'S AFFIRMATIVE COVENANTS    
  

        4.1    Payment of Note.    Borrower will pay all principal, interest, and other sums payable under the Note, the Loan
Agreement or this Mortgage or the Loan Documents, on the date when such payments are due, without notice or demand. 

        4.2    Performance of Other Obligations.    Borrower will promptly and strictly perform and comply with all other
covenants, conditions, and prohibitions required of Borrower by the terms of the Loan Documents. 

        4.3    Other Encumbrances.    Borrower will promptly and strictly perform and comply with all covenants, conditions,
and prohibitions required of Borrower in connection with any other encumbrance affecting the Real Property or the Collateral, or any part thereof, or any interest therein, regardless of whether such
other encumbrance is superior or subordinate to the lien hereof. This paragraph does not authorize any lien or encumbrance against the Real Property or the Collateral except as permitted by
Section 3.1 or with the prior written consent of the Lender as provided in this Mortgage. 

        4.4    Payment of Taxes.    

        (a)  Property Taxes. Borrower will pay, before delinquency, all taxes and assessments, including without limitation, general,
special and metropolitan district taxes, water charges, sewer service charges (collectively, the "Impositions"), which may be levied or imposed at any time against Borrower's interest and estate in
the Real Property or the Collateral. Within 10 days after request by Lender,
Borrower will deliver to Lender an official receipt for such payment or other evidence that such payment has been made. 

        (b)  Intangible Taxes. If by reason of any statutory or constitutional amendment or judicial decision adopted or rendered
after the date hereof, any tax, assessment, or similar charge is imposed against the Note, against Lender arising directly from Lender's interests in the Loan Documents (other than a tax based on
Lender's income), or against any security interest of Lender in the Property, Borrower will pay such tax, assessment, or other charge before delinquency and will indemnify Lender against all loss,
expense, or diminution of income in connection therewith. In the event Borrower is unable to do so, either for economic reasons or because the legal provisions or decisions creating such tax,
assessment or charge forbid Borrower from doing so, then the Note will, at Lender's option, become due and payable in full upon thirty (30) days' notice to Borrower. 

        (c)  Right to Contest. Notwithstanding any other provision of this section, Borrower will not be deemed to be in default
solely by reason of Borrower's failure to pay any Impositions so long as, in Lender's judgment, each of the following conditions is satisfied: 

          (i)  Borrower
is engaged in and diligently pursuing in good faith administrative or judicial proceedings appropriate to contest the validity or amount of such Impositions;
and 

        (ii)  Nonpayment
of such Impositions will not result in the loss or forfeiture of any Property encumbered hereby or any interest of Lender therein. 

If
Lender determines that any one or more of such conditions is not satisfied or is no longer satisfied, Borrower will pay the Impositions in question, together with any interest and penalties
thereon, within ten (10) days after Lender gives notice of such determination. 

        4.5    Maintenance of Insurance.    Borrower shall provide and maintain policies of insurance on the Property in
accordance with the Loan Agreement. 

61

 

        4.6    Lease Obligations.    Borrower represents and warrants to Lender that none of the Property is leased by
Borrower to any tenant. In the event there are at any time in the future any leases of all or any part of the Property, Borrower shall perform promptly all of Borrower's obligations under or in
connection with each such lease of all or any part of the Property (collectively called the "Leases"). If Borrower receives at any time any written communication from any tenant under any Lease
asserting a default by Borrower under any Lease, or purporting to terminate or cancel any Lease, Borrower will promptly
forward a copy of such communication (and any subsequent communications relating thereto) to Lender. 

        4.7    Recertified Appraisal.    If at any time (a) an Event of Default (as defined below), or (b) the
Lender is required by law or regulation to obtain a new appraisal, the Lender may require a new appraisal of the Real Property. 

        4.8    Management.    Borrower shall obtain Lender's advance written approval of any outside management services
provided, and of any contract therefore or assignment thereof, which written approval shall not be unreasonably withheld. 

        4.9    Condemnation.    Borrower hereby assigns, transfers and sets over unto Lender the entire proceeds of any award
or any claim for damages for any of the Real Property taken or damaged under the power of eminent domain or by condemnation. Lender may elect, in its discretion, to apply the proceeds of the award
upon or in reduction of the Secured Obligations, whether due or not. 

        4.10    Mechanics' Liens.    Borrower will keep the Real Property free and clear of all liens and claims of liens by
contractors, subcontractors, mechanics, laborers, material men, and other such persons in the manner provided in the Loan Agreement. 

        4.11    Defense of Actions.    Borrower will defend, at Borrower's expense, any action, proceeding or claim which
affects any Property encumbered hereby or any interest of Lender in such Property or in the Secured Obligations, and will indemnify and hold Lender harmless from all loss, damage, cost, or expense,
including attorneys' fees, which Lender may incur in connection therewith. 

        4.12    Further Assurances; Estoppel Certificates.    Borrower will execute and deliver to Lender upon demand, and pay
the costs of preparation and recording thereof, any further documents which Lender may request to confirm or perfect the liens and security interests created or intended to be created hereby, or to
confirm or perfect any evidence of the Secured Obligations. Borrower will also, within ten (10) days after any request by Lender, deliver to Lender a signed and acknowledged statement
certifying to Lender, or to any proposed transferee of the Secured Obligations, (a) the balance of principal, interest, and other sums then outstanding under the Note, and (b) whether
Borrower claims to have any offsets or defenses with respect to the Secured Obligations and, if so, the nature of such offsets or defenses. 

        4.13    Parking Requirements.    Borrower shall maintain at all times sufficient parking spaces to comply with the
parking requirements of all Leases, zoning and other regulations affecting the Property. 

        4.14    Financial Statements and Inspection of Records.    Borrower, at Borrower's expense, shall furnish to Lender
the financial and other reports required by the Loan Agreement. 

        4.15    Environmental Representations and Warranties.    Borrower has executed for the benefit of the Lender the
Environmental Indemnity, the provisions of which are included herein by reference. Borrower shall comply with, observe and perform each of the terms and provisions of the Environmental Indemnity. 

        4.16    Change in Name, Location of Collateral, Etc.    Without giving at least thirty (30) days' prior written
notice to Lender, the Borrower shall not: (a) change its name, federal employer's identification number, jurisdiction of organization or form of business association; (b) change the
location of its place 

62

 

of business (or chief executive office if more than one place of business); or (c) add to or change any location at which any of the Fixtures is stored, held or located. 

 
 

ARTICLE 5
  BORROWER'S NEGATIVE COVENANTS    
  

        5.1    Waste.    Borrower will not commit or permit any waste with respect to the Real Property or the Collateral. 

        5.2    Zoning and Private Covenants.    Except as specifically provided in the Loan Agreement, if at all, Borrower
will not initiate, join in, or consent to any change in any zoning ordinance or classification, any change in the "zone lot" or "zone lots" (or similar zoning unit or units) presently comprising the
Real Property, any change in any private restrictive covenant, or any change in any other public or private restriction limiting or defining the uses which may be made of the Real Property or any part
thereof, without the express written consent of Lender. If under applicable zoning provisions the use of all or any part of the Real Property is or becomes a nonconforming use, Borrower will not cause
such use to be discontinued or abandoned without the express written consent of Lender. 

        5.3    Disposition of Mortgaged Property, Leases, or Beneficial Interest in Borrower.    It is expressly acknowledged,
covenanted and agreed that except as may be permitted in this Mortgage that there may be no sale, lease, exchange, assignment, conveyance, encumbrance, mortgage, alienation, transfer or other
disposition (herein collectively called a "Disposition") of (a) all or any portion of the Property or any lease thereof (or any interest therein) which gives the lessee any option to purchase
the Property or any part thereof, or (b) all or any part of the legal or beneficial ownership interest or management control in Borrower, unless Lender has provided its prior written consent
thereto. In the event there
occurs a Disposition without Lender's written consent, then Lender may, at Lender's option, accelerate the maturity of the Note and enforce any and all of Lender's rights, remedies and recourses set
forth in this Mortgage upon the occurrence of an Event of Default. It is acknowledged and agreed that the Lender may withhold, at its sole option, its consent to any Disposition as described above.
Lender's failure to respond or otherwise consent within such thirty (30) day period shall be deemed a denial of the request for approval. Lender's failure to exercise its remedies hereunder for
a disapproved Disposition shall not be construed as a waiver of Lender's right to subsequently exercise such remedies, and Lender's approval of a Disposition shall not be construed as a waiver of the
provisions hereof with respect to any subsequent Disposition. The rights and options herein granted to Lender may be exercised at Lender's sole option and discretion, need not be based upon an
increased business risk or any other risk, and are an integral and valuable part of the security given to Lender. Notwithstanding the provisions of this section, Borrower may sell or otherwise convey
the Property, or any interest therein, without the consent of Lender provided that all outstanding and unpaid amounts of the Secured Obligations are fully repaid at the time of such sale or
conveyance. 

        5.4    Further Encumbrance of Property.    Borrower will not create, place or permit to be created or placed or allow
to remain against the Real Property or the Fixtures any mortgage or deed of trust, regardless of whether the same is expressly subordinate to the liens and security interests imposed hereby or by any
other instruments securing the Secured Obligations and Borrower shall not encumber the Property without the prior written consent of Lender. 

        5.5    Transfer or Removal of Fixtures.    Borrower will not sell, transfer or remove from the Real Property all or
any material part of the Fixtures, unless the items sold, transferred, or removed are simultaneously replaced with similar items of equal or greater value. 

        5.6    Further Encumbrance of Collateral.    Borrower will not create or permit any junior lien, security interest or
other encumbrance against the Collateral (except pursuant to the Existing Credit Agreement, as in effect on the date of this Deed of Trust) without the prior written consent of Lender. 

63

 

        5.7    Improper Use of Property or Collateral.    Borrower will not use the Real Property or the Collateral for any
purpose or in any manner, or take any action with respect to the Real Property or the Collateral which violates any applicable law, ordinance, or other governmental requirement, the requirements or
conditions of any insurance policy, or any private covenant. 

 
 

ARTICLE 6
  EVENTS OF DEFAULT    
  

        Each of the following events will constitute a default (an "Event of Default") under this Mortgage and under each of the other Loan Documents: 

        6.1    Failure to Pay.    Default shall be made in the payment of any installment of principal or interest on the Note
or any other sum under the Loan Documents when due (after giving consideration to any grace period which may be applicable under such document). 

        6.2    Insolvency.    The dissolution or termination of, or the insolvency of, Borrower, the appointment of a receiver
for any part of Borrower's property, any general assignment for the benefit of creditors or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. 

        6.3    Creditor or Forfeiture Proceedings.    Commencement of foreclosure or forfeiture proceedings, whether by
judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower, any creditor of any Grantor against any collateral securing the Secured Obligations, or by
any governmental agency. 

        6.4    Judgment.    A writ of execution or attachment or any similar process shall be issued or levied against all or
any part of or interest in the Real Property or a material part of the Collateral, or any judgment involving monetary damages shall be entered against Borrower which shall become a lien on the Real
Property or the Collateral or any portion thereof or interest therein and such execution, attachment, or similar process or judgment is not released, bonded, satisfied, vacated, or stayed within sixty
(60) days after its entry or levy. 

        6.5    Superior Lien Against the Property.    The assertion of any claim of priority over this Mortgage, by title,
lien, or otherwise in any legal, administrative, or equitable proceeding, unless such assertion be withdrawn, or effective action satisfactory to Lender commenced (and thereafter diligently
prosecuted) and Lender is secured against any loss or damage therefrom, within thirty (30) days of the assertion of such claim. 

        6.6    Abandonment.    The actual or constructive abandonment of all or a substantial portion of the Real Property or
the Collateral (such abandonment constituting an assignment to Lender, at Lender's option, of Borrower's interest in any lease or contract now or hereafter affecting the abandoned property). 

        6.7    Valid First Lien.    The failure of Lender to have a valid first lien against the entire Real Property and
Collateral as to all advances made now or at any time in the future pursuant to the Note, this Mortgage, or any other Loan Documents or the Note, the Mortgage or any of the Loan Documents ceases to be
in full force and effect (including failure of any security agreement to create a valid and perfected security interest) at any time and for any reason. 

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        6.8    Breach of Lease.    Borrower shall be in default under any Lease and such default shall continue for 30
calendar days after notice thereof by Lender to the Borrower and the lender or agent for the lenders, as applicable, under the Existing Credit Agreement; provided, however, that in the event that such
default is not capable of being cured (as determined by Lender in its reasonable discretion) within 30 calendar days, then Borrower shall have such longer period of time as Borrower reasonably
requires to cure such default so long as Borrower commences cure within the 30 day period and thereafter diligently pursues cure to completion; and provided, further, that such longer period of
time shall in no event exceed 60 calendar days. 

        6.9    Other Defaults.    Failure of Borrower to comply with or to perform when due any other term, obligation,
covenant or condition contained in the Note, this Mortgage or any other Loan Documents (and such failure shall not constitute an Event of Default under any of the other provisions of this section
entitled "EVENTS OF DEFAULT") and such failure to comply shall continue for 30 calendar days after notice thereof to the Borrower by the Lender;
provided, however, that in the event that such failure to comply is not capable of being cured (as determined by Lender in its reasonable discretion) within 30 calendar days, then Borrower shall have
such longer period of time as Borrower reasonably requires to cure such failure to comply so long as Borrower commences cure within the 30 day period and thereafter diligently pursues cure to
completion; and provided, further, that such longer period of time shall in no event exceed 60 calendar days. 

        6.10    Default in Favor of Third Parties.    Should Borrower default under any of the following in connection with a
transaction the total value of which is equal to or greater than $1,000,000.00: any loan, extension of credit, or agreement executed in connection with security for a loan or extension of credit, in
favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability to repay the Secured Obligations or perform its obligations under the Note, this
Mortgage or any of the Loan Documents. 

        6.11    False Statements.    Any warranty, representation or statement made or furnished to Lender by or on behalf of
Borrower or any Grantor under this Agreement or the Related Documents is false or misleading in any material respect at the time made or furnished, or becomes false or misleading in any material
respect at any time thereafter. 

 
 

ARTICLE 7
  LENDER'S REMEDIES    
  

        Immediately upon or any time after the occurrence of any Event of Default hereunder, Lender may exercise any remedy available at law or in equity, including but
not limited to those listed below and those listed in the other Loan Documents, in such sequence or combination as Lender may determine in Lender's sole discretion: 

        7.1    Performance of Defaulted Obligations.    Lender may make any payment or perform any other obligation under the
Loan Documents which Borrower has failed to make or perform, and Borrower hereby irrevocably appoints Lender as the true and lawful attorney-in-fact for Borrower to make any
such payment and perform any such obligation in the name of Borrower, which appointment is coupled with Lender's interest in the Real Property and the Collateral. All payments made and expenses
(including attorneys' fees and legal assistant's fees) incurred by Lender in this connection, together with interest thereon at the Default Rate, as set forth in the Note, from the date paid or
incurred until repaid, will be part of the Secured Obligations and will be immediately due and payable by Borrower to Lender. 

        7.2    Specific Performance and Injunctive Relief.    Notwithstanding the availability of legal remedies, Lender will
be entitled to obtain specific performance, mandatory or prohibitory injunctive relief, or other equitable relief requiring Borrower to cure or refrain from repeating any default. 

65

 

        7.3    Acceleration of Secured Obligations.    Lender may, without notice or demand, declare all of the Secured
Obligations immediately due and payable in full. 

        7.4    Possession of Property.    Lender may enter and take possession of the Real Property and the Collateral without
seeking or obtaining the appointment of a receiver, may employ a managing agent for the Real Property and the Collateral, and may complete the development and construction described in the Loan
Agreement with respect to all or any part of the Real Property or the Collateral, either in Lender's name or in the name of Borrower. 

        7.5    Enforcement of Security Interests.    Lender may exercise all rights of a secured party under the Code with
respect to the Collateral, including without limitation the right to recover any deficiency in the manner and to the full extent provided by New Hampshire law. Any requirement for reasonable notice of
the time and place of any public sale, or of the time after which any private sale or other disposition is to be made, will be satisfied by Lender's giving of such notice to Borrower at least fifteen
(15) days prior to the time of any public sale or the time after which any private sale or other intended disposition is to be made. If permitted by statute or court decision, the Collateral
may be sold as part of the foreclosure sale of the Real Property. 

        7.6    Foreclosure by Sale.    Exercise the statutory power of sale hereinafter granted to Lender or any other right,
privilege or remedy available to the Lender hereunder or under the Note or the Loan Documents or any statute or rule of law or equity; all of which are cumulative and may be exercised by the Lender
singly, concurrently or successively at the Lender's option, and as often as the occasion therefore shall occur in Lender's opinion, as further described in Article 9 below. 

        7.7    Judicial Foreclosure.    With respect to all or any part of the Real Property, Lender shall have the right in
lieu of foreclosure by power of sale to foreclose by judicial foreclosure if then available under New Hampshire law. 

        7.8    Collect Rents.    Lender shall have the rights described below in Article 8. 

        7.9    Tenancy at Sufferance.    If Borrower remains in possession of the Real Property after the Property is sold as
provided above or a Lender otherwise becomes entitled to possession of the Property upon default of Borrower, Borrower shall become a tenant at sufferance of Lender or the purchaser of the Property
and shall, at Lender's option, either (a) pay a reasonable rental for the use of the Property, or (b) vacate the Property immediately upon the demand of Lender. 

        7.10    Other Remedies.    Lender shall have any other right or remedy provided in this Mortgage or the Note or by
law. 

        7.11    Sale of the Property.    To the extent permitted by applicable law, Borrower hereby waives any and all rights
to have the Property marshaled. In exercising its rights and remedies, the Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender
shall be entitled to bid at any public sale on all or any portion of the Property. 

        7.12    No Contradiction of Law.    Nothing in this section dealing with foreclosure procedures or specifying
particular actions to be taken by Lender or others conducting the foreclosure sale shall be deemed to contradict or add to the requirements and procedures now or hereafter specified by New Hampshire
law, and any such inconsistency shall be resolved in favor of New Hampshire law applicable at the time of foreclosure. 

        7.13    Appointment of Receiver.    Lender shall be entitled, as a matter of absolute right and without regard to the
value of any security for the Secured Obligations or the solvency of any person liable therefore, to the appointment of a receiver for the Property, the Leases, and the Rents upon  ex parte application
to any court of competent jurisdiction. Borrower waives any right to any hearing or notice of hearing prior to the appointment of a
receiver. 

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        7.14    Right to Make Repairs, Improvements.    Should any part of the Property come into the possession of Lender or
a receiver, whether before or after an Event of Default, Lender or the receiver and receiver's agents shall be empowered: 

        (a)  To
take possession of the Property, Leases, Rents and any business conducted by Borrower or any other person thereon and any business assets used in connection therewith
and any Property in which Lender has a security interest granted by Borrower and, if the receiver deems it appropriate, to operate the same; 

        (b)  To
exclude Borrower and Borrower's agents, servants, and employees from the Real Property; 

        (c)  With
or without taking possession of the Real Property, to collect the Rents, including those past due and unpaid and security deposits; 

        (d)  To
rent, lease or let all or any portion of the Property to any party or parties at such rental and upon such terms as the Lender shall, and to pay any leasing or rental
commissions associated therewith in its discretion, determine; 

        (e)  To
continue the development, marketing and sale of the Property or any portion thereof; 

        (f)    To
complete any construction or development which may be in progress; 

        (g)  To
do such maintenance and make such repairs and alterations as the receiver deems necessary; 

        (h)  To
use all stores of materials, supplies and maintenance equipment on the Real Property and to replace and replenish such items at the expense of the receivership
estate; 

        (i)    To
pay the operating expenses of the Property, including costs of management and leasing or marketing thereof (which shall include lease commissions, sale commissions),
payments under contracts and agreements for development and construction; 

        (j)    To
pay all taxes and assessments against the Property and any property which is collateral for the Secured Obligations, all premiums for insurance thereon, all utility
and other operating expenses, and all sums due under any prior or subsequent encumbrance; 

        (k)  To
borrow from the Lender such funds as may be reasonably necessary to the effective exercise of the receiver's powers, on such terms as may be agreed upon by the
receiver and the Lender, but not in excess of the Default Rate under the Note; and 

        (l)    Generally
do anything which Borrower could legally do if Borrower were in possession of the Property. 

        (m)  All
expenses incurred by the receiver or the receiver's agent shall constitute part of the Secured Obligations. Any Rents collected by the receiver shall be applied
first to the expenses of the receivership (including attorneys' fees incurred by the receiver and by Lender), to expenses of the Property, and to preserve, protect, maintain and operate the Property
and any other collateral which is security for the Secured Obligations, and the balance shall be applied toward the Secured Obligations or any deficiency which may result from any foreclosure sale,
and then in such other manner as the court may direct. Unless sooner terminated with the express consent of the Lender, any such receivership will continue until all amounts remaining due under the
Note have been discharged in full, or until title to the Property has passed after foreclosure sale and all applicable periods of redemption have expired, and in either case, the court has discharged
the receiver. Borrower covenants to promptly reimburse and pay to Lender or such receiver, at the place where the Note is payable, or at such other place as may be designated in writing, the amount of
all reasonable expenses (including the cost of any insurance, taxes, or other charges) incurred by Lender or such receiver in connection with its custody, preservation, use or operation of the 

67

 

Property, together with interest thereon from the date incurred by Lender or such receiver at the Default Rate, as set forth in the Note, and all such expenses, costs, taxes, interest, and other
charges shall be part of the Secured Obligations. It is agreed, however, that the risk of accidental loss or damage to the Property is undertaken by Borrower and, except for Lender's or such
receiver's willful misconduct or gross negligence, Lender or such receiver shall have no liability whatsoever for decline in value of the Property, for failure to obtain or maintain insurance, or for
failure to determine whether any insurance ever in force is adequate as to amount or as to the risks insured, or to complete development. 

        7.15    Further Assurances.    Upon issuance of a deed or deeds pursuant to foreclosure of this Mortgage, all right,
title, and interest of the Borrower in and to any Leases shall, by virtue of this instrument, thereupon vest in and become the absolute property of the grantee or grantees in such deed or deeds
without any further act or assignment by the Borrower. Borrower hereby agrees to execute all instruments of assignment or further assurance in favor of such grantee or grantees in such deed or deeds,
as may be necessary or desirable for such purpose. But nothing contained herein shall prevent Lender from terminating any subordinated Lease not approved by the Lender through such foreclosure. 

        7.16    Intercreditor Agreement.    The rights and remedies of the Lender hereunder are subject to the provisions of
the Intercreditor Agreement. 

 
 

ARTICLE 8
  ASSIGNMENT OF RENTS    
  

        8.1    Assignment of Rents.    To further secure the Secured Obligations, Borrower does hereby sell, assign and
transfer unto the Lender all rents, now due and which may hereafter become due under or by virtue of any Leases or tenancies (collectively "Rents "), whether written or verbal, or any letting of, or
of any agreement for the sale, or occupancy of the Real Property or any part thereof, and all proceeds thereof, now or hereafter existing, whether or not with the Lender's approval. The Borrower does
hereby appoint irrevocably the Lender its true and lawful attorney in its name and stead (with or without taking possession of the Property) to collect all of said Rents arising from or accruing at
any time hereafter, and all now due or that may hereafter become due under each and every of the Leases, or other similar agreements, written or verbal, which may hereafter exist on the Property, on
the condition that Lender hereby grants to Borrower a license to collect and retain such Rents (but expressly not including the right to collect any rents more than one (1) month in advance or
any amount to prepay, terminate, or "buy out" any Leases prior to the occurrence of any Event of Default under the Loan Documents. Borrower expressly covenants to apply the Rents received, after
application for operating expenses permitted hereunder, to payment of the Secured Obligations as and when the same become due and in compliance with the Loan Documents. Such license shall be revocable
by Lender without notice to Borrower at any time upon or after an Event of Default under the Loan Documents, and immediately upon any such revocation, Lender shall be entitled to receive, and Borrower
shall deliver to Lender, any and all Rents theretofore collected by Borrower which remain in the possession or control of Borrower and all Leases, and other such agreements. It is the intention of the
Borrower to create and grant, and it is the intention of Lender to create and receive, a present and absolute assignment of all of the Leases, similar agreements, Rents now due or which may hereafter
become due, pursuant to New Hampshire law, but it is agreed that the Lender's right to collect the Rents is conditioned upon the existence of an Event of Default under the Loan Documents. Failure of
Lender at any time or from time to time to enforce its rights under this ARTICLE 8 shall not in any manner prevent its subsequent enforcement, and Lender is not obligated to collect anything
hereunder, but is accountable only for sums collected. Nothing contained herein shall be construed as constituting the Lender a mortgagee in possession in the absence of the taking of actual
possession of the Property by the Lender pursuant to Section 8.7 (Lender's Right of Possession In Case of Default) hereof. In the exercise of the powers herein granted to the Lender, no
liability shall be asserted or 

68

 

enforced against the Lender, all such liability being expressly waived and released by Borrower. Notwithstanding any of the provisions of this section, none of the provisions hereof shall cause or
effect the sale, transfer and assignment of revenues arising from the conduct of Borrower's business on the Real Property. 

        8.2    Covenants Regarding Leases.    Borrower agrees: 

        (a)  Not
to execute any Leases affecting the Property or any part thereof without the prior written consent of Lender; 

        (b)  Not
to collect any of the Rents for more than one (1) month in advance of the time when the same become due under the terms thereof; 

        (c)  Not
to discount any future accruing Rents; 

        (d)  Not
to execute any other assignments of any Leases or any interest therein or any of the Rents thereunder; 

        (e)  That
notwithstanding any variation of the terms of the Mortgage or any extension of time for payment thereunder or any release of part or parts of the Property, the
Leases, Rents hereby assigned, insofar as they relate to the unreleased Property, shall continue as additional security in accordance with the terms hereof; 

        (f)    To
hold and account for all down payment or earnest money deposits in the manner provided for under any state or local laws or ordinances applicable to the Property or
under the Loan Documents; and 

        (g)  To
perform all of the Borrower's covenants and agreements under the Leases and not to suffer or permit to occur any release of liability of the lessees or purchasers. 

        8.3    Representations Regarding Leases.    Borrower represents and warrants that at the time of the execution of this
Mortgage by Borrower, there are no Leases and Borrower has no present intention of entering into any Leases. 

        8.4    Further Assignments.    Borrower shall give Lender at any time upon demand any further or additional forms of
assignment of transfer of Rents, leases and security as may be reasonably requested by Lender, and shall deliver to Lender executed copies of all such leases and security. 

        8.5    Authority of Lender.    Any tenants or occupants of any part of the Real Property pursuant to any Leases that
may come into existence are hereby authorized to recognize the claims of Lender
hereunder without investigating the reason for any action taken by Lender, or the validity or the amount of indebtedness owing to Lender, or the existence of a Default or Event of Default under any
Loan Document, or the application to be made by Lender of any amounts to be paid to Lender. The sole signature of Lender or a receiver shall be sufficient for the exercise of any rights under this
ARTICLE 8 and the sole receipt of Lender or a receiver for any sums received shall be a full discharge and release therefore to any such tenant or occupant of the Real Property; and Borrower hereby
releases each such tenant and occupant or purchaser which makes payments to Lender under this ARTICLE 8 from any liability under the applicable Lease or occupancy agreement. Checks for all or any part
of the rentals collected under this ARTICLE 8 shall be drawn to the exclusive order of Lender or such receiver. 

        8.6    Indemnification of Lender.    Nothing herein contained shall be deemed to obligate Lender to perform or
discharge any obligation, duty, or liability of lessor under any Lease of the Real Property, and Borrower shall and does hereby indemnify and hold Lender harmless from any and all liability, loss, or
damage which Lender may or might incur under any Lease of the Real Property or by reason of this assignment; and any and all such liability, loss, or damage incurred by Lender, together with the costs
and expenses, including reasonable attorneys' fees, incurred by Lender in defense of any claims or 

69

 

demands therefore (whether successful or not), shall be additional Secured Obligations, and Borrower shall reimburse Lender therefore on demand. 

        8.7    Lender's Right of Possession in Case of Default.    In any case in which under the provision of this Mortgage,
the Lender has a right to institute foreclosure proceedings, whether before or after the whole principal sum secured hereby is declared to be immediately due, or whether before or after the
institution of legal proceedings to foreclose the lien hereof or before or after sale there under, promptly upon demand of Lender, Borrower shall surrender to Lender and Lender shall be entitled to
take actual possession of the Property or any part thereof personally, or by its agents or attorneys, as for condition broken, and Lender in its discretion may, with or without force and with or
without process of law, enter upon and take and maintain possession of all or any part of the Real Property, together with all documents, books, records, papers and accounts of the Borrower or then
owners of the Real Property relating thereto, and may exclude the Borrower, its agents or servants, wholly therefrom and may, as attorney-in-fact or agent of the Borrower, or
in its own name as Lender and under the powers herein granted, hold, operate, manage and control the Property and conduct the business, if any, thereof, either personally or by its agents, and with
full power to use such measures, legal or equitable, as in its discretion or in the discretion of its successors or assigns may be deemed proper or necessary to enforce the payment or security of the
rents, of the Real Property. 

        8.8    Severability and Survival.    The provisions of this ARTICLE 8 shall survive the foreclosure of the lien of
this Mortgage and the exercise of the power of sale granted under this Mortgage until the expiration of all periods of redemption following any such foreclosure or sale and thereafter with respect to
all Rents arising prior to or attributable to the period prior to the expiration of all such redemption periods. 

 
 

ARTICLE 9
  FORECLOSURE    
  

        9.1    Lender's Powers.    It is agreed that if Lender elects to exercise the statutory power of sale herein granted
to Lender by Borrower, Lender may (subject only to the provisions of RSA 479 or any successor statute of similar import then in effect which governs the foreclosure of New Hampshire mortgages): 

        (a)  Hold
any foreclosure sale of the Real Property and the Collateral securing the payment and performance of all, or any portion of the indebtedness secured hereby at a
public auction or auctions held on, near or in the vicinity of any of the Real Property. 

        (b)  Apply
the proceeds of any foreclosure sale of all, or any portion of the Real Property and the Collateral to the payment of (i) all costs and expenses thereof,
including, but not limited to, attorney's, appraiser's and auctioneer's fees and advertising costs, (ii) the indebtedness of Borrower to Lender secured by this Mortgage including, without
limitation, the indebtedness evidenced by, or arising under the Note, in such order of preference and priority as Lender deems appropriate, (iii) any other financial liabilities of Borrower
subject only to the senior and superior rights of third persons, if any and (iv) pay over any remaining balance of such proceeds to Borrower or for Lender's account. 

        (c)  Offer
for sale and sell all, or any combination of the Real Property and Collateral pursuant to New Hampshire RSA 479, as the same may be amended from time to time, as
an entirety for one bid or in such lots or item by item for combined bids or separate bids, as appropriate, or any combination of the foregoing which Lender deems to be appropriate and the proceeds of
any such entirety or lot sales may be accounted for in one account without making any distinction between the items of security and without assigning to them any proportion of the proceeds thereof,
and Borrower hereby waives the application of the equitable doctrine of marshalling or any rule of law or other equitable doctrine of similar import and relinquishes and releases all of Borrower's
rights thereunder and the benefits conferred upon Borrower thereby 

70

 

whether now existing or arising hereafter. In the event that Lender elects to exercise the statutory power of sale hereinbefore granted to Lender by selling the Real Property, Fixtures and Collateral
in parcels, parts or lots, such foreclosure sale or sales may be held from time to time, and this Mortgage shall remain in full force and effect and such statutory power of sale shall not be fully
executed until all of the Real Property, Fixtures and Collateral shall have been sold pursuant thereto. 

        9.2    Interpretation of Certain Terms.    In the interpretation of this Mortgage, the following definitions and rules
of construction shall apply unless the context of a provision otherwise specifies: the terms
"Mortgage Covenants", "statutory conditions" and "statutory power of sale" shall have the same meaning as attributed to such terms by New Hampshire RSA 477:29. 

        9.3    Notices to Borrower and other Parties.    Any notice under this Mortgage shall be in writing, may be sent by
telefacsimile (unless otherwise required by law), and shall be effective when deposited in the United States mail first class, certified or registered mail, postage prepaid, directed to the addresses
shown near the beginning of this Mortgage. Any party may change its address for notices under this Mortgage by giving formal written notice to the other parties, specifying that the purpose of the
notice is to change the party's address. All copies of notices of foreclosure from the holder of any lien which has priority over this Mortgage shall be sent to Lender's address, as shown near the
beginning of this Mortgage. For notice purposes, Borrower agrees to keep Lender informed at all times of Borrower's current address. Each Borrower requests that copies of any notices of default and
sale be directed to Borrower's address shown near the beginning of this Mortgage. Unless otherwise provided or required by law, any notice given by Lender to any Borrower is deemed to be notice given
to all Borrowers. 

 
 

ARTICLE 10
  ACCOMMODATION MORTGAGE    
  

        With respect to Laars, to the extent it has provided security for the benefit of Water Pik pursuant to its grant of this Mortgage, and to the extent applicable
California law with respect to guaranties and suretyship may be held to apply hereto (notwithstanding the choice of law provision contained herein) Laars agrees that until all indebtedness secured by
this Mortgage shall have been paid in full, and no commitment on the part of the Lender to make future advances or extend credit either to Laars or Water Pik exists, Laars shall have no right of
subrogation, and waives any right to enforce any remedy which Lender now has or may hereafter have against any person liable for the Indebtedness secured by this Mortgage, and waives any benefit of,
any right to participate in any security now or hereafter held by Lender and without limiting the generality of the foregoing, Laars specifically waives and relinquishes as against Lender any defense
or benefit otherwise available to Laars should Lender make an election of remedies as against any person liable for the Indebtedness (and irrespective of the circumstances or manner in which or
whereby such election is made) which destroys or impairs Laars' subrogation rights or rights to proceed against any person liable for the indebtedness secured hereby for reimbursement and, further, to
the extent Laars may be deemed a guarantor hereunder, such "guarantor" waives all rights and defenses arising out of an election of remedies by the creditor, even though that election of remedies,
such as non-judicial foreclosure with respect to security for a "guaranteed" obligation, has destroyed the "guarantor's" rights of subrogation and reimbursement against Water Pik by the
operation of Section 580d of the California Code of Civil Procedure or otherwise. This is an unconditional waiver of any rights and defenses
Laars may have because Water Pik's obligation is secured by real property. These rights and defenses include, but are not limited to, any rights and defenses based upon Section 580a, 580b,
580d, or 726 of the Code of Civil Procedure. Laars assumes the responsibility for being and keeping itself informed of the financial condition of Water Pik and of all other circumstances bearing upon
the risk of nonpayment of the indebtedness secured hereby which diligent inquiry would reveal, and agrees that Lender shall have no duty to advise Laars of information known to it regarding such
condition or circumstances. 

71

  

 
 

ARTICLE 11
  MISCELLANEOUS PROVISIONS    
  

        11.1    Time of the Essence.    Time is of the essence with respect to all provisions of this Mortgage. 

        11.2    Rights and Remedies Cumulative.    Lender's rights and remedies under each of the Loan Documents are
cumulative of the rights and remedies available to Lender under each of the other Loan Documents and those otherwise available to Lender at law or in equity. No act of Lender shall be construed as an
election to proceed under any particular provision of any Loan Document to the exclusion of any other provision in the same or any other Loan Document, or as an election of remedies to the exclusion
of any other remedy which may then or thereafter be available to Lender. 

        11.3    No Implied Waivers.    Lender shall not be deemed to have waived any provision of this Mortgage unless such
waiver is in writing and is signed by Lender. Without limiting the generality of the preceding sentence, neither Lender's acceptance of any payment with knowledge of a default by Borrower, nor any
failure by Lender to exercise any remedy following a default by Borrower shall be deemed a waiver of such default, and no waiver by Lender of any particular default on the part of Borrower shall be
deemed a waiver of any other default or of any similar default in the future. 

        11.4    No Third Party Rights.    No person shall be a third party beneficiary of any provision of this Mortgage. All
provisions of this Mortgage favoring Lender are intended solely for the benefit of Lender, and no third party shall be entitled to assume or expect that Lender will or will not waive or consent to
modification of any such provision in Lender's sole discretion. 

        11.5    Preservation of Liability and Priority.    Without affecting the liability of Borrower or of any other person
(except a person expressly released in writing) for payment and performance of all of the Secured Obligations, and without affecting the rights of Lender with respect to any security not expressly
released in writing, and without impairing in any way the priority of this Mortgage over the interests of any person acquired or first evidenced by recording subsequent to the recording hereof, Lender
may, either before or after the maturity of the Note, and without notice or consent: (a) release any person liable for payment or performance of all or any part of the Secured Obligations;
(b) make
any agreement altering the terms of payment or performance of all or any of the Secured Obligations; (c) exercise or refrain from exercising, or waive, any right or remedy which Lender may have
under any of the Loan Documents; (d) accept additional security of any kind for any of the Secured Obligations; or (e) release or otherwise deal with any real property or Collateral
securing the Secured Obligations. Any person acquiring or recording evidence of any interest of any nature in the Real Property or the Collateral shall be deemed, by acquiring such interest or
recording any evidence thereof, to have agreed and consented to any or all such actions by Lender. 

        11.6    Subrogation of Lender.    Lender shall be subrogated to the lien of any previous encumbrance discharged with
funds advanced by Lender under the Loan Documents, regardless of whether such previous encumbrance has been released of record. 

        11.7    Notices.    Any notice required or permitted to be given by Borrower or Lender under this Mortgage shall be in
writing and will be deemed given (a) upon personal delivery or upon confirmed transmission by telecopier or similar facsimile transmission device, (b) on the first business day after
receipted delivery to a courier service which guarantees next-business-day delivery, or (c) on the third business day 

        [Deed
of Trust continues on following page] 

72

 

after
mailing, by registered or certified United States mail, postage prepaid, in any case to the appropriate party at its address set forth below: 

        If
to Borrower: 

Water
Pik, Inc. and Laars, Inc.

23 Corporate Plaza, Suite 246

Newport Beach, CA 92660

Attn: Chief Financial Officer

Telephone: (949) 719-3700

Telecopier: (949) 719-6472 

With
a copy to: 

Water
Pik, Inc. and Laars, Inc.

23 Corporate Plaza, Suite 246

Newport Beach, CA 92660

Attn: General Counsel

Telephone: (949) 719-3700

Telecopier: (949) 719-6472 

        If
to Lender: 

U.S.
Bank National Association

4100 Newport Place, Suite 120

Newport Beach, CA 92660

Attn: Richard M. McNiven

Telephone: (949) 863-2307

Telecopier: (949) 863-2335 

With
a copy to: 

Law
Offices of Douglas L. Collins

8491 Sunset Blvd., Suite 360

Los Angeles, CA 90069

Attn: Douglas L. Collins, Esq.

Telephone: (323) 650-2088

Telecopier: (323) 650-2092 

Any
person may change such person's address for notices or copies of notices by giving notice to the other party in accordance with this section. 

        11.8    Defeasance.    Upon payment and performance in full of all the Secured Obligations and all costs of releasing
this Mortgage, Lender will execute and deliver to Borrower such documents as may be required to release this Mortgage of record. 

        11.9    Illegality.    If any provision of this Mortgage is held to be illegal, invalid, or unenforceable under
present or future laws effective during the term of this Mortgage, the legality, validity, and enforceability of the remaining provisions of this Mortgage shall not be affected thereby, and in lieu of
each such illegal, invalid or unenforceable provision there shall be added automatically as a part of this Mortgage a provision as similar in terms to such illegal, invalid, or unenforceable provision
as may be possible and be legal, valid, and enforceable. If the rights and liens created by this Mortgage shall be invalid or unenforceable as to any part of the Secured Obligations, then the
unsecured portion of the
Secured Obligations shall be completely paid prior to the payment of the remaining and secured portion of the Secured Obligations, and all payments made on the Secured Obligations shall be 

73

 

considered to have been paid on and applied first to the complete payment of the unsecured portion of the Secured Obligations. 

        11.10    Obligations Binding Upon Borrower's Successors.    This Mortgage is binding upon Borrower and Borrower's
successors and assigns, including all grantees and remote grantees of any interest of Borrower in the Property, and shall inure to the benefit of Lender, and its successors and assigns, and the
provisions hereof shall likewise be covenants running with the land. The duties, covenants, conditions, obligations, and warranties of Borrower in this Mortgage shall be joint and several obligations
of Borrower and Borrower's successors and assigns. 

        11.11    Governing Law.    The laws of the State of New Hampshire shall govern the validity, construction,
enforcement, and interpretation of this Mortgage, without regard to principles of conflicts of laws. 

        11.12    Survival.    This Mortgage shall survive foreclosure of the liens created hereby, to the extent necessary to
fulfill its purposes. 

        11.13    Multiple Parties    All obligations of Borrower hereunder shall be joint and several and all references to
"Borrower" shall mean each and every Borrower. That means that each and every entity or person executing this Mortgage below as a Borrower is responsible for all of Borrower's obligations in this
Mortgage. 

74

 

Signed
and delivered as of the date first mentioned above. 

Laars, Inc., a Delaware corporation  

	

By:	
 	

 	
 	

 
	 	 	
 Victor C. Streufert

Vice President—Finance,

Chief Financial Officer, and

Treasurer	 	 

75

QuickLinks

DEED OF TRUST, SECURITY AGREEMENT, FINANCING STATEMENT AND ASSIGNMENT OF RENTS

PARTIES, PROPERTY, AND DEFINITIONS

ARTICLE 2 GRANTING CLAUSE

ARTICLE 3 BORROWER'S TITLE AND AUTHORITY

ARTICLE 4 BORROWER'S AFFIRMATIVE COVENANTS

ARTICLE 5 BORROWER'S NEGATIVE COVENANTS

ARTICLE 6 EVENTS OF DEFAULT

ARTICLE 7 BANK'S REMEDIES

ARTICLE 8 ASSIGNMENT OF RENTS

ARTICLE 9 ACCOMMODATION DEED OF TRUST

ARTICLE 10 MISCELLANEOUS PROVISIONS

[Deed of Trust continues on following page]

DEED OF TRUST, SECURITY AGREEMENT, FINANCING STATEMENT AND ASSIGNMENT OF RENTS

ARTICLE 1 PARTIES, PROPERTY, AND DEFINITIONS

ARTICLE 2 GRANTING CLAUSE

ARTICLE 3 BORROWER'S TITLE AND AUTHORITY

ARTICLE 4 BORROWER'S AFFIRMATIVE COVENANTS

ARTICLE 5 BORROWER'S NEGATIVE COVENANTS

ARTICLE 6 EVENTS OF DEFAULT

ARTICLE 7 LENDER'S REMEDIES

ARTICLE 8 ASSIGNMENT OF RENTS

ARTICLE 9 ACCOMMODATION DEED OF TRUST

ARTICLE 10 MISCELLANEOUS PROVISIONS

DEED OF TRUST, SECURITY AGREEMENT, FINANCING STATEMENT AND ASSIGNMENT OF RENTS

ARTICLE 1 PARTIES, PROPERTY, AND DEFINITIONS

ARTICLE 2 GRANTING CLAUSE

ARTICLE 3 TRUSTOR'S TITLE AND AUTHORITY

ARTICLE 4 TRUSTOR'S AFFIRMATIVE COVENANTS

ARTICLE 5 TRUSTOR'S NEGATIVE COVENANTS

ARTICLE 6 EVENTS OF DEFAULT

ARTICLE 7 BANK'S REMEDIES

ARTICLE 8 ASSIGNMENT OF RENTS

ARTICLE 9 TRUSTEE

ARTICLE 10 ACCOMMODATION DEED OF TRUST

ARTICLE 1 MISCELLANEOUS PROVISIONS

MORTGAGE, SECURITY AGREEMENT, FINANCING STATEMENT AND ASSIGNMENT OF RENTS

ARTICLE 1 PARTIES, PROPERTY, AND DEFINITIONS

ARTICLE 2 GRANTING CLAUSE

ARTICLE 3 BORROWER'S TITLE AND AUTHORITY

ARTICLE 4 BORROWER'S AFFIRMATIVE COVENANTS

ARTICLE 5 BORROWER'S NEGATIVE COVENANTS

ARTICLE 6 EVENTS OF DEFAULT

ARTICLE 7 LENDER'S REMEDIES

ARTICLE 8 ASSIGNMENT OF RENTS

ARTICLE 9 FORECLOSURE

ARTICLE 10 ACCOMMODATION MORTGAGE

ARTICLE 11 MISCELLANEOUS PROVISIONS

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