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Exhibit 10.245
After Recording Return To:
Quarles & Brady LLP
500 West Madison Street
Suite 3700
Chicago, Illinois 60661
Attention: Peter A. Sarasck, Esq.
Loan No. 6518403
DEED TO SECURE DEBT, ASSIGNMENT OF LEASES AND RENTS
AND SECURITY AGREEMENT
(COLLATERAL INCLUDES FIXTURES)
Dated as of June 28, 2004
INLAND WESTERN DULUTH JOHN'S CREEK SPE, L.L.C.
(Grantor)
TO
JOHN HANCOCK LIFE INSURANCE COMPANY
(Grantee)
LOCATION OF PROPERTY:
11720 Medlock Bridge Road
Duluth, Georgia
NOTE TO TAX COMMISSIONER: THIS INSTRUMENT SECURES A NOTE CONTAINING A MATURITY
DATE OF MORE THAN THREE (3) YEARS FROM THE DATE THEREOF AND, THEREFORE, SUCH
NOTE IS A "LONG-TERM NOTE SECURED BY REAL ESTATE" AS SUCH TERM IS DEFINED IN
OFFICIAL CODE OF GEORGIA ANNOTATED SECTION 48-6-60. CONSEQUENTLY, INTANGIBLES
TAX IS DUE UPON THE RECORDATTON OF THIS INSTRUMENT IN THE AMOUNT OF $25,000.00.
SEE OFFICIAL CODE OF GEORGIA ANNOTATED SECTION 48-6-61.
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Loan No. 6518403
TABLE OF CONTENTS
<Table>
<Caption>
Page
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1. Payment of Indebtedness and Incorporation of Covenants,
Conditions and Agreements ............................................. 4
2. Warranty of Title ....................................................... 4
3. Insurance; Casualty ..................................................... 4
4. Payment of Taxes, Etc. .................................................. 9
5. Reserve Fund ............................................................ 9
6. Condemnation ............................................................12
7. Leases and Rents ........................................................12
8. Maintenance and Use of Trust Property ...................................14
9. Transfer or Encumbrance of the Trust Property or Interests
in the Grantor; Other Indebtedness ....................................15
10. Estoppel Certificates ...................................................20
11. No Cooperative or Condominium ...........................................20
12. Changes in the Laws Regarding Taxation ..................................20
13. No Credits on Account of the Indebtedness ...............................21
14. Documentary Stamps ......................................................21
15. Right of Entry ..........................................................21
16. Books and Records .......................................................21
17. Performance of Other Agreements .........................................22
18. Representations and Covenants Concerning Loan ...........................22
19. Single Purpose Entity/Separateness ......................................24
20. Events of Default; Remedies .............................................27
21. Additional Remedies .....................................................28
22. Right to Cure Defaults ..................................................30
23. Late Payment Charge .....................................................31
24. Prepayment ..............................................................31
25. Prepayment After Event of Default .......................................31
26. Appointment of Receiver .................................................31
27. Security Agreement ......................................................31
28. Authority ...............................................................32
29. Actions and Proceedings .................................................32
30. Further Acts, Etc. ......................................................32
31. Recording of Deed, Etc. .................................................33
32. Usury Laws ..............................................................33
33. Sole Discretion of Grantee ..............................................33
34. Recovery of Sums Required To Be Paid ....................................33
35. Marshalling and Other Matters ...........................................34
36. Waiver of Notice ........................................................34
37. Remedies of Grantor .....................................................34
38. Reporting Requirements ..................................................34
39. Hazardous Materials .....................................................34
40. Asbestos ................................................................36
41. Bankruptcy or Insolvency ................................................37
</Table>
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<Table>
42. Compliance with ERTSA and State Statutes on Governmental Plans ..........37
43. Assignments .............................................................38
44. Cooperation .............................................................38
45. Indemnification for Non-Recourse Carveout Obligations ...................39
46. Exculpation .............................................................39
47. Notices .................................................................40
48. Non-Waiver ..............................................................41
49. Joint and Several Liability .............................................41
50. Severability ............................................................41
51. Duplicate Originals .....................................................41
52. Indemnity and Grantee's Costs ...........................................41
53. Certain Definitions .....................................................42
54. No Oral Change ..........................................................42
55. No Foreign Person .......................................................42
56. Separate Tax Lot ........................................................42
57. Right to Release Any Portion of the Trust Property ......................42
58. Subrogation. ............................................................43
59. Administrative Fees .....................................................43
60. Disclosure ..............................................................43
61. Headings, Etc. ..........................................................43
62. Address of Real Property ................................................43
63. Intentionally Deleted ...................................................43
64. Publicity ...............................................................43
65. Relationship. ...........................................................43
66. Homestead ...............................................................43
67. No Third Party Beneficiaries. ...........................................44
68. Compliance with Regulation U ............................................44
69. Entire Agreement ........................................................44
70. Servicer ................................................................44
71. Governing Law; Consent to Jurisdiction. .................................44
72. Phase II Property; Letter of Credit .....................................45
73. Special State Provisions. ...............................................45
</Table>
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Loan No. 6518403
INDEX OF DEFINED TERMS
<Table>
Additional Land................................................................1
Architect......................................................................6
Assignee............................... ......................................13
Assignment of Leases and Rents................................................13
Assignor......................................................................13
Bankruptcy Code................................................................2
Code..........................................................................31
Collateral....................................................................30
Deed...........................................................................1
Depository.....................................................................9
Equipment......................................................................2
ERISA.........................................................................36
GAAP..........................................................................24
Grantee....................................................................1, 41
Grantor....................................................................1, 41
Guarantor.....................................................................41
Guaranty......................................................................41
Improvements...................................................................1
Indebtedness...................................................................1
Independent Director..........................................................25
Land...........................................................................1
Late Charge...................................................................30
Leases.........................................................................2
Loan...........................................................................1
Loan Documents................................................................41
Management Agreement..........................................................23
Manager.......................................................................23
Non-Consolidation Opinion.....................................................25
Non-Recourse Carveout Obligations.............................................38
Note.......................................................................1, 41
Other Charges..................................................................9
Permitted Encumbrances.........................................................4
Person........................................................................41
Policies.......................................................................5
Rating Agencies...............................................................17
Real Property..................................................................1
Rents......................................................................3, 13
Repair and Remediation Reserve Fund...........................................11
Replacement Reserve Agreement.................................................10
Replacement Reserve Fund......................................................10
Reserve Fund..................................................................11
Restoration....................................................................6
Secondary Market Transactions.................................................38
</Table>
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<Table>
Servicer......................................................................43
Small Lease...................................................................13
SPC Party.....................................................................25
Tax and Insurance Fund........................................................10
Taxes..........................................................................9
Tenant Improvement and Leasing Commission Reserve Fund........................11
Termination Amount............................................................13
Transferee....................................................................16
Trust Property.............................................................1, 41
Uniform Commercial Code........................................................2
</Table>
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THIS DEED TO SECURE DEBT, ASSIGNMENT OF LEASES AND RENTS AND SECURITY
AGREEMENT (this "DEED"), made as of the 28th day of June, 2004, by INLAND
WESTERN DULUTH JOHN'S CREEK SPE, L.L.C., a Delaware limited liability company,
having its principal place of business at 2901 Butterfield Road, Oak Brook,
Illinois 60523 ("GRANTOR"), to and for the benefit of JOHN HANCOCK LIFE
INSURANCE COMPANY, a Massachusetts corporation, having its principal place of
business at John Hancock Tower, T-56, 200 Clarendon Street, Boston,
Massachusetts 02116 ("GRANTEE").
W I T N E S S E T H:
For and in consideration of Ten Dollars and other good and valuable
consideration received to its full satisfaction and to secure the payment of an
indebtedness in the principal sum of Twenty-three Million Three Hundred
Thousand and No/100 Dollars ($23,300,000.00), lawful money of the United States
of America, to be paid with interest and all other sums and fees payable
according to a certain mortgage note dated the date hereof made by Grantor to
Grantee (the mortgage note, together with all extensions, renewals or
modifications thereof, being hereinafter collectively called the "NOTE"; and the
loan evidenced by the Note being hereinafter referred to as the "LOAN": and the
Note, unless renewed or extended, having a final maturity date of August 1,
2009) and all indebtedness, obligations, liabilities and expenses due hereunder
and under any other Loan Document (as hereinafter defined) (the indebtedness,
interest, other sums, fees, obligations and all other sums due under the Note
and/or hereunder and/or any other Loan Document being collectively called the
"INDEBTEDNESS"), Grantor has warranted, given, granted, bargained, sold,
alienated,enfeoffed, conveyed, confirmed, pledged, assigned and hypothecated and
by these presents does warrant, give, grant, bargain, sell, alien, enfeoff,
convey, confirm, pledge, assign and hypothecate unto Grantee, and hereby grants
unto Grantee a security interest in the following property and rights, whether
now owned or held or hereafter acquired (collectively, the "TRUST PROPERTY")):
GRANTING CLAUSE ONE
All right, title and interest in and to the real property or
properties described on EXHIBIT A hereto (collectively, the "LAND").
GRANTING CLAUSE TWO
All additional lands, estates and development rights hereafter
acquired by Grantor for use in connection with the Land and the development of
the Land and all additional lands and estates therein which may, from time to
time, by supplemental deed to secure debt or otherwise, be expressly made
subject to the lien and security title thereof (collectively, the "ADDITIONAL
LAND").
GRANTING CLAUSE THREE
Any and all buildings, structures, fixtures, additions, enlargements,
extensions, modifications, repairs, replacements and improvements now or
hereafter located on the Land or any part thereof (collectively, the
"IMPROVEMENTS"; the Land, the Additional Land and the Improvements hereinafter
collectively referred to as the "REAL PROPERTY").
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GRANTING CLAUSE FOUR
All easements, rights-of-way, strips and gores of land, streets, ways,
alleys, passages, sewer rights, water, water courses, water rights and powers,
oil, gas and mineral rights, air rights and development rights, zoning rights,
tax credits or benefits and all estates, rights, titles, interests, privileges,
liberties, tenements, hereditaments and appurtenances of any nature whatsoever
in any way belonging, relating or pertaining to the Real Property or any part
thereof and the reversion and reversions, remainder and remainders and all land
lying in the bed of any street, road or avenue, opened or proposed, in front of
or adjoining the Land or any part thereof to the center line thereof and all the
estates, rights, titles, interests, dower and rights of dower, curtesy and
rights of curtesy, property, possession, claim and demand whatsoever, both in
law and in equity, of Grantor in, of and to the Real Property and every part and
parcel thereof, with the appurtenances thereto.
GRANTING CLAUSE FIVE
All machinery, equipment, fixtures and other property of every kind
and nature whatsoever owned by Grantor or in which Grantor has or shall have an
interest (to the extent of such interest) now or hereafter located upon the Real
Property or appurtenant thereto and usable in connection with the present or
future operation and occupancy of the Real Property and all building equipment,
materials and supplies of any nature whatsoever owned by Grantor or in which
Grantor has or shall have an interest (to the extent of such interest) now or
hereafter located upon the Real Property or appurtenant thereto or usable in
connection with the present or future operation and occupancy of the Real
Property, including but not limited to all heating, ventilating, air
conditioning, plumbing, lighting, communications and elevator machinery,
equipment and fixtures (hereinafter collectively called the "EQUIPMENT") and the
right, title and interest of Grantor in and to any of the Equipment which may be
subject to any security agreements (as defined in the Uniform Commercial Code of
the State in which the Trust Property is located (the "UNIFORM COMMERCIAL
CODE")) superior, inferior or PARI PASSU in lien, security title and security
interest to the lien, security title and security interest of this Deed. In
connection with Equipment which is leased to Grantor or which is subject to a
lien, security title or security interest which is superior to the lien,
security title and security interest of this Deed, this Deed shall also cover
all right, title and interest of each Grantor in and to all deposits and the
benefit of all payments now or hereafter made with respect to such Equipment.
GRANTING CLAUSE SIX
All awards or payments, including interest thereon, which may
heretofore and hereafter be made with respect to the Real Property or any part
thereof, whether from the exercise of the right of eminent domain (including but
not limited to any transfer made in lieu of or in anticipation of the exercise
of said right), or for a change of grade or for any other injury to or decrease
in the value of the Real Property.
GRANTING CLAUSE SEVEN
All leases and subleases (including, without limitation, all
guarantees thereof) and other agreements affecting the use, enjoyment and/or
occupancy of the Real Property or any part thereof, now or hereafter entered
into (including any use or occupancy arrangements created pursuant to Section
365(h) of Title 11 of the United States Code (the "BANKRUPTCY CODE") or
otherwise in connection with the commencement or continuance of any bankruptcy,
reorganization, arrangement, insolvency, dissolution, receivership or similar
proceedings or any assignment for the benefit of creditors in respect of any
tenant or occupant of any portion of the Real Property), together with any
extension or renewal of
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the same (the "LEASES") and all income, rents, issues, profits, revenues and
proceeds including, but not limited to, all oil and gas or other mineral
royalties and bonuses from the Real Property (including any payments received
pursuant to Section 502(b) of the Bankruptcy Code or otherwise in connection
with the commencement or continuance of any bankruptcy, reorganization,
arrangement, insolvency, dissolution, receivership or similar proceedings or any
assignment for the benefit of creditors in respect of any tenant or occupant of
any portion of the Real Property and all claims as a creditor in connection with
any of the foregoing) (the "RENTS") and all proceeds from the sale,
cancellation, surrender or other disposition of the Leases and the right to
receive and apply the Rents to the payment of the Indebtedness.
GRANTING CLAUSE EIGHT
All proceeds of and any unearned premiums on any insurance policies
covering the Real Property or any part thereof including, without limitation,
the right to receive and apply the proceeds of any insurance, judgments or
settlements made in lieu thereof, for damage to the Real Property or any part
thereof.
GRANTING CLAUSE NINE
All tax refunds, including interest thereon, tax credits and tax
abatements and the right to receive or benefit from the same, which may be
payable or available with respect to the Real Property.
GRANTING CLAUSE TEN
The right, in the name and on behalf of Grantor, to appear in and
defend any action or proceeding brought with respect to the Real Property or any
part thereof and to commence any action or proceeding to protect the interest of
Grantee in the Real Property or any part thereof.
GRANTING CLAUSE ELEVEN
All accounts receivable, utility or other deposits, intangibles,
contract rights, interests, estate or other claims, both in law and in equity,
which Grantor now has or may hereafter acquire in the Real Property or any part
thereof.
GRANTING CLAUSE TWELVE
All rights which Grantor now has or may hereafter acquire to be
indemnified and/or held harmless from any liability, loss, damage, cost or
expense (including, without limitation, attorneys' fees and disbursements)
relating to the Real Property or any part thereof.
GRANTING CLAUSE THIRTEEN
All plans and specifications, maps, surveys, studies, reports,
contracts, subcontracts, service contracts, management contracts, franchise
agreements and other agreements, franchises, trade names (excluding any trade
names to the extent they include therein the name "Inland"), trademarks
(excluding any trademarks to the extent they include therein the name "Inland"),
symbols, service marks, approvals, consents, permits, special permits, licenses
and rights, whether governmental or otherwise, respecting the use, occupation,
development construction and/or operation of the Real Property or any part
thereof or the activities conducted thereon or therein, or otherwise pertaining
to the Real Property or any part thereof.
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GRANTING CLAUSE FOURTEEN
All proceeds, products, offspring, rents and profits from any of the
foregoing, without limitation, those from sale, exchange, transfer, collection,
loss, damage, disposition, substitution or replacement of any of the foregoing.
WITH RESPECT to any portion of the Trust Property which is not real
estate under the laws of the State of Georgia, Grantor hereby grants, bargains,
sells and conveys the same to Grantee for the purposes set forth hereunder and
Grantee shall be vested with all rights, power and authority granted hereunder
or by law to Grantee with respect thereto.
TO HAVE AND TO HOLD the above granted and described Trust Property
unto and to the use and benefit of Grantee and its successors and assigns in fee
simple forever.
PROVIDED, HOWEVER, these presents are upon the express condition, if
Grantor shall well and truly pay to Grantee the Indebtedness at the time and in
the manner provided in the Note and this Deed and shall well and truly abide by
and comply with each and every covenant and condition set forth herein, in the
Note and in the other Loan Documents, these presents and the estate hereby
granted shall be cancelled and surrendered in accordance with the existing
Official Code of the State of Georgia;
AND Grantor represents to, covenants with and warrants with Grantee as
follows:
PART I - GENERAL PROVISIONS
1. PAYMENT OF INDEBTEDNESS AND INCORPORATION OF COVENANTS,
CONDITIONS AND AGREEMENTS. Grantor shall pay the Indebtedness at the time and in
the manner provided in the Note, this Deed and the other Loan Documents. All the
covenants, conditions and agreements contained in the Note and the other Loan
Documents are hereby made a part of this Deed to the same extent and with the
same force as if fully set forth herein.
2. WARRANTY OF TITLE. Grantor has good and marketable title to
the Trust Property; Grantor has the right to give, grant, bargain, sell,
alienate, enfeoff, convey, confirm, pledge, lease, assign, hypothecate and grant
a security interest in the Trust Property; Grantor possesses an indefeasible fee
estate in the Real Property; and Grantor owns the Trust Property free and clear
of all liens, encumbrances and charges whatsoever except those exceptions shown
in the title insurance policy insuring the lien, security title and security
interest of this Deed (this Deed and the liens, encumbrances and charges shown
as exceptions in such title policy, hereinafter collectively referred to as the
"permitted encumbrances"). Grantor shall forever warrant, defend and preserve
such title and the validity and priority of the lien, security title and
security interest of this Deed and shall forever warrant and defend the same to
Grantee against the claims of all persons whomsoever.
3. INSURANCE; CASUALTY.
(a) Grantor, at its sole cost and expense, shall keep the
Trust Property insured during the term of this Deed for the mutual benefit of
each Grantor and Grantee against loss or damage by any peril covered by a
standard "special perils" or "all-risk-of-physical-loss" insurance policy
including, without limitation, riot and civil commotion, acts of terrorism,
vandalism, malicious mischief, burglary, theft and mysterious disappearance in
an amount (i) equal to at least one hundred percent (100%) of the then "full
replacement cost" of the Improvements and Equipment, without deduction for
physical depreciation and (ii) such that the insurer would not deem Grantor a
coinsurer under such
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policies. The policies of insurance carried in accordance with this PARAGRAPH 3
shall be paid annually in advance and shall contain the "Replacement Cost
Endorsement" with a waiver of depreciation, and shall have a deductible no
greater than $10,000 unless so agreed by Grantee.
(b) Grantor, at its sole cost and expense, for the mutual
benefit of each Grantor and Grantee, shall also obtain and maintain during the
term of this Deed the following policies of insurance:
(i) Flood insurance if any part of the Real Property is
located in an area identified by the Secretary of Housing and Urban
Development as an area having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance Act of
1968 (and any successor act thereto) in an amount at least equal to the
outstanding principal amount of the Note or the maximum limit of coverage
available with respect to the Improvements and Equipment under said Act,
whichever is less.
(ii) Comprehensive public liability insurance, including
broad form property damage, blanket contractual and personal injuries
(including death resulting therefrom) coverages.
(iii) Rental loss insurance in an amount equal to at least
one hundred percent of the aggregate annual amount of all rents and
additional rents payable by all of the tenants Under the Leases (whether or
not such Leases are terminable in the event of a fire or casualty), such
rental loss insurance to cover rental losses for a period of at least one
(1) year after the date of the fire or casualty in question. The amount of
such rental loss insurance shall be adjusted no less frequently than
annually during the term of this Deed to reflect all increased rent and
increased additional rent payable by all of the tenants under renewal
Leases entered into in accordance with the terms of this Deed and all rent
and additional rent payable by all of the tenants under new Leases entered
into in accordance with the terms of this Deed.
(iv) Insurance against loss or damage from explosion of
steam boilers, air conditioning equipment, high pressure piping, machinery
and equipment, pressure vessels or similar apparatus now or hereafter
installed in the Improvements.
(v) Such other insurance (including, without limitation,
earthquake insurance) as may from time to time be reasonably required by
Grantee in order to protect its interests or, in the event of a Secondary
Market Transaction, as required by the Rating Agencies (as such terms are
hereinafter defined).
(c) All policies of insurance (the "POLICIES") required
pursuant to this PARAGRAPH 3 (i) shall be issued by an insurer satisfactory to
Grantee (and, in the event of a Secondary Market Transaction, to the Rating
Agencies), (ii) shall contain the standard New York mortgage non-contribution
clause naming Grantee as the person to which all payments made by such insurance
company shall be paid, (iii) shall be maintained throughout the term of this
Deed without cost to Grantee, (iv) shall be delivered to Grantee, (v) shall
contain such provisions as Grantee deems reasonably necessary or desirable to
protect its interest including, without limitation, endorsements providing that
neither Grantor, Grantee nor any other party shall be a co-insurer under such
Policies and that Grantee shall receive at least thirty (30) days prior written
notice of any modification or cancellation and (vi) shall be reasonably
satisfactory in form and substance to Grantee (and, in the event of a Secondary
Market Transaction, to the Rating Agencies) and shall be approved by Grantee
(and, in the event of a Secondary Market Transaction, by the Rating Agencies) as
to amounts, form, risk coverage, deductibles,
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loss payees and insureds. All amounts recoverable thereunder are hereby assigned
to the Grantee. Not later than thirty (30) days prior to the expiration date of
each of the Policies, Grantor will deliver to Grantee satisfactory evidence of
the renewal of each of the Policies.
(d) If the Improvements shall be damaged or destroyed, in
whole or in part, by fire or other casualty, Grantor shall give prompt notice
thereof to Grantee and prior to the making of any repairs thereto. Following the
occurrence of fire or other casualty, Grantor, regardless of whether insurance
proceeds are payable under the Policies or, if paid, are made available to
Grantor by Grantee, shall promptly proceed with the repair, alteration,
restoration, replacement or rebuilding of the Improvements as near as possible
to their value, utility, condition and character prior to such damage or
destruction. Such repairs, alterations, restoration, replacement and rebuilding
are herein collectively referred to as the "RESTORATION". The Restoration shall
be performed in accordance with the following provisions:
(i) Grantor shall procure, pay for and furnish to Grantee
true copies of all required governmental permits, certificates and
approvals with respect to the Restoration.
(ii) Grantor shall furnish Grantee, within thirty (30) days
of the casualty, evidence reasonably satisfactory to Grantee of the cost to
complete the Restoration.
(iii) If the Restoration involves structural work or the
estimated cost to complete the Restoration exceeds five percent (5%) of the
original principal amount of the Loan, the Restoration shall be conducted
under the supervision of an architect (the "ARCHITECT") selected by Grantor
and approved by Grantee (which approval shall not be unreasonably
withheld), and no such Restoration shall be made except in accordance with
detailed plans and specifications, detailed cost estimates and detailed
work schedules approved by Grantee (which approval shall not be
unreasonably withheld).
(iv) If the estimated cost of the Restoration shall exceed
twenty-five percent (25%) of the fair market value of the Trust Property,
at the request of Grantee, Grantor, before commencing any work, shall cause
to be furnished to Grantee a surety bond or bonds, in form and substance
reasonably satisfactory to Grantee, naming Grantor and Grantee as
co-obligees, in an amount that is not less than the estimated cost of the
Restoration, issued by a surety company or companies reasonably
satisfactory to Grantee.
(v) The Restoration shall be prosecuted to completion with
all due diligence and in an expeditious and first class workmanlike manner
and in compliance with all laws and other governmental requirements, all
permits, certificates and approvals, all requirements or fire underwriters
and all insurance policies then in force with respect to the Real Property.
(vi) At all times when any work is in progress, Grantor
shall maintain all insurance then required by law or customary with respect
to such work, and, prior to the commencement of any work, shall furnish to
Grantee duplicate originals or certificates of the policies therefor.
(vii) Upon completion of the Restoration, Grantor shall
obtain (A) any occupancy permit which may be required for the Improvements
and (B) all other governmental permits, certificates and approvals and all
permits, certificates and approvals of fire underwriters which are required
for or with respect to the Restoration, and shall furnish true copies
thereof to Grantee.
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(viii) An Event of Default (as hereinafter defined) shall be
deemed to have occurred under this Deed if Grantor, after having commenced
demolition or construction of any Improvements, shall abandon such
demolition or the construction work or shall fail to complete such
demolition and construction within a reasonable time after the commencement
thereof.
(e) If the estimated cost of the Restoration is $50,000.00
or less, and so long as no Event of Default then exists under any of the Loan
Documents, Grantor shall be entitled to adjust and settle the insurance claim
without the consent or participation of Grantee and Grantor shall be entitled to
receive the payment for such loss. Grantor and Grantee shall jointly adjust and
settle all insurance claims over $50,000.00, PROVIDED, HOWEVER, if an Event of
Default shall have occurred and be continuing, Grantee shall have the right to
adjust and settle such claims without the prior consent of Grantor. In the event
of any insured loss, the payment for such loss shall be made directly to
Grantee. Any insurance proceeds payable under any of the Policies in excess of
$50,000.00 (and, if an Event of Default then exists hereunder, any insurance
proceeds of $50,000.00 or less) may, at the option of Grantee, be used in one or
more of the following ways: (w) applied to the Indebtedness, whether such
Indebtedness then be matured or unmatured (such application to be without
prepayment fee or premium, except that if an Event of Default, or an event which
with notice and/or the passage of time, or both, would constitute an Event of
Default, has occurred and remains uncured, then such application shall be
subject to the applicable premium computed in accordance with the Note), (x)
used to fulfill any of the covenants contained herein as the Grantee may
determine, (y) used to replace or restore the property to a condition
satisfactory to the Grantee, or (z) released to the Grantor. Notwithstanding the
foregoing, provided (i) not more than forty percent (40%) of the gross area of
the Improvements is directly affected by such damage, destruction or loss and
the amount of the loss does not exceed twenty-five percent (25%) of the fair
market value of the Trust Property, (ii) no Event of Default or event that with
the passage of time or giving of notice or both would constitute a default has
occurred hereunder, under the Note or under any of the other Loan Documents and
remains uncured at the time of such application, (iii) the insurer does not deny
liability to any named insured, (iv) each major and/or anchor tenant (as
determined by Grantee) whose Lease permits termination thereof as a result of
such insured loss, agrees in writing to continue its Lease, (v) rental loss
insurance is available and in force and effect to offset in full any abatement
of rent to which any tenant may be entitled as a result of such damage,
destruction or loss, (vi) the remaining Improvements continue at all times to
comply with all applicable building, zoning and other land use laws and
regulations, (vii) in Grantee's judgment, the Restoration is practicable and can
be completed within one (1) year after the damage, destruction or loss and at
least one (1) year prior to the Maturity Date (as such term is defined in the
Note) and (viii) rebuilding of the Improvements to substantially identical size,
condition and use as existed prior to the casualty is permitted by all
applicable laws and ordinances, then all of such proceeds shall be used for
Restoration. Notwithstanding the foregoing, such proceeds shall be used for
Restoration to the extent required under the terms of any existing leases of any
portion of the Trust Property. Any application of insurance proceeds to the
Indebtedness shall be to the unpaid installments of principal due under the Note
in the inverse order of their maturity, such that the regular payments under the
Note shall not be reduced or altered in any manner. In the event the above
criteria are satisfied (including that no Event of Default or event that, with
the passage of time or giving of notice or both, would constitute a default has
occurred hereunder, under the Note or other Loan Documents) or Grantee otherwise
elects to allow the use of such proceeds for the Restoration, such proceeds
shall be disbursed in accordance with the following provisions:
(i) Each request for an advance of insurance proceeds
shall be made on seven (7) days' prior notice to Grantee and shall be
accompanied by a certificate of the Architect, if one be required under
PARAGRAPH 3(d)(iii) above, otherwise by an executive officer or managing
general partner or managing member of Grantor, stating (A) that all work
completed to date has been performed in compliance with the approved plans
and specifications and in accordance with
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all provisions of law, (B) the sum requested is properly required to
reimburse Grantor for payments by Grantor to, or is properly due to, the
contractor, subcontractors, materialmen, laborers, engineers, architects or
other persons rendering services or materials for the Restoration (giving a
brief description of such services and materials), and that when added to
all sums, if any, previously disbursed by Grantee, does not exceed the
value of the work done to the date of such certificate and (C) that the
amount of such proceeds remaining in the hands of Grantee will be
sufficient on completion of the work to pay the same in full (giving, in
such reasonable detail as Grantee may require, an estimate of the cost of
such completion).
(ii) Each request for an advance of insurance proceeds
shall, to the extent permitted under applicable law, be accompanied by
waivers of liens satisfactory to Grantee covering that part of the
Restoration previously paid for, if any, and by a search prepared by a
title company or by other evidence reasonably satisfactory to Grantee
including without limitation a title endorsement satisfactory to Grantee if
available in the state where the Real Property is located, that there has
not been filed with respect to the Real Property any mechanic's lien or
other lien or instrument and that there exist no encumbrances on or
affecting the Real Property other than the Permitted Encumbrances or
otherwise approved by Grantee. In addition to the foregoing, the request
for the final advance shall be accompanied by (A) any final occupancy
permit which may be required for the Improvements, (B) all other
governmental permits, certificates and approvals and all other permits
necessary for the occupancy and operation of the Real Property, (C) Tenant
estoppels from tenants whose space was affected and (D) final lien waivers
from all contractors, subcontractors and materialmen.
(iii) No advance of insurance proceeds shall be made if
there exists an Event of Default or event which with the passage of time or
the giving of notice or both would constitute a default on the part of
Grantor under this Deed, the Note or any other Loan Document.
(iv) If the cost of the Restoration (as reasonably
estimated by Grantee) at any time shall exceed the amount of the insurance
proceeds available therefor, insurance proceeds shall not be advanced until
Grantor, before commencing the Restoration or continuing the Restoration,
as the case may be, shall deposit the full amount of the deficiency (or
other assurances reasonably satisfactory to Grantee) with Grantee and the
amount so deposited shall first be applied toward the cost of the
Restoration before any portion of the insurance proceeds is disbursed for
such purpose.
Upon completion of the Restoration and payment in full therefor, or
upon failure on the part of Grantor promptly to commence or diligently to
continue the Restoration, or at any time upon request by Grantor, Grantee may
apply the amount of any such proceeds then or thereafter in the hands of Grantee
to the payment of the Indebtedness; PROVIDED, HOWEVER, that nothing herein
contained shall prevent Grantee from applying at any time the whole or any part
of such proceeds to the curing of any default that has not been cured within the
applicable cure period under this Deed, the Note or any other Loan Document.
(f) Insurance proceeds and any additional funds deposited
by Grantor with Grantee shall constitute additional security for the
Indebtedness. Grantor shall execute, deliver, file and/or record, at its
expense, such documents and instruments as Grantee deems necessary or advisable
to grant to Grantee a perfected, first priority security interest in the
insurance proceeds and such additional funds. If Grantee elects to have the
insurance proceeds applied to Restoration, (i) the insurance proceeds shall be,
at Grantee's election, disbursed in installments by Grantee or by a
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disbursing agent ("DEPOSITORY") selected by Grantee and whose fees and expenses
shall be paid by Grantor in the manner provided in PARAGRAPH 3(e) above and (ii)
all costs and expenses incurred by Grantee in connection with the Restoration,
including, without limitation, reasonable counsel fees and costs, shall be paid
by Grantor.
4. PAYMENT OF TAXES, ETC.
(a) Grantor shall pay or cause to be paid all taxes,
assessments, water rates and sewer rents, now or hereafter levied or assessed or
imposed against the Trust Property or any part thereof (the "TAXES") and all
ground rents, maintenance charges, other governmental impositions, and other
charges levied, assessed or imposed against the Trust Property, including,
without limitation, vault charges and license fees (collectively, "OTHER
CHARGES") for the use of vaults, chutes and similar areas adjoining the Real
Property, as same become due and payable. Grantor will deliver to Grantee,
promptly upon Grantee's request, evidence satisfactory to Grantee that the Taxes
and Other Charges have been so paid and are not then delinquent. Grantor shall
not suffer or permit any lien or charge (including, without limitation, any
mechanic's lien) against all or any part of the Trust Property and Grantor shall
promptly cause to be paid and discharged any lien or charge whatsoever which may
be or become a lien or charge against the Trust Property. Grantor shall promptly
pay for all utility services provided to the Trust Property. In addition,
Grantee may, at its option, retain the services of a firm to monitor the payment
of Taxes, the cost of which shall be borne by Grantor.
(b) Notwithstanding the provisions of subsection (a) of
this PARAGRAPH 4, Grantor shall have the right to contest in good faith the
amount or validity of any such Taxes, liens or Other Charges (including, without
limitation, tax liens and mechanics' liens) referred to in subsection (a) above
by appropriate legal proceedings and in accordance with all applicable law,
after notice to, but without cost or expense to, Grantee, provided that (i) no
Event of Default or event that, with the passage of time or giving of notice or
both, would constitute a default hereunder, under the Note or other Loan
Documents has occurred and is continuing, (ii) Grantor pays such Taxes, liens or
Other Charges as same become due and payable, unless Grantor delivers evidence
satisfactory to Grantee that, as a result of Grantor's contest, Grantor's
obligation to pay such Taxes, liens or Other Charges has been deferred by the
appropriate governmental authority, in which event, Grantor may defer such
payment of such Taxes, liens or Other Charges until the date specified by such
governmental authority, (iii) such contest shall be promptly and diligently
prosecuted by and at the expense of Grantor, (iv) Grantee shall not thereby
suffer any civil penalty, or be subjected to any criminal penalties or
sanctions, (v) such contest shall be discontinued and such Taxes, liens or Other
Charges promptly paid if at any time all or any part of the Trust Property shall
be in imminent danger of being foreclosed, sold, forfeited or otherwise lost or
if the security title, lien and security interest created by this Deed or the
priority thereof shall be in imminent danger of being impaired, (vi) Grantor
shall have set aside adequate reserves (in Grantee's judgment) for the payment
of such Taxes, liens or Other Charges, together with all interest and penalties
thereon and (vii) Grantor shall have furnished such security as may be
reasonably required in the proceeding or as may be requested by Grantee, to
insure the payment of any such Taxes, liens or Other Charges, together with all
interest and penalties thereon.
5. RESERVE FUND.
(a) TAX AND INSURANCE FUND. Grantor shall pay to Grantee
on the first day of each calendar month such amounts as Grantee from time to
time estimates to be sufficient to create and maintain a reserve fund from which
(i) to pay the Taxes and Other Charges, at least thirty (30) days prior to the
date they are due without the payment of any penalties or interest, and (ii) to
pay, at least thirty (30) days prior to their due date for the renewal of the
coverage afforded by the Policies upon the
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expiration thereof, the insurance premiums for the Policies estimated by Grantee
to be payable on such due date, (said amounts in (i) and (ii) above hereafter
called the "TAX AND INSURANCE FUND").
(1) Notwithstanding the foregoing clause (i) of this
subsection (a), provided (X) Inland Western Duluth John's Creek SPE, L.L.C. or a
Permitted Affiliated Transferee, as defined in Paragraph 9(h) below, or a
Transferee approved by Grantee pursuant to Paragraph 9(f) below is and remains
the owner of the Trust Property, (Y) no Event of Default has occurred and is
continuing under this Deed to Secure Debt or any of the Loan Documents beyond
any applicable notice or cure period, (Z) Grantor pays such Taxes and Other
Charges prior to the date they are due and prior to the assessment of any
penalties or interest and provides, upon request, evidence of such timely
payment to Grantee, then Grantee will not require Grantor to make the deposits
referred to in clause (i) of this subsection (a). In the event Grantor is
hereafter required to make the deposits referred to in clause (i) of this
subsection (a) on account of Grantor's failure to satisfy all of the
requirements of the preceding sentence, Grantor agrees at Grantor's sole cost
and expense, upon request thereafter of Grantee, to promptly execute and deliver
to Grantee a written agreement for the making of such deposits in the future.
(2) Notwithstanding the foregoing clause (ii) of
this subsection (a), provided (X) no Event of Default has occurred and is
continuing under this Deed or any of the Loan Documents beyond any applicable
notice or cure period, (Y) Inland Western Duluth John's Creek SPE, L.L.C. or a
Permitted Affiliated Transferee, as defined in Paragraph 9(h) below, or a
Transferee approved by Grantee pursuant to Paragraph 9(f) below is and remains
the owner of the Trust Property, and (Z) Grantor complies in full with all
obligations in the Loan Documents regarding insurance, including without
limitation providing Grantee with timely evidence (i) that the required
insurance is in place for the Trust Property and is never delinquent or
suspended, and (ii) that all insurance premiums are paid when due, then Grantee
will not require Grantor to make the deposits referred to in clause (ii) of this
subsection (a). In the event Grantor is hereafter required to make the deposits
referred to in clause (ii) of this subsection (a) on account of Grantor's
failure to satisfy all of the requirements of the preceding sentence, Grantor
agrees at Grantor's sole cost and expense, upon request thereafter of Grantee,
to promptly execute and deliver to Grantee a written agreement for the making of
such deposits in the future.
(b) REPLACEMENT RESERVE FUND. If required by Grantee,
Grantor shall enter into a Replacement Reserve Agreement which shall require
Grantor to pay to Grantee on the first day of each calendar month one twelfth
(1/12) of the amount reasonably estimated by Grantee to be due for the
replacements and capital repairs required to be made to the Trust Property
during each calendar year (the "REPLACEMENT RESERVE FUND"). Grantee shall make
disbursements from the Replacement Reserve Fund for items specified in the
Replacement Reserve Agreement as set forth in such Agreement. Grantee may
require an inspection of the Trust Property prior to making a disbursement in
order to verify completion of replacements and repairs. Grantee reserves the
right to make any disbursement from the Replacement Reserve Fund directly to the
party furnishing materials and/or services.
Notwithstanding the foregoing, provided: (W) no Event of
Default has occurred and is continuing under this Deed to Secure Debt or any of
the Loan Documents beyond any applicable notice or cure period, (X) Inland
Western Duluth John's Creek SPE, L.L.C. or a Permitted Affiliated Transferee, as
defined in Paragraph 9(h) below, or a Transferee approved by Grantee pursuant to
Paragraph 9(f) below is and remains the owner of the Trust Property, (Y) Grantor
has complied in full with all obligations set forth in this Deed to Secure Debt
and in the other Loan Documents regarding maintaining the Trust Property,
including without limitation maintaining the Trust Property in good order and
repair, and (Z) inspections of the Trust Property do not uncover the necessity
of creating or
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reinstating the Replacement Reserve Fund, in Grantee's sole discretion, then
Grantee will not require Grantor to make the deposits referred to in this
subsection (b). In the event Grantor is hereafter required to make the deposits
referred to in this subsection (b) on account of Grantor's failure to satisfy
all of the requirements of the preceding sentence, Grantor agrees at Grantor's
sole cost and expense, upon request thereafter of Grantee, to promptly execute
and deliver to Grantee a written agreement for the making of such deposits in
the future.
(c) TENANT IMPROVEMENT AND LEASING COMMISSION RESERVE. If
required by Grantee, Grantor shall enter into a Tenant Improvement and Leasing
Commission Agreement which shall require Grantor to pay to Grantee on the first
day of each calendar month deposits for tenant improvements and leasing
commissions in amounts determined by Grantee in its sole discretion, for payment
of costs and expenses incurred by Grantor in connection with the performance of
work to refit and release space in the Improvements that is currently vacant or
anticipated to be vacated during the term of the Loan, and for payment of
leasing commissions incurred by Grantor in connection with the releasing of
space in the Improvements that is currently vacant or anticipated to be vacated
during the term of the Loan (the "TENANT IMPROVEMENT AND LEASING COMMISSION
RESERVE FUND"), all according to the Tenant Improvement and Leasing Commission
Agreement.
Notwithstanding the foregoing, provided no Event of Default
has occurred and is continuing under this Deed to Secure Debt or any of the Loan
Documents beyond any applicable notice or cure period and no condition or event
exists which with notice, the passage or time, or both, would constitute an
Event of Default under this Deed to Secure Debt or any of the Loan Documents,
then Grantee will not require Grantor to make the deposits referred to in this
subsection (c). In the event Grantor is hereafter required to make the deposits
referred to in this subsection (c) on account of Grantor's failure to satisfy
all of the requirements of the preceding sentence, Grantor agrees at Grantor's
sole cost and expense, upon request thereafter of Grantee, to promptly execute
and deliver to Grantee a written agreement for the making of such deposits in
the future.
(d) REPAIR AND REMEDIATION RESERVE FUND. If required by
Grantee, Grantor shall enter into a Reserve Agreement for Repairs and shall pay
to Grantee the estimated cost to complete any required repairs (the "REPAIR AND
REMEDIATION RESERVE FUND") as more fully set forth in said Agreement.
Notwithstanding anything herein to the contrary, Grantee agrees that the Repair
and Remediation Reserve Fund shall not be required if the aggregate cost to
repair all items set forth in any applicable Property Condition Assessment,
Environmental Assessment or other report is less than $500,000.00.
The amounts in (a), (b), (c) and (d) above shall hereinafter be
collectively called the "RESERVE FUND". Grantor hereby pledges to Grantee any
and all monies now or hereafter deposited as the Reserve Fund as additional
security for the payment of the Indebtedness. Grantee may apply the Reserve Fund
to payments of Taxes, Other Charges, insurance premiums and, as applicable,
payments for replacements and capital repairs, tenant improvements and leasing
commissions and repairs and remediations required to be made by Grantor pursuant
to the terms hereof or pursuant to the terms of any other Loan Documents (even
though subsequent owners of the Trust Property may benefit thereby); PROVIDED,
HOWEVER, if there is an Event of Default which is continuing, then Grantee may
credit such Reserve Fund against the Indebtedness in such priority and
proportions as Grantee in its discretion shall deem proper. If the Reserve Fund
is not sufficient to fully pay for the Taxes, Other Charges and/or the insurance
premiums or, as applicable, amounts for replacements and capital repairs, tenant
improvements and leasing commissions and repairs and remediation when due,
Grantor shall promptly pay to Grantee, upon demand, an amount which Grantee
shall estimate as sufficient to make up the deficiency. The
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Reserve Fund shall not constitute a trust fund and may be commingled with other
monies held by Grantee. No earnings or interest on the Reserve Fund shall be
payable to Grantor.
6. CONDEMNATION. Grantor shall promptly give Grantee written
notice of the actual or threatened commencement of any condemnation or eminent
domain proceeding and shall deliver to Grantee copies of any and all papers
served in connection with such proceedings. Following the occurrence of a
condemnation, Grantor, regardless of whether an award is available, shall
promptly proceed to restore, repair, replace or rebuild the Improvements to the
extent practicable to be of at least equal value and of substantially the same
character as prior to such condemnation, all to be effected in accordance with
applicable law. Notwithstanding any taking by any public or quasi-public
authority through eminent domain or otherwise (including but not limited to any
transfer made in lieu of or in anticipation of the exercise of such taking),
Grantor shall continue to pay the Indebtedness at the time and in the manner
provided for its payment in the Note, in this Deed and the other Loan Documents
and the Indebtedness shall not be reduced until any award or payment therefor
shall have been actually received after expenses of collection and applied by
Grantee to the discharge of the Indebtedness. Grantor shall cause the award or
payment made in any condemnation or eminent domain proceeding, which is payable
to Grantor, to be paid directly to Grantee. Grantee may, at Grantee's election,
use the award in any one or more of the following ways: (a) apply any such award
or payment (for purposes of this PARAGRAPH 6, the award or payment that may be
made in any condemnation or eminent domain proceeding shall mean the entire
award allocated to Grantor in any capacity) to the discharge of the Indebtedness
whether or not then due and payable (such application to be without prepayment
fee or premium, except that if an Event of Default, or an event which with
notice and/or the passage of time, or both, would constitute an Event of
Default, has occurred, then such application shall be subject to the applicable
premium computed in accordance with the Note), (b) use the same or any part
thereof to fulfill any of the covenants contained herein as the Grantee may
determine, (c) use the same or any part thereof to replace or restore the Trust
Property to a condition satisfactory to the Grantee, or (d) release the same to
the Grantor. If the Trust Property is sold, through foreclosure or otherwise,
prior to the receipt by Grantee of such award or payment, Grantee shall have the
right, whether or not a deficiency judgment on the Note shall have been sought,
recovered or denied, to receive said award or payment or a portion thereof
sufficient to pay the Indebtedness.
7. LEASES AND RENTS.
(a) Grantor does hereby absolutely and unconditionally
assign to Grantee its right, title and interest in all current and future Leases
and Rents and all proceeds from the sale, cancellation, surrender or other
disposition of the Leases, it being intended by Grantor that this assignment
constitutes a present, absolute assignment and not an assignment for additional
security only. Such assignment to Grantee shall not be construed to bind Grantee
to the performance of any of the covenants, conditions or provisions contained
in any such Lease or otherwise to impose any obligation upon Grantee. Grantor
agrees to execute and deliver to Grantee such additional instruments in form and
substance satisfactory to Grantee, as may hereafter be requested by Grantee to
further evidence and confirm such assignment. Nevertheless, subject to the terms
of this PARAGRAPH 7, Grantee grants to Grantor a revocable license to operate
and manage the Trust Property and to collect the Rents. Grantor shall hold the
Rents, or a portion thereof sufficient to discharge all current sums due on the
Indebtedness, in trust for the benefit of Grantee for use in the payment of such
sums. The grant of the foregoing license is subject to the provisions of
PARAGRAPH 1 of the separate Assignment of Leases and Rents of even date herewith
granted by the Grantor as "Assignor" to the Grantee as "Assignee" with respect
to the Trust Property ("ASSIGNMENT OF LEASES AND RENTS"). Upon the occurrence of
an Event of Default, the license granted to Grantor herein shall be
automatically revoked and Grantee shall immediately be entitled to possession of
all Rents, whether or not Grantee enters upon or takes control of the Trust
Property.
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Grantee is hereby granted and assigned by Grantor the right, at its option, upon
the revocation of the license granted herein to enter upon the Trust Property in
person, by agent or by court-appointed receiver to collect the Rents. Any Rents
collected after the revocation of the license herein granted may be applied
toward payment of the Indebtedness in such priority and proportion as Grantee in
its discretion shall deem proper. It is further the intent of Grantor and
Grantee that the Rents hereby absolutely assigned are no longer, during the term
of this Deed, property of Grantor or property of any estate of Grantor as
defined in Section 541 of the Bankruptcy Code and shall not constitute
collateral, cash or otherwise, of Grantor. The term "Rents" as used herein shall
mean the gross rents without deduction or offsets of any kind.
(b) All Leases executed after the date of this Deed shall
provide that they are subordinate to this Deed and that the lessee agrees to
attorn to Grantee; PROVIDED, HOWEVER, that nothing herein shall affect Grantee's
right to designate from time to time any one or more Leases as being superior to
this Deed and Grantor shall execute and deliver to Grantee and shall cause to be
executed and delivered to Grantee from each tenant under such Lease any
instrument or agreement as Grantee may deem necessary to make such Lease
superior to this Deed. Upon request, Grantor shall promptly furnish Grantee with
executed copies of all Leases.
(c) Grantor shall not, without the prior consent of
Grantee, (i) lease all or any part of the Trust Property, (ii) alter or change
the terms of any Lease or cancel or terminate, abridge or otherwise modify the
terms of any Lease, (iii) consent to any assignment of or subletting under any
Lease not in accordance with its terms, (iv) cancel, terminate, abridge or
otherwise modify any guaranty of any Lease or the terms thereof, (v) collect or
accept prepayments of installments of Rents for a period of more than one (1)
month in advance or (vi) further assign the whole or any part of the Leases or
the Rents; PROVIDED, HOWEVER, that such action as described in subsections
(i)-(iv) above may be taken without Grantee's consent for any Lease which is for
10,000 square feet of space or less, and has a term (including the renewal or
extension term) of five (5) years or less, and so long as such Lease provides
for an annual rent at least equal to the then competitive and comparable market
rent (a lease satisfying those criteria shall be referred to as a "SMALL LEASE")
so long as the taking of such action is in the ordinary course of Grantor's
business and that such action is still subject to PARAGRAPH 1 of the separate
Assignment of Leases and Rents pertaining to Termination Amounts (as defined
therein).
(d) With respect to each Lease, Grantor shall (i) observe
and perform each and every provision thereof on the lessor's part to be
fulfilled or performed under each Lease and not do or permit to be done anything
to impair the value of the Lease as security for the Loan, including surrender
or voluntary termination of any Lease, (ii) promptly send to Grantee copies of
all notices of default which Grantor shall send or receive thereunder, (iii)
enforce all of the terms, covenants and conditions contained in such Lease upon
the lessee's part to be performed, short of termination thereof, (iv) execute
and deliver, at the request of Grantee, all such further assurances,
confirmations and assignments in connection with the Trust Property as Grantee
shall, from time to time, require and (v) upon request, furnish Grantee with
executed copies of all Leases; PROVIDED, HOWEVER, the notice to Grantee
referenced in subsection (ii) above and the restriction on termination of a
Lease in connection with the enforcement of its terms covenants and conditions
set forth in (iii) above shall not be required or apply, as the case may be, for
any Small Lease. Upon the occurrence of any Event of Default under this Deed,
Grantor shall pay monthly in advance to Grantee, or any receiver appointed to
collect the Rents, the fair and reasonable rental value for the use and
occupation of the Trust Property or part of the Trust Property as may be
occupied by Grantor or any one Grantor and upon default in any such payment
Grantor shall vacate and surrender possession of the Trust Property to Grantee
or to such receiver and, in default thereof, Grantor may be evicted by summary
proceedings or otherwise.
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(e) All security deposits of tenants, whether held in cash
or any other form, shall not be commingled with any other funds of Grantor and,
if cash, shall be deposited by Grantor at such commercial or savings bank or
banks as may be reasonably satisfactory to Grantee. Any bond or other instrument
which Grantor is permitted to hold in lieu of cash security deposits under any
applicable legal requirements shall be maintained in full force and effect in
the full amount of such deposits unless replaced by cash deposits as hereinabove
described, shall be issued by an institution reasonably satisfactory to Grantee,
shall, if permitted pursuant to any legal requirements, name Grantee as payee or
Grantee thereunder (or at Grantee's option, be fully assignable to Grantee) and
shall, in all respects, comply with any applicable legal requirements and
otherwise be reasonably satisfactory to Grantee. Grantor shall, upon request,
provide Grantee with evidence reasonably satisfactory to Grantee of Grantor's
compliance with the foregoing. Following the occurrence and during the
continuance of any Event of Default, Grantor shall, upon Grantee's request, if
permitted by any applicable legal requirements, turn over to Grantee the
security deposits (and any interest theretofore earned thereon) with respect to
all or any portion of the Trust Property, to be held by Grantee subject to the
terms of the Leases.
8. MAINTENANCE AND USE OF TRUST PROPERTY. Grantor shall or shall
cause tenants to, at its sole cost and expense, keep and maintain the Trust
Property, including, without limitation, parking lots and recreational and
landscaped portions thereof, if any, in good order and condition. The
Improvements and the Equipment shall not be diminished, removed, demolished or
materially altered (except for normal replacement of Equipment) and Grantor
shall not erect any new buildings, structures or building additions on the Trust
Property without the prior consent of Grantee. So long as no Event of Default
shall have occurred and be continuing, Grantor shall have the right at any time
and from time to time after providing Grantee with written notice to make or
cause to be made reasonable alterations of and additions to the Trust Property
or any part thereof, PROVIDED that any alteration or addition (i) shall not
change the general character of the Trust Property or reduce the fair market
value thereof below its value immediately before such alteration or addition, or
impair the usefulness of the Trust Property, (ii) is effected with due
diligence, in a good and workmanlike manner and in compliance with all
applicable laws and with all provisions of any insurance policy covering or
applicable to the Trust Property and all requirements of the issuers thereof,
(iii) is promptly and fully paid for, or caused to be paid for, by Grantor, (iv)
the estimated cost of such alteration or addition does not exceed five percent
(5%) of the original principal amount of the Loan, and (v) is made under the
supervision of a qualified architect or engineer, (vi) shall not violate the
terms of any Leases, and (vii) upon completion, Grantor shall provide Grantee
with (aa) a satisfactory final improvement survey if the footprint of the
building has been altered, (bb), any final occupancy permit which may be
required for the Improvements, (cc) all other governmental permits, certificates
and approvals and all other permits, certificates and approvals of fire
underwriters which are required with respect to the alterations and additions
and the use and occupancy thereof, and shall furnish true copies thereof to
Grantee, and (dd) final lien waivers from all contractors, subcontractors and
materialmen. Grantor shall promptly comply with all laws, orders and ordinances
affecting the Trust Property, or the use thereof, PROVIDED, HOWEVER, that
nothing in the foregoing clause shall require Grantor to comply with any such
law, order or ordinance so long as Grantor shall in good faith, after notice to,
but without cost or expense to, Grantee, contest the validity of such law, order
or ordinance by appropriate legal proceedings and in accordance with all
applicable law, which proceedings must operate to prevent (i) the enforcement
thereof, (ii) the payment of any fine, charge or penalty, (iii) the sale or
forfeiture of the Trust Property or any part thereof, (iv) the lien, security
title and security interest of this Deed and the priority thereof from being
impaired, (v) the imposition of criminal liability on Grantee and (vi) the
imposition, unless stayed, of civil liability on Grantee; PROVIDED that during
such contest Grantor shall, at the option of Grantee, provide cash, bonds or
other security satisfactory to Grantee, indemnifying and protecting Grantee
against any liability, loss or injury by reason of such non-compliance or
contest, and PROVIDED FURTHER, that such contest shall be promptly and
diligently prosecuted
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by and at the expense of Grantor. Grantor shall promptly, at its sole cost and
expense, repair, replace or rebuild any part of the Trust Properly which may be
destroyed by any casualty, or become damaged, worn or dilapidated. Grantor shall
not commit any waste at the Trust Property. Grantor shall not initiate, join in,
acquiesce in or consent to any material adverse change in any private
restrictive covenant, zoning law or other public or private restriction,
limiting or defining the uses which may be made of the Trust Property or any
part thereof. If under applicable zoning provisions the use of all or any
portion of the Trust Property is or shall become a nonconforming use, Grantor
will not cause or permit such nonconforming use to be discontinued or abandoned
without the express consent of Grantee. Grantor covenants and agrees that it
shall operate the Trust Property at all times as a first-class commercial retail
shopping center facility.
9. TRANSFER OR ENCUMBRANCE OF THE TRUST PROPERTY OR INTERESTS IN
THE GRANTOR; OTHER INDEBTEDNESS.
(a) Grantor acknowledges that Grantee has examined and
relied on the creditworthiness and experience of Grantor in owning and operating
properties such as the Trust Property in agreeing to make the Loan, and that
Grantee will continue to rely on Grantor's ownership of the Trust Property as a
means of maintaining the value of the Trust Property as security for repayment
of the Indebtedness. Grantor acknowledges that Grantee has a valid interest in
maintaining the value of the Trust Property so as to ensure that, should Grantor
default in the repayment of the Indebtedness, Grantee can recover the
Indebtedness by a sale of the Trust Property. Grantor shall not, without the
prior written consent of Grantee, sell, convey, alienate, mortgage, encumber,
pledge or otherwise transfer in trust or otherwise the Trust Property or any
part thereof or interest therein, or permit the Trust Property or any part
thereof to be sold, conveyed, alienated, mortgaged, encumbered, pledged or
otherwise transferred.
(b) A sale, conveyance, alienation, mortgage, encumbrance,
pledge or transfer within the meaning of this PARAGRAPH 9 shall be deemed to
include (i) an installment sales agreement wherein Grantor agrees to sell the
Trust Property or any part thereof for a price to be paid in installments, (ii)
an agreement by Grantor leasing all or a substantial part of the Trust Property
for other than actual occupancy by a space tenant thereunder or a sale,
assignment or other transfer of, or the grant of a security interest in,
Grantor's right, title and interest in and to any Leases or any Rents, (iii) if
Grantor, any guarantor of Non-Recourse Carveout Obligations (as hereinafter
defined), any other guarantor, any indemnitor of environmental liabilities, or
any general partner or managing member of Grantor or of any such guarantor or
indemnitor is a corporation, the voluntary or involuntary sale, assignment,
conveyance or transfer of such corporation's stock (or the stock of any
corporation directly or indirectly controlling such corporation by operation of
law or otherwise) or the creation or issuance of new stock in one or a series of
transactions by which an aggregate of more than ten percent (10%) of such
corporation's stock shall be vested in a party or parties who are not now
stockholders or any change in the control of such corporation, (iv) if Grantor,
any guarantor, of Non-Recourse Carveout Obligations, any other guarantor or any
indemnitor of environmental liabilities or any general partner or managing
member of Grantor or any such guarantor or indemnitor is a limited or general
partnership, joint venture or limited liability company, the change, removal,
resignation or addition of a general partner, managing partner, limited partner,
joint venturer or member or the transfer of the partnership interest of any
general partner, managing partner or limited partner or the transfer of the
interest of any joint venturer or member, and (v) if Grantor, any guarantor of
Non-Recourse Carveout Obligations or any other guarantor or any indemnitor of
environmental liabilities, is an entity, whether one of the above-mentioned
entities or not, any change in the ownership or control of such entity, any
merger, consolidation or dissolution or syndication affecting such entity, or
the transfer sale, assignment or pledge of any interest in such entity or in any
person, directly or indirectly, controlling such entity or in any general
partner of managing member thereof, whether at one time or in a series of
related transactions.
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(c) Grantee shall not be required to demonstrate any
actual impairment of its security or any increased risk of default hereunder in
order to declare the Indebtedness immediately due and payable upon Grantor's
sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Trust Property without Grantee's consent. This provision shall apply to every
sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Trust Property regardless of whether voluntary or not, or whether or not Grantee
has consented to any previous sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer of the Trust Property.
(d) Grantee's consent to a sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer of the Trust Property or any other
action described in this Paragraph 9 shall not be deemed to be a waiver of
Grantee's right to require such consent to any future occurrence of same. Any
sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Trust Property or other action made in contravention of this PARAGRAPH 9 shall
be null and void and of no force and effect.
(e) Grantor agrees to bear and shall pay or reimburse
Grantee on demand for all reasonable expenses (including, without limitation,
reasonable attorneys' fees and disbursements, title search costs and title
insurance endorsement premiums) incurred by Grantee in connection with the
review, approval and documentation of any such sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer.
(f) Notwithstanding the foregoing, from and after the date
of satisfaction by Grantor of the Transfer Conditions described in Paragraph 72
below, Grantee shall permit two (2) sales or transfers of the Trust Property,
PROVIDED that:
(i) no Event of Default or event which with the giving of
notice or passage of time would constitute an Event of Default shall have
occurred and remain uncured;
(ii) the proposed transferee ("TRANSFEREE"), the guarantors
of Non-Recourse Carveout Obligations, any other guarantor and the
indemnitors of environmental liabilities shall be reputable entities or
persons of good character, creditworthy, with sufficient financial worth
considering the obligations assumed and undertaken, as evidenced by
financial statements and other information reasonably requested by Grantee;
(iii) the Transferee and its property manager shall have
sufficient experience in the ownership and management of properties similar
to the Trust Property, and Grantee shall be provided with reasonable
evidence thereof (and Grantee reserves the right to approve the Transferee
without approving the substitution of the property manager);
(iv) that Grantee has received a written request for
approval from the Grantor at least thirty (30) days prior to the proposed
transfer (including a description of the proposed terms of the transfer),
together with a diagram showing the legal structure of the Transferee, the
proposed guarantors of Non-Recourse Carveout Obligations, any other
proposed guarantors, and the proposed indemnitors of environmental
liabilities and all of the constituent entities of each, after the
contemplated transfer, and a list of the names, types of interests and
ownership percentages of all persons to have ownership interests in any of
the foregoing or any constituent entity thereof, financial statements for
all such entities and an administrative fee of $5,000, which shall be
deemed fully earned on the date of receipt and shall be retained by Grantee
regardless of whether or not the transfer occurs and whether or not
approval is given;
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(v) Grantee and its counsel have received (aa)
certification from Grantor and the Transferee that the proposed terms of
the transfer described in subparagraph 9(f)(iv) are the actual terms of the
transfer, (bb) evidence of casualty insurance and other applicable
insurance, (cc) all corporate, partnership or other entity documents and
(dd) all other certificates, legal opinions, title materials and other
documents which Grantee may require, all in form and substance satisfactory
to Grantee, at least thirty (30) days prior to the proposed transfer;
(vi) Grantee be provided satisfactory evidence concerning
the effect of any change in the real estate taxes to result from the sale
and the effect of such change on the ability of the Trust Property to
generate a cash flow sufficient to pay the debt service on the Loan and to
maintain a debt service coverage ratio satisfactory to Grantee;
(vii) if the Loan is part of a Secondary Market Transaction
and the documents governing such Secondary Market Transaction so require,
Grantee shall have received in writing evidence from the Rating Agencies to
the effect that such transfer will not result in a re-qualification,
reduction or withdrawal of any rating initially assigned or to be assigned
in a Secondary Market Transaction together with such legal opinions as may
be requested by the Rating Agencies. The term "RATING AGENCIES" as used
herein shall mean each of Standard & Poor's Ratings Group, Moody's
Investors Service, Inc., Duff & Phelps Credit Rating Co., Fitch Investors
Service, Inc. or any other nationally-recognized statistical rating agency
who shall then be rating the certificates or securities issued in
connection with the Secondary Market Transaction;
(viii) the Transferee and its constituent entities shall
comply with all of the Single Purpose Entity/Separateness requirements set
forth in Paragraph 19 hereof;
(ix) the Transferee shall have executed and delivered to
Grantee an assumption agreement in form and substance acceptable to
Grantee, evidencing such Transferee's agreement to abide and be bound by
the terms of the Note, this Deed and the other Loan Documents, together
with an executed guaranty of Non-Recourse Carveout Obligations and any
other guaranty from an approved guarantor and an executed separate
environmental indemnity agreement from an approved indemnitor, both in form
and substance acceptable to Grantee, other documentation as Grantee may
reasonably require, and such legal opinions and title insurance
endorsements as may be reasonably requested by Grantee;
(x) Grantee shall have received an assumption fee equal to
one percent (1%) of the then unpaid principal balance of the Note (against
which the administrative fee shall be credited) in addition to the payment
of all reasonable costs and expenses incurred by Grantee in connection with
such assumption (including reasonable attorney's fees and costs); and
(xi) the Transferee shall be able to make the
representations and warranties set forth in Paragraph l8(h) of this Deed to
Secure Debt.
In the event all of the foregoing conditions are satisfied and Grantee
consents to the sale or transfer, Grantee agrees to release Grantor, any
indemnitors under any environmental indemnity and any guarantors of the
Non-Recourse Carveout Obligations of all liability under the Loan Documents upon
such transfer of the Trust Property pursuant to this Paragraph 9(f), (1) except
for any event or circumstance with respect to which Grantor and such indemnitors
remain obligated to continue to indemnify Grantee under any environmental
indemnity agreement; (2) except for any fraud or willful misrepresentation by or
on behalf of Grantor, or such indemnitor or guarantor with respect to the Trust
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Property or the making or delivery of any of the Loan Documents or with respect
to any materials or information provided by or on behalf of Grantor, indemnitor
or guarantor in connection with the Loan, and (3) provided that Grantor's
obligations arising prior to completion of such transfer are no longer subject
to disgorgement under any applicable state or federal creditor rights or
bankruptcy laws and Grantee receives an assumption of the obligations of such
indemnitor and guarantor by an individual(s) or entity(ies) acceptable to
Grantee in its sole discretion.
Grantor and Grantee further agree that (1) any environmental
indemnification obligations of Grantor or any indemnitor under an environmental
indemnity agreement shall not apply to any future environmental activity or
conditions resulting solely from any act or omission for which Grantor bears no
responsibility and which occurs after Grantor or any person or entity in any way
related to Grantor no longer holds possession to or has any interest in the
Trust Property; provided, however, the transferor Grantor, the prior guarantors
and the prior indemnitors, respectively, shall have the burden of establishing
that all the conditions in this PARAGRAPH 9 (including, without limitation, the
time as to which matters described herein arose) were satisfied by clear and
convincing evidence and shall indemnify and hold Grantee harmless for all
matters set forth in PARAGRAPH 39 and in the Non-Recourse Carveout Obligations
until such transferor Grantor, prior guarantors or prior indemnitors,
respectively, have met such burden (Grantee agrees that Grantor shall have met
such burden with respect to the Trust Property if Grantor at such time delivers
to Grantee a clean Phase I environmental assessment report satisfactory in all
respects to Grantee if prior to delivery thereof there has not occurred any
release of Hazardous Materials at the Trust Property nor has there been any
prior violation of Environmental Laws at the Trust Property, and if there has
been a release of Hazardous Materials or a violation of Environmental Laws, in
such instance in lieu of delivery of such Phase I environmental assessment
Grantor shall deliver to Grantee an environmental insurance policy satisfactory
in all respects to Grantee in its reasonable discretion); and (2) in the event
the individual or entity(ies) assuming the obligations of such indemnitor and
guarantor are acceptable to Grantee in its sole discretion, are willing to
accept such indemnitor's obligation under the environmental indemnity for the
time period in which the original indemnitor guaranteed the obligations of
Grantor (i.e. the time period prior to such transfer of the Trust Property) and
are willing to execute an indemnity in form and content acceptable to Grantee,
then, notwithstanding the foregoing, such original indemnitor will be completely
relieved of liability under such environmental indemnity (except for any fraud
or willful misrepresentation by or on behalf of Grantor or such indemnitor or
guarantor with respect to the Trust Property, the making or delivery of any of
the Loan Documents or in any materials or information provided by or on behalf
of such indemnitor in connection with the Loan).
(g) The provisions of Paragraphs 9(a), 9(b) and 9(f) shall
not operate to prohibit the transfer, sale or conveyance of shares in Inland
Western Retail Real Estate Trust, Inc. (the "Trust") as long as all of the
following conditions are satisfied:
(i) the Trust continues to be the sole member and
owner of Grantor or the sole member and owner of the sole member of Grantor
and continues to control the day-to-day operations of Grantor and the Trust
Property;
(ii) the Trust maintains its status as a real estate
investment trust; and
(iii) no such transfer results in any party owning
more than twenty percent (20%) (or such lesser amount as constitutes a
controlling interest) in the shares or ownership units or interests of the
Trust.
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The term CONTROL or CONTROLLING shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of
management, policies or activities of a person or entity, whether through
ownership of voting securities or other interests, by contract or
otherwise.
(h) Notwithstanding anything in this Paragraph 9 to the
contrary, from and after the ninetieth (90th) day following satisfaction by
Grantor of the Transfer Conditions described in Paragraph 72 below, Grantor
shall have a one time right, provided no Event of Default or event which with
the giving of notice or passage of time would constitute an Event of Default
under the Loan Documents shall have occurred and remain uncured, to assign, sell
or transfer (the "Permitted Affiliated Transfer") all of the Trust Property to
an affiliate of Inland Western Retail Real Estate Trust, Inc. ("Permitted
Affiliated Transferee"), PROVIDED that:
(i) Grantor shall pay to Grantee a $5,000.00 transfer fee;
(ii) Grantee shall have received from Grantor reimbursement
of all of Grantee's expenses, including legal fees, incurred in connection
with the Permitted Affiliated Transfer;
(iii) the Permitted Affiliated Transferee shall assume, in
form and substance satisfactory to Grantee, all obligations of Grantor
under the Loan Documents, including, without limitation, the environmental
Indemnity Agreement and Guaranty of non-recourse carveout obligations, with
the same degree of recourse liability as Grantor and subject to the same
exculpatory provisions;
(iv) Grantee shall have received a title policy
satisfactory to Grantee updated to the date of the Permitted Affiliated
Transfer, evidencing that such Permitted Affiliated Transfer will not
adversely affect Grantee's first and prior lien, security title and
security interest on the Trust Property or any other rights or interests
granted to Grantee under the Loan Documents;
(v) Grantee shall have received legal opinions of
Grantor's independent or in-house counsel, as the case may be, in form and
substance satisfactory to Grantee, that all previous opinions pertaining to
Grantor are true with respect to the Permitted Affiliated Transferee and
the Permitted Affiliated Transferee has duly assumed the Loan Documents,
and the same are valid and enforceable against the Permitted Affiliated
Transferee and the Trust Property and that Grantor has the requisite power
and authority to properly transfer the Trust Property;
(vi) no Event of Default shall have occurred and remain
uncured under the Loan Documents;
(vii) no such transfer of interest shall result in a change
of control of Grantor or the day-to-day operations of the Trust Property;
(viii) without limiting the foregoing, no such transfer,
either singly or in the aggregate with other transfers, will result in a
violation of the special purpose entity provisions of the Loan Documents or
Grantor's organizational documents and Grantor will provide new or updated
non-consolidation opinions and other opinions to the extent required at the
initial funding of the Loan with respect to the Permitted Affiliated
Transfer; and
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(ix) Grantee has received at least thirty (30) days' prior
written notice of such transfer, together with a diagram showing the
structure of the Grantor and all constituent entities after the
contemplated transfer and a list of the names, types of interests and
percentages of ownership of all owners of interests in Grantor and any
constituent entities (except the shareholders of Inland Western Retail Real
Estate Trust, Inc.) after the contemplated transfer.
(i) Grantor has not incurred and will not incur any
indebtedness, secured or unsecured, other than the Loan and debt (i) incurred in
the ordinary course of business to vendors and suppliers of services to the
Trust Property, (ii) not secured by the Trust Property, or any portion thereof,
or by interests in the Grantor or any constituent entity thereof, and (iii) not
accompanied by any rights to control or to obtain control of the Grantor or any
constituent entity thereof. No indebtedness other than the Loan may be secured
(subordinate or pari passu) by the Trust Property, or any portion thereof, or by
interests in the Grantor or any constituent entity thereof.
10. ESTOPPEL CERTIFICATES.
(a) Grantor, within ten (10) business days after request
by Grantee, shall furnish Grantee from time to time with a statement, duly
acknowledged and certified, setting forth (i) the amount of the original
principal amount of the Note, (ii) the unpaid principal amount of the Note,
(iii) the rate of interest in the Note, (iv) the date through which all
installments of interest, commitment fees and/or principal have been paid, (v)
any offsets or defenses to the payment of the Indebtedness, if any, (vi) that
the Note and this Deed have not been modified or if modified, giving particulars
of such modification and (vii) such other information as shall be requested by
Grantee.
(b) Grantor, after request by Grantee, will use
commercially reasonable efforts to obtain and furnish (within the time periods,
if any, provided in the applicable Leases or if no time period is so specified,
within ten (10) business days after request) Grantee from time to time with
estoppel certificates from any tenants under then existing Leases, which
certificates shall be in form and substance as required by such Leases, or if
not required, then in form and substance reasonably satisfactory to Grantee.
11. NO COOPERATIVE OR CONDOMINIUM. Grantor represents and warrants
that the Trust Property has not been subjected to a cooperative or condominium
form of ownership. Grantor hereby covenants and agrees that it will not file a
declaration of condominium, map or any other document having the effect of
subjecting the Trust Property, the condominium or cooperative form of ownership.
12. CHANGES IN THE LAWS REGARDING TAXATION. If any law is enacted
or adopted or amended after the date of this Deed which deducts the Indebtedness
or any portion thereof from the value of the Trust Property for the purpose of
taxation or which imposes a tax, either directly or indirectly, on the principal
amount of the Note or Grantee's interest in the Trust Property, Grantor will pay
such tax, with interest and penalties thereon, if any. In the event Grantee is
advised by counsel chosen by it that the payment of such tax or interest and
penalties by Grantor would be unlawful or taxable to Grantee or unenforceable or
provide the basis for a defense of usury, then in any such event, Grantee shall
have the option, by notice of not less than sixty (60) days, to declare the
Indebtedness immediately due and payable without prepayment fee or premium,
except that if an Event of Default, or an event which with notice and/or the
passage of time, or both, would constitute an Event of Default, has occurred,
the applicable premium computed in accordance with the Note shall apply.
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13. NO CREDITS ON ACCOUNT OF THE INDEBTEDNESS. Grantor will not
claim or demand or be entitled to any credit or credits on account of the
Indebtedness for any part of the Taxes assessed against the Trust Property or
any part thereof and no deduction shall otherwise be made or claimed from the
taxable value of the Trust Property, or any part thereof, by reason of this Deed
or the Indebtedness. In the event such claim, credit or deduction shall be
required by law, Grantee shall have the option, by notice of not less than sixty
(60) days, to declare the Indebtedness immediately due and payable without
prepayment fee or premium, except that if an Event of Default, or an event which
with notice and/or the passage of time, or both, would constitute an Event of
Default, has occurred, the applicable premium computed in accordance with the
Note shall apply.
14. DOCUMENTARY STAMPS. If at any time the United States of
America, any State thereof or any subdivision of any such State shall require
revenue or other stamps to be affixed to the Note or this Deed, or impose any
other tax or charge on the same, Grantor will pay for the same, with interest
and penalties thereon, if any.
15. RIGHT OF ENTRY. Grantee and its agents shall have the right to
enter and inspect the Trust Property at any time during reasonable business
hours upon twenty-four (24) hour notice to Grantor, except in the case of an
emergency, in which event Grantee and its agents may enter and inspect the Trust
Property at any time.
16. BOOKS AND RECORDS.
(a) Grantor will maintain full, accurate and complete
books of accounts and other records reflecting the results of the operations of
the Trust Property as well as its other operations and will furnish, or cause to
be furnished, to Grantee the following:
(i) within ninety (90) days after the end of each fiscal
year, the Grantor will furnish to Grantee, a statement of Grantor's
financial condition, including a balance sheet with respect to Grantor, and
a statement of annual income and expenses satisfactory in form and
substance to Grantee in connection with the operation of the Trust
Property, in detail satisfactory to Grantee, prepared by, audited and
certified by a certified public accountant who is a member of the American
Institute of Certified Public Accountants, provided however that so long as
there in then no Event of Default hereunder, such statement may be prepared
and certified by Grantor, Grantor's accountant or a financial officer of
Grantor if such certified statement by a certified public accountant is not
available, and, in addition, within forty-five (45) days after the end of
each fiscal quarter of Grantor, Grantor shall provide the above information
except that it may be prepared and certified by the financial officer of
Grantor who is responsible for the preparation of such annual financial
statements.
(ii) accompanying the submission of the certified
statements of annual and quarterly income and expenses, when the Trust
Property is office, retail or multi-tenant industrial property, shall be a
certified current rent roll in a form previously approved by Grantee, which
shall include among other things tenant names, lease commencement and
expiration dates, square footage and annual rent.
(b) Grantee shall have the right, upon five (5) days'
prior notice to Grantor, to inspect and make copies of Grantor's books and
records and income tax returns and notices.
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(c) In the event of a Secondary Market Transaction,
Grantor shall furnish from time to time such information relating to Grantor and
the Trust Property as shall be reasonably requested by the Rating Agencies at no
cost to Grantor.
17. PERFORMANCE OF OTHER AGREEMENTS. Grantor shall observe and
perform each and every term to be observed or performed by such Grantor pursuant
to the terms of any agreement or recorded instrument, affecting or pertaining to
the Trust Property.
18. REPRESENTATIONS AND COVENANTS CONCERNING LOAN. Grantor
represents, warrants and covenants as follows:
(a) The Note, this Deed and the other Loan Documents are
not subject to any right of rescission, set-off, counterclaim or defense,
including the defense of usury, nor would the operation of any of the terms of
the Note, this Deed and the other Loan Documents, or the exercise of any right
thereunder, render this Deed unenforceable, in whole or in part, or subject to
any right of rescission, set-off, counterclaim or defense, including the defense
of usury.
(b) To Grantor's best knowledge, all certifications,
permits, licenses and approvals, including, without limitation, certificates of
completion and occupancy permits required for the legal use, occupancy of the
Trust Property, have been obtained and are in full force and effect. The Trust
Property is free of material damage and is in good repair, and there is no
proceeding pending for the total or partial condemnation of, or affecting, the
Trust Property.
(c) To Grantor's best knowledge, all of the Improvements
which were included in determining the appraised value of the Trust Property lie
wholly within the boundaries and building restriction lines of the Trust
Property, and no improvements on adjoining properties encroach upon the Trust
Property, and no easements or other encumbrances upon the Land encroach upon any
of the Improvements, so as to affect the value or marketability of the Trust
Property except those which are insured against by title insurance. All of the
Improvements comply with all requirements of applicable zoning and subdivision
laws and ordinances in all material respects.
(d) The Trust Property is not subject to any Leases other
than the Leases described in the rent roll delivered to Grantee in connection
with this Deed. No person has any possessory interest in the Trust Property or
right to occupy the same except under and pursuant to the provisions of the
Leases. Except as otherwise disclosed in writing to Grantee, to Grantor's best
knowledge the current Leases are in full force and effect and there are no
defaults thereunder by either party and there are no conditions that, with the
passage of time or the giving of notice, or both, would constitute defaults
thereunder. Except as otherwise disclosed in writing to Grantee, all presently
existing Leases are subordinate to the Deed.
(e) To Grantor's best knowledge, the Trust Property and
the Lease are in compliance with all statutes, ordinances, regulations and other
governmental or quasi-governmental requirements and private covenants now or
hereafter relating to the ownership, construction, use or operation of the Trust
Property.
(f) To Grantor's best knowledge there has not been and
shall never be committed by Grantor any act or omission affording the federal
government or any state or local government the right of forfeiture as against
the Trust Property or any part thereof or any monies paid in performance of
Grantor's obligations under any of the Loan Documents. Grantor hereby covenants
and agrees not to commit, permit or suffer to exist any act or omission
affording such right of forfeiture.
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(g) The Management Agreement dated June 23, 2004 (the
"MANAGEMENT AGREEMENT") between Grantor and Inland Northwest Management Corp.
("MANAGER") pursuant to which Manager operates the Trust Property (a true,
correct and complete copy of which has been delivered to Grantee) is in full
force and effect and there is no default or violation by any party thereunder.
The fee due under the Management Agreement, and the terms and provisions of the
Management Agreement, are subordinate to this Deed and the Manager shall attorn
to Grantee. Grantor shall not terminate, cancel, modify, renew or extend the
Management Agreement, or enter into any agreement relating to the management or
operation of the Trust Property with Manager or any other party without the
express written consent of Grantee, which consent shall not be unreasonably
withheld. If at any time Grantee consents to the appointment of a new manager,
such new manager and Grantor shall, as a condition of Grantee's consent, execute
a Manager's Consent and Subordination of Management Agreement in the form then
used by Grantee.
(h) IMPROPER FINANCIAL TRANSACTIONS.
(i) Grantor is, and shall remain at all times, in full
compliance with all applicable laws and regulations of the United States of
America that prohibit, regulate or restrict financial transactions, and any
amendments or successors thereto and any applicable regulations promulgated
thereunder (collectively, the "FINANCIAL CONTROL LAWS"), including but not
limited to those related to money laundering offenses and related
compliance and reporting requirements (including any money laundering
offenses prohibited under the Money Laundering Control Act, 18 U.S.C.
Sections 1956, 1957 and the Bank Secrecy Act, 31 U.S.C. Sections 5311 ET
SEQ.) and the Foreign Assets Control Regulations, 31 C.F.R. Section 500 ET
SEQ.
(ii) Grantor represents and warrants that: (i) Grantor is
not a Barred Person (hereinafter defined); (ii) Grantor is not owned or
controlled, directly or indirectly, by any Barred Person; and (iii) Grantor
is not acting, directly or indirectly, for or on behalf of any Barred
Person.
(iii) Grantor represents and warrants that it understands
and has been advised by legal counsel on the requirements of the Financial
Control Laws.
(iv) Under any provision of this Deed, of Trust or any of
the other Loan Documents where the Grantee shall have the right to approve
or consent to any particular action, including without limitation any (i)
sale, transfer, assignment of the Trust Property or of any direct or
indirect ownership interest in Grantor, (ii) leasing of the Trust Property,
or any portion thereof, or (iii) incurring of additional financing secured
by Trust Property, or any portion thereof or by any direct of indirect
ownership interest in the Grantor, Grantee shall have the right to withhold
such approval or consent, in its sole discretion, if the granting of such
approval or consent could be construed as a violation of any of the
Financial Control Laws.
(v) Grantor covenants and agrees that it will upon request
provide Grantee with (or cooperate with Grantee in obtaining) information
required by Grantee for purposes of complying with any Financial Control
Laws.
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As used in this Deed of Trust, the term "Barred Person" shall
mean (i) any person, group or entity named as a "Specially Designated National
and Blocked Person" or as a person who commits, threatens to commit, supports,
or is associated with terrorism as designated by the United States Department of
the Treasury's Office of Foreign Assets Control ("OFAC"), (ii) any person, group
or entity named in the lists maintained by the United Stated Department of
Commerce (Denied Persons and Entities), (iii) any government or citizen of any
country that is subject to a United States Embargo identified in regulations
promulgated by OFAC and (iv) any person, group or entity named as a denied or
blocked person or terrorist in any other list maintained by any agency of the
United States government.
19. SINGLE PURPOSE ENTITY/SEPARATENESS. Grantor represents,
warrants and covenants as follows:
(a) The purpose for which the Grantor is organized shall
be limited solely to (A) owning, holding, selling, leasing, transferring,
exchanging, operating and managing the Trust Property, (B) entering into the
Loan with the Grantee, (C) refinancing the Trust Property in connection with a
permitted repayment of the Loan, and (D) transacting any and all lawful business
for which a Grantor may be organized under its constitutive law that is
incident, necessary and appropriate to accomplish the foregoing.
(b) Grantor does not own and will not own any asset or
property other than (i) the Trust Property, and (ii) incidental personal
property necessary for and used in connection with the ownership or operation of
the Trust Property.
(c) Grantor will not engage in any business other than the
ownership, management and operation of the Trust Property.
(d) Grantor will not enter into any contract or agreement
with any affiliate of Grantor, any constituent party of Grantor, any owner of
the Grantor, the Guarantors (as hereinafter defined) or any affiliate of any
constituent party or Guarantor, except upon terms and conditions that are
intrinsically fair, commercially reasonable and substantially similar to those
that would be available on an arms-length basis with third parties not
affiliated with the Grantor or any constituent party of Grantor or any owner of
Grantor.
(e) Grantor has not incurred and will not incur any
indebtedness, secured or unsecured, other than the Loan and debt (i) incurred in
the ordinary course of business to vendors and suppliers of services to the
Trust Property, (ii) not secured by the Trust Property, or any portion thereof,
or by interests in the Grantor or any constituent entity thereof, and (iii) not
accompanied by any rights to control or to obtain control of the Grantor or any
constituent entity thereof. No indebtedness other than the Loan may be secured
(subordinate or PARI PASSU) by the Trust Property, or any portion thereof, or by
interests in the Grantor or any constituent entity thereof.
(f) Grantor has not made and will not make any loans or
advances to any entity or person (including any affiliate or any constituent
party of Grantor or any owner of Grantor, any Guarantor or any affiliate of any
constituent party or Guarantor), and shall not acquire obligations or securities
of its affiliates or any constituent party.
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(g) Grantor is and will remain solvent and Grantor will
pay its debts and liabilities (including, as applicable, shared personnel and
overhead expenses) from its assets as the same shall become due.
(h) Grantor has done or caused to be done and will do all
things necessary to observe organizational formalities and preserve its
existence, and Grantor will not, nor will Grantor permit any constituent party
of Grantor or any owner of Grantor or any Guarantor to amend, modify or
otherwise change the partnership certificate, partnership agreement, articles of
incorporation and bylaws, operating agreement, trust or other organizational
documents of Grantor or such constituent party or Guarantor without the written
consent of Grantee.
(i) Grantor will maintain all of its books, records and
financial statements separate from those of its affiliates and any constituent
party. Grantor's assets will not be listed as assets on the financial statement
of any other entity except the ownership interests in Grantor may be listed as
assets on the financial statements of the Trust. Grantor shall have its own
separate financial statement, provided, however, that Grantor's assets may be
included in a consolidated financial statement of its parent companies if
inclusion on such a consolidated statement is required to comply with the
requirements of generally accepted accounting principles ("GAAP"), provided that
such consolidated financial statement shall contain a footnote to the effect
that Grantor's assets are owned by Grantor and that they are being included on
the financial statement of its parent solely to comply with the requirements of
GAAP, and further provided that such assets shall be listed on Grantor's own
separate balance sheet. Grantor will file its own tax returns if required by law
and will not file a consolidated federal income tax return with any other
corporation except the Trust in which case Grantor will be shown on a separate
schedule of such return as a separate member of the consolidated group with its
delineated financial information. Grantor shall maintain its books, records,
resolutions and agreements as official records.
(j) Grantor will be, and at all times will hold itself out
to the public as, a legal entity separate and distinct from any other entity
(including any affiliate of Grantor, any constituent party of Grantor, any
Guarantor or any affiliate of any constituent party or Guarantor), shall correct
any known misunderstanding regarding its status as a separate entity, shall
conduct business in its own name, shall not identify itself or any of its
affiliates as a division or part of the other except the Trust and shall
maintain and utilize separate telephone numbers, stationery, invoices and
checks.
(k) Grantor will maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character and
in light of its contemplated business operations.
(l) Neither Grantor nor any constituent party will seek
the dissolution, winding up, liquidation, consolidation or merger, in whole or
in part, or the sale of material assets of Grantor.
(m) Grantor will not commingle the funds and other assets
of Grantor with those of any affiliate or any constituent party of Grantor or
any owner of Grantor, any Guarantor, or any affiliate of any constituent party
or Guarantor, or any other person except for the Manager, and will not
participate in a cash management system with any such party.
(n) Grantor will not commingle its assets with those of
any other person or entity except the Manager and will hold all of its own name
or in its agent's name.
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(o) Grantor will not guarantee or become obligated for the
debts of any other entity or person and does not and will not hold itself out as
being responsible for the debts or obligations of any other person.
(p) If Grantor is a limited partnership or a limited
liability company, at least one general partner or member (an "SPC PARTY") shall
be a corporation or Delaware limited liability company whose sole asset is its
interest in Grantor, and each such SPC Party will at all times comply, and shall
cause Grantor to comply, with each of the representations, warranties and
covenants contained in this PARAGRAPH 19 as if such representation, warranty or
covenant was made directly by such SPC Party; or in the alternative, if Grantor
is a limited liability company organized under the laws of the State of Delaware
which does not have an SPC Party as one of its members, then Grantor shall have
an independent manager and Grantor shall cause to be delivered to rantee such
legal opinions with respect thereto from Delaware counsel reasonably
satisfactory to Grantee that address such matters as may be required by Grantee
or the Rating Agencies at such time..
(q) Grantor shall at all times cause there to be at least
one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR")
of Grantor, in the case of a corporation or Delaware limited liability company
whose sole asset is its interest in Grantor, and each SPC Party in Grantor in
the case of a limited partnership or limited liability company, in each case
reasonably satisfactory to Grantee who is not at the time of initial
appointment, and has not been at any time during the preceding five (5) years:
(a) stockholder, director, officer, employee, partner, attorney or counsel of
the SPC Party, the Grantor or any affiliate of either of them; (b) a customer,
supplier or other person who derives more than ten percent (10%) of its
purchases or revenues from its activities with the SPC Party, the Grantor or any
affiliate of either of them; (c) a person or other entity controlling or under
common control with any such stockholder, partner, customer, supplier or other
person; or (d) a member of the immediate family of any such stockholder,
director, officer, employee, partner, customer, supplier or other person. As
used herein, the term "control" means the possession, directly or indirectly, of
the power to direct or cause the direction of management, policies or activities
of a person or entity, whether through ownership of voting securities, by
contract or otherwise.
(r) Grantor shall not cause or permit the board of
directors of each SPC Party in Grantor to take any action which, under the terms
of any certificate of incorporation, by-laws or any voting trust agreement with
respect to any common stock, requires the vote of each SPC Party in Grantor
unless at the time of such action there shall be at least one member who is an
Independent Director.
(s) Grantor shall conduct its business so that the
assumptions made with respect to Grantor in that certain opinion letter dated
June 30, 2004 (the "Non-Consolidation Opinion") delivered by Levenfeld
Pearlstein in connection with the Loan shall be true and correct in all
respects.
(t) Grantor shall allocate fairly and reasonably any
overhead expenses that are shared with an affiliate, including paying for office
space and services performed by any employee of an affiliate.
(u) The stationery, invoices and checks utilized by
Grantor or utilized to collect its funds or pay its expenses shall bear its own
name and shall not bear the name of any other entity unless such entity is
clearly designated as being Grantor's agent.
(v) Grantor shall not pledge its assets for the benefit of
any other person or entity, and other than with respect to the Loan.
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(w) Grantor shall correct any known misunderstanding
regarding its separate identity.
(x) Grantor shall not identify itself as a division of any
other person or entity.
20. EVENTS OF DEFAULT; REMEDIES. Each of the following events
after any applicable grace or cure periods shall constitute an "EVENT OF
DEFAULT" hereunder:
(a) if (i) any installment of interest is not paid within
five (5) days after the same is due, (ii) the entire Indebtedness is not paid on
or before the Maturity Date (or if the Maturity Date has been, accelerated, upon
such acceleration), or (iii) any other payment or charge due under the Note,
this Deed or any other Loan Documents is not paid when due;
(b) if any Taxes payable directly to the billing authority
by Grantor are not paid before interest becomes payable on the amount due or a
penalty is assessed (provided that the foregoing provisions of this clause (b)
shall be subject to the right to contest Taxes granted to Grantor in PARAGRAPH
4(b) of this Deed, but only for so long as the conditions in PARAGRAPH 4(b) of
this Deed remain satisfied);
(c) if the Policies are not kept in full force and effect
and are not delivered to Grantee when required hereunder, or if the Policies are
not delivered to Grantee within ten (10) days after written request by Grantee;
(d) if any of the provisions of PARAGRAPHS 7, 9,19 or 39
herein are violated or not complied with;
(e) if any of the events described in PARAGRAPH 41 shall
occur;
(f) if at any time any representation or warranty of
Grantor or any Guarantor made herein or in any guaranty, agreement, certificate,
report, affidavit, owner's affidavit, financial statement or other instrument
furnished to Grantee shall be materially false or misleading in any respect;
(g) if any grantee under a deed to secure debt on the
Trust Property, whether superior or subordinate to this Deed (i) demands payment
in full or otherwise accelerates any indebtedness of Grantor or (ii) otherwise
commences the exercise of any remedy available to such party under any Loan
Document;
(h) if Grantor fails to cure promptly any violation of any
law or ordinance affecting the Trust Property (provided that the foregoing
provisions of this clause (h) shall be subject to any right to contest such
violation specifically granted to Grantor in PARAGRAPH 8 of this Deed);
(i) if any Guaranty (as hereinafter defined) is terminated
or any event or condition occurs which, in the sole judgment of Grantee, may
impair the ability of any Guarantor to perform its obligations under any
Guaranty or any Guarantor attempts to withdraw, cancel or disclaim any Guaranty;
(j) if a default by Grantor under any of the other terms,
covenants or conditions of the Note, this Deed or any other Loan Document shall
occur and such default shall not have
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been cured within thirty (30) days after notice from Grantee, provided that if
such default is not susceptible of being cured within such thirty (30) day
period and Grantor shall have commenced the cure of such default within such
thirty (30) day period and thereafter diligently pursues such cure to
completion, then such thirty (30) day period shall be extended for a period of
ninety (90) days from the occurrence of the default, provided, further, that the
notice and grace period set forth in this subparagrapb (j) shall not apply to
any other Event of Default expressly set forth in this PARAGRAPH 20 or to any
other Event of Default defined as such in any other Loan Document or to any
other covenant or condition with respect to which a grace period is expressly
provided elsewhere; or
(k) if any of the provisions of PARAGRAPHS 42(d) and/or
PARAGRAPH 42(f) are violated or not complied with, and/or if any representation
or warranty in PARAGRAPH 42(b) and/or 42(c) shall prove false or misleading in
any respect and/or if any of the events described in PARAGRAPH 42(e) shall
occur.
Upon the occurrence of any Event of Default, the Indebtedness shall
immediately become due at the option of Grantee.
Upon the occurrence of any Event of Default, Grantor shall pay
interest on the entire unpaid principal balance of the Note, at the Default Rate
as defined in and provided for in the Note.
Upon the occurrence of any Event of Default, Grantee may, to the
extent permitted under applicable law, elect to treat the fixtures included in
the Trust Property either as real property or as personal property, or both, and
proceed to exercise such rights as apply thereto. With respect to any sale of
real property included in the Trust Property made under the powers of sale
herein granted and conferred, Grantee may, to the extent permitted by applicable
law, include in such sale any fixtures included in the Trust Property and
relating to such real property.
21. ADDITIONAL REMEDIES.
(a) Upon the occurrence of any Event of Default, Grantee
may take such action, without notice or demand, as it shall deem advisable to
protect and enforce its rights against Grantor and in and to the Trust Property
or any part thereof or interest therein, including, but not limited to, the
following actions, each of which may be pursued concurrently or otherwise, at
such time and in such order as Grantee may determine, in its sole discretion,
without impairing or otherwise affecting the other rights and remedies of
Grantee (i) enter into or upon the Real Property, either personally or by its
agents, nominees or attorneys and dispossess Grantor and its agents and servants
therefrom, and thereupon Grantee may (A) use, operate, manage, control, insure,
maintain, repair, restore and otherwise deal with all and every part of the
Trust Property and conduct the business thereat, (B) complete any construction
on the Trust Property in such manner and form as Grantee deems advisable, (C)
make alterations, additions, renewals, replacements and improvements to or on
the Trust Property, (D) exercise all rights and powers of Grantor with respect
to the Trust Property, whether in the name of Grantor or otherwise, including,
without limitation, the right to make, cancel, enforce or modify leases, obtain
and evict tenants and demand, sue for, collect and receive all earnings,
revenues, rents, issues, profits and other income of the Trust Property and
every part thereof and (E) apply the receipts from the Trust Property to the
payment of the Indebtedness, after deducting therefrom all expenses (including
reasonable attorneys' fees and expenses) incurred in connection with the
aforesaid operations and all amounts necessary to pay the taxes, assessments,
insurance and other charges in connection with the Trust Property, as well as
just and reasonable compensation for the services of counsel and other third
parties providing services to Grantee, or (ii) institute proceedings for the
complete foreclosure of this Deed in which case the Trust Property may be sold
for cash or upon credit in one or more parcels, or (iii)
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with or without entry, to the extent permitted and pursuant to the procedures
provided by applicable law, institute proceedings for the partial foreclosure of
this Deed for the portion of the Indebtedness then due and payable, subject to
the continuing lien, security title and security interest of this Deed for the
balance of the Indebtedness not then due, or (iv) sell for cash or upon credit
the Trust Property or any part thereof and all or any part of any estate, claim,
demand, right, title and interest of Grantor therein and rights of redemption
thereof, pursuant to power of sale or otherwise, at one or more sales, as an
entity or in parcels, at such time and place, upon such terms and after such
notice thereof as may be required or permitted by law, and in the event of a
sale, by foreclosure or otherwise, of less than all of the Trust Property, this
Deed shall continue as a lien, security title and security interest on the
remaining portion of or estate in the Trust Property, or (v) institute an
action, suit or proceeding in equity for the specific performance of any
covenant, condition or agreement contained herein or in the Note or any other
Loan Document, or (vi) recover judgment on the Note or any Guaranty either
before, during or after any proceedings for the enforcement of this Deed or
(vii) pursue such other remedies as Grantee may have under applicable law.
(b) The purchase money proceeds or avails of any sale made
under or by virtue of this PARAGRAPH 21, together with any other sums which then
may be held by Grantee under this Deed, whether under the provisions of this
PARAGRAPH 21 or otherwise, shall be applied as follows:
FIRST: To the payment of the costs and expenses of any such sale,
including reasonable compensation to Grantee, its agents and counsel, and of any
foreclosure or judicial proceedings wherein the same may be made, including the
expense of any litigation and all costs of collection or enforcement of the
Indebtedness secured hereby (including, without limitation, reasonable
attorneys' fees) and of all expenses, liabilities and advances made or incurred
by Grantee under this Deed, together with interest as provided herein on all
advances made by Grantee and all taxes or assessments, except any taxes,
assessments or other charges subject to which the Trust Property shall have been
sold.
SECOND: To the payment of the whole amount then due, owing or unpaid
upon the Note for principal, together with any and all applicable interest, fees
and late charges.
THIRD: To the payment of any other sums required to be paid by Grantor
pursuant to any provision of this Deed or of the Note or of the Guaranty.
FOURTH: To the payment of the surplus, if any, to whomsoever may be
lawfully entitled to receive the same.
Grantee and any receiver of the Trust Property, or any part thereof,
shall be liable to account for only those rents, issues and profits actually
received by it.
(c) Grantee may adjourn from time to time any sale by
Grantee to be made under or by virtue of this Deed by announcement at the time
and place appointed for such sale or for such adjourned sale or sales; and,
except as otherwise provided by any applicable provision of law, Grantee,
without further notice or publication, may make such sale at the time and place
to which the same shall be so adjourned.
(d) Upon the completion of any sale or sales made by
Grantee under or by virtue of this PARAGRAPH 21. Grantee, or an officer of any
court empowered to do so, as the case may be, shall execute and deliver to the
accepted purchaser or purchasers a good and sufficient instrument, or good and
sufficient instruments, conveying, assigning and transferring all estate, right,
title and interest
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in and to the property and rights sold. Grantee is hereby irrevocably appointed
the true and lawful attorney of Grantor, in its name and stead, to make all
necessary conveyances, assignments, transfers and deliveries of the Trust
Property and rights so sold and for that purpose Grantee, may execute all
necessary instruments of conveyance, assignment and transfer, and may substitute
one or more persons with like power, Grantor hereby ratifying and confirming all
that its said attorney or such substitute or substitutes shall lawfully do by
virtue hereof. Any such sale or sales made under or by virtue of this PARAGRAPH
21, whether made under the power of sale herein granted or under or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale, shall
operate to divest all the estate, right, title, interest, claim and demand
whatsoever, whether at law or in equity, of Grantor in and to the properties and
rights so sold, and shall be a perpetual bar both at law and in equity against
Grantor and against any and all persons claiming or who may claim the same, or
any part thereof from, through or under Grantor.
(e) In the event of any sale made under or by virtue of
this PARAGRAPH 21 (whether made under the power of sale herein granted or under
or by virtue of judicial proceedings or of a judgment or decree of foreclosure
and sale) the entire Indebtedness, if not previously due and payable,
immediately thereupon shall, anything in the Note, this Deed, any Guaranty or
any other Loan Document to the contrary notwithstanding, become due and payable.
(f) Upon any sale made under or by virtue of this
PARAGRAPH 21 (whether made under the power of sale herein granted or under or by
virtue of judicial proceedings or of a judgment or decree of foreclosure and
sale), Grantee may bid for and acquire the Trust Property or any part thereof
and in lieu of paying cash therefor may make settlement for the purchase price
by crediting upon the Indebtedness the net sales price after deducting therefrom
the expenses of the sale and the costs of the action and any other sums which
Grantee is authorized to deduct under this Deed.
(g) No recovery of any judgment by Grantee and no levy of
an execution under any judgment upon the Trust Property or upon any other
property of Grantor shall affect in any manner or to any extent, the lien,
security title and security interest of this Deed upon the Trust Property or any
part thereof, or any liens, rights, powers or remedies of Grantee hereunder, but
such liens, rights, powers and remedies of Grantee shall continue unimpaired as
before.
22. RIGHT TO CURE DEFAULTS. Upon the occurrence of any Event of
Default or if Grantor fails to make any payment or to do any act as herein
provided, Grantee may, but without any obligation to do so and without notice to
or demand on Grantor and without releasing Grantor from any obligation
hereunder, make or do the same in such manner and to such extent as Grantee may
deem necessary to protect the security hereof. Without limiting the foregoing,
Grantee may enter upon the Trust Property for such purposes or appear in,
defend, or bring any action or proceeding to protect its interest in the Trust
Property, and the cost and expense thereof (including, without limitation,
reasonable attorneys' fees and disbursements to the extent permitted by law),
with interest as provided in this PARAGRAPH 22, shall be immediately due and
payable to Grantee upon demand by Grantee therefor. All such costs and expenses
incurred by Grantee in remedying such Event of Default or in appearing in,
defending, or bringing any such action or proceeding shall bear interest at the
Default Rate (as such term is defined in the Note), for the period from the date
that such cost or expense was incurred to the date of payment to Grantee. All
such costs and expenses, together with interest thereon at the Default Rate,
shall be added to the Indebtedness and shall be secured by this Deed. If the
principal sum of the Note or any other amount required to be paid on the
Maturity Date under the Note shall not be paid on the Maturity Date, interest
shall thereafter be computed and paid at the Default Rate.
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23. LATE PAYMENT CHARGE. If any monthly principal and interest
payment is not paid in accordance with the Note, a late charge (the "LATE
CHANGE") shall be due as provided in the Note.
24. PREPAYMENT. The Indebtedness may be prepaid only in accordance
with the terms of the Note.
25. PREPAYMENT AFTER EVENT OF DEFAULT. A tender of the amount
necessary to satisfy the entire indebtedness, paid at any time following an
Event of Default or acceleration (which acceleration shall be at Grantee's sole
option), including at a foreclosure sale or during any subsequent redemption
period, if any, shall be deemed a voluntary prepayment, which payment shall
include a premium, the calculation of which shall be in accordance with the
terms of the Note and shall depend upon whether the Event of Default or
acceleration first occurred (i) prior to the time, if any, the prepayment of the
principal balance is permitted pursuant to the terms of the Note and prior to
the date on which the full amount of the balance of principal and interest then
remaining unpaid shall be due or (ii) on or after the date on which prepayment
of the principal balance is permitted pursuant to the terms of the Note.
26. APPOINTMENT OF RECEIVER. Grantee, upon the occurrence of an
Event of Default or in any action to foreclose this Deed or upon the actual or
threatened waste to any part of the Trust Property, shall be entitled to the
appointment of a receiver without notice and without regard to the value or
condition of the Trust Property as security for the Indebtedness or the solvency
or insolvency of any person liable for the payment of the Indebtedness.
27. SECURITY AGREEMENT.
(a) This Deed is both a real property Deed and a "security
agreement" within the meaning of the Uniform Commercial Code. The Trust Property
includes both real and personal property and all other rights and interests,
whether tangible or intangible in nature, of Grantor in the Trust Property.
Grantor, by executing and delivering this Deed grants to Grantee, as security
for the Indebtedness, a security interest in the Trust Property to the full
extent that the Trust Property may be subject to the Uniform Commercial Code
(such portion of the Trust Property so subject to the Uniform Commercial Code
being called in this PARAGRAPH 27 the "COLLATERAL"). Grantor hereby authorizes
Grantee to file financing statements (and amendments thereto and continuations
thereof) in order to create, perfect, preserve and continue the security
interest(s) herein granted. This Deed shall cover all items of the Collateral
that are or are to become fixtures. Information concerning the security
interest(s) herein granted may be obtained from Grantee upon request.
If an Event of Default shall occur, Grantee, in addition to
any other rights and remedies which it may have, shall have and may exercise
immediately and without demand, any and all rights and remedies granted to a
secured party upon default under the Uniform Commercial Code, including, without
limiting the generality of the foregoing, the right to take possession of the
Collateral or any part thereof, and to take such other measures as Grantee may
deem necessary for the care, protection and preservation of the Collateral. Upon
request or demand of Grantee, Grantor shall at its expense assemble the
Collateral and make it available to Grantee at a convenient place reasonably
acceptable to Grantee. Grantor shall pay to Grantee on demand any and all
expenses, including legal expenses and attorneys' fees and disbursements,
incurred or paid by Grantee in protecting its interest in the Collateral and in
enforcing its rights hereunder with respect to the Collateral. Any notice of
sale, disposition or other intended action by Grantee with respect to the
Collateral sent to Grantor in accordance with the provisions hereof at least
five (5) days prior to such sale, disposition or action shall constitute
reasonable notice to Grantor. The proceeds of any disposition of the Collateral,
or any part
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thereof, may be applied by Grantee to the payment of the Indebtedness in such
priority and proportions as Grantee in its discretion shall deem proper.
Grantor shall notify Grantee of any change in name, identity
or structure of Grantor, and Grantor hereby expressly authorizes Grantee to file
and record, at Grantor's sole cost and expense, such Uniform Commercial Code
forms as are necessary to maintain the priority of the lien, security title and
security interest of Grantee upon and security interest in the Collateral. In
addition, Grantor shall promptly execute, file and record such additional
Uniform Commercial Code forms or continuation statements as Grantee shall deem
necessary and shall pay all expenses and fees in connection with the filing and
recording thereof, provided that no such additional documents shall increase the
obligations of Grantor under the Note, this Deed or the other Loan Documents.
Grantor hereby grants to Grantee an irrevocable power of attorney, coupled with
an interest, to file with the appropriate public office on its behalf any
financing or other statements signed only by Grantee, as secured party, in
connection with the Collateral covered by this Deed.
(b) That portion of the Trust Property consisting of
personal property and equipment, shall be owned by Grantor and shall not be the
subject matter of any lease or other transaction whereby the ownership or any
beneficial interest in any of such property is held by any person or entity
other than Grantor nor shall Grantor create or suffer to be created any security
interest covering any such property as it may from time to time be replaced,
other than the security interest created herein.
28. AUTHORITY.
(a) Grantor has full power, authority and legal right to
execute this Deed, and to deed, give, grant, bargain, sell, alien, enfeoff,
convey, confirm, pledge, hypothecate and assign and grant a security interest in
the Trust Property pursuant to the terms hereof and to keep and observe all of
the terms of this Deed on Grantor's part to be performed.
(b) Grantor represents and warrants to Grantee that
Grantor is not a "foreign person" and covenants with Grantee that Grantor will
not, throughout the term of the Note, become a "foreign person" within the
meaning of Section 1445 and Section 7701 of the Internal Revenue Code of 1986,
(26 USC Sections 1445, 7701) and the related Treasury Department regulations,
including, without limitation, temporary regulations (hereinafter collectively
the "CODE"); that is, such Grantor is not a non-resident alien, foreign
corporation, foreign partnership, foreign trust or foreign estate as those terms
are defined in the Code.
(c) Grantor represents and warrants to Grantee that
Grantor is a limited liability company organized and existing under the laws of
the State of Delaware.
29. ACTIONS AND PROCEEDINGS. Grantee shall have the right to
appear in and defend any action or proceeding brought with respect to the Trust
Property and to bring any action or proceeding, in the name and on behalf of
Grantor, which Grantee, in its discretion, shall decide should be brought to
protect its interests in the Trust Property.
30. FURTHER ACTS, ETC. Grantor will, at the sole cost of Grantor,
and without expense to Grantee, do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, deeds to secure debt, assignments,
notices of assignments, transfers and assurances as Grantee shall, from time to
time, require, for the better assuring, conveying, assigning, transferring and
confirming unto Grantee the property and rights hereby given, granted,
bargained, sold, aliened, enfeoffed, conveyed, confirmed, pledged, assigned and
hypothecated or intended now or hereafter so to
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be, or which Grantor may be or may hereafter become bound to convey or assign to
Grantee, or for carrying out the intention or facilitating the performance of
the terms of this Deed or for filing, registering or recording this Deed and, on
demand, will execute and deliver within five (5) business days after request of
Grantee, and if Grantor fails to so deliver, hereby authorizes Grantee
thereafter to execute in the name of Grantor without the signature of Grantor to
the extent Grantee may lawfully do so, one or more financing statements, chattel
Deeds or comparable security instruments, to evidence more effectively the lien,
security title and security interest hereof upon the Trust Property. Grantor
grants to Grantee an irrevocable power of attorney coupled with an interest for
the purpose of exercising and perfecting any and all rights and remedies
available to Grantee at law and in equity, including without limitation such
rights and remedies available to Grantee pursuant to this PARAGRAPH 30.
31. RECORDING OF DEED, ETC. Grantor forthwith upon the execution
and delivery of this Deed, will cause this Deed, and any security instrument
creating a lien or security interest or evidencing the lien, security title and
security interest hereof upon the Trust Property, to be filed, registered or
recorded and, thereafter, from time to time, each such other instrument of
further assurance to be filed, registered or recorded, all in such manner and in
such places as may be required by any present or future law in order to publish
notice of and fully to protect the lien, security title or security interest
hereof upon, and the interests of Grantee in, the Trust Property. Grantor will
pay all filing, registration or recording fees, and all expenses incident to the
preparation, execution and acknowledgment of this Deed, any Deed supplemental
hereto, any security instrument with respect to the Trust Property and any
instrument of further assurance, and all federal, state, county and municipal,
taxes, duties, imposts, assessments and charges arising out of or in connection
with the making, execution, delivery and/or recording of this Deed, any Deed
supplemental hereto, any security instrument with respect to the Trust Property
or any instrument of further assurance, except where prohibited by law so to do.
Grantor shall hold harmless and indemnify Grantee, its successors and assigns,
against any liability incurred by reason of the imposition of any tax on the
making, execution, delivery and/or recording of this Deed, any Deed supplemental
hereto, any security instrument with respect to the Trust Property or any
instrument of further assurance.
32. USURY LAWS. This Deed and the Note are subject to the express
condition that at no time shall Grantor be obligated or required to pay interest
on the principal balance due under the Note at a rate which could subject the
holder of the Note to either civil or criminal liability as a result of being in
excess of the maximum interest rate which Grantor is permitted by law to
contract or agree to pay. If by the terms of this Deed or the Note, Grantor is
at any time required or obligated to pay interest on the principal balance due
under the Note at a rate in excess of such maximum rate, the rate of interest
under the Note shall be deemed to be immediately reduced to such maximum rate
and the interest payable shall be computed at such maximum rate and all prior
interest payments in excess of such maximum rate shall be applied and shall be
deemed to have been payments in reduction of the principal balance of the Note
and the principal balance of the Note shall be reduced by such amount in the
inverse order of maturity.
33. SOLE DISCRETION OF GRANTEE. Wherever pursuant to this Deed,
Grantee exercises any right given to it to approve or disapprove, or any
arrangement or term is to be satisfactory to Grantee, the decision of Grantee to
approve or disapprove or to decide that arrangements or terms are satisfactory
or not satisfactory shall be in the sole discretion of Grantee and shall be
final and conclusive, except as may be otherwise specifically provided herein.
34. RECOVERY OF SUMS REQUIRED TO BE PAID. Grantee shall have the
right from time to time to take action to recover any sum or sums which
constitute a part of the Indebtedness as the same become due, without regard to
whether or not the balance of the Indebtedness shall be due, and
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without prejudice to the right of Grantee thereafter to bring an action of
foreclosure, or any other action, for a default or defaults by Grantor existing
at the time such earlier action was commenced.
35. MARSHALLING AND OTHER MATTERS. Grantor waives, to the extent
permitted by law, the benefit of all appraisement, valuation, stay, extension,
reinstatement and redemption laws now or hereafter in force and all rights of
marshalling in the event of any sale hereunder of the Trust Property or any part
thereof or any interest therein. Further, Grantor expressly waives any and all
rights of redemption from sale under any order or decree of foreclosure of this
Deed on behalf of Grantor, and on behalf of each and every person acquiring any
interest in or title to the Trust Property subsequent to the date of this Deed
and on behalf of all persons to the extent permitted by applicable law.
36. WAIVER OF NOTICE. Grantor shall not be entitled to any notices
of any nature whatsoever from Grantee except with respect to matters for which
this Deed specifically and expressly provides for the giving of notice by
Grantee to Grantor and except with respect to matters for which Grantee is
required by applicable law to give notice, and Grantor hereby expressly waives
the right to receive any notice from Grantee with respect to any matter for
which this Deed does not specifically and expressly provide for the giving of
notice by Grantee to Grantor.
37. REMEDIES OF GRANTOR. In the event that a claim or adjudication
is made that Grantee has acted unreasonably or unreasonably delayed acting in
any case where by law or under the Note, this Deed or the other Loan Documents,
it has an obligation to act reasonably or promptly, Grantee shall not be liable
for any monetary damages, and Grantor's remedies shall be limited to injunctive
relief or declaratory judgment.
38. REPORTING REQUIREMENTS. At the request of Grantee, Grantor
shall supply or cause to be supplied to Grantee either (a) a copy of a completed
Form 1099-B, Statement for Recipients of Proceeds from Real Estate, Broker and
Barter Exchange Proceeds prepared by Grantor's attorney or other person
responsible for the preparation of such form, together with a certificate from
the person who prepared such form to the effect that such form has, to the best
of such person's knowledge, been accurately prepared and that such person will
timely file such form or (b) a certification from Grantor that the Loan is a
refinancing of the Trust Property or is otherwise not required to be reported to
the Internal Revenue Service pursuant to Section 6045(e) of the Code. Grantor
hereby indemnifies, defends and holds Grantee harmless from and against all
loss, cost, damage and expense (including without limitation, attorneys' fees
and disbursements and costs incurred in the investigation, defense and
settlement of claims) that Grantee may incur, directly or indirectly, as a
result of or in connection with the assertion against Grantee of any claim
relating to the failure of Grantee to comply with this PARAGRAPH 38.
39. HAZARDOUS MATERIALS.
(a) Grantor represents and warrants that based on the
environmental report prepared by ATC Assoc. Inc. dated MAY 21, 2004 (the
"Report") and except as disclosed therein (i) the Trust Property is now and at
all times during Grantor's ownership thereof has been free of contamination from
any petroleum product and all hazardous or toxic substances, wastes or
substances, any substances which because of their quantitative concentration,
chemical, radioactive, flammable, explosive, infectious or other
characteristics, constitute or may reasonably be expected to constitute or
contribute to a danger or hazard to public health, safety or welfare or to the
environment, including, without limitation, any asbestos (whether or not
friable) and any asbestos-containing materials, Mold (defined as the presence of
any form of (i) multicellular fungi that live on plant or animal matter and an
indoor environment (including without limitation Cladosporium, Penicillium,
Alternaria, Aspergillus,
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Fusarium, Trichoderma, Memnoniella, Mucor, and Stachybotrys chartarum (SC) often
found in water damaged building materials), (ii) spores, scents or byproducts
produced or released by fungi, including mycotoxins and (iii) microbial matter
which reproduces through mold, mildew and viruses, whether or not such microbial
matter is living (collectively "Mold")), waste oils, solvents and chlorinated
oils, polychlorinated biphenyls (PCBs), toxic metals, etchants, pickling and
plating wastes, explosives, reactive metals and compounds, pesticides,
herbicides, radon gas, urea formaldehyde foam insulation and chemical,
biological and radioactive wastes, or any other similar materials or any
hazardous or toxic wastes or substances which are included under or regulated by
any federal, state or local law, rule or regulation (whether now existing or
hereafter enacted or promulgated, as they may be amended from time to time)
pertaining to environmental regulations, contamination, clean-up or disclosures,
and any judicial or administrative interpretation thereof, including any
judicial or administrative orders or judgments ("HAZARDOUS MATERIALS"),
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. section 9601 ET SEQ.
("CERCLA"); The Federal Resource Conservation and Recovery Act, 42 U.S.C.
section 6901 ET SEQ. ("RCRA"); Superfund Amendments and Reauthorization
Act of 1986, Public Law No. 99-499 ("SARA"); Toxic Substances Control Act, 15
U.S.C. section 2601 ET SEQ. ("TSCA"); the Hazardous Materials Transportation
Act, 49 U.S.C. section 1801 ET SEQ.; and any other state superlien or
environmental clean-up or disclosure statutes (all such laws, rules and
regulations being referred to collectively as "ENVIRONMENTAL LAWS"), (ii)
Grantor has not caused or suffered to occur any discharge, spill, uncontrolled
loss or seepage of any Hazardous Materials onto any property adjoining the Trust
Property, (iii) Grantor has not received any complaint, notice, letter, or other
communication from occupants, tenants, guests, employees, licensees or any other
person regarding odors, poor indoor quality, Mold, or any activity, condition,
event or omission that causes or facilitates the growth of Mold and Grantor
further represents to the best of its knowledge that no Mold or any activity,
condition, event or omission that causes or facilitates the growth of Mold
exists at the property, and (iv) neither the Grantor nor to Grantor's best
knowledge any tenant or occupant of all or part of the Trust Property is now or
has been involved in operations at the Trust Property which could lead to
liability for Grantor or any other owner of the Trust Property or the imposition
of a lien on the Trust Property under any Environmental Law.
(b) At its sole cost and expense, Grantor shall comply
with and shall cause all tenants and other occupants of the Trust Property to
comply with all Environmental Laws now in effect or hereafter enacted with
respect to the discharge, generation, removal, transportation, storage and
handling of Hazardous Materials. Grantor shall promptly notify Grantee if
Grantor shall become aware of any Hazardous Materials on or near the Trust
Property (except materials which (i) are ordinarily and customarily used in the
regular operation of the Trust Property as a commercial retail facility by the
Grantor or any current tenant or any future tenant, which tenant and its Lease
have been approved by the Grantee, and (ii) are used, stored, disposed of and
handled in compliance with and in quantities permitted by all applicable
Environmental Laws) and/or if Grantor shall become aware that the Trust Property
is in direct or indirect violation of any Environmental Laws and/or if Grantor
shall become aware of any condition on or near the Trust Property which shall
pose a threat to the health, safety or welfare of humans. Grantor shall promptly
remove all Hazardous Materials from the Trust Property, such removal to be
performed in accordance with all applicable federal, state and local laws,
statutes, rules and regulations. Grantor shall pay immediately when due the cost
of removal of any Hazardous Materials and shall keep the Trust Property free of
any lien imposed pursuant to any Environmental Laws now in effect or hereinafter
enacted.
(c) Grantor grants Grantee and its employees and agents an
irrevocable and non-exclusive license, subject to the rights of tenants, to
enter the Trust Property in the event that Grantee has a reasonable belief that
a violation of Environmental Laws or release or threatened release of
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Hazardous Materials has occurred on or onto the Trust Property, or at any time
after an uncured Event of Default under the Loan Documents, to conduct testing
and to remove any Hazardous Materials, and the costs of such testing and removal
shall immediately become due to Grantee and shall be secured by this Deed.
Grantor, promptly upon the request of Grantee, and only if Grantee has a
reasonable belief that there is a change in the environmental condition of the
Trust Property, shall provide Grantee with an environmental site assessment or
environmental audit report, or an update of such an assessment or report, all in
scope, form and content satisfactory to Grantee. Grantor shall maintain the
integrity of all storage tanks and drums on or under the Trust Property during
the term of the Loan in compliance with all Environmental Laws now in effect or
hereinafter enacted. Grantor shall follow an operation and maintenance program
with respect to all storage tanks and drums on or under the Trust Property,
which program has been approved in writing by Grantee.
(d) Grantor shall indemnify Grantee and hold Grantee
harmless from and against all liability, loss, cost, damage and expense
(including, without limitation, attorneys' fees and costs incurred in the
investigation, defense and settlement of claims) that Grantee may incur as a
result of or in connection with the assertion against Grantee (whether as past
or present grantee of this Deed, as lender in possession or as past or present
owner of the Trust Property by virtue of a foreclosure or acceptance of a deed
in lieu of foreclosure or the exercise of a power of sale) of any claim relating
to the presence and/or release, threatened release, storage, disposal,
generating or removal of any Hazardous Materials or compliance with any
Environmental Laws now in effect or hereinafter enacted except for the gross
negligence or willful misconduct of Grantee. Subject to the provisions of
Paragraph 9(f) above, the obligations and liabilities of Grantor under this
PARAGRAPH 39 shall survive full payment of the Loan, entry of a judgment of
foreclosure or acceptance of a deed in lieu of foreclosure or any subsequent
transfer to a third party. It is understood that the presence and/or release of
substances referred to in this section hereof does not pertain to a presence
and/or release which first occurs solely after (A) repayment of the Loan in full
in accordance with the Loan Documents or (B) possession of the Property by
Grantee upon a foreclosure or acceptance of a deed in lieu of foreclosure or the
exercise of a power of sale and surrender of possession and occupancy of the
Property by Grantor, its agents, affiliates, employees and independent
contractors. Grantor shall have the burden of establishing that the conditions
in subsection (d) were satisfied by clear and convincing evidence and shall
indemnify and hold Grantee harmless for all matters set forth in this Paragraph
39, until Grantor has met such burden (Grantee agrees that Grantor shall have
met such burden with respect to the Trust Property if Grantor at such time
delivers to Grantee a clean Phase I environmental assessment report satisfactory
in all respects to Grantee if prior to delivery thereof there has not occurred
any release of Hazardous Materials at the Trust Property nor has there been any
prior violation of Environmental Laws at the Trust Property, and if there has
been a release of Hazardous Materials or a violation of Environmental Laws, in
such instance in lieu of delivery of such Phase I environmental assessment
Grantor shall deliver to Grantee an environmental insurance policy satisfactory
in all respects to Grantee in its reasonable discretion).
(e) Nothing contained herein shall constitute or be
construed as a waiver of any statutory or judicial federal, state or local law
which may provide rights or remedies to Grantee against Grantor or others in
connection with any claim relating to the Trust Property and pertaining to the
presence and/or release, threatened release, storage, disposal, generating or
removal of any Hazardous Materials or to the failure to comply with any
Environmental Laws now or hereafter enacted.
40. ASBESTOS. Grantor shall not install or permit to be installed
in the Trust Property, friable asbestos or any substance containing asbestos.
With respect to any such material currently present in the Trust Property,
Grantor, at Grantor's expense, shall promptly comply with and shall cause all
occupants of the Trust Property to comply with all present and future applicable
federal, state or local laws, rules, regulations or orders relating to asbestos,
friable asbestos and asbestos
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containing materials. In the event any asbestos, friable asbestos or asbestos
containing material is discovered at the Trust Property, Grantor shall obtain a
comprehensive asbestos report prepared by a licensed engineer or asbestos
consultant acceptable to Grantee describing the form, extent, location and
condition of such asbestos and recommending methods of removal or abatement.
Grantor shall promptly comply at its sole cost and expense with the
recommendations contained in such report, such compliance to be performed in
accordance with all applicable federal, state and local laws, statutes, rules
and regulations. Grantor shall indemnify Grantee and hold Grantee harmless from
and against all loss, cost, damage and expense (including, without limitation,
attorneys' fees and costs incurred in the investigation, defense and settlement
of claims) that Grantee may incur as a result of or in connection with the
assertion against Grantee (whether as past or present grantee of the Deed, as
lender in possession, or as past or present owner of the Trust Property by
virtue of a foreclosure or acceptance of a deed in lieu of foreclosure or the
exercise of a power of sale) of any claim relating to the presence or removal of
any asbestos substance referred to in this PARAGRAPH 40, or compliance with any
federal, state or local laws, rules, regulations or orders relating thereto. The
obligations and liabilities of Grantor under this PARAGRAPH 40 shall survive
full payment of the Loan, entry of a judgment of foreclosure or the acceptance
of a deed in lieu of foreclosure or the exercise of a power of sale.
41. BANKRUPTCY OR INSOLVENCY. In the event that Grantor or any
Guarantor or, if Grantor or any Guarantor is a general or limited partnership,
any general partner of any such entity (a) admits in writing its inability to
pay its debts generally as they become due, or does not pay its debts generally
as they become due, (b) commences as debtor any case or proceeding under any
bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law,
or seeks or consents to the appointment of a receiver, conservator, trustee,
custodian, manager, liquidator or similar official for it or the whole or any
substantial part of its property, (c) has a receiver, conservator, trustee,
custodian, manager, liquidator, or similar official appointed for it or the
whole or any substantial part of its property, by any governmental authority
with jurisdiction to do so, (d) makes a proposal or any assignment for the
benefit of its creditors, or enters into an arrangement or composition or
similar plan or scheme with or for the benefit of creditors generally occurring
in circumstances in which such entity is unable to meet its obligations as they
become due or (e) has filed against it any case or proceeding under any
bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law
which (i) is consented to or not timely contested by such entity, (ii) results
in the entry of an order for relief, appointment of a receiver, conservator,
trustee, custodian, manager, liquidator or similar official for such entity or
the whole or any substantial part of its property or (iii) is not dismissed
within sixty (60) days, an Event of Default shall have occurred and as a result,
the entire principal balance of the Note and all obligations under any Guaranty
shall become immediately due and payable at the option of Grantee without notice
to Grantor or any Guarantor and Grantee may exercise any remedies available to
it hereunder, under any other Loan Document, at law or in equity.
42. COMPLIANCE WITH ERISA AND STATE STATUTES ON GOVERNMENTAL
PLANS.
(a) Grantee represents and warrants to Grantor that, as of
the date of this Deed and throughout the term of this Deed, the source of funds
from which Grantee extends this Deed is its general account, which is subject to
the claims of its general creditors under state law.
(b) Grantor represents and warrants that, as of the date
of this Deed and throughout the term of this Deed, (i) Grantor is not 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 and (ii) the assets of such Grantor do not constitute "plan assets" of
one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101.
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Loan No. 6518403
(c) Grantor represents and warrants to Grantee that, as of
the date of this Deed and throughout the term of this Deed (i) Grantor is not a
"governmental plan" within the meaning of Section 3(32) of ERISA and (ii)
transactions by or with Grantor or any Grantor are not subject to state statues
regulating investments of and fiduciary obligations with respect to governmental
plans.
(d) Grantor covenants and agrees to deliver to Grantee
such certifications or other evidence from time to time throughout the term of
this Deed, as reasonably requested by Grantee in its sole discretion, that (i)
Grantor is not an "employee benefit plan" or a "governmental plan", (ii) Grantor
is not subject to state statutes regulating investments and fiduciary
obligations with respect to governmental plans, and (iii) one or more of the
following circumstances is true:
(A) Equity interests in Grantor are publicly offered
securities, within the meaning of 29 C.F.R. Section
2510.3-101(b)(2);
(B) Less than 25 percent of all equity interests in such
Grantor are held by "benefit plan investors" within
the meaning of 29 C.F.R. Section 2510.3-101(f)(2); or
(C) Grantor qualifies as an "operating company" or a "real
estate operating company" within the meaning of 29
C.F.R. Section 2510.3.-101(c) or (e).
(e) Any of the following shall constitute an Event of
Default under this Deed, entitling Grantee to exercise any and all remedies to
which it may be entitled under this Deed, and any other Loan Documents (i) the
failure of any representation or warranty made by any Grantor under this
PARAGRAPH 42 to be true and correct in all respects, (ii) the failure of any
Grantor to provide Grantee with the written certifications and evidence referred
to in this PARAGRAPH 42 within five (5) days after written notice or (iii) the
consummation by Grantor or any one Grantor of a transaction which would cause
this Deed or any exercise of Grantee's rights under this Deed, or the other Loan
Documents to constitute a non-exempt prohibited transaction under ERISA or a
violation of a state statute regulating governmental plans, or otherwise
subjecting Grantee to liability for violation of ERISA or such state statute.
(f) Grantor shall indemnify Grantee and defend and hold
Grantee harmless from and against all civil penalties, excise taxes, or other
loss, cost, damage and expense (including, without limitation, reasonable
attorneys' fees and disbursements and costs incurred in the investigation,
defense and settlement of claims and losses incurred in correcting any
prohibited transaction or in the sale of a prohibited loan, and in obtaining any
individual prohibited transaction exemption under ERISA that may be required, in
Grantee's sole discretion) that Grantee may incur, directly or indirectly, as a
result of a default under this PARAGRAPH 42. This indemnity shall survive any
termination, satisfaction, foreclosure of or exercise of power of sale under
this Deed.
43. ASSIGNMENTS. Grantee shall have the right to assign or
transfer its rights under this Deed without limitation at no cost to Grantor.
Any assignee or transferee shall be entitled to all the benefits afforded
Grantee under this Deed.
44. COOPERATION. Grantor acknowledges that Grantee and its
successors and assigns may (a) sell this Deed, the Note and other Loan Documents
to one or more investors as a whole loan, (b) participate the Loan to one or
more investors, (c) deposit this Deed, the Note and other Loan Documents with a
trust, which trust may sell certificates to investors evidencing an ownership
interest in the trust assets or (d) otherwise sell the Loan or interest therein
to investors (the transactions referred to in clauses
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Loan No. 6518403
(a) through (d) are hereinafter referred to as "SECONDARY MARKET TRANSACTIONS").
Grantor shall cooperate in good faith with Grantee (aa) in effecting any such
Secondary Market Transaction and (bb) to implement all requirements imposed by
the Rating Agency involved in any Secondary Market Transaction including,
without limitation, all structural or other changes to the Loan, modifications
to any documents evidencing or securing the Loan, delivery of opinions of
counsel acceptable to the Rating Agency and addressing such matters as the
Rating Agency may require; PROVIDED, HOWEVER, that Grantor shall not be required
to modify any documents evidencing or securing the Loan which would modify (i)
the interest rate payable under the Note, (ii) the stated maturity of the Note,
(iii) the amortization of principal of the Note or (iv) any other material
economic term of the Loan. Grantor shall provide such information and documents
relating to Grantor, Guarantor, if any, the Trust Property, the Lease and the
Lessee as Grantee may reasonably request in connection with a Secondary Market
Transaction. Grantee shall have the right to provide to prospective investors
any information in its possession, including, without limitation, financial
statements relating to Grantor, the Guarantor, if any, the Trust Property and
the Lessee. Grantor acknowledges that certain information regarding the Loan and
the parties thereto and the Trust Property may be included in a private
placement memorandum, prospectus or other disclosure documents.
45. INDEMNIFICATION FOR NON-RECOURSE CARVEOUT OBLIGATIONS. Grantor
hereby covenants and agrees unconditionally and absolutely to indemnify and save
harmless Grantee, its officers, directors, shareholders, employees, agents and
attorneys against all damages, losses, liabilities, obligation, claims,
litigation, demands or defenses, judgments, suits, proceedings, fines,
penalties, costs, disbursements and expenses of any kind or nature whatsoever
(including without limitation attorneys' fees reasonably incurred), which may at
any time be imposed upon, incurred by or asserted or awarded against Grantee and
arising from the Non-Recourse Carveout Obligations except to the extent arising
from the gross negligence or willful misconduct of Grantee.
This indemnity shall survive any foreclosure of this Deed, the taking
of a deed in lieu thereof, the exercise of any power of sale, or any other
discharge of the obligations of the Grantor hereunder or a transfer of the Trust
Property, even if the indebtedness secured hereby is satisfied in full. Grantor
agrees that the indemnification granted herein may be enforced by Grantee
without resorting to or exhausting any other security or collateral or without
first having recourse to the Note or the Trust Property covered by this Deed
through foreclosure proceedings or otherwise; provided, however, that, subject
to PARAGRAPH 46 of this Deed, nothing herein contained shall prevent Grantee
from suing on the Note or foreclosing this Deed or exercising any power of sale
or from exercising any other rights under the Loan Documents.
46. EXCULPATION. Notwithstanding anything to the contrary
contained herein, but subject to PARAGRAPH 45 hereof, any claim based on or in
respect of any liability of Grantor under the Note or under this Deed or any
other Loan Document shall be enforced only against the Trust Property and any
other collateral now or hereafter given to secure the Loan and not against any
other assets, properties or funds of Grantor; PROVIDED, HOWEVER, that the
liability of Grantor for loss, costs or damage arising out of the matters
described below (collectively, "Non-Recourse Carveout Obligations") shall not be
limited solely to the Trust Property and other collateral now or hereafter given
to secure the Loan but shall include all of the assets, properties and funds of
Grantor: (i) fraud, misrepresentation and waste, (ii) any rents, issues or
profits collected more than one (1) month in advance of their due dates to the
extent such sums remain collected more than one month in advance of their due
dates following an Event of Default, (iii) any misapplication of rents, issues
or profits, security deposits and any other payments from tenants or occupants
(including, without limitation, lease termination fees) insurance proceeds,
condemnation awards, or other sums of a similar nature to the extent such
misapplication continues following an Event of Default, (iv) liability under
environmental covenants, conditions and indemnities
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Loan No. 6518403
contained in the Deed and in any separate environmental indemnity agreements,
(v) personalty or fixtures removed or allowed to be removed by or on behalf of
Grantor and not replaced by items of equal or greater value or functionality
than the personalty or fixtures so removed, (vi) failure to pay taxes,
assessments or ground rents prior to delinquency, or to pay charges for labor,
materials or other charges which can create liens on any portion of the Trust
Property and any sums expended by Grantee in the performance of or compliance
with the obligations of Grantor under the Loan Documents, including, without
limitation, sums expended to pay taxes or assessments or hazard insurance
premiums or bills for utilities or other services or products for the benefit of
the Trust Property, (vii) the unauthorized sale, conveyance or transfer of title
to the Trust Property or encumbrance of the Trust Property, (viii) the failure
of Grantor to maintain its status as a single purpose, bankruptcy-remote entity
pursuant to its organizational documents and the Loan Documents, and (ix)
reasonable attorney's fees, court costs and other expenses incurred by Grantee
in connection with enforcement of Grantor's personal liability as set forth
herein. Nothing herein shall be deemed (w) to be a waiver of any right which
Grantee may have under any bankruptcy law of the United States or the State
where the Trust Property is located including, but not limited to, Section
506(a), 506(b), 1lll(b) or any other provisions of the U.S. Bankruptcy Code, to
file a claim for the full amount of the indebtedness secured by this Deed or to
require that all of the collateral securing the indebtedness secured hereby
shall continue to secure all of the indebtedness owing to Grantee under the
Note, this Deed and the other Loan Documents; (x) to impair the validity of the
indebtedness secured by this Deed; (y) to impair the right of Grantee as Grantee
or secured party to commence an action to foreclose any lien, security title or
security interest; or (z) to modify, diminish or discharge the liability of any
Guarantor under any Guaranty.
47. NOTICES. Any notice, demand, statement, request or consent
made hereunder shall be effective and valid only if in writing, referring to
this Deed, signed by the party giving such notice, and delivered either
personally to such other party, or sent by nationally recognized overnight
courier delivery service or by certified mail of the United States Postal
Service, postage prepaid, return receipt requested, addressed to the other party
as follows (or to such other address or person as either party or person
entitled to notice may by notice to the other party specify):
TO GRANTEE:
John Hancock Life Insurance Company
Real Estate Investment Group
John Hancock Tower, T-56
200 Clarendon Street
Boston, MA 02116
Re: Loan No. 6518403
and with a copy concurrently to:
Quarles & Brady LLP
500 West Madison Street
Suite 3700
Chicago, Illinois 60661
Attention: Peter A. Sarasek, Esq.
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TO GRANTOR:
Inland Western Duluth John's Creek SPE, L.L.C.
2901 Butterfield Road
Oak Brook, Illinois 60523
Attention: Roberta Matlin, Vice President
and with a copy concurrently to:
The Inland Real Estate Group, Inc.
2901 Butterfield Road
Oak Brook, Illinois 60523
Attention: Robert H. Baum, Esq., General Counsel
Unless otherwise specified, notices shall be deemed given as follows:
(i) if delivered personally, when delivered, (ii) if delivered by nationally
recognized overnight courier delivery service, on the day following the day such
material is sent, or (iii) if delivered by certified mail, on the third day
after the same is deposited with the United States Postal Service as provided
above.
48. NON-WAIVER. The failure of Grantee to insist upon strict
performance of any term hereof shall not be deemed to be a waiver of any term of
this Deed. Grantor shall not be relieved of Grantor's obligations hereunder by
reason of (a) failure of Grantee to comply with any request of Grantor or any
Guarantor to take any action to foreclose this Deed or otherwise enforce any of
the provisions hereof or of the Note, any Guaranty or the other Loan Documents,
(b) the release, regardless of consideration, of the whole or any part of the
Trust Property, or of any person liable for the Indebtedness or portion thereof
or (c) any agreement or stipulation by Grantee extending the time of payment or
otherwise modifying or supplementing the terms of the Note, any Guaranty, this
Deed or the other Loan Documents. Grantee may resort for the payment of the
Indebtedness to any other security held by Grantee in such order and manner as
Grantee, in its discretion, may elect. Grantee may take action to recover the
Indebtedness, or any portion thereof, or to enforce any covenant hereof without
prejudice to the right of Grantee thereafter to foreclose this Deed. The rights
of Grantee under this Deed shall be separate, distinct and cumulative and none
shall be given effect to the exclusion of the others. No act of Grantee shall be
construed as an election to proceed under any one provision herein to the
exclusion of any other provision. Grantee shall not be limited exclusively to
the rights and remedies herein stated but shall be entitled to every right and
remedy now or hereafter afforded by law.
49. JOINT AND SEVERAL LIABILITY. If there is more than one party
comprising Grantor, then the obligations and liabilities of each party under
this Deed shall be joint and several.
50. SEVERABILITY. If any term, covenant or condition of the Note,
any Guaranty or this Deed is held to be invalid, illegal or unenforceable in any
respect, the Note, any Guaranty and this Deed shall be construed without such
provision.
51. DUPLICATE ORIGINALS. This Deed may be executed in any number
of duplicate originals and each such duplicate original shall be deemed to
constitute but one and the same instrument.
52. INDEMNITY AND GRANTEE'S COSTS. Grantor agrees to pay all
costs, including, without limitation, reasonable attorneys' fees and expenses,
incurred by Grantee in enforcing the terms hereof and/or the terms of any of the
other Loan Documents or the Note or any Guaranty, whether or not suit is filed
and waives to the full extent permitted by law all right to plead any statute of
limitations as a defense to any action hereunder. Grantor agrees to indemnify
and hold Grantee harmless from any and all liability, loss, damage or expense
(including, without limitation, attorneys' fees and disbursements)
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that Grantee incurs hereunder or in connection with the enforcement of any of
its rights or remedies hereunder, any action taken by Grantee hereunder, or by
reason or in defense of any and all claims and demands whatsoever that are
asserted against Grantee arising out of the Trust Property; and should Grantee
incur any such liability, loss, damage or expense, the amount thereof with
interest thereon at the Default Rate shall be payable by Grantor immediately
without demand, shall be secured by this Deed, and shall be a part of the
Indebtedness.
53. CERTAIN DEFINITIONS. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words used in
this Deed shall be used interchangeably in singular or plural form. The word
"GRANTOR" shall mean Grantor and/or any subsequent owner or owners of the Trust
Property or any part thereof or interest therein. The word "GRANTEE" shall mean
Grantee or any subsequent holder of the Note. The word "GUARANTY" shall mean any
Guaranty of Payment, Guaranty of Completion, Guaranty of Collection,
Environmental Indemnity or any other Guaranty or Indemnity given at any time to
or for the benefit of Grantee in connection with the Loan. The word "GUARANTOR"
shall mean any person giving or making any Guaranty. The word "NOTE" shall mean
the Note or any other evidence of indebtedness secured by this Deed. The words
"LOAN DOCUMENTS" shall mean the Note, this Deed, the loan agreement, if any,
between Grantor and Grantee, the security agreement, if any, between Grantor and
Grantee, the assignment of leases and rents, if any, made by Grantor to Grantee,
any reserve agreements between Grantor and Grantee, any escrow agreements
between Grantor and Grantee, the assignment of contracts, if any, made by
Grantor to Grantee, all Guaranties, if any, made to Grantee, any other deed or
deed of trust securing the Note and any other agreement, instrument, affidavit
or document executed by Grantor, any Guarantor or any indemnitor and delivered
to Grantee in connection with the Loan, The word "PERSON" shall include an
individual, corporation, partnership, trust, unincorporated association,
government, governmental authority or other entity. The words "TRUST PROPERTY"
shall include any portion of the Trust Property or interest therein. Whenever
the context may require, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns and pronouns shall include the plural and vice versa.
54. NO ORAL CHANGE. This Deed, and any provisions hereof, may not
be modified, amended, waived, extended, changed, discharged or terminated orally
or by any act or failure to act on the part of Grantor or any one Grantor or
Grantee, but only by an agreement in writing signed by the party against whom
enforcement of any modification, amendment, waiver, extension, change, discharge
or termination is sought.
55. NO FOREIGN PERSON. Grantor is not a "foreign person" within
the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986, as
amended and the related Treasury Department Regulations, including temporary
regulations.
56. SEPARATE TAX LOT. The Trust Property is assessed for real
estate tax purposes as one or more wholly independent tax lot or lots, separate
from any adjoining land or improvements not constituting a part of such lot or
lots, and no other land or improvements is assessed and taxed together with the
Trust Property or any portion thereof.
57. RIGHT TO RELEASE ANY PORTION OF THE TRUST PROPERTY. Grantee
may release or reconvey any portion of the Trust Property for such consideration
as Grantee may require without, as to the remainder of the Trust Property, in
any way impairing or affecting the lien, security title, security interest or
priority of this Deed, or improving the position of any subordinate lienholder
with respect thereto, except to the extent that the obligations hereunder shall
have been reduced by the actual monetary consideration, if any, received by
Grantee for such release, and may accept by assignment, pledge or otherwise any
other property in place thereof as Grantee may require without being
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accountable for so doing to any other lienholder. This Deed shall continue as a
lien, security title and security interest in the remaining portion of the Trust
Property.
58. SUBROGATION. The Grantee shall be subrogated for further
security to the lien, although released of record, of any and all encumbrances
paid out of the proceeds of the Loan secured by this Deed.
59. ADMINISTRATIVE FEES. Grantee may charge administrative fees
and be reimbursed for all costs and expenses, including reasonable attorneys'
fees and disbursements, associated with reviewing and processing post-closing
requests of Grantor.
60. DISCLOSURE. Grantor represents and warrants that (a) it has
fully disclosed to Grantee all facts material to the Trust Property and the
operation and tenants thereof, the Grantor, the Grantor's business operations,
any guarantor of Non-Recourse Carveout Obligations, any indemnitor of
environmental liabilities, and any other Guarantor and any principal of any of
them and the background, creditworthiness, financial condition and business
operations of each, (b) to Grantor's best knowledge, all material information
submitted in connection with this Loan is true, correct and complete, (c) to
Grantor's best knowledge, the financial and operating statements and other
accounting information submitted in connection with the Loan are true, correct,
complete, and fairly present the financial condition of the Grantor, Guarantors
and Indemnitors and their respective principals and have been prepared
consistent with proper accounting standards; and (d) there is no litigation,
action, claim, or other proceeding, pending or threatened which might, in any
way, materially and/or adversely affect the Applicant, Grantor, any Guarantor,
any Indemnitor or the principals of any of them, or the Trust Property,
Grantee's lien, security title and security interest thereon, or the financial
condition of the Trust Property or any of the aforementioned persons; and a
misrepresentation or breach of any representation, warranty or covenant shall be
an Event of Default under the Loan Documents.
61. HEADINGS. ETC.. The headings and captions of various
paragraphs of this Deed are for convenience of reference only and are not to be
construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
62. ADDRESS OF REAL PROPERTY. The street address of the Real
Property is as follows: 11720 Medlock Bridge Road, Duluth, Georgia 30097.
63. INTENTIONALLY DELETED.
64. PUBLICITY. Grantor agrees that Grantee, at its expense, may
publicize the financing of the Trust Property in trade and similar publications.
65. RELATIONSHIP. The relationship of Grantee to Grantor under
this Deed is strictly and solely that of lender and borrower and nothing
contained in this Deed or any other Loan Document is intended to create, or
shall in any event or under any circumstance be construed to create, a
partnership, joint venture, tenancy-in-common, joint tenancy or other
relationship of any nature whatsoever between Grantee and Grantor other than
that of lender and borrower.
66. HOMESTEAD. Grantor hereby waives and renounces all homestead
and exemption rights provided by the constitution and the laws of the United
States and of any state, in and to the Land as against the collection of the
Indebtedness, or any part hereof.
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67. NO THIRD PARTY BENEFICIARIES. Nothing contained herein is
intended or shall be deemed to create or confer any rights upon any third person
not a party hereto, whether as a third-party beneficiary or otherwise, except as
expressly provided herein.
68. COMPLIANCE WITH REGULATION U. Grantor represents, warrants and
covenants that no part of the proceeds of the Loan will be used for the purpose
(whether immediate, incidental or ultimate) of buying or carrying any margin
stock within the meaning of Regulation U (12 CFR part 221) of the Board of
Governors of the Federal Reserve System of the United States or for the purpose
of reducing or retiring any indebtedness which was originally incurred for any
such purpose, or for any other purpose which might constitute this Loan a
"purpose credit" within the meaning of such Regulation U.
69. ENTIRE AGREEMENT. This Deed, the Note and the other Loan
Documents constitute the entire agreement among Grantor and Grantee with respect
to the subject matter hereof and all understandings, oral representations and
agreements heretofore or simultaneously had among the parties are merged in, and
are contained in, such documents and instruments.
70. SERVICER. Grantee may from time to time appoint a servicer
(the "SERVICER") to administer the Loan, which Servicer shall have the power and
authority to exercise all of the rights and remedies of Grantee and to act as
agent of Grantee hereunder.
71. GOVERNING LAW; CONSENT TO JURISDICTION. THIS DEED SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE IN WHICH THE
TRUST PROPERTY IS LOCATED WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.
EACH GRANTOR, ENDORSER AND GUARANTOR HEREBY SUBMITS TO PERSONAL JURISDICTION IN
SAID STATE AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN
SAID STATE (AND ANY APPELLATE COURTS TAKING APPEALS THEREFROM) FOR THE
ENFORCEMENT OF SUCH GRANTOR'S, ENDORSER'S OR GUARANTOR'S OBLIGATIONS HEREUNDER,
UNDER THE NOTE, THE GUARANTY AND THE OTHER LOAN DOCUMENTS, AND WAIVES ANY AND
ALL PERSONAL RIGHTS UNDER THE LAW OF ANY OTHER STATE TO OBJECT TO JURISDICTION
WITHIN SUCH STATE FOR THE PURPOSES OF SUCH ACTION, SUIT, PROCEEDING OR
LITIGATION TO ENFORCE SUCH OBLIGATIONS OF SUCH GRANTOR, ENDORSER OR GUARANTOR.
EACH GRANTOR, ENDORSER AND GUARANTOR HEREBY WAIVES AND AGREES NOT TO ASSERT, AS
A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
DEED, THE NOTE, ANY GUARANTY OR ANY OTHER LOAN DOCUMENT, (A) THAT IT IS NOT
SUBJECT TO SUCH JURISDICTION OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE
BROUGHT OR IS NOT MAINTAINABLE IN THOSE COURTS OR THAT THIS DEED, THE NOTE, THE
GUARANTY AND/OR ANY OF THE OTHER LOAN DOCUMENTS MAY NOT BE ENFORCED IN OR BY
THOSE COURTS OR THAT IT IS EXEMPT OR IMMUNE FROM EXECUTION, (B) THAT THE ACTION,
SUIT OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR (C) THAT THE VENUE OF
THE ACTION, SUIT OR PROCEEDING IS IMPROPER. IN THE EVENT ANY SUCH ACTION, SUIT,
PROCEEDING OR LITIGATION IS COMMENCED, GRANTOR, ENDORSER AND GUARANTOR AGREE
THAT SERVICE OF PROCESS MAY BE MADE, AND PERSONAL JURISDICTION OVER SUCH
GRANTOR, ENDORSER OR GUARANTOR OBTAINED, BY SERVICE OF A COPY OF THE SUMMONS,
COMPLAINT AND OTHER PLEADINGS REQUIRED TO COMMENCE SUCH LITIGATION UPON SUCH
GRANTOR, ENDORSER OR GUARANTOR AT 2901 BUTTERFIELD ROAD, OAK BROOK, ILLINOIS
60523.
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72. PHASE II PROPERTY; LETTER OF CREDIT. At the time of the
initial funding of the Loan, this Deed shall be and become a first lien,
security title and security interest upon certain improved property containing
approximately 167,475 net rentable square feet of retail space and associated
improvements which is legally described on Exhibit A attached hereto and made a
part hereof (the "Phase I Property"), as well as a first lien, security title
and security interest upon certain other property which will be improved and
thereafter consist of approximately 24,000 net rentable square feet of retail
space and associated improvements which is adjacent and contiguous to the Phase
I Property (the "Phase II Property"). As further security and collateral for the
Loan, Grantor has delivered to Deed a letter of credit in the amount of Eleven
Million Two Hundred Eighty-six Thousand Six Hundred Fifty-two and No/100 Dollars
($11,286,652.00), and has entered into a certain Transitional Security (Phase
II) Reserve Agreement (the "Phase II Reserve Agreement"). Upon satisfaction of
the Transition Conditions set forth in the Phase II Reserve Agreement, Grantee
shall thereafter return to Grantor the letter of credit theretofore deposited
with Grantee pursuant to the Phase II Reserve Agreement.
PART II - SPECIAL STATE PROVISIONS
73. SPECIAL STATE PROVISIONS. The provisions of this Part II are
an integral part of this Deed. In the event of any inconsistencies between the
terms and conditions of Parts I and II of this Deed, the terms and conditions of
Part II shall be controlling.
(a) MATURITY DATE. The Maturity Date of each note
comprising the Note, unless renewed or extended, is set forth on page 1 hereof.
(b) ATTORNEYS' FEES. In case the Note or this Deed or any
other Loan Document should be placed in the hands of an attorney at law for
collection or enforcement, Grantor agrees to pay all costs of collection or
enforcement including reasonable attorneys' fees.
(c) INTEREST BEFORE AND AFTER JUDGMENT. The Indebtedness
evidenced by the Note, all accrued and unpaid interest thereon and all other
sums evidenced and/or secured by the Loan Documents shall bear interest at the
Default Rate both before and after any judgment on the Indebtedness.
(d) CONVEYANCE TO OPERATE AS DEED TO SECURE DEBT. This
conveyance is intended to operate and is to be construed as a deed passing title
to the Trust Property to Grantee and is made under those provisions of the
existing laws of the State of Georgia relating to deeds to secure debt, and
shall not be construed as a Deed (notwithstanding the use of terms such as
"Deed", "Grantee", "Grantor" or "Trust Property" in this Deed or any of the Loan
Documents.
(e) POWER OF SALE. This paragraph shall be deemed to be
part of Section 21 (Additional Remedies) of this Deed, and shall be in addition
to and supplementary to the remedies provided in that Section. Whenever an Event
of Default under this Deed shall have occurred, Grantee, at its option, may sell
the Trust Property or any part of the Trust Property at one or more public sale
or sales at the usual place for conducting sales of the county in which the Land
or any part of the Land is situated, to the highest bidder for cash, in order to
pay the Indebtedness secured hereby, and all expenses of sale and of all
proceedings in connection therewith, including reasonable attorney's fees, after
advertising the time, place and terms of sale once a week for four (4) weeks
immediately preceding such sale (but without regard to the number of days) in a
newspaper in which sheriffs sales are advertised in said county, all other
notice being hereby waived by Grantor. At any such public sale, Grantee may
execute and deliver to the purchaser a conveyance of the Trust Property or any
part of the Trust Property in fee
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simple, with full warranties of title, and to this end Grantor hereby
constitutes and appoints Grantee the agent and attorney-in-fact of Grantor to
make such sale and conveyance, and thereby to divest Grantor of all right, title
and equity that Grantor may have in and to the Trust Property and to vest the
same in the purchaser or purchasers at such sale or sales, and all the acts and
doings of said agent and attorney-in-fact are hereby ratified and confirmed, and
any recitals in said conveyance or conveyances as to facts essential to a valid
sale shall be binding upon Grantor. The aforesaid power of sale and agency
hereby granted are coupled with an interest and are irrevocable by death or
otherwise, and shall not be exhausted by one exercise thereof but may be
exercised until full payment of all of the debt secured hereby. In the event of
any sale under this Deed by virtue of the exercise of the powers herein granted,
or pursuant to any order in any judicial proceeding or otherwise, the Trust
Property may be sold as an entirety or in separate parcels and in such manner
or order as Grantee in its discretion may elect, and if Grantee so elects,
Grantee may sell the personal property covered by this Deed at one or more
separate sales in any manner permitted by the Uniform Commercial Code, and one
or more exercises of the powers herein granted shall not extinguish nor exhaust
such powers, until the entire Trust Property are sold or the debt secured hereby
is paid in full. Grantee may, at its option, sell the Trust Property subject to
the rights of any tenants of the Trust Property, and the failure to make any
such tenants parties to any foreclosure proceedings and to foreclose their
rights will not be asserted by Grantor to be a defense to any proceedings
instituted by Grantee to collect the debt secured hereby. If the debt secured
hereby is now or hereafter further secured by any chattel Deeds, pledges,
contracts of guaranty, assignments of lease or other security deeds, Grantee may
at its option exhaust the remedies granted under any of said security either
concurrently or independently, and in such order as Grantee may determine in its
discretion. Upon any foreclosure sale, Grantee may bid for and purchase the
Trust Property and shall be entitled to apply all or any part of the debt
secured hereby as a credit to the purchase price. In the event of any such
foreclosure sale by Grantee, Grantor shall be deemed a tenant holding over and
shall forthwith deliver possession to the purchaser or purchasers at such sale
or be summarily dispossessed according to provisions of law applicable to
tenants holding over. In case Grantee shall have proceeded to enforce any right,
power or remedy under this Deed by foreclosure, entry or otherwise or in the
event Grantee commences advertising of the intended exercise of the sale under
power provided hereunder, and such proceeding or advertisement shall have been
withdrawn, discontinued or abandoned for any reason, then in every such case (i)
Grantor and Grantee shall be restored to their former positions and rights, (ii)
all rights, powers and remedies of Grantee shall continue as if no such
proceeding had been taken, (iii) each and every Event of Default declared or
occurring prior or subsequent to such withdrawal, discontinuance or abandonment
shall be deemed to be a continuing Event of Default, and (iv) neither this Deed,
nor the Note, nor the other debt secured hereby, nor any Loan Document shall be
or shall be deemed to have been reinstated or otherwise affected by such
withdrawal, discontinuance or abandonment; and Grantor hereby expressly waives
the benefit of any statute or rule of law now provided, or which may hereafter
be provided, which would produce a result contrary to or in conflict with this
sentence. In the event of a sale of the Trust Property or any part thereof, the
proceeds of sale shall be applied as set forth in Section 2l(b) of this Deed.
(f) WAIVER OF GRANTOR'S RIGHTS. BY EXECUTION OF THIS DEED
AND BY INITIALING THIS SECTION, GRANTOR EXPRESSLY: (A) ACKNOWLEDGES THE RIGHT OF
GRANTEE TO ACCELERATE THE INDEBTEDNESS EVIDENCED BY THE NOTE, AND ANY OTHER
INDEBTEDNESS AND THE POWER OF ATTORNEY GIVEN HEREIN TO GRANTEE TO SELL THE
SECURED PREMISES BY NONJUDICIAL FORECLOSURE UPON DEFAULT BY GRANTOR WITHOUT ANY
JUDICIAL HEARING AND WITHOUT ANY NOTICE OTHER THAN SUCH NOTICE (IF ANY) AS IS
SPECIFICALLY REQUIRED TO BE GIVEN UNDER THE PROVISIONS OF THIS DEED OR THE NOTE
OR THE OTHER NOTES OR ANY OTHER DEBT SECURED HEREBY; (B) WAIVES ANY AND ALL
RIGHTS WHICH GRANTOR MAY HAVE UNDER THE CONSTITUTION OF THE UNITED STATES OF
AMERICA (INCLUDING, WITHOUT
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LIMITATION, THE FIFTH AND FOURTEENTH AMENDMENTS THEREOF), THE VARIOUS PROVISIONS
OF THE CONSTITUTIONS FOR THE SEVERAL STATES, OR BY REASON OF ANY OTHER
APPLICABLE LAW, (1) TO NOTICE AND TO JUDICIAL HEARING PRIOR TO THE EXERCISE BY
GRANTEE OF ANY RIGHT OR REMEDY HEREIN PROVIDED TO GRANTEE, EXCEPT SUCH NOTICE
(IF ANY) AS IS SPECIFICALLY REQUIRED TO BE GIVEN UNDER THE PROVISIONS OF THIS
DEED OR THE NOTE OR THE OTHER NOTES OR ANY OTHER DEBT SECURED HEREBY; AND (2)
CONCERNING THE APPLICATION, RIGHTS OR BENEFITS OF ANY STATUTE OF LIMITATION OR
ANY MORATORIUM, REINSTATEMENT, MARSHALLING, FORBEARANCE, APPRAISEMENT,
VALUATION, STAY, EXTENSION, HOMESTEAD, EXEMPTION OR REDEMPTION LAWS; (C)
ACKNOWLEDGES THAT GRANTOR HAS READ THIS DEED AND ANY AND ALL QUESTIONS OF
GRANTOR REGARDING THE LEGAL EFFECT OF THIS DEED AND ITS PROVISIONS HAVE BEEN
EXPLAINED FULLY TO GRANTOR, AND GRANTOR HAS CONSULTED WITH COUNSEL OF GRANTOR'S
CHOICE PRIOR TO EXECUTING THIS DEED AND INITIALING THIS SECTION; AND (D)
ACKNOWLEDGES THAT ALL WAIVERS OF THE AFORESAID RIGHTS OF GRANTOR HAVE BEEN MADE
KNOWINGLY, INTENTIONALLY AND WILLINGLY BY GRANTOR AS PART OF A BARGAINED FOR
LOAN TRANSACTION AND THAT THIS DEED IS VALID AND ENFORCEABLE BY GRANTEE AGAINST
GRANTOR IN ACCORDANCE WITH ALL THE TERMS AND CONDITIONS HEREOF.
INITIALED BY GRANTOR:
/s/ Debra A Palmer
-------------------
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IN WITNESS WHEREOF, Grantor has duly executed and delivered this Deed under
seal as of the day and year first above written.
INLAND WESTERN DULUTH JOHN'S CREEK
SPE, L.L.C., a Delaware limited liability company
By: Inland Western Duluth John's Creek, L.L.C., a
Delaware limited liability company, its Sole
Member
By: Inland Western Retail Real Estate Trust,
Inc., a Maryland corporation, its Sole
Member
By: /s/ Debra A Palmer
---------------------------
Name: Debra A Palmer
-------------------------
Title: Asst Secretary
------------------------
Attest:
/s/ Valerie Medina
- --------------------------
(Assistant) Secretary
[Affix Corporate Seal]
Signed, sealed and delivered
in the presence of:
/s/ [ILLEGIBLE]
- -------------------------
Unofficial Witness
/s/ [ILLEGIBLE]
- -------------------------
Notary Public
(Notarial Seal)
Commission Expiration Date: 11-14-2004
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EXHIBIT A
DESCRIPTION OF LAND
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