Exhibit 10.72
Prepared by and after recording return to:
Principal Life Insurance Company
000 Xxxxx Xxxxxx
Xxx Xxxxxx, XX 00000-0000
ATTN: Commercial Real Estate - Closing
Xxxxx Xxxxxxxxxxxx
DEED OF TRUST, SECURITY AGREEMENT
AND ASSIGNMENT OF RENTS
LOAN NO. 753865
A. THIS DEED OF TRUST (as the same may from time to time hereafter be
modified, supplemented or amended, this "DEED OF TRUST") is made as of April 6,
2004, by and between INLAND SOUTHEAST XXXX'X XXXXX, L.L.C., a Delaware limited
liability company, having its principal place of business and post office
address at 0000 Xxxxxxxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxx 00000, as "BORROWER"
("Borrower" to be construed as "Borrowers" if the context so requires), X. X.
XXXXXXXXXXX, an individual of Polk County, whose address is 000 Xxxxx Xxxxxx,
Xxx Xxxxxx, Xxxx 00000-0000, as "TRUSTEE", and PRINCIPAL LIFE INSURANCE COMPANY,
an Iowa corporation, having a principal place of business and post office
address c/o Principal Real Estate Investors, LLC at 000 Xxxxx Xxxxxx, Xxx
Xxxxxx, Xxxx 00000-0000, as "LENDER".
WITNESSETH:
B. Borrower is justly indebted to Lender for money borrowed (the "LOAN") in
the original principal sum of Five Million Three Hundred Forty-two Thousand and
00/100 Dollars ($5,342,000.00) (the "LOAN AMOUNT") evidenced by Borrower's
secured promissory note of even date herewith, made payable and delivered to
Lender, (as may be modified, amended, supplemented, extended or consolidated in
writing and any note(s) issued in exchange therefor or replacement thereof) (the
"NOTE") in which Note Borrower promises to pay to Lender the
1
Loan Amount, together with all accrued and unpaid interest thereon, interest
accrued at the Default Rate (if any), Late Charges (if any), the Make Whole
Premium (if any), and all other obligations and liabilities due or to become due
to Lender pursuant to the Loan Documents and all other amounts, sums and
expenses paid by or payable to Lender pursuant to the Loan Documents and the
Environmental Indemnity (collectively the "INDEBTEDNESS") until the Indebtedness
has been paid, but in any event, the unpaid balance (if any) remaining due on
the Note shall be due and payable on May 1, 2009 or such earlier date resulting
from the acceleration of the Indebtedness by Lender (the "MATURITY DATE").
Capitalized terms used herein and not otherwise defined shall have those
meanings given to them in the other Loan Documents.
C. NOW, THEREFORE, to secure the payment of the Indebtedness in accordance
with the terms and conditions of the Loan Documents, and all extensions,
modifications, and renewals thereof and the performance of the covenants and
agreements contained therein, and also to secure the payment of any and all
other Indebtedness, direct or contingent, that may now or hereafter become owing
from Borrower to Lender in connection with the Loan Documents, and in
consideration of the Loan Amount in hand paid, receipt of which is hereby
acknowledged, Borrower does by these presents grant, bargain, sell and convey,
in Trust, with full power of sale as provided by law unto Trustee, its heirs,
successors and assigns forever, that certain real estate and all of Borrower's
estate, right, title and interest therein, located in the county of Cabarrus,
state of North Carolina, more particularly described in EXHIBIT A attached
hereto and made a part hereof (the "LAND"), which Land, together with the
following described property, rights and interests, is collectively referred to
herein as the "PREMISES".
D. Together with Borrower's interest as lessor in and to all Leases and all
Rents, which are pledged primarily and on a parity with the Land and not
secondarily.
E. Together with all and singular the tenements, hereditaments, easements,
appurtenances, passages, waters, water courses, riparian rights, sewer rights,
rights in trade names, licenses, permits and contracts and all other rights,
liberties and privileges of any kind or character in any way now or hereafter
appertaining to the Land, including but not limited to, 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.
F. Together with the right in the case of foreclosure hereunder of the
encumbered property for Lender to take and use the name by which the buildings
and all other improvements situated on the Premises are commonly known and the
right to manage and operate the said buildings under any such name and variants
thereof.
G. Together with all right, title and interest of Borrower in any and all
buildings and improvements of every kind and description now or hereafter
erected or placed on the said Land and all materials intended for construction,
reconstruction, alteration and repairs of such buildings and improvements now or
hereafter erected thereon, all of which materials shall be deemed to be included
within the Premises immediately upon the delivery thereof to the Premises, and
all fixtures now or hereafter owned by Borrower and attached to or contained in
and used in connection with the Premises including, but not limited to, all
machinery, motors, elevators, fittings, radiators, awnings, shades, screens, and
all plumbing, heating, lighting, ventilating, refrigerating, incinerating,
air-conditioning and sprinkler equipment and fixtures and appurtenances thereto;
and all items of furniture, furnishings, equipment and personal property owned
by Borrower used or useful in the
2
operation of the Premises; and all renewals or replacements of all of the
aforesaid property owned by Borrower or articles in substitution therefor,
whether or not the same are or shall be attached to said buildings or
improvements in any manner (collectively, the "IMPROVEMENTS"); it being mutually
agreed, intended and declared that all the aforesaid property owned by Borrower
and placed by it on the Land or used in connection with the operation or
maintenance of the Premises shall, so far as permitted by law, be deemed to form
a part and parcel of the Land and for the purpose of this Deed of Trust to be
Land and covered by this Deed of Trust, and as to any of the property aforesaid
which does not form a part and parcel of the Land or does not constitute a
"fixture" (as such term is defined in the Uniform Commercial Code) this Deed of
Trust is hereby deemed to be, as well, a security agreement under the Uniform
Commercial Code for the purpose of creating hereby a security interest in such
property which Borrower hereby grants to Lender as secured party. Borrower
authorizes Lender at any time until the Indebtedness is paid in full, to prepare
and file any and all Uniform Commercial Code financing statements, amendments,
assignments, terminations and the like, necessary to create and/or maintain a
prior security interest in such property all without Borrower's execution of the
same.
H. Together with all right, title and interest of Borrower, now or hereafter
acquired, in and to any and all strips and gores of land adjacent to and used in
connection with the Premises and all right, title and interest of Borrower, now
owned or hereafter acquired, in, to, over and under the ways, streets, sidewalks
and alleys adjoining the Premises.
I. Together with all funds now or hereafter held by Lender under any escrow
security agreement or under any of the terms hereof, including but not limited
to funds held under the provisions of paragraph 5 hereof, insurance proceeds
from all insurance policies required to be maintained by Borrower under the Loan
Documents (subject to the balance of the terms contained in this Deed of Trust)
and all awards, decrees, proceeds, settlements or claims for damage now or
hereafter made to or for the benefit of Borrower by reason of any damage to,
destruction of or taking of the Premises or any part thereof, whether the same
shall be made by reason of the exercise of the right of eminent domain or by
condemnation or otherwise (a "TAKING").
J. TO HAVE AND TO HOLD the same unto Trustee, Trustee's heirs, successors and
assigns, upon the trusts, covenants and agreements herein expressed.
K. Borrower represents that it is the absolute owner in fee simple of the
Premises described in Exhibit A, which Premises are free and clear of any liens
or encumbrances except as set out in Exhibit B attached hereto, and except for
taxes which are not yet due or delinquent. Borrower shall forever warrant and
defend the title to the Premises against all claims and demands of all persons
whomsoever and will on demand execute any additional instrument which may be
required to give Trustee a valid first lien on all of the Premises, subject to
the "PERMITTED ENCUMBRANCES" set forth in Exhibit X.
X. Borrower further represents that (i) the Premises is not subject to any
casualty damage; (ii) Borrower has not received any written notice of any
eminent domain or condemnation proceeding affecting the Premises; and (iii) to
the best of Borrower's knowledge following due and diligent inquiry, there are
no actions, suits or proceedings pending, completed or threatened against or
affecting Borrower or any person or entity owning an interest (directly or
indirectly) in Borrower ("INTEREST OWNER(S)") or any property of Borrower or any
Interest Owner in any court or before any arbitrator of any kind or before or by
any governmental authority (whether
3
local, state, federal or foreign) that, individually or in the aggregate, could
reasonably be expected by Lender to be material to the transaction contemplated
hereby.
M. Borrower further represents and warrants that as of the date hereof and
until the Indebtedness is paid in full: (i) Borrower is not and will not be an
"employee benefit plan" as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), which is subject to Title I
of ERISA; (ii) the assets of Borrower do not and will not constitute "plan
assets" of one or more such plans for purposes of Title I of ERISA; (iii)
Borrower is not and will not be a "governmental plan" within the meaning of
Section 3(32) of ERISA; (iv) transactions by or with Borrower are not and will
not be subject to state statutes applicable to Borrower regulating investments
of and fiduciary obligations with respect to governmental plans; (v) Borrower
has made and will continue to make all required contributions to all employee
benefit plans, if any, established for or on behalf of Borrower or to which
Borrower is required to contribute; (vi) Borrower has and will continue to
administer each such plan, if any, in accordance with its terms and the
applicable provisions of ERISA and any other federal or state law; and (vii)
Borrower has not and will not permit any liability under Sections 4201, 4243,
4062 or 4069 of Title IV of ERISA or taxes or penalties relating to any employee
benefit plan or multi-employer plan to become delinquent or assessed,
respectively, which would have a material adverse effect upon (i) the business
or the financial position or results of operation of Borrower, (ii) the ability
of Borrower to perform, or of Lender to enforce, any of the Loan Documents or
Environmental Indemnity or (iii) the value of the Premises.
BORROWER COVENANTS AND AGREES AS FOLLOWS:
1. Borrower shall
(a) pay each item of Indebtedness secured by this Deed of Trust
when due according to the terms of the Loan Documents;
(b) pay a Late Charge on any payment of principal, interest, Make
Whole Premium or Indebtedness which is not paid within fifteen
(15) days of the due date thereof or such period of time as
may be permitted by North Carolina law, to cover the expense
involved in handling such late payment;
(c) pay on or before the due date thereof any indebtedness
permitted to be incurred by Borrower pursuant to the Loan
Documents and any other claims which could become a lien on
the Premises (unless otherwise specifically addressed in
paragraph 1(e) hereof), and upon request of Lender exhibit
satisfactory evidence of the discharge thereof;
(d) complete within a reasonable time, the construction of any
Improvements now or at any time in process of construction
upon the Land which are required to be performed by Borrower;
(e) manage, operate and maintain the Premises and keep the
Premises, including but not limited to, the Improvements, in
good condition and repair and free from mechanics' liens or
other liens or claims for liens, provided however, that
Borrower may in good faith, with reasonable diligence and upon
written Notice to Lender within twenty (20) days
4
after Borrower has knowledge of such lien or claim, contest
the validity or amount of any such lien or claim and defer
payment and discharge thereof during the pendency of such
contest in the manner provided by law, provided that (i) such
contest may be made without the payment thereof; (ii) such
contest shall prevent the sale or forfeiture of the Premises
or any part thereof, or any interest therein, to satisfy such
lien or claim; (iii) Borrower shall have obtained a bond over
such lien or claim from a bonding company acceptable to Lender
which has the effect of removing such lien or collection of
the claim or lien so contested; and (iv) Borrower shall pay
all costs and expenses incidental to such contest; and further
provided, that in the event of a final, non-appealable ruling
or adjudication adverse to Borrower and provided the court of
jurisdiction has not granted a stay of the enforcement of the
ruling or judgment, Borrower shall promptly pay such claim or
lien, shall indemnify and hold Lender and the Premises
harmless from any loss for damage arising from such contest
and shall take whatever action necessary to prevent sale,
forfeiture or any other loss or damage to the Premises or to
the Lender;
(f) comply, and cause each lessee or other user of the Premises to
comply, with all requirements of law and ordinance, and all
rules and regulations, now or hereafter enacted, by
authorities having jurisdiction of the Premises and the use
thereof, including but not limited to all covenants,
conditions and restrictions of record pertaining to the
Premises, the Improvements, and the use thereof (collectively,
"LEGAL REQUIREMENTS");
(g) subject to the provisions of paragraph 6 hereof, promptly
repair, restore or rebuild any Improvements now or hereafter a
part of the Premises which may become damaged or be destroyed
by any cause whatsoever, so that upon completion of the
repair, restoration and rebuilding of such Improvements, there
will be no liens of any nature arising out of the construction
and the Premises will be of substantially the same character
and quality as it was prior to the damage or destruction;
(h) if other than a natural person, do all things necessary to
preserve and keep in full force and effect its existence,
franchises, rights and privileges under the laws of the state
of its formation and, if other than its state of formation,
the state where the Premises is located. Borrower shall notify
Lender at least thirty (30) days prior to (i) any relocation
of Borrower's principal place of business to a different state
or any change in Borrower's state of formation, and/or (ii) if
Borrower is an individual, any relocation of Borrower's
principal residence to a different state;
(i) do all things necessary to preserve and keep in full force and
effect Lender's title insurance coverage insuring the lien of
this Deed of Trust as a first and prior lien, subject only to
the Permitted Encumbrances stated in Exhibit B and any other
exceptions after the date of this Deed of Trust approved in
writing by Lender, including without limitation, delivering to
Lender not less than 30 days prior to the effective date of
any rate adjustment, modification or extension of the Note or
any other Loan Document, any
5
new policy or endorsement which may be reasonably required to
assure Lender of such continuing coverage;
(j) execute any and all documents which may be required to perfect
the security interest granted by this Deed of Trust;
(k) remain a Single-Purpose Entity;
(l) furnish Lender with copies of the 2005 tax bills for the
Premises evidencing that the Premises has been separately
assessed for real estate taxing purposes on or prior to July
31, 2005. (It is Lender's understanding that the following tax
parcel numbers have been established, however, bills have not
yet been issued: Toys R Us Parcel 5.17 acres 0000-00-0000; Red
Lobster 1.15 acres 0000-00-0000; Olive Garden 1.27 acres
0000-00-0000 and Jared Jewelers 4.51 acres 0000-00-0000.)
2. Borrower shall not:
(a) except as required by applicable Legal Requirements, construct
any building or structure nor make any alteration or addition
(other than normal repair and maintenance) to (i) the roof or
any structural component of any Improvements on the Premises,
or (ii) the building operating systems, including but not
limited to, the mechanical, electrical, heating, cooling, or
ventilation systems (other than replacement with equal or
better quality and capacity), without the prior written
consent of Lender not to be unreasonably withheld;
(b) remove or demolish any material Improvements, or any portion
thereof, which at any time constitutes a part of the Premises.
Notwithstanding anything hereinabove to the contrary, Borrower
may construct, remove or demolish tenant improvements within
the then existing building(s) or other structures to the
extent such work is required solely under the terms of any
Leases approved by Lender provided (i) no Event of Default
exists under the Loan Documents; (ii) the work is completed on
a timely basis, in a good, workmanlike, lien-free manner and
in accordance with all Legal Requirements, and (iii) such work
does not negatively affect the structural integrity of the
Improvements or the value of the Premises;
(c) cause or permit any change to be made in the general use of
the Premises without Lender's prior written consent;
(d) initiate any or acquiesce to a zoning reclassification or
material change in zoning without Lender's prior written
consent. Borrower shall use reasonable efforts to contest any
such zoning reclassification or change;
6
(e) make or permit any use of the Premises that could with the
passage of time result in the creation of any right of use, or
any claim of adverse possession or easement on, to or against
any part of the Premises in favor of any person or entity or
the public;
(f) allow any of the following to occur (unless a Permitted
Transfer):
(i) a Transfer of all or any portion of the Premises or any
interest in the Premises;
(ii) a Transfer of any ownership interest in Borrower or any
entity which owns, directly or indirectly, an interest
in Borrower at any level of the ownership structure; or
(iii) in addition to (i) and (ii) above, if the Borrower is a
trust, or if a trust owns an interest, directly or
indirectly, in any entity which owns an interest in
Borrower at any level of the ownership structure, the
addition, deletion or substitution of a trustee of such
trust.
If any of such events occur, it shall be null and void and
shall constitute an Event of Default under the Loan Documents.
It is understood and agreed that the Indebtedness evidenced by
the Note is personal to Borrower and in accepting the same
Lender has relied upon what it perceived as the willingness
and ability of Borrower to perform its obligations under the
Loan Documents and the Environmental Indemnity and as lessor
under the Leases of the Premises. Furthermore, Lender may
consent to a Transfer and expressly waive Borrower's covenants
contained in this paragraph 2(f), in writing to Borrower;
however any such consent and waiver shall not constitute any
consent or waiver of such covenants as to any Transfer other
than that for which the consent and waiver was expressly
granted. Furthermore, Lender's willingness to consent to any
Transfer and waive Borrower's covenants contained in this
paragraph 2(f), implies no standard of reasonableness in
determining whether or not such consent shall be granted and
the same may be based upon what Lender solely deems to be in
its best interest.
For purposes of the Loan Documents, the following terms shall
have the respective meanings set forth below:
"TRANSFER" or "TRANSFERRED" shall mean with respect to the
Premises, an interest in the Premises, or an ownership
interest or interest therein:
(i) a sale, assignment, transfer, conveyance or other
disposition (whether voluntary, involuntary or by
operation of law);
(ii) the creation, sufferance or granting of any lien,
encumbrance, security interest or collateral assignment
(whether voluntarily, involuntarily or by operation of
law), other than the lien hereof, the leases of the
Premises assigned to Lender, the
7
Permitted Encumbrances, the granting of a lien on a
tenant's interest under any Lease in accordance with
the terms specifically set forth therein, and those
liens which Borrower is contesting in accordance with
the provisions of paragraph 1(e);
(iii) the issuance or other creation of ownership interests
in an entity;
(iv) the reconstitution or conversion from one entity to
another type of entity;
(v) a merger, consolidation, reorganization or any other
business combination; or
(vi) a conversion to or operation of all or any portion of
the Premises as a cooperative or condominium form of
ownership.
"PERMITTED TRANSFER" shall mean:
(i) a minor (as determined by Lender) conveyance of an
interest in the Premises by Borrower, such as a utility
easement, and for which Lender has given its prior
written consent and imposed such conditions as Lender
deems advisable and appropriate;
(ii) a sale, assignment, transfer or conveyance of all or
any portion of the Premises or an interest in the
Premises for which Borrower has complied with all of
the Property Transfer Requirements; or
(iii) any of the following Transfers for which Borrower has
complied with all of the Ownership Transfer
Requirements as applicable and Lender has given its
prior written consent (and in connection with such
consent, Lender may impose any conditions it wishes in
its sole discretion);
(A) a sale, assignment, transfer, or conveyance of an
ownership interest or interest therein;
(B) the issuance or other creation of ownership
interests in an entity;
(C) a reconstitution or conversion from one entity to
another type of entity;
(D) a merger, consolidation, reorganization or any
other business combination;
(iv) with at least thirty (30) days advance written notice,
transfers of ownership interests in Borrower and
entities owning interests in Borrower between Inland
Western Retail Real Estate Trust, Inc., a Maryland
corporation ("IWRRET"), and its wholly owned affiliates
for which Borrower has complied with all of the
Specific Transfer Requirements -1;
(v) with at least thirty (30) days advance written notice,
transfers of ownership interests in Borrower and/or
shares in entities owning interests in Borrower to
Qualified New Members (hereinafter defined), for which
Borrower has complied with all of the Specific Transfer
Requirements - 2 (for purposes of this Permitted
Transfer, a "Qualified New Member" shall be defined as
an institutional investor or fund managed by an
institutional investor having assets of $100,000,000 or
more;
(vi) following the full release of the Guaranty-II by
Lender, with at least thirty (30) days advance written
notice, transfers of direct or indirect ownership
interests in Borrower and entities owning interests in
Borrower and IWRRET, and its wholly
8
owned affiliates to a Qualified Successor)
(hereinafter defined) and/or its wholly owned
affiliates for which Borrower has complied with all of
the Specific Transfer Requirements - 3 (for purposes of
this Permitted Transfer, a "Qualified Successor" shall
be defined as an entity with a tangible net worth of
$200,000,000 or more); a debt to equity ratio of 1.5 or
less; and management personnel experienced in the
ownership and management of retail properties similar
to the Premises; or
(vii) transfers of ownership interests in IWRRET.
"PROPERTY TRANSFER REQUIREMENTS" are all of the following:
1. Prior review and approval of the proposed purchaser or
other transferee and the subject transaction by Lender,
at Lender's sole discretion. Review of the proposed
purchaser or other transferee and the subject
transaction shall encompass various factors, including,
but not limited to, the proposed purchaser's or other
transferee's creditworthiness, financial strength, and
real estate management and leasing expertise as well as
the proposed transaction's effect on the Premises, the
Borrower, and other security for the Loan;
2. Payment to Lender of an assumption fee equal to the
greater of: (a) one half of one percent (0.5%) of the
principal balance of the Note; or (b) $15,000.00;
provided, however, that Lender will require $15,000.00
of such fee to be paid at the beginning of Lender's
review process, and such sum shall be nonrefundable and
earned upon receipt by Lender whether or not the
transaction is ultimately completed or Lender
ultimately approves the proposed purchaser or other
transferee;
3. Receipt, at Borrower's expense, of either (at Lender's
discretion) a new ALTA standard loan policy or an
endorsement updating the Lender's existing loan policy
in the full amount of the Loan, in form and by an
issuer satisfactory to Lender, and which insures this
Deed of Trust to be a first and prior lien subject only
to those exceptions which were previously approved by
Lender and provides coverage against usury and
mechanic's liens;
4. Receipt by Lender of copies of all relevant information
and documentation relating to or required by Lender in
connection with the proposed transfer including but not
limited to (a) the organizational documents of the
proposed transferee and an opinion of counsel
satisfactory to Lender as to its due formation, valid
existence and authority to enter into and carry out the
proposed transaction as well as the proposed
transferee's compliance with its status as a Single
Purpose Entity; (b) the deeds or other instruments of
transfer and documents relating to the assignment and
assumption of Leases; (c) evidence of compliance with
the insurance requirements contained in the Loan
Documents; and (d) compliance
9
with such other closing requirements as are customarily
imposed by Lender in connection with such transactions;
5. Execution, delivery, acknowledgment and recordation, as
applicable, of new, revised and/or replacement
assumption agreements, loan modification agreements,
indemnification agreements, escrow security or property
reserves agreements, security instruments, financing
statements, UCCs, new or revised letters of credit
and/or guarantees, including the Guaranty-II if such
has not been released, in form and substance
satisfactory to Lender;
6. Payment of outside counsel fees and costs, other
applicable professional's fees and costs, taxes,
recording fees and the like, and any other fees and
costs incurred;
7. Receipt by Lender of 60 days advance written notice of
the proposed Transfer in question;
8. Receipt by Lender of a waiver from any tenant having a
right or option to purchase the Premises or any portion
thereof, waiving such right or option in form and
substance acceptable to Lender; and
9. At Lender's option, and if required by the procedures
promulgated by any rating agency(ies) associated with a
securitization transaction with respect to the Loan,
receipt by Lender of written evidence from such
agency(ies) to the effect that the proposed transfer
will not result in a re-qualification, reduction or
withdrawal of any rating in effect immediately prior to
such transfer issued in connection with the
securitization transaction.
"OWNERSHIP TRANSFER REQUIREMENTS" are all of the Property Transfer
Requirements which Lender deems appropriate in its discretion, as well
as a reasonable processing fee to be determined by Lender; provided,
however, that (i) with respect to item 2 of the Property Transfer
Requirements, the 0.5% component of the fee shall be prorated
(subject, however, to the $15,000 minimum) based on Lender's
calculation of the effective percentage interest in Borrower
transferred, and (ii) item 3 of the Property Transfer Requirements
shall be required, at Lender's discretion, only in the event of (A) a
merger, consolidation, reorganization or any other business
combination, or (B) a reconstitution or conversion from one entity to
another type of entity.
"SPECIFIC TRANSFER REQUIREMENTS - 1" are all of the following which
Borrower agrees to provide to Lender prior to each proposed transfer:
(i) a transfer fee of $2,000.00; (ii) all relevant documentation and
information related to the organization, authority, and validity of
the proposed ownership interest purchaser, transferee and the
transaction in general; (iii) all documents and instruments of
conveyance, transfer and assignment; (iv) at Lender's discretion, a
reaffirmation of the obligations of the Guarantor(s) under the
Guaranty, and the Guaranty-II if
10
such has not been released by Lender; and (v) evidence of payment of
all outside counsel fees, professional fees, title insurance fees, if
any, and any and all other fees, costs and expenses related to the
proposed transfer (provided that no assumption or transfer fee other
than the $2,000 fee stated in (i) above shall be required).
"SPECIFIC TRANSFER REQUIREMENTS - 2" are all of the following which
Borrower agrees to provide to Lender prior to each proposed transfer:
IWRRET or a wholly owned affiliate thereof (i) remains the sole member
of Borrower; (ii) (a) retains 51% or more of the ownership interest in
the Borrower, or (b) retains ownership of 20% to 50% of the ownership
interest in the Borrower subject to Lender's review and approval in
each instance of the proposed transferee and the subject transaction;
Lender's review of the proposed transferee and the subject transaction
shall encompass various factors, including but not limited to,
transferee's creditworthiness, financial strength, and real estate
management expertise, as well as the proposed transaction's effect on
the Premises, Borrower and the other security for the Loan, and (iii)
otherwise retains operational and management control of Borrower as
determined by Lender, and further provided Borrower provides Lender
each of the following items prior to each proposed transfer; (a) a
transfer fee equal to the greater of $5,000.00 or the product of the
percentage ownership interest in Borrower to be transferred multiplied
by one percent (1%) of the outstanding principal balance of the Loan;
(b) all relevant documentation and information related to the
organization, authority, and validity of the proposed ownership
interest purchaser, transferee and the transaction in general; (c) all
documents and instruments of conveyance, transfer and assignment; (d)
a reaffirmation of the obligations of the Guarantor(s) under the
Guaranty, and the Guaranty-II if such has not been released by Lender,
and (e) evidence of payment of all outside counsel fees, professional
fees, title insurance fees and any and all other fees, costs and
expenses related to the proposed transfer (provided that no assumption
or transfer fee other than the $5,000.00 fee stated in (a) above shall
be required).
"SPECIFIC TRANSFER REQUIREMENTS - 3" are all of the following which
Borrower agrees to provide to Lender prior to each proposed transfer:
(i) said transfers are made to accommodate either the merger of IWRRET
with the Qualified Successor or the sale of a majority of IWRRET's
assets to the Qualified Successor; (ii) the Qualified Successor
retains direct or indirect ownership of 51% or more of the ownership
interests in the Borrower; (iii) the Qualified Successor or its
wholly-owned affiliate remains the sole member of the Borrower; and
(iv) the Qualified Successor otherwise retains operational and
management control of Borrower as determined by Lender, and further
provided, Borrower provides Lender with each of the following items
prior to the proposed transfer: (a) a transfer fee of $10,000.00; (b)
all relevant documentation and information related to the
organization, authority, and validity of the proposed ownership
interest purchaser, transferee and the transaction in general; (c) all
documents and instruments of conveyance, transfer and assignment; (d)
a reaffirmation of the obligations of the Guarantor(s) under the
Guaranty, and the Guaranty-II if such has not been released by Lender,
or assumption thereof by an individual(s) or entity(ies) acceptable to
Lender in its sole discretion; and (e) evidence of payment of all
outside counsel fees, professional fees, title insurance fees and any
and all other fees, costs and expenses related to the proposed
transfer (provided that no assumption or transfer fee other than the
$10,000.00 fee stated in (a) above shall be required).
11
3. (a) Borrower shall pay or cause to be paid when due and before any penalty
attaches or interest accrues all general taxes, special taxes,
assessments (including assessments for benefits from public works or
improvements whenever begun or completed), utility charges, water
charges, sewer service charges, common area maintenance charges, if
any, vault or space charges and all other like charges against or
affecting the Premises or against any property or equipment located on
the Premises, or which might become a lien on the Premises, and shall,
within 10 days following Lender's request, furnish to Lender a
duplicate receipt of such payment. If any such tax, assessment or
charge may legally be paid in installments, Borrower may, at its
option, pay such tax, assessment or charge in installments.
(b) If Borrower desires to contest any tax, assessment or charge relating
to the Premises, Borrower may do so by paying the same in full, under
protest, in the manner provided by law; provided, however, that
(i) if contest of any tax, assessment or charge may be made
without the payment thereof, and
(ii) such contest shall have the effect of preventing the
collection of the tax, assessment or charge so contested and
the sale or forfeiture of the Premises or any part thereof or
any interest therein to satisfy the same,
then Borrower may in its discretion and upon the giving of written
notice to Lender of its intended action and upon the furnishing to
Lender of such security or bond as Lender may require, contest any
such tax, assessment or charge in good faith and in the manner
provided by law. All costs and expenses incidental to such contest
shall be paid by Borrower. In the event of a ruling or adjudication
adverse to Borrower, Borrower shall promptly pay such tax, assessment
or charge. Borrower shall indemnify and save harmless the Lender and
the Premises from any loss or damage arising from any such contest and
shall, if necessary to prevent sale, forfeiture or any other loss or
damage to the Premises or to Lender, pay such tax, assessment or
charge or take whatever action is necessary to prevent any sale,
forfeiture or loss.
4. (a) Borrower shall at all times keep or cause to be kept in force (i)
property insurance insuring all Improvements which now are or
hereafter become a part of the Premises for perils covered by a causes
of loss-special form insurance policy, including coverage against
terrorism containing both replacement cost and agreed amount
endorsements or equivalent coverage; (ii) commercial general liability
insurance naming Lender as an additional insured protecting Borrower
and Lender against liability for bodily injury or property damage
occurring in, on or adjacent to the Premises in commercially
reasonable amounts; (iii) boiler and machinery insurance if the
property has a boiler or is an office building; (iv) rental value
insurance for the perils specified herein for one hundred percent
(100%) of the Rents (including operating expenses, real estate taxes,
assessments
12
and insurance costs which are lessee's liability) for a period of
twelve (12) months; (v) builders risk insurance during all periods of
construction; and (vi) insurance against all other hazards as may be
reasonably required by Lender, including, without limitation,
insurance against loss or damage by flood.
Notwithstanding anything herein above to the contrary, if neither: (i)
property insurance without an exclusion for terrorism, terrorist acts
or similar perils ("Terrorism") nor; (ii) a separate policy insuring
specifically against Terrorism is available at a cost which is in
Lender's opinion is commercially reasonable, taking into
consideration, among other things: (a) how properties similar in type,
size, quality and location are insured with respect to Terrorism; and
(b) the amount of coverage, premium and deductible applicable to such
insurance, then Lender agrees to waive the requirement to provide
insurance covering Terrorism until such coverage again becomes
available at a cost, which in Lender's opinion is commercially
reasonable.
Further not withstanding the above, so long as there is no Event of
Default hereunder and so long as the lease between Borrower and Toys
"R" Us - Delaware, Inc. ("Toys R Us") dated April 19, 2000, or any
lease to any replacement tenant approved by Lender, remains in full
force and effect and there are no breaches thereof, Lender will allow
Toys "R" Us or said replacement tenant approved by Lender
("REPLACEMENT TENANT") to keep in force the commercial general
liability insurance required herein. (Neither Borrower nor Toys R Us
will be required to provide property insurance for the Toys R Us
Improvements.) All insurance coverages and requirements that are not
maintained by Toys R Us or Replacement Tenant in accordance with the
Lender's insurance requirements herein shall at all times during the
Loan be maintained by Borrower.
(b) All insurance (including deductibles and exclusions) shall be in form,
content and amounts approved by Lender and written by an insurance
company or companies approved by Lender and rated A-, class size VIII
or better in the most current issue of Best's Insurance Reports and
which is licensed to do business in the state in which the Premises
are located or a governmental agency or instrumentality approved by
Lender. The policies for such insurance shall have attached thereto
standard mortgagee clauses in favor of and permitting Lender to
collect any and all proceeds payable thereunder and shall include a 30
day (except for nonpayment of premium, in which case, a 10 day) notice
of cancellation clause in favor of Lender. All certificates of
insurance (or policies if requested by Lender) shall be delivered to
and held by Lender as further security for the payment of the Note and
any other obligations arising under the Loan Documents, with evidence
of renewal coverage delivered to Lender at least 30 days before the
expiration date of any policy. Borrower shall not carry or permit to
be carried separate insurance, concurrent in kind or form and
contributing in the event of loss, with any insurance required in the
Loan Documents.
5. (a) Upon the occurrence of an Event of Default and upon request of Lender,
Borrower shall deposit with and pay to Lender, on the Closing Date
and/or on each payment date
13
specified in the Note, sums calculated by Lender for payment of the
following as they become due and payable: (i) the estimated taxes and
assessments assessed or levied against the Premises, and (ii) the
estimated premiums for insurance required by the Loan Documents,
excluding commercial general liability insurance. Lender shall use
such deposits to pay the taxes, assessments and premiums when the same
become due. Borrower shall procure and deliver to Lender, in advance,
statements for such charges. If the total payments made by Borrower
under this paragraph exceed the amount of payments actually made by
Lender for taxes, assessments and insurance premiums, such excess
shall be credited by Lender on subsequent deposits to be made by
Borrower. If, however, the deposits are insufficient to pay the taxes,
assessments and insurance premiums when the same shall be due and
payable, Borrower will pay to Lender any amount necessary to make up
the deficiency, five (5) business days before the date when payment of
such taxes, assessments and insurance premiums shall be due. If at any
time Borrower shall tender to Lender, in accordance with the
provisions of the Note secured by this Deed of Trust, full payment of
the entire Indebtedness represented thereby, Lender shall, in
computing the amount of such Indebtedness, credit to the account of
Borrower any balance remaining in the funds accumulated and held by
Lender under the provisions of this paragraph. If there is an Event of
Default resulting in a public sale of the Premises, or if Lender
otherwise acquires the Premises after an Event of Default, Lender
shall apply, at the time of commencement of such proceedings, or at
the time the Premises is otherwise acquired, the balance then
remaining in the funds accumulated under this paragraph as a credit
toward any delinquent or accrued taxes and then in such priority as
Lender elects to the other Indebtedness.
(b) Any funds held under this paragraph shall not constitute any deposit
or account of the Borrower or moneys to which the Borrower is
entitled upon demand, or upon the mere passage of time, or sums to
which Borrower is entitled to any interest or crediting of interest by
virtue of Lender's mere possession of such deposits. Lender shall not
be required to segregate such deposits and may hold such deposits in
its general account or any other account and may commingle such
deposits with any other moneys of Lender or moneys which Lender is
holding on behalf of any other person or entity.
6. In the event of any damage to or destruction of the Premises, or any part
thereof:
(a) Borrower will immediately notify Lender thereof in the manner provided
in this Deed of Trust for the giving of notices. Lender shall have the
right (which may be waived by Lender in writing) to settle and adjust
any claim under such insurance policies required to be maintained by
Borrower. In all circumstances, the proceeds thereof shall be paid to
Lender and Lender is authorized to collect and to give receipts
therefor. Borrower agrees and acknowledges that such proceeds shall be
held by Lender without any allowance of interest and that in any
bankruptcy proceeding of Borrower, all such proceeds shall be deemed
to be "Cash Collateral" as that term is defined in Section 363 of the
Bankruptcy Code. Provided that no Event of Default exists, Borrower
shall have the right to participate in any settlement or adjustment;
provided, however, that any settlement or
14
adjustment shall be subject to the written approval of Lender, not to
be unreasonably withheld.
(b) Such proceeds, after deducting therefrom any reasonable expenses
incurred by Lender in the collection thereof (including but not
limited to reasonable attorneys' fees and costs), shall be applied by
Lender to pay the Indebtedness secured hereby including, but not
limited to the Make Whole Premium, whether or not then due and
payable, provided, however, that if no Event of Default exists at the
time of such application, no Make Whole Premium shall be due.
Notwithstanding anything hereinabove to the contrary,
(i) in the event the casualty occurs more than six (6) months
prior to the Maturity Date and no Event of Default exists,
Lender shall apply such proceeds as follows:
(A) If the aggregate amount of such proceeds is less than
$250,000, Lender shall pay such proceeds directly to
Borrower, to be held in trust for Lender and applied to
the cost of rebuilding and restoring the Premises.
(B) If the aggregate amount of such proceeds equals or
exceeds $250,000 Lender shall disburse such amounts of
the proceeds as Lender reasonably deems necessary for
the repair or replacement of the Premises, subject to
the conditions set forth in paragraph 6(c) below.
(ii) in the event (x) an Event of Default exists, or (y) the
casualty occurs during the last six (6) months prior to the
Maturity Date and Lender determines that the repair and
restoration of such casualty cannot be completed prior to the
Maturity Date, or (z) the conditions set forth in paragraph
6(c) are not met, then Lender, in its sole and absolute
discretion may either:
(A) declare the entire Indebtedness to be immediately due
and payable, provided, however, that if no Event of
Default exists, no Make Whole Premium shall be due. All
proceeds shall be applied toward payment of the
Indebtedness in such priority as Lender elects; or
(B) disburse such proceeds as Lender reasonably deems
necessary for the repair or replacement of the Premises
subject to those conditions set forth in paragraph 6(c)
which Lender in its sole and absolute discretion may
require.
(c) (i) In the event that Borrower is to be reimbursed out of the
insurance proceeds or out of any award or payment received
with respect to a Taking, Lender shall from time to time make
available such proceeds, subject to the following conditions:
(a) there continues to exist no Event of Default; (b) the
delivery to Lender of
15
satisfactory evidence of the estimated cost of completion of
such repair and restoration work and any architect's
certificates, waivers of lien, contractor's sworn statements,
and other evidence of cost and of payment and of the continued
priority of the lien hereof over any potential liens of
mechanics and materialmen (including, without limitation,
title policy endorsements) as Lender may reasonably require
and approve; (c) the time required to complete the repair and
restoration work and for the income from the Premises to
return to the level it was prior to the loss will not exceed
the coverage period of the rental value insurance required
hereunder; (d) the annual net cash flow (annual net operating
income after deduction for tenant improvements, leasing
commissions, annual replacement reserves, and a management
fee) shall equal or exceed 1.5 times the annual debt service
on the Note. Only net operating income from approved executed
Leases in effect on the Premises, having at least three (3)
years remaining prior to the expiration of their term, with no
uncured defaults, shall be used in Lender's determination of
the annual net cash flow; (e) Lender approves the plans and
specifications of such work before such work is commenced if
the estimated cost of rebuilding and restoration exceeds 25%
of the Indebtedness or involves any structural changes or
modifications. If said plans and specifications substantially
comply with those previously approved by Lender, Lender's
approval shall not be unreasonably withheld; (f) if the amount
of any insurance proceeds, award or other payment is
insufficient to cover the cost of restoring and rebuilding the
Premises, Borrower shall pay such cost in excess of such
proceeds, award or other payment before being entitled to
reimbursement out of such funds; (g) Borrower pays to Lender a
non-refundable processing fee equal to the greater of
$5,000.00 or .25% of the amount of such proceeds within sixty
(60) days of the occurrence of any such damage or destruction
and before Lender disburses any proceeds; and (h) such other
conditions to such disbursements, in Lender's reasonable
discretion, as would be customarily required by a construction
lender doing business in the area where the Premises is
located or which are otherwise required by any rating agency
rating a securitization transaction with respect to the Loan.
(ii) No payment made by Lender prior to the final completion of the
repair or restoration work shall, together with all payments
theretofore made, exceed 90% of the cost of such work
performed to the time of payment, and at all times the
undisbursed balance of said proceeds shall be at least
sufficient to pay for the cost of completion of such work free
and clear of all liens. Any proceeds remaining after payment
of the cost of rebuilding and restoration shall, at the option
of Lender, either be (a) applied in reduction of the
Indebtedness secured hereby, provided, however, that if no
Event of Default exists at the time of such application, no
Make Whole Premium shall be due, or (b) paid to Borrower.
(iii) Repair and restoration of the Premises shall be commenced
promptly after the occurrence of the loss and shall be
prosecuted to completion diligently, and the
16
Premises shall be so restored and rebuilt to substantially the
same character and quality as prior to such damage and
destruction and shall comply with all Legal Requirements.
(d) Should such damage or destruction occur after foreclosure or sale
proceedings have been instituted, the proceeds of any such insurance
policy or policies, if not applied in rebuilding or restoration of the
Improvements, shall be used to pay (i) the Indebtedness then due and
owing in the event of a non-judicial sale in such priority as Lender
elects, or (ii) the amount due in accordance with any decree of
foreclosure or deficiency judgment that may be entered in connection
with such proceedings, and the balance, if any, shall be paid to the
owner of the equity of redemption if it shall then be entitled to the
same, or otherwise as any court having jurisdiction may direct.
7. In the event of the commencement of a Taking affecting the Premises:
(a) Borrower shall notify Lender thereof in the manner provided in this
Deed of Trust for the giving of notices. Lender may participate in
such proceeding, and Borrower shall deliver to Lender all documents
requested by it to permit such participation.
(b) Borrower shall cause the proceeds of any award or other payment made
relating to a Taking, to be paid directly to Lender. Lender, in its
sole and absolute discretion: (i) may apply all such proceeds to pay
the Indebtedness in such priority as Lender elects, provided however,
that if no Event of Default exists at the time of such application no
Make Whole Premium shall be due; or (ii) subject to and in accordance
with the provisions set forth in paragraph 6(c) above, may disburse
such amounts of the proceeds as Lender reasonably deems necessary for
the repair or replacement of the Premises.
Notwithstanding anything herein above to the contrary, provided no Event of
Default exists, Lender agrees to disburse the proceeds received from any
Inconsequential Taking, as hereinafter defined, to Borrower for the repair
and/or replacement of the Premises. An Inconsequential Taking shall be a
Taking which (i) results in less than $250,000 in proceeds; (ii) does not,
in Lender's determination, materially or adversely affect the Improvements,
parking, access, ingress, egress or use of the Premises; and (iii) does not
trigger any rights or options of tenants under the Leases.
8. If by the laws of the United States of America or of any state or
governmental subdivision having jurisdiction over Borrower or of the
Premises or of the Loan evidenced by the Loan Documents or any amendments
or modifications thereof, any tax or fee is due or becomes due or is
imposed upon Lender in respect of the issuance of the Note hereby secured
or the making, recording and registration of this Deed of Trust or
otherwise in connection with the Loan Documents, the Environmental
Indemnity or the Loan, except for Lender's income or franchise tax,
Borrower covenants and agrees to pay such tax or fee in the manner required
by such law and to hold harmless and indemnify Trustee and Lender, their
successors and assigns, against any liability incurred by reason of the
imposition of any such tax or fee.
17
9. (a) Upon the occurrence of any Event of Default, Lender may, but need
not, make any payment or perform any act herein required of Borrower,
in any form and manner deemed expedient and may, but need not, make
full or partial payments of principal or interest on prior
encumbrances, if any, and purchase, discharge, compromise or settle
any tax lien or other prior lien or title or claim thereof, or redeem
from any tax sale or forfeiture affecting said Premises, or contest
any tax or assessment. All moneys paid for any of the purposes herein
authorized and all reasonable expenses paid or incurred in connection
therewith, including but not limited to, reasonable attorneys' fees
and costs and reasonable attorneys' fees and costs on appeal, and any
other money advanced by Lender to protect the Premises and the lien
hereof, shall be so much additional Indebtedness secured hereby and
shall become immediately due and payable without notice and with
interest thereon at the Default Rate from the date of expenditure or
advance until paid.
(b) In making any payment hereby authorized relating to taxes or
assessments or for the purchase, discharge, compromise or settlement
of any prior lien, Lender may make such payment according to any xxxx,
statement or estimate secured from the appropriate public office
without inquiry into the accuracy thereof or into the validity of any
tax, assessment, sale, forfeiture, tax lien or title or claim thereof
or without inquiry as to the validity or amount of any claim for lien
which may be asserted.
10. If one or more of the following events (herein called an "EVENT OF DEFAULT"
or "EVENTS OF DEFAULT" as the context so requires) shall have occurred:
(a) failure to pay when due any principal, interest, Make Whole Premium or
other Indebtedness, utilities, taxes or assessments or insurance
premiums required pursuant to the Loan Documents or the Environmental
Indemnity, and such failure shall have continued for 5 days as to
payment of any principal, interest or taxes or assessments, or
insurance premiums or for 5 days after written notice specifying such
default is given by Lender to Borrower as to payment of any Make Whole
Premium; or
(b) Borrower, Interest Owner or any guarantor voluntarily brings or
acquiesces to any of the following: (A) any action for dissolution,
act of dissolution or dissolution or the like of Borrower, Interest
Owner or any guarantor under the Federal Bankruptcy Code as now or
hereafter constituted; (B) the filing of a petition or answer
proposing the adjudication of Borrower, Interest Owner or any
guarantor as a bankrupt or its reorganization or arrangement, or any
composition, readjustment, liquidation, dissolution or similar relief
with respect to it pursuant to any present or future federal or state
bankruptcy or similar law; or (C) the appointment by order of a court
of competent jurisdiction of a receiver, trustee or liquidator of the
Premises or any part thereof or of Borrower, Interest Owner or any
guarantor or of substantially all of the assets of Borrower, Interest
Owner or any guarantor; or
18
(c) one or more of the items set forth in paragraph 10(b) above occur
which were either not (i) voluntarily brought by Borrower, Interest
Owner or any guarantor or (ii) acquiesced in by Borrower, Interest
Owner or any guarantor, and which are not discharged or dismissed
within 90 days after the action, filing or appointment, as the case
may be; or
With respect to the matters in (b) and (c) above for an Interest Owner
only, no Event of Default shall occur until an interested party or
Interest Owner asserts a claim or right against Borrower or the
Premises which delays or otherwise affects Lender's rights, remedies,
or interests granted under the Loan Documents (whether or not such
assertion is successful).
(d) with respect to the matters not described in the other subparagraphs
of this paragraph 10, failure to duly observe or perform any covenant,
condition or agreement of the Borrower or any guarantor contained in
this Deed of Trust, the Guaranty, the Guaranty-II, the Note or the
Assignment of Leases from Borrower to Lender or in any other
instrument or agreement which evidences or secures the Loan (the "LOAN
DOCUMENTS"), or in the Environmental Indemnity and such failure shall
have continued for 30 days after Notice specifying such failure is
given by Lender to Borrower; or
If any failure to observe or perform under (d) above shall be of such
nature that it cannot be cured or remedied within 30 days, Borrower
shall be entitled to a reasonable period of time to cure or remedy
such failure (not to exceed 90 days following the giving of Notice),
provided Borrower commences the cure or remedy thereof within the 30
day period following the giving of Notice and thereafter proceeds with
diligence, as determined by Lender, to complete such cure or remedy.
(e) the failure of Borrower to duly observe or perform any of the
covenants, conditions and agreements of the Borrower contained in
paragraph 2(f) of this Deed of Trust; or
(f) any representation when made by or on behalf of Borrower, Interest
Owner or any guarantor regarding the Premises, the making or delivery
of any of the Loan Documents or the Environmental Indemnity or in any
material written information provided by or on behalf of Borrower,
Interest Owner or any guarantor in connection with the Loan shall
prove to be untrue or inaccurate in any material respect; or
(g) the failure of Borrower to give Notice to Lender within 90 days after
the death of any individual who is personally liable for any
obligation under the Loan Documents or the Environmental Indemnity, as
Borrower, indemnitor or guarantor, whether or not such individual had
executed the Note or this Deed of Trust; or
(h) subject to the provisions of paragraph 2(f), the failure of Borrower
to provide Lender with an assumption agreement in form and substance
and executed by a person(s) or entity(ies) acceptable to Lender in its
sole discretion to assume the obligations of any deceased individual
who is personally liable for any obligation under the Loan
19
Documents or the Environmental Indemnity, as Borrower, indemnitor or
guarantor, whether or not such individual had executed the Note or
this Deed of Trust, and such failure shall have continued for 90 days
after the death of such individual; or
(i) the failure of Borrower to remain a Single-Purpose Entity;
then, in each and every such case, the whole of said principal sum hereby
secured shall, at the option of the Lender and without further notice to
Borrower, become immediately due and payable together with accrued interest
thereon, a Make Whole Premium calculated in accordance with the provisions
of the Loan Documents and all other Indebtedness, and whether or not Lender
has exercised said option, interest shall accrue on the entire principal
balance and any interest or Make Whole Premium or other Indebtedness then
due, at the Default Rate until fully paid or if Lender has not exercised
said option, for the duration of any Event of Default. As used in this Deed
of Trust, "SINGLE PURPOSE ENTITY" means a corporation, limited or general
partnership, limited liability company, or business trust which, at all
times until the Indebtedness is paid in full (i) will be organized solely
for the purpose of owning the Premises, (ii) will not engage in any
business unrelated to the ownership of the Premises, (iii) will not have
any assets other than those related to the Premises, (iv) will not engage
in, seek or consent to any dissolution, winding up, liquidation,
consolidation or merger, and, except as otherwise expressly permitted by
the Loan Documents, will not engage in, seek or consent to any asset sale,
transfer of partnership, membership, shareholder, beneficial interests, or
amendment of its limited partnership agreement, articles of incorporation,
articles of organization, certificate of formation, operating agreement,
trust agreement, or trust certificate (as applicable), (v) will not fail to
correct any known misunderstanding regarding the separate identity of such
Entity, (vi) without the unanimous consent of all of the partners,
directors, members, beneficial owners and trustees, as applicable, will not
with respect to itself or to any other Entity in which it has a direct or
indirect legal or beneficial ownership interest (a) file a bankruptcy,
insolvency or reorganization petition or otherwise institute insolvency
proceedings or otherwise seek any relief under any laws relating to the
relief from debts or the protection of debtors generally; (b) seek or
consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator, custodian or any similar official for such Entity or all or
any portion of such Entity's properties; (c) make any assignment for the
benefit of such Entity's creditors; or (d) take any action that might cause
such Entity to become insolvent, (vii) will maintain its accounts, books
and records separate from any other person or Entity, (viii) will maintain
its books, records, resolutions and agreements as official records, (ix)
has not commingled and will not commingle its funds or assets with those of
any other person or Entity, (x) has held and will hold its assets in its
own name, (xi) will conduct its business in its name, (xii) will maintain
its financial statements, accounting records and other Entity documents
separate from any other person or Entity, (xiii) will pay its own
liabilities out of its own funds and assets, (xiv) will observe all
corporate, limited liability company and partnership formalities, as
applicable, (xv) has maintained and will maintain an arms-length
relationship with its Affiliates, (xvi) if such Entity owns the Premises,
will have no indebtedness other than the Indebtedness and commercially
reasonable unsecured trade payables in the ordinary course of business
relating to the ownership and operation of the Premises which are paid
within sixty (60) days of the date incurred, (xvii) will not assume or
guarantee or become
20
obligated for the debts of any other person or Entity or hold out its
credit as being available to satisfy the obligations of any other person or
Entity, except for the Indebtedness, (xviii) will not acquire obligations
or securities of its partners, members, trustees, beneficial owners or
shareholders, (xix) will allocate fairly and reasonably shared expenses,
including, without limitation, shared office space and uses separate
stationery, invoices and checks, (xx) will not pledge its assets for the
benefit of any other person or Entity, (xxi) will hold itself out and
identify itself as a separate and distinct Entity under its own name and
not as a division or part of any other person or Entity, (xxii) will not
make loans to any person or Entity, (xxiii) will not identify its partners,
members, shareholders, trustees, beneficiaries or any Affiliates of any of
them as a division or part of it, (xxiv) will not enter into or be a party
to, any transaction with its partners, members, shareholders,
beneficiaries, trustees or its Affiliates except in the ordinary course of
its business and on terms which are intrinsically fair and are no less
favorable to it than would be obtained in a comparable arms-length
transaction with an unrelated third party, (xxv) will pay the salaries of
its own employees from its own funds, (xxvi) will maintain adequate capital
in light of its contemplated business operations, (xxvii) if such Entity is
a limited liability company, limited partnership, or business trust then
such Entity shall continue (and not dissolve) for so long as a solvent
managing member, general partner, or trustee, as applicable, exists and
such Entity's organizational documents shall contain such provision.
It is the intention of the parties hereto that this Deed of Trust is made
and executed to comply with the provisions of NCGS Sections 45-67 ET SEQ.,
and shall secure any and all present and future Indebtedness which Grantor
now or may hereafter owe to Lender (but in no event incurred more than
fifteen (15) years after the date hereof), including without limitation,
any future loans and advances made by Lender pursuant to the Note to or for
the benefit of Borrower, up to a maximum aggregate amount of principal
indebtedness outstanding at any one time of Ten Million Six Hundred
Eight-Four Thousand and 00/100 Dollars ($10,684,000). The amount of present
Indebtedness of Grantor to Lender secured hereby is in the sum of
$5,342,000.00 as of the date hereof, and the amount of all present and
future Indebtedness of Borrower to Lender secured hereby is in the sum of
$10,684,000 plus interest, costs and advances made by Lender to protect or
preserve the Premises or the lien hereof on the Premises, or for taxes,
assessments or insurance premiums as herein provided. Pursuant to NCGS
Section 45-68(2), Borrower and Lender agree that at the time each
Indebtedness is incurred, it shall not be necessary for each such
Indebtedness to be evidenced by the Loan Documents or any other written
instrument or notation signed by Borrower and stipulating that such
Indebtedness is secured by this Deed of Trust.
THIS CONVEYANCE IS MADE UPON THIS SPECIAL TRUST that if Borrower shall pay
the Note secured hereby in accordance with its terms, together with
interest thereon, and all renewals and extensions thereof, and shall
faithfully comply with all of the covenants, stipulations and conditions of
this Deed of Trust and of the other documents evidencing the obligations
secured hereby, then this Deed of Trust shall become null and void and may
be canceled of record at the request and at the cost of Borrower; however,
if an Event of Default (as hereinafter defined) shall occur, Lender may, at
its option, declare the entire principal sum secured hereby, immediately
due and payable; and on the application of Lender it shall be lawful for
and the duty
21
of Trustee, and Trustee is hereby authorized and empowered to expose to
sale and to sell the Premises or any part thereof at public auction to the
highest bidder for cash, after having first complied with all applicable
requirements of North Carolina law with respect to the exercise of powers
of sale contained in deeds of trust, and upon such sale Trustee shall
collect the purchase proceeds and convey title to the portion of the
Premises so sold to the purchaser in fee simple. After retaining from the
proceeds of such sale a commission for his services as hereinafter provided
and all expenses incurred by him, including reasonable attorneys' fees,
Trustee shall apply the residue of the proceeds, first to the reimbursement
of Lender for all sums expended or incurred by the Lender under this Deed
of Trust or to establish, preserve or enforce this Deed of Trust; second,
to the payment of the Indebtedness secured hereby; and the balance, if any,
shall be paid to Borrower or other person lawfully entitled thereto.
Borrower agrees that in the event of a sale hereunder, Lender shall have
the right to bid at such sale and shall have the right to credit the
Indebtedness secured hereby against the purchase price. Trustee shall have
the right to designate the place of sale in compliance with applicable law,
and the sale shall be held at the place designated by the notice of sale.
Trustee may require the successful bidder at any sale to deposit
immediately with Trustee cash or certified check in an amount up to ten
percent (10%) of the bid, provided notice of such requirement is contained
in the advertisement of the sale. The bid may be rejected if the deposit is
not immediately made. Such deposit shall be refunded in case a resale is
had because of an upset bid or if Trustee is unable to convey the portion
of the Premises so sold to the bidder because the power of sale has been
terminated in accordance with applicable law. If the purchaser fails to
comply with its bid, the deposit shall be applied to the expenses of the
sale and the residue, if any, shall be applied to the Indebtedness secured
hereby. In all other cases, the deposit shall be applied to the purchase
price. Pursuant to Section 25-9-501 (4) of the North Carolina Uniform
Commercial Code (or any amendment thereto), Trustee is expressly authorized
and empowered to expose to sale and sell, together with the real estate,
any portion of the Premises which constitutes personal property. If
personal property is sold hereunder, it need not be at the place of sale.
The notice of sale, however, shall state the time and place where such
personal property may be inspected prior to sale. The Premises may be sold
in such parcels or lots as Trustee may determine without regard to
principles of marshaling, and the Premises may be sold at one sale or in
multiple sales as determined by Trustee. The exercise of the power of sale
hereunder by Trustee on one or more occasions shall not be deemed to
extinguish the power of sale, which power of sale shall continue in full
force and effect until all the Premises shall have been finally sold and
properly conveyed to the purchasers at the sales. The Trustee's commission
shall be a fair commission of up to, but not exceeding, the following
formula: (i) if the Premises are sold, then from the proceeds of a sale
Trustee shall be entitled to a commission not to exceed five percent (5%)
of the gross proceeds thereof; (ii) if the proceedings are commenced by
Trustee and a notice of sale has been advertised, but the Premises are not
sold, then Trustee shall be entitled to a commission of two and one-half
percent (2.5%) of the outstanding Indebtedness secured hereby at the time
of commencement of such proceedings; and (iii) if Trustee has delivered
notice to Borrower of such sale, but no further proceedings are undertaken,
then Trustee shall be entitled to a commission equal to one and one-quarter
percent (1.25%) of the outstanding Indebtedness secured hereby at the time
of commencement of such proceedings.
22
11. Borrower agrees that if Lender accelerates the whole or any part of the
principal sum hereby secured after the occurrence of an Event of Default,
or applies any proceeds pursuant to the provisions hereof, Borrower waives
any right to prepay the principal sum hereby secured in whole or in part
without premium and agrees to pay, as yield maintenance protection and not
as a penalty, a "MAKE WHOLE PREMIUM". However, in the event any proceeds
from a casualty or Taking of the Premises are applied to reduce the
principal balance under the Note, no Make Whole Premium shall be due so
long as no Event of Default exists at the time of such application. The
Make Whole Premium shall be the greater of one percent (1%) of the
principal amount to be prepaid or a premium calculated as follows;
(a) Determine the "REINVESTMENT YIELD." The Reinvestment
Yield will be equal to the yield on the U.S. Treasury Issue ("PRIMARY
ISSUE")* published one week prior to the date of prepayment and converted
to an equivalent monthly compounded nominal yield.
*At this time there is not a U.S. Treasury Issue for this prepayment
period. At the time of prepayment, Lender shall select in its sole and
absolute discretion a U.S. Treasury Issue with similar remaining time to
the Maturity Date.
(b) Calculate the "PRESENT VALUE OF THE LOAN." The Present Value of the
Loan is the present value of the payments to be made in accordance
with the Note (all installment payments and any remaining payment due
on the Maturity Date) discounted at the Reinvestment Yield for the
number of months remaining from the date of prepayment to the Maturity
Date. In the event of a partial prepayment as a result of the
aforementioned application of proceeds, the Present Value of the Loan
shall be calculated in accordance with the preceding sentence
multiplied by the fraction which results from dividing the amount of
the prepaid proceeds by the principal balance immediately prior to
prepayment.
(c) Subtract the amount of the prepaid proceeds from the Present Value of
the Loan as of the date of prepayment. Any resulting positive
differential shall be the premium.
Notwithstanding anything herein to the contrary, during the last 90 days
prior to the Maturity Date, the Make Whole Premium shall not be subject to
the one percent (1%) minimum and shall be calculated only as provided in
(a) through (c) above.
12. In the event of such a sale of the Premises or any part thereof and the
execution of a deed or deeds therefor under these trusts, any recital
therein of the occurrence of an Event of Default or of the giving or
recording of any notice or demand by Trustee or Lender regarding such sale
shall be conclusive proof thereof, and the receipt of the purchase money
recited therein shall fully discharge the purchaser from any obligation for
the proper application of the proceeds of sale in accordance with these
trusts.
13. Following the occurrence of an Event of Default, unless the same has been
specifically waived in writing, Borrower shall forthwith upon demand of
Trustee or Lender surrender to Lender possession of the Premises, and
Lender shall be entitled to take actual possession of the Premises
23
or any part thereof personally or by its agents or attorneys, 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
Premises together with all documents, books, records, papers and accounts
of the Borrower or the then owner of the Premises relating thereto, and may
exclude Borrower, its agents or assigns 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:
(a) hold, operate, maintain, repair, rebuild, replace, alter, improve,
manage or control the Premises as it deems judicious, insure and
reinsure the same and any risks related to Lender's possession,
operation and management thereof and receive all Rents, either
personally or by its agents, and with full power to use such measures,
legal or equitable, as in its discretion it deems proper or necessary
to enforce the payment or security of the Rents, including actions for
the recovery of Rent, actions in forcible detainer and actions in
distress for Rents, hereby granting full power and authority to
exercise each and every of the rights, privileges and powers herein
granted at any and all times hereafter, without notice to Borrower;
and
(b) conduct leasing activity pursuant to the provisions of the Assignment
of Leases.
Neither Trustee nor Lender shall be obligated to perform or discharge, nor
does either hereby undertake to perform or discharge, any obligation, duty
or liability under any Lease. Except to the extent that the same is caused
solely by Lender's gross negligence or willful misconduct, should Trustee
or Lender incur any liability, loss or damage under any Leases, or under or
by reason of the Assignment of Leases, or in the defense of any claims or
demands whatsoever which may be asserted against Lender or Trustee by
reason of any alleged obligations or undertakings on its part to perform or
discharge any of the terms, covenants or agreements in any Lease, the
amount thereof, including costs, expenses and reasonable attorneys' fees
and costs, including reasonable attorneys' fees and costs on appeal, shall
be added to the Indebtedness and secured hereby.
14. Upon the occurrence of an Event of Default, Trustee and Lender in the
exercise of the rights and powers conferred upon them shall have the full
power to use and apply the Rents, less costs and expenses of collection to
the payment of or on account of the items listed in (a) - (c) below, at the
election of Lender and in such order as Lender may determine as follows:
(a) to the payment of (i) the expenses of operating and maintaining the
Premises, including, but not limited to the cost of management,
leasing (which shall include reasonable compensation to Trustee,
Lender and their respective agent or agents if management and/or
leasing is delegated to an agent or agents), repairing, rebuilding,
replacing, altering and improving the Premises, (ii) premiums on
insurance as hereinabove authorized, (iii) taxes and special
assessments now due or which may hereafter become due on the Premises,
and (iv) expenses of placing the Premises in such condition as will,
in the sole judgment of Lender, make it readily rentable;
24
(b) to the payment of any principal, interest or any other Indebtedness
secured hereby or any deficiency which may result from any foreclosure
sale;
(c) to the payment of established claims for damages, if any, reasonable
attorneys' fees and costs and reasonable attorneys' fees and costs on
appeal.
The manner of the application of Rents, the reasonableness of the costs and
charges to which such Rents are applied and the item or items which shall
be credited thereby shall be within the sole and unlimited discretion of
Lender. To the extent that the costs and expenses in (a) and (c) above
exceed the amounts collected, the excess shall be added to the Indebtedness
and secured hereby.
15. Upon the occurrence of any Event of Default, unless the same has been
specifically waived in writing, Lender may apply to any court having
jurisdiction for the appointment of a receiver of the Premises. Such
appointment may be made either before or after sale, without notice,
without regard to the solvency or insolvency of Borrower at the time of
application for such receiver and without regard to the then value of the
Premises or the adequacy of Lender's security. Lender may be appointed as
such receiver. The receiver shall have power to collect the Rents during
the pendency of any foreclosure proceedings and, in case of a sale, during
the full statutory period of redemption, if any, as well as during any
further times when Borrower, except for the intervention of such receiver,
would be entitled to collect such Rents. In addition, the receiver shall
have all other powers which shall be necessary or are usual in such cases
for the protection, possession, control, management and operation of the
Premises during the whole of said period. The court from time to time may
authorize the receiver to apply the net income in its possession at
Lender's election and in such order as Lender may determine in payment in
full or in part of those items listed in paragraph 16.
16. (a) Borrower agrees that all reasonable costs, charges and expenses,
including but not limited to, reasonable attorneys' fees and costs,
incurred or expended by Trustee or Lender arising out of or in
connection with any action, proceeding or hearing, legal, equitable or
quasi-legal, including the preparation therefor and any appeal
therefrom, in any way affecting or pertaining to the Loan Documents,
the Environmental Indemnity, or the Premises, shall be promptly paid
by Borrower. All such sums not promptly paid by Borrower shall be
added to the Indebtedness secured hereby and shall bear interest at
the Default Rate from the date of such advance and shall be due and
payable on demand.
(b) Borrower hereby agrees that upon the occurrence of an Event of Default
and the acceleration of the principal sum secured hereby pursuant to
this Deed of Trust, to the full extent that such rights can be
lawfully waived, Borrower hereby waives and agrees not to insist upon,
plead, or in any manner take advantage of, any notice of acceleration,
any stay, extension, exemption, homestead, marshaling or moratorium
law or any law providing for the valuation or appraisement of all or
any part of the Premises prior to any sale or sales thereof under any
provision of this Deed of Trust or before or after any decree,
judgment or order of any court or confirmation thereof, or claim or
exercise any right to redeem all or any part of the Premises so sold
and hereby expressly waives to the
25
full extent permitted by applicable law on behalf of itself and each
and every person or entity acquiring any right, title or interest in
or to all or any part of the Premises, all benefit and advantage of
any such laws which would otherwise be available to Borrower or any
such person or entity, and agrees that neither Borrower nor any such
person or entity will invoke or utilize any such law to otherwise
hinder, delay or impede the exercise of any remedy granted or
delegated to Lender herein but will permit the exercise of such remedy
as though any such laws had not been enacted. Borrower hereby further
expressly waives to the full extent permitted by applicable law on
behalf of itself and each and every person or entity acquiring any
right, title or interest in or to all or any part of the Premises any
and all rights of redemption from any sale or any order or decree of
foreclosure obtained pursuant to provisions of this Deed of Trust.
17. In accordance with and subject to the terms and conditions of the
Assignment of Leases, Borrower hereby assigns to Lender directly and
absolutely, and not merely collaterally, the interest of Borrower as lessor
under the Leases of the Premises and the Rents payable under any Lease
and/or with respect to the use of the Premises, or portion thereof,
including any oil, gas or mineral lease, or any installments of money
payable pursuant to any agreement or any sale of the Premises or any part
thereof, subject only to a license, if any, granted by Lender to Borrower
with respect thereto prior to the occurrence of an Event of Default.
Borrower has executed and delivered the Assignment of Leases which grants
to Lender specific rights and remedies in respect of said Leases and
governs the collection of Rents thereunder and from the use of the
Premises, and such rights and remedies so granted shall be cumulative of
those granted herein.
The collection of such Rents and the application thereof as aforesaid shall
not cure or waive any Event of Default or notice of default hereunder or
invalidate any act done pursuant to such notice, except to the extent any
such Event of Default is fully cured. Failure or discontinuance of Lender
at any time, or from time to time, to collect any such moneys shall not
impair in any manner the subsequent enforcement by Lender of the right,
power and authority herein conferred on Lender. Nothing contained herein,
including the exercise of any right, power or authority herein granted to
Lender, shall be, or be construed to be, an affirmation by Lender of any
tenancy, Lease or option, or an assumption of liability under, or the
subordination of the lien or charge of this Deed of Trust to any such
tenancy, Lease or option. Borrower hereby agrees that, in the event Lender
exercises its rights as provided for in this paragraph or in the Assignment
of Leases, Borrower waives any right to compensation for the use of
Borrower's furniture, furnishings or equipment in the Premises for the
period such assignment of rents or receivership is in effect, it being
understood that the Rents derived from the use of any such items shall be
applied to Borrower's obligations hereunder as above provided.
18. All rights and remedies granted to Trustee or Lender in the Loan Documents
shall be in addition to and not in limitation of any rights and remedies to
which it is entitled in equity, at law or by statute, and the invalidity of
any right or remedy herein provided by reason of its conflict with
applicable law or statute shall not affect any other valid right or remedy
afforded to Trustee or Lender. No waiver of any default or Event of Default
under any of the Loan Documents shall at any time thereafter be held to be
a waiver of any rights of the Trustee or Lender hereunder, nor
26
shall any waiver of a prior Event of Default or default operate to waive
any subsequent Event of Default or default. All remedies provided for in
the Loan Documents are cumulative and may, at the election of Lender, be
exercised alternatively, successively or concurrently. No act of Trustee or
Lender shall be construed as an election to proceed under any one provision
herein to the exclusion of any other provision or to proceed against one
portion of the Premises to the exclusion of any other portion. Time is of
the essence under this Deed of Trust and the Loan Documents.
19. By accepting payment of any sum secured hereby after its due date, Lender
does not waive its right either to require prompt payment when due of all
other sums or installments so secured or to declare a default for failure
to pay such other sums or installments.
20. The usury provisions of paragraph 6 of the Note and the limitation of
recourse liability provisions of paragraph 9 of the Note are fully
incorporated herein by reference as if the same were specifically stated
here.
21. In the event one or more provisions of the Loan Documents shall be held to
be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision hereof,
and the Loan Documents shall be construed as if any such provision had
never been contained herein.
22. If the payment of the Indebtedness secured hereby or of any part thereof
shall be extended or varied, or if any part of the security be released,
all persons now or at any time hereafter liable therefor, or interested in
said Premises, shall be held to assent to such extension, variation or
release, and their liability and the lien and all provisions hereof shall
continue in full force, the right of recourse against all such persons
being expressly reserved by Lender notwithstanding such variation or
release.
23. Upon payment in full of the principal sum, interest and other Indebtedness
secured by the Loan Documents, these presents shall be null and void, and
Trustee shall release this Deed of Trust and the lien hereof by proper
instrument executed in recordable form.
24. (a) Borrower hereby grants to Lender and its respective agents, attorneys,
employees, consultants, contractors and assigns an irrevocable license
and authorization to enter upon and inspect the Premises and all
facilities located thereon at reasonable times, subject to the
inspection rights provisions afforded to Borrower under the Leases.
Lender shall make reasonable efforts to ensure that the operations of
the tenants are not disrupted.
(b) In connection with any sale or conveyance of this Deed of Trust,
Borrower grants to Lender and its respective agents, attorneys,
employees, consultants, contractors and assigns an irrevocable license
and authorization to conduct, at Lender's expense, a Phase I
environmental audit of the Premises, subject to the inspection rights
provisions afforded to Borrower under the Leases.
27
(c) In the event there has been an Event of Default or in the event Lender
has formed a reasonable belief, based on its inspection of the
Premises or other factors known to it, that Hazardous Materials may be
present on the Premises, then Borrower grants to Lender and its
respective agents, attorneys, employees, consultants, contractors and
assigns an irrevocable license and authorization to conduct, at
Borrower's expense using Engineering Consulting Services, Inc. or the
firm of Borrower's choice, subject to Lender's reasonable approval,
environmental tests of the Premises, including without limitation, a
Phase I environmental audit, subsurface testing, soil and ground water
testing, and other tests which may physically invade the Premises or
facilities (the "TESTS"). The scope of the Tests shall be such as
Lender, in its sole discretion, determines is necessary to (i)
investigate the condition of the Premises, (ii) protect the security
interests created under this Deed of Trust, or (iii) determine
compliance with Environmental Laws, the provisions of the Loan
Documents and the Environmental Indemnity and other matters relating
thereto. Lender shall make reasonable efforts to ensure that the
operations of the tenants are not disrupted.
(d) Provided no Event of Default has occurred, Lender will provide
Borrower with reasonable notice of Lender's intent to enter, inspect
and conduct the Tests provided for in this paragraph. In addition,
Lender shall conduct such inspections and Tests during normal business
hours and use reasonable efforts to minimize disruption of the
lessees' business operations.
The foregoing licenses and authorizations are intended to be a means
of protection of Lender's security interest in the Premises and not as
participation in the management of the Premises.
25. Within 15 days after any written request by any party to this Deed of
Trust, the requested party shall certify, by a written statement duly
acknowledged, the amount of principal, interest and other Indebtedness then
owing on the Note, the terms of payment, Maturity Date and the date to
which interest has been paid. Borrower shall further certify whether any
defaults, offsets or defenses exist against the Indebtedness secured
hereby. Borrower shall also furnish to Lender, within 30 days of its
request therefor, tenant estoppel letters from such tenants of the Premises
as Lender may reasonably require; which Lender shall not request more than
one (1) time per annum.
26. (a) Borrower shall furnish to Lender within 90 days after the end of each
fiscal year of Borrower, a detailed and analytical financial report
prepared in accordance with generally accepted accounting principles
consistently applied, certified in a manner and otherwise in form
acceptable to Lender covering the full and complete operation of the
Premises, including without limitation; (i) income and expense
statements, and (ii) a report of the leasing status of the Premises as
of the end of such period, identifying the lessee, square footage
leased, rental amount, base rental increases, rental concessions
and/or rental deferments, if any, and commencement and expiration
dates under each Lease of the Premises and a listing of sales
28
volumes attained by lessees of the Premises under percentage leases
for the immediately preceding year, and (iii) within 15 days after
written request by Lender, an aged accounts receivable report and an
annual budget. Such reports shall be prepared by an accountant who may
be an employee of Borrower, or of an affiliate of Borrower, acceptable
to Lender. In addition to the reports referred to herein, Borrower
shall promptly supply any additional information or records relating
to the Premises or its operation as Lender may from time to time
reasonably request.
(b) Within 15 days after any written request by Lender, Borrower shall
furnish to Lender, for the most recently completed fiscal quarter of
Borrower, the reports specified in (i) and (ii) above.
(c) Within 15 days after any written request by Lender, Borrower shall
furnish to Lender, for the most recently completed fiscal year, a
combined or consolidated federal income tax return filed by IWRRET.
Said information shall be subject to Lender's review.
27. Each notice, consent, request, report or other communication under this
Deed of Trust or any other Loan Document (each, a "NOTICE"), which any
party hereto may desire or be required to give to the other shall be deemed
to be an adequate and sufficient notice if given in writing and service is
made by either (i) registered or certified mail, postage prepaid, in which
case notice shall be deemed to have been received three (3) business days
following deposit to U.S. mail; or (ii) nationally recognized overnight air
courier, next day delivery, prepaid, in which case such notice shall be
deemed to have been received one (1) business day following delivery to
such nationally recognized overnight air courier. All Notices shall be
addressed to Borrower at its address given on the first page hereof, or to
Lender at c/o Principal Real Estate Investors, LLC, 000 Xxxxx Xxxxxx, Xxx
Xxxxxx, Xxxx 00000-0000, Attn: Commercial Real Estate Servicing, Loan No.
753865, or to such other place as any party may by written notice to the
other parties designate as a place for service of notice. Borrower shall
not be permitted to designate more than one place for service of Notice
concurrently.
28. Lender, from time to time, may substitute another Trustee in place of the
Trustee named herein, to execute the trusts hereby created; and upon such
appointment, and without conveyance to the successor trustee, the successor
trustee shall be vested with all the title, interest, powers, duties and
trusts in the Premises hereby vested in or conferred upon Trustee herein
named. Each such appointment and substitution shall be made by written
instrument executed by the Lender containing reference to this Deed of
Trust sufficient to identify it, which instrument, when recorded in the
office of the Register of Deeds of the county or counties in which the
Premises is situated, shall be conclusive proof of proper appointment of
the successor trustee. The recital or statement, in any instrument executed
by Trustee in pursuance of any of said trusts, of the due authorization of
any agent of the Trustee executing the same shall for all purposes be
conclusive proof of such authorization.
29. Trustee at any time, at Trustee's option, may commence and maintain suit in
any court of competent jurisdiction and obtain the aid and direction of
said court in the execution by it of the trusts or any of them, herein
expressed or contained, and, in such suit, may obtain the orders or
29
decrees, interlocutory or final of said court directing the execution of
said trusts, and confirming and approving Trustee's acts, or any of them,
or any sales or conveyances made by Trustee, and adjudging the validity
thereof, and directing that the purchasers of the property sold and
conveyed be let into immediate possession thereof, and providing for orders
of court or other process requiring the Sheriff of the county in which said
property is situated to place and maintain said purchasers in quiet and
peaceable possession of the property so purchased by them, and the whole
thereof.
30. Borrower has had the opportunity to fully negotiate the terms hereof and
modify the draftsmanship of the Loan Documents and the Environmental
Indemnity. Therefore, the terms of the Loan Documents and the Environmental
Indemnity shall be construed and interpreted without any presumption,
inference, or rule requiring construction or interpretation of any
provision of the Loan Documents and the Environmental Indemnity against the
interest of the party causing the Loan Documents and the Environmental
Indemnity or any portion of it to be drafted. Borrower is entering into the
Loan Documents and the Environmental Indemnity freely and voluntarily
without any duress, economic or otherwise.
31. Borrower, forthwith upon request, at any and all times hereafter, at the
expense of Borrower, will cause to be made, executed, acknowledged and
delivered to Trustee, any and every deed or assurance in law which Trustee
or counsel of Trustee shall reasonably advise or require for the more sure,
effectual and satisfactory granting and confirming of said Premises unto
Trustee.
32. Trustee shall not be liable or responsible for its acts or omissions
hereunder, except for Trustee's own gross negligence or willful default, or
be liable or responsible for any acts or omissions of any agent, attorneys
or employee by him employed hereunder, if selected with reasonable care.
33. Trustee accepts this trust when this Deed of Trust executed and
acknowledged is made a public record as provided by law. Trustee is not
obligated to notify any party hereto of pending sale under any other deed
of trust or of any action or proceeding in which Borrower, Lender, or
Trustee shall be a party unless brought by Trustee.
34. This Deed of Trust and all provisions hereof shall inure to the benefit of
the heirs, successors and assigns of Lender and shall bind the heirs and
permitted successors and assigns of Borrower.
35. This Deed of Trust shall be governed by, and construed in accordance with,
the laws of the state of North Carolina, without regard to its conflicts of
law principles.
36. As used herein, the term "DEFAULT RATE" means a rate equal to the lesser of
(i) four percent (4%) per annum above the then applicable interest rate
payable under the Note or (ii) the maximum rate allowed by applicable law.
37. BORROWER AND LENDER EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE, TO
THE EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY ACTIONS BROUGHT BY
BORROWER, TRUSTEE OR LENDER IN CONNECTION
30
WITH THIS DEED OF TRUST, ANY OF THE LOAN DOCUMENTS, THE INDEBTEDNESS
SECURED HEREBY, OR ANY OTHER STATEMENTS OR ACTIONS OF LENDER.
38. This Deed of Trust and the Indebtedness secured hereby is for the sole
purpose of conducting or acquiring a lawful business, professional or
commercial activity or for the acquisition or management of real or
personal property as a commercial investment, and all proceeds of such
Indebtedness shall be used for said business or commercial investment
purpose. Such proceeds will not be used for the purchase of any security
within the meaning of the Securities Exchange Act of 1934, as amended, or
any regulation issued pursuant thereto, including without limitation,
Regulations U, T and X of the Board of Governors of the Federal Reserve
System. This is not a purchase money deed of trust where a seller is
providing financing to a buyer for the payment of all or any portion of the
purchase price and the Premises secured hereby is not a residence or
homestead or used for mining, grazing, agriculture, timber or farming
purposes.
39. Unless Lender shall otherwise direct in writing, Borrower shall appear in
and defend all actions or proceedings purporting to affect the security
hereunder, or any right or power of the Lender, excluding any Federal
regulatory proceedings against Lender that are not instituted because of
any act or omission by Borrower, any Interest Owner or which result from
the Premises. The Lender shall have the right to appear in such actions or
proceedings. Borrower shall save Lender harmless from all reasonable costs
and expenses, including but not limited to, reasonable attorneys' fees and
costs and costs of a title search, continuation of abstract and preparation
of survey incurred by reason of any action, suit, proceeding, hearing,
motion or application before any court or administrative body in and to
which Lender may be or become a party by reason hereof, excluding any
Federal regulatory proceedings against Lender that are not instituted
because of any act or omission by Borrower, any Interest Owner or which
result from the Premises. Such proceedings shall include but not be limited
to condemnation, bankruptcy, probate and administration proceedings, as
well as any other action, suit, proceeding, right, motion or application
wherein proof of claim is by law required to be filed or in which it
becomes necessary to defend or uphold the terms of this Deed of Trust or
the Loan Documents or otherwise purporting to affect the security hereof or
the rights or powers of Lender. All money paid or expended by Lender in
that regard, together with interest thereon from date of such payment at
the Default Rate shall be additional Indebtedness secured hereby and shall
be immediately due and payable by Borrower without notice.
40. Upon the occurrence of an Event of Default, unless the same has been
specifically waived in writing, all Rents collected or received by Borrower
shall be accepted and held for Lender in trust and shall not be commingled
with the funds and property of Borrower, but shall be promptly paid over to
Lender.
41. If more than one, all obligations and agreements of Borrower are joint and
several.
42. This Deed of Trust may be executed in counterparts, each of which shall be
deemed an original; and such counterparts when taken together shall
constitute but one agreement.
31
REMAINDER OF PAGE INTENTIONALLY BLANK
(Signatures on next page)
32
IN WITNESS WHEREOF, Borrower has caused this Deed of Trust, Security
Agreement and Assignment of Rents to be duly executed and delivered as of the
date first hereinabove written.
INLAND SOUTHEAST XXXX'X XXXXX, L.L.C., a Delaware
limited liability company
By: INLAND WESTERN RETAIL REAL ESTATE TRUST,
INC., a Maryland corporation, its sole member
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------
Name: XXXXXXX X. XXXXXX
-----------------
Title: Vice President
----------------
STATE OF ILLINOIS )
)
COUNTY OF XXXX )
On April 2, 2004, before me, Xxxxxxxxx Xxx Xxxxxx, a Notary Public in and
for said state, personally appeared Xxxxxxx X. Xxxxxx, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person whose
name is subscribed to the within instrument and acknowledged to me that he\she
executed the same in his\her authorized capacity, and that by his\her signature
on the instrument, the person, or the entity upon behalf of which the person
acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Xxxxxxxxx Xxx Xxxxxx
-----------------------------------
Notary Public in and for said State
"OFFICIAL SEAL"
XXXXXXXXX XXX XXXXXX
NOTARY PUBLIC STATE OF ILLINOIS
My Commission Expires 11/14/2004
33
