EXHIBIT 10.18
REPLACEMENT RESERVE AGREEMENT
THIS REPLACEMENT RESERVE AGREEMENT ("Agreement") is made as of January
10, 2002, by and between ILLUMINA, INC., a Delaware corporation, having its
principal place of business at 9885 Towne Centre Drive, San Diego, California
92121 ("Borrower") and BNY WESTERN TRUST COMPANY AS TRUSTEE FOR WASHINGTON
CAPITAL JOINT MASTER TRUST MORTGAGE INCOME FUND, having an address at c/o
Washington Capital Management, Inc., 4350 La Jolla Village Drive, Suite 960, San
Diego, California 92122 ("Lender"), with reference to the following facts:
A. Borrower, by a promissory note given to Lender (the note, together
with all extensions, renewals, modifications, consolidations, substitutions,
replacements, restatements and increases thereof shall collectively be referred
to as the "Note") executed originally by Diversified Eastgate Venture, an
Illinois general partnership, and assumed by Borrower, is indebted to Lender in
the principal sum of Twenty Six Million Dollars ($26,000,000.00) in lawful money
of the United States of America, with interest at the rate(s) set forth in the
Note (the indebtedness evidenced by the Note, together with such interest
accrued thereon, shall collectively be referred to as the "Loan"), principal and
interest to be payable in accordance with the terms and conditions provided in
the Note.
B. The Loan is secured by, among other things, a Deed of Trust, Security
Agreement, Assignment of Rents and Fixture Filing (the "Deed of Trust"), dated
as of September 27, 2000, which grants Lender a first lien on the property
encumbered thereby (the "Property"). All and any of the documents other than the
Note, the Deed of Trust and this Agreement now or hereafter executed by Borrower
and/or others and by or in favor of Lender, which wholly or partially secure or
Guarantee payment of the Note are referred to as the "Other Security Documents."
C. Lender requires as a condition to the assumption of the Loan by
Borrower that Borrower enter into this Agreement and make certain deposits with
Lender as provided in this Agreement as additional security for all of
Borrower's obligations under the Note, the Deed of Trust and the Other Security
Documents.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Deposits To The Replacement Reserve.
1.1 Monthly Deposits. On each date that a regularly scheduled
payment of principal or interest is due under the Note, Borrower shall deposit
with Lender (or, at Lender's election, in a pledged bank or escrow account in
the name of Borrower and pledged to and selected by Lender) a monthly deposit in
the amount of Two Thousand One Hundred Seventy Dollars ($2,170.00) (the "Monthly
Deposit").
1.2 Reassessment of Monthly Deposit. No more often than once each
"Loan Year" (as defined below), Lender may reassess its estimate of the amount
necessary for the Replacement Reserve Fund (defined below) and may increase the
amount of the Monthly
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Deposit by thirty (30) calendar days written notice to Borrower based upon the
cumulative increase in the then-current "Index" (as defined below) over the
"Basic Index" (as defined below). For purposes of this Section 1.2, the "Index"
means: the Consumer Price Index, All Items 1982-1984 = 100, All Urban Consumers
("CPI-U"), for the Los Angeles-Riverside-Orange County, CA metropolitan area, as
published by the United State Department of Labor, Bureau of Labor Statistics,
or its successor index; and the "Basic Index" means the Index published for the
month in which this Agreement is dated. In the event of the discontinuation of
the compilation or publication of the Index, the index selected by Lender that
most nearly replicates the information and statistics compiled in the Index
shall be used to make such calculation. For purposes of this Section 1.2, a
"Loan Year" means each 365 day period (or 366 day period in leap years)
commencing with the date of this Agreement and ending on each anniversary
thereof.
1.3 Scheduled Repairs. With respect to any Replacement (as
defined below) which is identified on Exhibit "A" attached hereto and made a
part hereof as a Scheduled Repair or Replacement (collectively, a "Scheduled
Repair"), Borrower shall deposit with Lender the amount allocated for such
Scheduled Repair (each, a "Scheduled Repair Deposit") at least two (2) months
prior to the date on which the work for such Scheduled Repair is scheduled to
begin.
1.4 Replacement Reserve. Monthly Deposits and Scheduled Repair
Deposits made pursuant to this Agreement shall be referred to herein as the
"Replacement Reserve Fund." Lender shall deposit the Replacement Reserve Fund,
as received, in an interest bearing, pledged escrow or bank account (the
"Replacement Reserve") selected by Lender with interest accruing thereon to
Borrower's benefit. Borrower hereby acknowledges and confirms that (a) the
Replacement Reserve Fund shall not constitute a trust fund (and, if deposited in
Lender's name, may be commingled with other monies held by Lender, but if held
in the name of Borrower, such funds shall not be commingled with monies held by
Borrower), and (b) Lender or its designee shall have the sole right to make or
approve withdrawals from the Replacement Reserve.
2. Pledge Of Replacement Reserve.
As additional security for the payment of all sums due under the Loan
and the performance by Borrower of the Obligations (as defined in the Deed of
Trust), Borrower hereby pledges, assigns and grants to Lender a continuing
perfected security interest in and to and a first lien upon, the Replacement
Reserve Fund and the Replacement Reserve; provided that, Lender shall make
disbursements from the Replacement Reserve in accordance with the terms of this
Agreement.
3. Disbursements From Replacement Reserve.
3.1 Disbursements for Replacements Only. Lender shall make
disbursements from the Replacement Reserve to pay or reimburse Borrower only for
the costs of those items listed in Exhibit A (such items, including, without
limitation, those items identified as Scheduled Repairs, collectively the
"Replacements") in the manner provided in this Section 3. Lender shall not be
obligated to make disbursements from the Replacement Reserve to pay or reimburse
Borrower for the costs of routine maintenance to the Property or for costs which
are to be reimbursed from funds held pursuant to a Required Repair Reserve
Agreement dated as of the date hereof between Borrower and Lender, or any
similar agreement, if any (the "Required
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Repair Reserve Agreement"). Lender shall, upon written request from Borrower and
satisfaction of the requirements set forth in this Section 3 and Section 4 of
this Agreement, disburse to Borrower amounts from the Replacement Reserve
necessary to pay for the actual approved costs of Replacements or to reimburse
Borrower therefor, upon completion of such Replacements (or, upon partial
completion in the case of Replacements made pursuant to Section 3.4) as
determined by Lender. In no event shall Lender be obligated to disburse funds
from the Replacement Reserve if an Event of Default (hereinafter defined)
exists.
3.2 Request for Disbursement. Each request for disbursement from
the Replacement Reserve shall be in a form specified or approved by Lender and
shall specify (a) the specific Replacements for which the disbursement is
requested, (b) the quantity and price of each item purchased, if the Replacement
includes the purchase or replacement of specific items, (c) the price of all
materials (grouped by type or category) used in any Replacement other than the
purchase or replacement of specific items, and (d) the cost of all contracted
labor or other services applicable to each Replacement for which such request
for disbursement is made. With each request, Borrower shall certify that all
Replacements have been made in accordance with applicable laws. Each request for
disbursement shall include copies of invoices for all items or materials
purchased and all contracted labor or services provided and each request shall
include evidence satisfactory to Lender of payment of all such amounts. Except
as provided in Section 3.4, each request for disbursement from the Replacement
Reserve shall be made only after completion of the Replacement for which
disbursement is requested. Borrower shall provide Lender evidence of completion
satisfactory to Lender in its reasonable judgment.
3.3 Disbursement Conditions. Except as set forth in Section 3.4
below, Borrower shall pay all invoices in connection with the Replacements with
respect to which a disbursement is requested prior to submitting such request
for disbursement from the Replacement Reserve unless all such invoices do not
exceed $10,000.00, in which case Lender shall disburse the amount for such
invoices directly to Borrower and Borrower covenants and agrees to promptly pay
such invoices. In addition, as a condition to any disbursement, Lender may
require Borrower to obtain lien waivers from each contractor, supplier,
materialman, mechanic or subcontractor who receives payment in an amount equal
to or greater than $10,000.00 for completion of its work or delivery of its
materials. Any lien waiver delivered hereunder shall conform to the requirements
of applicable law and shall cover all work performed and materials supplied
(including equipment and fixtures) for the Property by that contractor,
supplier, subcontractor, mechanic or materialman through the date covered by the
current reimbursement request. Lender may in its sole discretion, accept copies
of cancelled checks in lieu of, or in addition to any of the foregoing invoice
and/or lien waiver requirements.
3.4 Partial Completion. If (a) the time required to complete a
Replacement exceeds one month, (b) the contractor performing such Replacement
requires periodic payments pursuant to the terms of a written contract, (c)
Lender has approved in writing in advance such periodic payments, and (d) the
cost of the portion of the work completed under such contract exceeds Ten
Thousand Dollars ($10,000.00), a request for reimbursement from the Replacement
Reserve may be made after completion of a portion of the work under such
contract, provided (i) such contract requires payment upon completion of such
portion of the work, (ii) the materials for which the request is made are on
site at the Property and are properly secured or have been installed in the
Property, (iii) all other conditions in this Agreement for disbursement have
been
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satisfied, (iv) funds remaining in the Replacement Reserve are, in Lender's
judgment, sufficient to complete such Replacement and other Replacements when
required, and (v) each contractor or subcontractor receiving payments under such
contract shall provide a waiver of lien with respect to amounts which have been
paid to that contractor or subcontractor.
3.5 Number of Requests. Except as provided in Section 3.4,
Borrower shall not make a request for disbursement from the Replacement Reserve
more frequently than once in any calendar month.
3.6 Final Disbursement. Lender shall disburse to Borrower all
amounts remaining in the Replacement Reserve (less all amounts which may have
been applied by Lender as permitted by this Agreement) upon Borrower's
completion of all Replacements to the reasonable satisfaction of Lender,
provided that (a) there is no Event of Default under the Note, the Deed of
Trust, this Agreement or any of the Other Security Documents which has not been
cured to Lender's satisfaction, (b) Lender has received evidence required by
Section 4.8 below that there are no mechanic's or materialman's liens, and (c)
Lender has received all cost and architectural information required by Lender.
4. Performance Of Replacements.
4.1 Workmanlike Completion. Borrower shall make Replacements when
required in order to keep the Property in good order and repair and in good
marketable condition, and to keep the Property or any portion thereof from
deteriorating. With respect to those Replacements identified as Scheduled
Repairs, Borrower shall commence the work in connection with each such Scheduled
Repair on or before the date specified in Exhibit A, and shall diligently pursue
such work to completion, and shall complete such Scheduled Repair no later than
the date specified therefor in Exhibit A. Borrower shall complete all
Replacements in a good and workmanlike manner as soon as practicable following
the commencement of making each such Replacement.
4.2 Contracts. Lender reserves the right, at its option, to
approve all contracts or work orders with materialmen, mechanics, suppliers,
subcontractors, contractors or other parties providing labor or materials in
connection with the Replacements, the cost of which exceeds or is expected to
exceed $10,000.00. Upon Lender's request, Borrower shall assign any contract or
subcontract to Lender.
4.3 Lender's Right to Complete Replacements. In the event Lender
determines in its reasonable discretion that any Replacement has not been
commenced as required in Section 4.1 above, is not being performed in a
workmanlike or timely manner, or that any Replacement has not been completed in
a workmanlike manner by the completion date specified for such Replacement in
Exhibit "A," Lender shall have the option to withhold the disbursement for such
unsatisfactory Replacement and to proceed under existing contracts or to
contract with third parties to make or complete such Replacement and to apply
the Replacement Reserve Fund toward the labor and materials necessary to
complete such Replacement, without providing any prior notice to Borrower, and
to exercise any and all other remedies available to Lender upon an Event of
Default hereunder.
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4.4 Additional Replacements. If at any time during, the term of
the Loan, Lender determines that replacements not listed on Exhibit "A" (and not
covered by the Required Repair Reserve Agreement), are advisable to keep the
Property in good order and repair and in good marketable condition, or to
prevent deterioration of the Property or if any major building system or
component (e.g., roof, HVAC system) not listed on Exhibit "A" will reach the end
of its useful life within two (2) years of the date of any inspection by Lender,
Lender may send Borrower written notice of the need for making such additional
replacements (the "Additional Replacements"). Borrower shall promptly commence
making such Additional Replacements in accordance with all the requirements of
this Agreement. If Lender determines that (i) such replacements are of the type
intended to be covered by this Agreement, (ii) such replacements are not covered
or of the type intended to be covered by the Required Repair Reserve Agreement,
(iii) costs for such replacements are reasonable, (iv) the funds in the
Replacement Reserve are sufficient to pay for such replacements, and (v) all
other conditions for disbursement under this Agreement have been met, Lender may
disburse funds from the Replacement Reserve for such Additional Replacements;
provided, however, Lender, in its discretion, may refuse to disburse funds from
the Replacement Reserve for any item other than a Replacement specified on
Exhibit "A." If Borrower fails to commence, within thirty (30) days after such
notice or the commencement date specified in such notice, such Additional
Replacements and/or fails to diligently pursue completion of such Additional
Replacements, such failure shall be an Event of Default under this Agreement,
and, in addition to all other rights Lender may have under this Agreement upon
an Event of Default (including but not limited to Lender's rights under Section
5 of this Agreement) and under the Note, the Deed of Trust and the Other
Security Documents, Lender may contract with third parties to make such
Additional Replacements and may at its sole discretion (a) apply the funds in
the Replacement Reserve toward the labor and materials necessary to complete
such Additional Replacements, or (b) demand payment of such Additional
Replacements from Borrower. Except for Sections 3.1 through 3.5, all references
in this Agreement to "Replacements" or "Scheduled Repairs" shall include the
"Additional Replacements," as applicable.
4.5 Entry onto Property. In order to facilitate Lender's
completion or making of the Replacements pursuant to Sections 4.3 and 4.4 above,
Borrower grants Lender the right to enter onto the Property and perform any and
all work and labor necessary to complete or make the Replacements and/or employ
watchmen to protect the Property from damage. All sums so expended by Lender
shall be deemed to have been advanced under the Loan to Borrower and secured by
the Deed of Trust. For this purpose, Borrower constitutes and appoints Lender
its true and lawful attorney-in-fact with full power of substitution to complete
or undertake the Replacements in the name of Borrower. Such power of attorney
shall be deemed to be a power coupled with an interest and cannot be revoked.
Borrower empowers said attorney-in-fact as follows: (a) to use any funds in the
Replacement Reserve for the purpose of making or completing the Replacements;
(b) to make such additions, changes and corrections to the Replacements as shall
be necessary or desirable to complete the Replacements; (c) to employ such
contractors, subcontractors, agents, architects and inspectors as shall be
required for such purposes; (d) to pay, settle or compromise all existing bills
and claims which are or may become liens against the Property, or as may be
necessary or desirable for the completion of the Replacements, or for clearance
of title; (e) to execute all applications and certificates in the name of
Borrower which may be required by any of the contract documents; (f) in its
reasonable discretion, to prosecute and defend all actions or proceedings in
connection with the Property or
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the rehabilitation and repair of the Property; and (g) to do any and every act
which Borrower might do in its own behalf to fulfill the terms of this
Agreement.
4.6 No Obligation of Lender. Nothing in this Section 4 shall: (a)
make Lender responsible for making or completing the Replacements; (b) require
Lender to expend funds in addition to the Replacement Reserve Fund to make or
complete any Replacement; (c) obligate Lender to proceed with the Replacements;
or (d) obligate Lender to demand from Borrower additional sums to make or
complete any Replacement.
4.7 Inspections.
(a) Borrower shall permit Lender and Lender's agents and
representatives (including, without limitation, Lender's engineer, architect or
inspector) or third parties making Replacements pursuant to this Section 4 to
enter onto the Property during normal business hours (subject to the rights of
tenants under their Leases) to inspect the progress of any Replacements and all
materials being used in connection therewith, to examine all plans and shop
drawings relating to such Replacements which are or may be kept at the Property,
and to complete any Replacements made pursuant to this Section 4. Borrower shall
cause all contractors and subcontractors to cooperate with Lender or Lender's
representatives or such other persons described above in connection with
inspections described in this Section 4.7 or the completion of Replacements
pursuant to this Section 4.
(b) Lender may require an inspection of the Property at
Borrower's expense prior to making a monthly disbursement from the Replacement
Reserve in order to verify completion of the Replacements for which
reimbursement is sought. Lender may require that such inspection be conducted by
an appropriate, independent, qualified professional selected by Lender and/or
may require a copy of a certificate of completion by an independent, qualified
professional acceptable to Lender prior to the disbursement of any amounts from
the Replacement Reserve. Borrower shall pay the expense of the inspection as
required hereunder, whether such inspection is conducted by Lender or by an
independent, qualified professional.
4.8 Lien-Free Completion.
(a) The Replacements and all materials, equipment, fixtures,
or any other item comprising a part of any Replacement shall be constructed,
installed or completed, as applicable, free and clear of all mechanic's,
materialman's or other liens (except for those liens existing on the date of
this Agreement which have been approved in writing, by Lender, if any).
(b) Lender may require Borrower to provide Lender with a
search of title to the Property effective to the date of the disbursement, which
search shows that no mechanic's or materialmen's liens or other liens of any
nature have been placed against the Property since the date of recordation of
the Deed of Trust and that title to the Property is free and clear of all liens
(other than the lien of the Deed of Trust and any other liens previously
approved in writing by Lender, if any).
4.9 Compliance with Laws. All Replacements shall comply with all
applicable laws and applicable insurance requirements, including, without
limitation, applicable
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building codes, special use permits, environmental regulations and requirements
of insurance underwriters.
4.10 Insurance Requirements. In addition to any insurance
required under the Deed of Trust and the Other Security Documents, Borrower
shall provide or cause to be provided workmen's compensation insurance,
builder's risk, and public liability insurance and other insurance to the extent
required under applicable law in connection with a particular Replacement. All
such policies shall be in form and amount reasonably satisfactory to Lender. All
such policies which can be endorsed with standard mortgagee clauses making loss
payable to Lender or its assigns shall be so endorsed. Certified copies of such
policies shall be delivered to Lender.
5. Failure To Make Replacements.
5.1 Event of Default. It shall be an "Event of Default" under
this Agreement if Borrower (a) fails to make any Monthly Deposit payment
required hereunder within ten (10) calendar days of the date when due, or (b) at
any time prior to the completion of the Required Repairs, Borrower abandons or
ceases work on any Replacement (which Borrower has commenced making) for a
period of thirty (30) calendar days, unless such cessation results from an event
of Force Majeure (as defined in the Deed of Trust) causes beyond the control of
Borrower and Borrower is diligently pursuing the reinstitution of work, (c)
Borrower fails to complete each Replacement in a good and workmanlike manner
within the date set forth in Exhibit "A", (d) a mechanic's or materialman's lien
is filed against the Property (unless such mechanic's or materialman's lien is
promptly contested in good faith by Borrower and is bonded over to the
satisfaction of Lender), or (e) Borrower fails to comply with any other
provision of this Agreement and such failure is not cured within thirty (30)
calendar days after notice from Lender; provided that if such default cannot
reasonably be cured within such thirty (30) day period and Borrower shall have
commenced to cure such default within such thirty (30) day period and thereafter
diligently and expeditiously proceeds to cure the same, such thirty (30) day
period shall be extended for so long as it shall require Borrower in the
exercise of due diligence to cure such default, it being agreed that no such
extension shall be for a period in excess of one hundred twenty (120) days,
unless, only in the case of cures that require construction or remedial work,
such cure cannot with diligence be completed within such one hundred twenty
(120) day period, in which case such period shall be extended for an additional
one hundred twenty (120) days. The occurrence of an Event of Default, as defined
in the Note, the Deed of Trust or any of the Other Security Documents, shall
also be an "Event of Default" under this Agreement. Upon the occurrence and
during the continuance of an Event of Default, Borrower shall not be entitled to
receive any funds from the Replacement Reserve and Lender may use the
Replacement Reserve Fund (or any portion thereof) for any purpose, including,
but not limited to, completion of the Replacements as provided in Section 4, or
for any other repair or replacement to the Property or toward payment of the
Debt in such order, proportion and priority as Lender may determine in its sole
discretion. Lender's right to withdraw and apply the Replacement Reserve Fund
shall be in addition to all other rights and remedies provided to Lender under
this Agreement, the Note, the Deed of Trust, the Other Security Documents, and
at law or in equity.
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5.2 Insufficient Funds in the Replacement Reserve. The
insufficiency of any balance in the Replacement Reserve shall not relieve
Borrower from its obligation (a) to fulfill all covenants in the Deed of Trust
and the Other Security Documents, and (b) to complete all Replacements in
accordance with the covenants and agreements in this Agreement and to pay all
costs in connection therewith.
6. Waivers.
6.1 Waiver of Counterclaim. Borrower hereby waives the right to
assert a counterclaim, other than a mandatory or compulsory counterclaim, in any
action or proceeding brought against it by Lender arising out of or in any way
connected with this Agreement, the Note, the Deed of Trust, any of the Other
Security Documents, or the Obligations.
6.2 Waiver of Notice. To the extent permitted by applicable law,
Borrower shall not be entitled to any notices of any nature whatsoever from
Lender except with respect to matters for which this Agreement specifically and
expressly provides for the giving of notice by Lender to Borrower and except
with respect to matters for which Lender is required by applicable law to give
notice, and Borrower hereby expressly waives the right to receive any notice
from Lender with respect to any matter for which this Agreement does not
specifically and expressly provide for the giving of notice by Lender to
Borrower.
6.3 Waiver of Statute of Limitations. Borrower hereby expressly
waives and releases to the fullest extent permitted by law, the pleading of any
statute of limitations as a defense to any and all of its obligations hereunder.
6.4 Waiver of Trial By Jury. BORROWER HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING
DIRECTLY OR INDIRECTLY TO THE LOAN EVIDENCED BY THE NOTE, THE APPLICATION FOR
THE LOAN EVIDENCED BY THE NOTE, THE NOTE, THIS AGREEMENT, THE DEED OF TRUST OR
THE OTHER SECURITY DOCUMENTS OR ANY ACTS OR OMISSIONS OF LENDER, ITS OFFICERS,
EMPLOYEES, DIRECTORS OR AGENTS IN CONNECTION THEREWITH.
7. Miscellaneous Provisions.
7.1 Notices. All notices or other written communications
hereunder shall be given and become effective as provided in the Deed of Trust.
7.2 Choice of Law. This Agreement shall be governed, construed,
applied and enforced in accordance with the laws of the State of California and
the applicable laws of the United States of America.
7.3 Provisions Subject to Applicable Law. All rights, powers and
remedies provided in this Agreement may be exercised only to the extent that the
exercise thereof does not violate any applicable provisions of law and are
intended to be limited to the extent necessary so that they will not render this
Agreement invalid or unenforceable under the provisions of any applicable law.
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7.4 Inapplicable Provision. If any term of this Agreement or any
application thereof shall be invalid or unenforceable, the remainder of this
Agreement and any other application of the term shall not be affected thereby.
7.5 Costs. Borrower agrees to indemnify Lender and to hold Lender
harmless from and against any and all actions, suits, claims, demands,
liabilities, losses, damages, obligations and costs and expenses (including
litigation costs) arising from or in any way connected with the performance of
the Replacements or the holding or disbursing of the Replacement Reserve or the
Replacement Reserve Fund. Wherever it is provided for herein that Borrower pay
any costs and expenses, such costs and expenses shall include, but not be
limited to, all legal fees and disbursements of Lender (whether of retained
firms, the reimbursement for the expenses of in-house staff or otherwise).
Borrower hereby assigns to Lender all rights and claims Borrower may have
against persons or entities supplying labor or materials in connection with the
Replacements.
7.6 Headings, Etc. The headings and captions of various Sections
of this Agreement are for convenience of reference only and are not to be
construed as defining or limiting in any way, the scope or intent of the
provisions hereof.
7.7 No Oral Change. This Agreement, and any provisions hereof,
may not be modified, amended, waived, extended, changed, discharged or
terminated orally or by any act or failure to act on the part of Borrower or
Lender, but only by an agreement in writing signed by the party against whom
enforcement of any modification, amendment, waiver, extension, change, discharge
or termination is sought.
7.8 Liability. If Borrower consists of more than one person, the
obligations and liabilities of each such person hereunder shall be joint and
several. This Agreement shall be binding upon and inure to the benefit of
Borrower and Lender and their respective successors and assigns forever.
7.9 Duplicate Originals; Counterparts. This Agreement may be
executed in any number of duplicate originals and each duplicate original shall
be deemed to be an original. This Agreement may be executed in several
counterparts, each of which counterparts shall be deemed an original instrument
and all of which together shall constitute a single Agreement. The failure of
any party hereto to execute this Agreement, or any counterpart hereof, shall not
relieve the other signatories from their obligations hereunder.
7.10 Number and Gender. Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural and vice versa.
7.11 Borrower's Records. Borrower shall furnish such financial
statements, invoices, records, papers and documents relating to the Property as
Lender may reasonably require from time to time to make the determinations
permitted or required to be made by Lender under this Agreement.
7.12 No Third Party Beneficiary. This Agreement is intended
solely for the benefit of Borrower and Lender and their respective successors
and assigns, and no third party
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shall have any rights or interest in the Replacement Reserve, the Replacement
Reserve Fund, this Agreement, the Note, the Deed of Trust or any of the Other
Security Documents. Nothing contained in this Agreement shall be deemed or
construed to create an obligation on the part of Lender to any third party, nor
shall any third party have a right to enforce against Lender any right that
Borrower may have under this Agreement.
7.13 No Agency or Partnership. Nothing contained in this
Agreement shall constitute Lender as a joint venturer, partner, agent,
tenant-in-common or joint tenant of Borrower, or render Lender liable for any
debts, obligations, acts, omissions, representations, or contracts of Borrower.
7.14 Termination of Replacement Reserve. After (a) payment in
full of the Debt and release by Lender of the lien of the Deed of Trust and (b)
payment in full for all Replacements completed or contracted to be performed
prior to the date of the payment described in (a) above (provided Borrower has
supplied Lender with evidence satisfactory to Lender of payment in full for all
Replacements, and, if requested by Lender, waivers of liens and/or a title
search of the Property or an endorsement to Lender's title insurance policy),
Lender shall disburse to Borrower all amounts remaining in the Replacement
Reserve, and this Agreement shall terminate.
7.15 Enforcement of Agreement. This Agreement is executed by
Borrower and Lender for the benefit of Lender. Borrower understands and agrees
that, in connection with any sale of the Loan to an Investor (as defined in the
Deed of Trust), this Agreement may be assigned to such Investor.
7.16 Sole Discretion of Lender. Wherever pursuant to this
Agreement (a) Lender exercises any right given to it to approve or disapprove,
(b) any arrangement or term is to be satisfactory to Lender, or (c) any other
decision or determination is to be made by Lender, the decision of Lender to
approve or disapprove all decisions that arrangements or terms are satisfactory
or not satisfactory, and all other decisions and determinations made by Lender,
shall be in the reasonable discretion of Lender and shall be final and
conclusive, except as may be otherwise expressly and specifically provided
herein.
7.17 Completion of Replacements. Lender's approval of any plans
for any Replacement, release of funds from the Replacement Reserve, inspection
of the Property by Lender or Lender's agents, or other acknowledgment of
completion of any Replacement in a manner satisfactory to Lender shall not be
deemed an acknowledgment or warranty to any person that the Replacement has been
completed in accordance with applicable laws.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
"BORROWER" ILLUMINA, INC.,
a Delaware corporation
By: /s/ TIMOTHY M. KISH
-------------------------------
Timothy M. Kish
Its: Vice President and Chief
Financial Officer
"LENDER" BNY WESTERN TRUST COMPANY AS TRUSTEE FOR
WASHINGTON CAPITAL JOINT MASTER TRUST
MORTGAGE INCOME FUND
By: /s/ COLLEEN IWANO
-------------------------------
Colleen Iwano
Its: Senior Vice President
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EXHIBIT A
List of Potential Replacements
1. Non-recurring capital repairs and replacements, including non-recurring
structural repairs to the Property.
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