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Exhibit 10.162
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
THOMPSON & KNIGHT L.L.P.
1700 PACIFIC AVENUE, SUITE 3300
DALLAS, TEXAS 75201
ATTENTION: JEANNE M. BURTON
DEED OF TRUST, SECURITY AGREEMENT
AND ASSIGNMENT OF RENTS
LOAN NO. 753946
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 June 17,
2004, by and between INLAND WESTERN ARVADA, L.L.C., a Delaware limited liability
company, having its principal place of business and post office address at 2901
Butterfield Road, Oak Brook, Illinois 60523, as "BORROWER" ("Borrower" to be
construed as "Borrowers" if the context so requires), and the PUBLIC TRUSTEE OF
JEFFERSON COUNTY, STATE OF COLORADO, as "TRUSTEE", for the benefit of 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 801
Grand Avenue, Des Moines, Iowa 50392-1450, as "LENDER".
WITNESSETH:
B. Borrower is justly indebted to Lender for money borrowed (the "LOAN") in
the original principal sum of Twenty Eight Million Five Hundred Ten Thousand and
No/100 Dollars ($28,510,000.00) (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 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 July 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.
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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 power of sale, unto Trustee, its successors and assigns forever,
that certain real estate and all of Borrower's estate, right, title and interest
therein, located in the county of Jefferson, state of Colorado, 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 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,
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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 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 B.
L. 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 local,
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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 on or before
the due date thereof 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 l(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;
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(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 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 or shall have substituted a
bond for such lien, causing a release of the lien, in
accordance with Colo. Rev. Stat. Sections 38-22-131 & 132
(2000) as amended; 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
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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 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) (i) comply with all terms and provisions of that certain
Redevelopment Agreement (herein so called) executed between
Borrower and CIN Arvada, L.P. ("Seller") recorded April 30,
2004 at Reception No. F2016532, Records of Jefferson County,
Colorado; (ii) provide to Lender evidence of exercise by
Seller of the acquisition rights or payment of any amounts due
to Seller under the Redevelopment Agreement (as the case may
be) within ten (10) business days after the occurrence
thereof; and (iii) prior to receipt by Lender of evidence of
exercise by Seller of the acquisition rights or payment of any
amounts due to Seller under the Redevelopment Agreement (as
the case may be), Lender shall be provided, at Borrower's
expense, with periodic title searches (as frequently as
monthly if necessary in Lender's reasonable discretion) to
confirm that no lien or lis pendens has been filed against the
Premises in connection with the Redevelopment Agreement; and
(m) use its best efforts to deliver to Lender evidence of payment
in full of the tenant improvement allowance due to the tenant
under the lease with Sweet Petunia, Inc. (dba Lady of America)
relating to the relocation of such tenant in connection with
the Redevelopment Agreement within ten (10) business days of
such payment.
As used herein, the term "SINGLE PURPOSE ENTITY" means: a
corporation, limited or general partnership, limited liability
company, or business trust which, at all
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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 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
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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 whether as a consequence of bankruptcy or
insolvency of one or more of the members, general partners, or
trustees, as applicable, or otherwise, for so long as a solvent
managing member, general partner, or trustee, as applicable, exists
and, subject to applicable law, dissolution of the entity shall not
occur so long as the entity remains owner of the Premises subject to
the Deed of Trust. Such entity's organizational documents shall
contain such provision.
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, (1)
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, and (2) Borrower may demolish and
reconstruct the building located at 7310 West 52nd Avenue in
connection with the work contemplated by the Redevelopment
Agreement, 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, in the case of tenant improvements, the value of the
Premises;
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(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 all reasonable efforts to contest
any such zoning reclassification or change;
(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.
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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 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;
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(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) 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 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;
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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 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 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;
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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 (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) (a) retains
51% or more of the ownership interest in the
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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 (ii) 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 (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; and (ii) the
Qualified Successor retains direct or indirect ownership of 51% or
more of the ownership interests in 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 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).
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
14
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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
15
<Page>
for the perils specified herein for one hundred percent (100%)
of the Rents (including operating expenses, real estate taxes,
assessments 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.
(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
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
16
<Page>
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
17
<Page>
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 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
outlined below; provided, further, that Lender's rights
in this subparagraph are subject to Borrower's rights
to use such proceeds for rebuilding and restoring the
buildings and improvements as may be required or
permitted by law in effect at the time of the loss.
(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
18
<Page>
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
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
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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
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.
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(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.
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
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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 bill, 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
(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
22
<Page>
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 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
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<Page>
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, 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.
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
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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. Lender may foreclose this Deed of Trust, insofar as it encumbers the
Premises, either by judicial action or through Trustee. Foreclosure
through Trustee will be initiated by Lender's filing of its notice
of election and demand for sale with Trustee. Upon the filing of
such notice of election and demand for sale, Trustee shall promptly
comply with all notice and other requirements of the laws of
Colorado then in force with respect to such sales. Any sale
conducted by Trustee pursuant to this section shall be held at the
front door of the county courthouse for such county or city and
county, or on the Premises, or at such other place as similar sales
are then customarily held in such county or city and county,
provided that the actual place of sale shall be specified in the
notice of sale. The proceeds of any sale under this section shall be
applied first to the fees and expenses of the officer conducting the
sale, and then to the reduction or discharge of the Indebtedness
(including reasonable attorneys' fees). Any surplus remaining shall
be paid over to Borrower or to such other person or persons as may
be lawfully entitled to such surplus. At the conclusion of any
foreclosure sale, the officer conducting the sale shall execute and
deliver to the purchaser at the sale a certificate of purchase which
shall describe the property sold to such purchaser and shall state
that upon the expiration of the applicable periods for redemption,
the holder of such certificate will be entitled to a deed to the
Premises described in the certificate. After the expiration of all
applicable periods of redemption, unless the Premises sold has been
redeemed, the officer who conducted such sale shall, upon request,
execute and deliver an appropriate deed to the holder of the
certificate of purchase or the last certificate of redemption, as
the case may be, and such deed shall operate to divest Borrower and
all persons claiming under Borrower of all right, title, and
interest, whether legal or equitable, in the Premises described in
the deed. Nothing in this section dealing with foreclosure
procedures or specifying particular actions to be taken by Lender or
by Trustee or any similar officer shall be deemed to contradict or
add to the requirements and procedures now or hereafter specified by
Colorado law, and any such inconsistency shall be resolved in favor
of Colorado law applicable at the time of foreclosure.
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13. Intentionally Deleted.
14. 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.
15. Following the occurrence of an Event of Default, unless the same has
been specifically waived in writing, Borrower shall forthwith upon
demand of Lender surrender to Lender possession of the Premises, and
Lender shall be entitled to take actual possession of the Premises
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
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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.
16. Upon the occurrence of an Event of Default, 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 Lender and its 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;
(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.
17. 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,
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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.
18. (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 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.
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19. 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.
20. 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 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
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to the exclusion of any other portion. Time is of the essence under
this Deed of Trust and the Loan Documents.
21. 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.
22. 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.
23. 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.
24. 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.
25. Upon payment in full of the principal sum, interest and other
Indebtedness secured by the Loan Documents, Lender shall execute and
deliver to Borrower such documents as may be required to release any
Loan Documents of record.
26. (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.
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(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 ATC Associates, 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.
27. 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.
28. (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
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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 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.
29. Except as provided herein with respect to notices required by
Colorado law to be given in connection with foreclosure proceedings,
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, 801 Grand Avenue, Des Moines, Iowa 50392-1450, Attn:
Commercial Real Estate Servicing, Loan No. 753946, 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.
30. Intentionally Deleted.
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31. Trustee or Lender at any time, at Trustee's or Lender'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 decrees, interlocutory or
final of said court directing the execution of said trusts, and
confirming and approving Trustee's or Lender'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.
32. 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.
33. 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 Lender, any and every deed or
assurance in law which Lender or counsel of Lender shall reasonably
advise or require for the more sure, effectual and satisfactory
granting and confirming of said Premises unto Trustee.
34. Intentionally Deleted.
35. Intentionally Deleted.
36. 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.
37. This Deed of Trust shall be governed by, and construed in accordance
with, the laws of the state of Colorado, without regard to its
conflicts of law principles.
38. 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.
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39. 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 WITH THIS DEED
OF TRUST, ANY OF THE LOAN DOCUMENTS, THE INDEBTEDNESS SECURED
HEREBY, OR ANY OTHER STATEMENTS OR ACTIONS OF LENDER.
40. 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.
41. 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.
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42. 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.
43. If more than one, all obligations and agreements of Borrower are
joint and several.
44. 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.
45. If at any time before the Indebtedness secured hereby is paid in
full CIN Arvada, L.P. exercises its rights under the Redevelopment
Agreement and Borrower provides Lender with the following
information, then upon receipt by Lender, Lender will execute and
deliver to Borrower a partial release, releasing from this Deed of
Trust and the lien hereof, the portion of the Premises to be
conveyed to CIN Arvada, L.P. as more particularly described in the
Redevelopment Agreement; PROVIDED, HOWEVER, that the following are
conditions precedent to Lender's obligation to execute and deliver
said partial release:
(a) Borrower shall furnish Lender with satisfactory evidence
of the recording of the resubdivision of the Premises;
(b) Borrower shall furnish Lender a satisfactory recertified
as-built survey;
(c) Borrower shall furnish Lender an endorsement updating
the existing loan title policy in the full amount of the Loan and
reflecting the revised legal description in form and by an issuer
satisfactory to Lender or, if such endorsement is not available, a
new ALTA standard loan title policy. The policy shall insure this
Deed of Trust to be a first and prior lien on the Land remaining
subject to the lien of this Deed of Trust subject only to those
exceptions which were previously approved by Lender;
(d) the Land remaining subject to the lien of this Deed of
Trust, after any such release with the Improvements thereon will in
all respects be a complete lot for zoning purposes and will meet all
requirements with respect to building ordinances, zoning laws,
parking requirements, building restrictions and all other applicable
rules and regulations of all governmental bodies having jurisdiction
thereof;
(e) the buildings located on the Land remaining subject to
the lien of this Deed of Trust, shall be independent,
self-sufficient structural and functional entities;
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(f) the Land remaining subject to the lien of this Deed of
Trust shall maintain its original access to public roads, subject to
the execution and delivery of any reciprocal easements for ingress
and egress as may be appropriate;
(g) Borrower must satisfy Lender that the proposed use of
the released land construed in the broadest sense will not violate
the provisions of any private declaration of restrictive covenants
or any other reciprocal casement agreement or operating agreement
pertaining to all or any part of the Land remaining subject to the
lien of this Deed of Trust;
(h) Borrower shall furnish Lender with evidence satisfactory
to Lender that the Land and Improvements remaining subject to this
Deed of Trust are separately assessed for real estate taxing
purposes;
(i) no default exists under the Loan Documents; and
(j) Borrower agrees to pay Lender's attorneys' fees and
costs in connection with the review and approval of the partial
release or, in the alternative, Borrower may elect to have Lender
perform all necessary reviews in which event Lender shall have the
right to assess a reasonable handling fee in Lender's reasonable
discretion.
46. Upon the occurrence of a default by Borrower under the Redevelopment
Agreement, Lender shall have the right (but shall be under no
obligation) to advance funds necessary to cure such default in which
event, any funds so advanced by Lender shall be a demand obligation
owing by Borrower to Lender with interest at the Default Rate from
the date advanced until repaid. Upon failure to remit such amount to
Lender within five (5) days after advance and notice thereof by
Lender then, in addition to any other rights or remedies of Lender
as provided in the Loan Documents or at law (including the right to
declare an Event of Default), Lender shall have the option to
terminate the license granted to Borrower in the Assignment of
Leases and Rents immediately and automatically, without further
action or documentation other than written notice to Borrower and
written notice of Borrower's Event of Default given by Lender to any
lessee, and all Rents thereafter payable and all agreements and
covenants thereafter to be performed by any such lessee shall be
paid and performed by such lessee directly to Lender in the same
manner as if the above license had not been granted, without
prosecution of any legal or equitable remedies hereunder. Lender
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 below:
(a) first to the payment of any principal, interest or any other
Indebtedness secured hereby; and
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(b) the balance to be credited against the repayment of any funds
advanced by Lender in connection with Borrower's default under
the Redevelopment Agreement, including interest at the Default
Rate from the date of advancement, reasonable attorneys' fees
and other costs incurred by Lender in connection therewith
until such advance and all other sums have been repaid in
full.
Upon repayment in full of all amounts due under subparagraph 46(b),
then provided no other Event of Default has occurred, all amounts
received by Lender in excess of the funds required in subparagraph
46(a) shall be remitted to Borrower.
REMAINDER OF PAGE INTENTIONALLY BLANK
(Signatures on next page)
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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 WESTERN ARVADA, L.L.C., a
Delaware limited liability company
By: INLAND WESTERN RETAIL REAL
ESTATE TRUST, INC., a Maryland
corporation, Member
By: /s/ Valerie Medina
-----------------------------
Name: Valerie Medina
------------------------
Title: asst. Secretary
-----------------------
STATE OF ILLINOIS )
)
COUNTY OF Du Page )
The foregoing instrument was acknowledged before me this 17th day of June,
2004 by Valerie Medina, as Asst. Secretary of Inland Western Retail Real Estate
Trust, Inc., a Maryland corporation, on behalf of said corporation, in its
capacity as Member of Inland Western Arvada, L.L.C, a Delaware limited liability
company, on behalf of said limited liability company.
Witness my hand and official seal.
/s/ Kimberly A. Mitchell
---------------------------------------
Notary Public, State of Illinois
My Commission expires: ---------------------------------------
[Printed name]
- ----------------------
OFFICIAL SEAL
KIMBERLY A. MITCHELL
NOTARY PUBLIC-STATE OF ILLINOIS
MY COMMISSION EXPIRES: 03-12-07
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EXHIBIT A
(Legal Description)
Tax Parcel No.:
Tract I 39-144-01-011
Tract II39-141-14-001 and 39-141-14-002
Tract III 39-141-14-002
Addresses:
Tract I 7310, 7370, 7380, 7400, 7430, 7450, 7460, 7490
West 552nd Avenue, Arvada, Colorado
Tract II 5220A-5220Z, 5230, 5240, 5260, 5280
Wadsworth Bypass, Arvada, Colorado
Tract III Not Applicable
TRACT I:
PARCEL A:
Lot 1-B, Block 1, ARVADA MARKETPLACE FILING NO. 1 - 2ND AMENDMENT MINOR
SUBDIVISION PLAT, a subdivision of the City of Arvada, recorded October 23, 2003
in the Official Records of Jefferson County, Colorado under Reception No.
F1892166.
PARCEL B:
Easement estate appurtenant to Parcel A created in Declaration of Restrictions
and Grant of Easements recorded April 16, 1991, in the Official Records of
Jefferson County, Colorado under Reception No. 91031345, over and across the
real property more particularly described therein.
PARCEL C:
Easement estate appurtenant to Parcel A created in Easements With Covenants and
Restrictions Affecting Land ("ECR") recorded April 30, 2004, in the Official
Records of Jefferson County, Colorado under Reception No. F2016531, over and
across the real property more particularly described therein.
County of Jefferson
State of Colorado
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TRACT II:
PARCEL A:
Lots 1 and 2, Block 1, ARVADA MARKETPLACE FILING NO. 2 AMENDED, a subdivision of
the City of Arvada, recorded June 11, 1987 in the Official Records of Jefferson
County, Colorado under Reception No. 87077266.
PARCEL B:
Easement estates appurtenant to Parcel A as follows:
Access rights as created in Declaration of Covenants recorded December 19, 1986
in the Official Records of Jefferson County, Colorado under Reception No.
86156798 over and across the real property more particularly described therein.
Ingress and egress rights as shown in Note 2 on plat of ARVADA MARKETPLACE
FILING NO. 2 AMENDED, a subdivision of the City of Arvada, recorded June 11,
1987 in the Official Records of Jefferson County, Colorado under Reception No.
87077266, over and across the real property more particularly described therein.
County of Jefferson
State of Colorado
TRACT III:
PARCEL A:
Lot 2, Block 1, ARVADA MARKETPLACE FILING NO. 2 SECOND AMENDED, a subdivision of
the City of Arvada, recorded December 17, 1992 in the Official Records of
Jefferson County, Colorado under Reception No. 92164135.
PARCEL B:
Easement estate appurtenant to Parcel A as shown in Note 2 on plat of ARVADA
MARKETPLACE FILING NO. 2 SECOND AMENDED, a subdivision of the City of Arvada,
recorded December 17, 1992 in the Official Records of Jefferson County, Colorado
under Reception No. 92164135, over and across the real property more
particularly described therein.
County of Jefferson
State of Colorado
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EXHIBIT B
Permitted Encumbrances
Loan No. 753946
(Arvada)
1. Taxes for the year 2004 and subsequent years.
2. Rights of tenants, as tenants only, under recorded tenant leases more
particularly described in Exhibit B to the Assignment of Leases and Rents
of even date herewith executed by Borrower in favor of Lender.
3. Covenants, conditions and restrictions set forth on the deed recorded
January 30, 1953 in Book 792 at Page 507.
4. Right to deny or restrict each and every right of access to and from the
land insured hereby, directly onto abutting street or highway designated as
Colorado State Highway No. 72 and Colorado State Highway No. 76 by reason
of grant or relinquishment of said access right(s) by deeds recorded
February 3, 1965 in Book 1775 at Page 56, June 15, 1979 at Reception No.
79053154, February 12, 1981 at Reception No. 81010076, August 12, 1981 at
Reception No. 81059108, March 23, 1982 at Reception No. 82019011, September
30, 1982 at Reception No. 82068419 and December 20, 1982 at Reception No.
82089220.
5. Terms, conditions, provisions, agreements and obligations specified under
the Development Agreement, which was recorded February 21, 1974 in Book
2594 at Page 390.
6. Terms, conditions, provisions, agreements and obligations specified under
the Subdivider's Agreement, which was recorded October 10, 1978 at
Reception No. 78093171.
7. Covenants, conditions and restrictions set forth on the deed recorded
October 22, 1985 at Reception No. 85101751, January 23, 1986 at Reception
No. 86008076, January 23, 1986 at Reception No. 86008078 and February 4,
1986 at Reception No. 86011931, Arvada Urban Renewal Authority Certificate
of Completion of Improvements and Renunciation of Right of Re-Entry for
Condition Broken recorded June 24, 1987 at Reception No. 87082391.
8. Easement for construction and maintenance of sewer lines as granted to
Metropolitan Denver Sewage Disposal District No. 1 in instrument recorded
November 29, 1985 at Reception No. 85115275.
9. An easement for transmission, distribution of electricity and incidental
purposes granted to Public Service Company of Colorado by the instrument
recorded November 29, 1985
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at Reception No. 85115495, upon the terms and conditions set forth in the
instrument, over a portion of the land.
10. All items set forth on the plat of ARVADA MARKETPLACE FILING NO. 1 recorded
January 2, 1986 at Reception No. 86000509.
11. An easement for utility and incidental purposes granted to Public Service
Company of Colorado by the instrument recorded January 27, 1986 at
Reception No. 86009158, upon the terms and conditions set forth in the
instrument, over a portion of the land.
12. Easement and right of way for utility facilities as granted to City of
Arvada in instrument recorded September 25, 1986 at Reception No. 86116003.
13. Easement and right of way for water meters and appurtenances as granted to
City of Arvada in instrument recorded May 26, 1988 at Reception No.
88051265.
14. Terms, conditions and provisions specified under the Agreement for
Administrative Approval of Final Development Plan Amendment Arvada
Marketplace Filing No. 1, which was recorded March 15, 1990 at Reception
No. 90021411.
15. All items set forth on the plat of ARVADA MARKETPLACE FILING NO. 1 -
AMENDED recorded March 28, 1990 at Reception No. 90025037.
Ordinance vacating utility and emergency access easement recorded October
26, 2000 at Reception No. F1135476, and recorded September 11, 2003 at
Reception No. F1862666.
16. Terms, conditions, provisions, agreements and obligations specified under
the Declaration of Restrictions and Grant of Easements, which was recorded
April 16, 1991 at Reception No. 91031345.
17. Terms, agreements, provisions conditions and obligations of a Memorandum of
Lease, executed by CIN Arvada, L.P., a Delaware limited partnership, as
lessor(s), and Red Robin Holding Co., Inc., a Nevada corporation, as
lessee(s), recorded August 22, 2000 at Reception No. F1103255.
18. Terms, agreements, provisions, conditions and obligations of a Memorandum
of Lease, executed by CIN Arvada, L.P., a Delaware limited partnership, as
lessor(s), and Famous American Barbecue, LLC, a Colorado limited liability
company, as lessee(s), recorded November 30, 2000 at Reception No.
F1151069.
19. Fire Lane and Emergency Access and Utility easement as granted to City of
Arvada in instrument recorded February 8, 2001 at Reception No. F1181779.
20. Terms, conditions, provisions, agreements and obligations specified under
the Declaration of No-Build Area, which was recorded September 4, 2003 at
Reception No. F1856413.
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21. All items set forth on the plat of ARVADA MARKETPLACE FILING NO. 1 - 2nd
AMENDMENT recorded October 23, 2003 at Reception No. F1892166.
22. Arvada Marketplace Filing No. 1 Amended Utility Easements Vacation in
instrument recorded December 18, 2003 at Reception No. F1928468.
23. Ordinance No. 3858, vacating a portion of Fire Lane easement in instrument
recorded February 5, 2004 at Reception No. F1956987.
24. Easement and right of way for underground water lines and appurtenances as
granted to City of Arvada in instrument recorded January 8, 2004 at
Reception No. 1939850.
25. Fire Lane and Emergency Access easement as granted to City of Arvada in
instrument recorded January 8, 2004 at Reception No. F1939851.
26. Matters as set forth on ALTA/ACSM Land Title Survey prepared by CR Moore
Land Surveying, dated April 12, 2004, Job No. 20-99, to wit:
a. Brick wall encroaches into PSCO easement.
b. 2' x 16' Shopping Center Sign lies outside the property line.
c. 6.9' encroachment on trash enclosure into easement.
27. An easement for street light conductor and incidental purposes granted to
Public Service Company of Colorado by the instrument recorded September 16,
1976 in Book 2909 at Page 223, upon the terms and conditions set forth in
the instrument, over a portion of the land.
28. Terms, conditions, provisions, agreements and obligations specified under
the Development Agreement Arvada Marketplace, Phases 1 and 2, which was
recorded September 19, 1985 at Reception No. 85089856, amendment recorded
October 10, 1985 at Reception No. 85098111, Second Amendment recorded
November 27, 1985 at Reception No. 85114885, Third Amendment recorded
December 26, 1985 at Reception No. 85125186, Fourth Amendment recorded May
21, 1986 at Reception No. 86054072, Fifth Amendment recorded May 21, 1986
at Reception No. 86054073, Sixth Amendment recorded May 21, 1986 at
Reception No. 86054074, Seventh Amendment recorded January 22, 1987 at
Reception No. 87009793 and Eighth Amendment recorded June 11, 1987 at
Reception No. 87077267.
29. All items set forth on the plat of ARVADA MARKETPLACE FILING NO. 2 recorded
December 18, 1986 at Reception No. 86156779.
30. Covenants, conditions and restrictions set forth on the Declaration
recorded December 19, 1986 at Reception No. 86156798.
31. Easement and right of way for underground pipelines and incidental purposes
as granted to Cort and Graves Ditch Associates in instrument recorded May
26, 1987 at Reception No. 87068305.
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32. Easement and right of way for underground pipelines and incidental purposes
as granted to Cort & Graves Ditch Associates in instrument recorded May 26,
1987 at Reception No. 87068306.
33. An easement for public utilities, and incidental purposes granted to Public
Service Company of Colorado and Mountain States Telephone and Telegraph
Company, by the instrument recorded October 20, 1987 at Reception No.
87129696.
34. Easement and right of way for public utilities as granted to City of Arvada
in instrument recorded December 10, 1987 at Reception No. 87147505.
35. Easement and right of way for fire lane and incidental purposes as granted
to City of Arvada in instrument recorded December 10, 1987 at Reception No.
87147506.
36. An easement for utility and incidental purposes granted to Public Service
Company of Colorado by the instrument recorded January 11, 1988 at
Reception No. 88002497.
37. An easement for utility and incidental purposes granted to Public Service
Company of Colorado by the instrument recorded January 11, 1988 at
Reception No. 88002498.
38. An easement for utility and incidental purposes granted to Public Service
Company of Colorado by the instrument recorded February 1, 1988 at
Reception No. 88009506.
39. Terms, agreements, provisions, conditions and obligations of a Memorandum
of Lease, executed by Arvada Connection Associates, Ltd., as lessor(s), and
International House of Pancakes, Inc., as lessee(s), recorded April 11,
1988 at Reception No. 88035441.
40. All items set forth on the plat of ARVADA MARKETPLACE FILING NO. 2 SECOND
AMENDED recorded December 17, 1992 at Reception No. 92164135.
41. Covenants, conditions and restrictions set forth on the deed recorded
January 21, 1993 at Reception No. 93009625.
42. Matters as shown on the ALTA/ACSM Land Title Survey prepared by CR Moore
Land Surveying, dated April 13, 2004, Job No. 20-99, to-wit:
a. 3.9' encroachment of building into easement.
b. 0.5' encroachment of building into easement.
43. Terms, conditions, provisions, agreements and obligations specified under
the Easements with Covenants and Restrictions Affecting Land, which was
recorded April 30, 2004 at Reception No. F2016531.
44. Terms, conditions, provisions, agreements and obligations specified under
the Redevelopment Agreement, which was recorded April 30, 2004 at Reception
No. F2016532.
4