Maximum principal indebtedness for Tennessee recording tax purposes is $36,910,642.12. DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING BORROWER: EQRT 1500 SHOALS, L.P., a Delaware limited partnership and BENEFICIARY: STATE FARM LIFE INSURANCE...

 

Exhibit 10.14.1

 

This instrument was prepared by

and upon recordation should be

returned to:

 

▇▇▇▇▇▇▇▇ & English, LLP

Four Gateway Center

▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇

Newark, New Jersey 07102

Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.

 

Maximum principal indebtedness for Tennessee recording tax purposes is $36,910,642.12.

 

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING

 

BORROWER:

 

EQRT 1500 SHOALS, L.P., a Delaware limited partnership

and

 

BENEFICIARY:

 

STATE FARM LIFE INSURANCE COMPANY, an Illinois insurance company

 

DATE: August 15, 2024

 

TRUSTEE:

 

▇▇▇▇ ▇▇▇, an individual

 

NOTICE: PURSUANT TO SECTIONS 47-9-323 AND ▇▇-▇▇-▇▇▇ OF THE TENNESSEE CODE ANNOTATED: THIS DEED OF TRUST SECURES FUTURE ADVANCES WHICH ARE OBLIGATORY ADVANCES AS DEFINED IN THE AFORESAID STATUTE. THIS DEED OF TRUST IS FOR “COMMERCIAL PURPOSES” PURSUANT TO SECTION ▇▇-▇▇-▇▇▇ ET SEQ. OF SUCH CODE.

 

THIS DEED OF TRUST ALSO IS A UNIFORM COMMERCIAL CODE FINANCING STATEMENT WHICH IS BEING FILED AS A FIXTURE FILING IN ACCORDANCE WITH T.C.A. § 47-9-502. THE BORROWER IS THE RECORD OWNER OF THE REAL ESTATE. THE COLLATERAL DESCRIBED HEREIN IS OR IS TO BECOME FIXTURES ON THE REAL ESTATE DESCRIBED HEREIN. THE NAMES AND ADDRESSES OF THE BORROWER AND SECURED PARTY ("BENEFICIARY" OR "LENDER" HEREIN) ARE LISTED IN THE PREAMBLE OF THIS DEED OF TRUST.

 

Loan No. _______ 

 

 

 

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING

 

THIS DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING (this "Deed of Trust") is made and executed as of the 15th day of August, 2024, by EQRT 1500 SHOALS, L.P., a Delaware limited partnership ("Borrower"), whose mailing address is c/o EQT Exeter, Five Radnor Corporate Center, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, to ▇▇▇▇ ▇▇▇, whose mailing address is c/o First American Title Insurance Company, ▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, a resident of Shelby County, Tennessee (the "Trustee"), for the benefit of STATE FARM LIFE INSURANCE COMPANY, an Illinois insurance company ("Lender"), whose mailing address is Attn: Law Department – Investments, Loan # ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and pertains to the real estate described on Exhibit A attached hereto and made a part hereof (the "Real Estate").

 

ARTICLE One
RECITALS

 

1.1            Note.

 

▇▇▇▇▇▇▇▇, et al., have executed and delivered to Lender a certain Promissory Note (the "Note") of even date herewith. In the Note, ▇▇▇▇▇▇▇▇ promises to pay to the order of Lender the principal sum of up to One Hundred Nine Million Six Hundred Thousand and 00/100 Dollars ($109,600,000.00) (the "Loan"). This Deed of Trust secures the Loan. From the date hereof, the Loan shall be repaid with interest thereon, in monthly installments as set forth in the Note, and the entire unpaid principal balance and all accrued interest thereon shall be due and payable on September 1, 2034 (the "Maturity Date"). The terms and provisions of the Note are by this reference incorporated herein and made a part hereof.

 

1.2            Indebtedness.

 

As used herein, the term "Indebtedness" means (a) the indebtedness evidenced by the Note, including principal, interest and prepayment premium, if any; and (b) all other sums which may at any time be due, owing or required to be paid under the Note, this Deed of Trust and the other Loan Documents (as defined in Section 1.3) including, without limitation, sums owing from or required to be paid by ▇▇▇▇▇▇▇▇ as a result of the breach or non-performance of any of the Obligations (as defined in Article Two), regardless of whether ▇▇▇▇▇▇▇▇ is personally liable for any such payment.

 

1.3            Loan Documents.

 

In addition to this Deed of Trust and the Note, there have been executed and delivered to and in favor of Lender certain other loan documents all of even date with the Note (the Note, this Deed of Trust, a Deed of Trust, Security Agreement and Fixture Filing executed by EQRT 110 Southeast Inner Loop, L.P. and a Cash Collateral Security and Escrow Agreement executed by Borrower and all other documents and instruments, whether now or hereafter existing, which secure or guarantee payment of the Note or are otherwise executed in connection with the Loan, as the same may hereafter be amended, modified, supplemented or replaced from time to time, are collectively referred to herein as the "Loan Documents").

 

 

ARTICLE Two
THE GRANT

 

In order to secure (i) the payment of the Indebtedness; and (ii) the performance of any of the terms, provisions, covenants, agreements, representations, warranties, certifications and obligations contained herein or under the other Loan Documents (collectively, the "Obligations"), regardless of whether Borrower is personally liable for such performance and observance, and in consideration of the sum of Ten and No/100 Dollars ($10.00) in hand paid by ▇▇▇▇▇▇ to Borrower, the Recitals hereinabove stated in Article One and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower hereby irrevocably and unconditionally grants, bargains, sells, assigns, warrants, releases, aliens, transfers, and conveys to Trustee IN TRUST for the benefit of Lender and its successors and assigns forever, WITH THE POWER OF SALE and right of entry and possession, all of Borrower’s existing and after-acquired right, title and interest in, to and under the following property, rights, interests and estates now owned, or hereafter acquired by Borrower (collectively, the "Secured Property") to and for the use, benefit and behalf of Lender and its successors and assigns forever:

 

(a)            all the Real Estate;

 

(b)            all buildings, structures and other improvements now or hereafter constructed, erected, installed, placed or situated upon the Real Estate (collectively, the "Improvements");

 

(c)            all estate, claim, demand, right, title and interest of Borrower now owned or hereafter acquired, including, without limitation, any after-acquired title, franchise, license, remainder or reversion, in and to (i) any land or vaults lying within the right-of-way of any street, avenue, way, passage, highway or alley, open or proposed, vacated or otherwise, adjoining the Real Estate; (ii) any and all alleys, sidewalks, streets, avenues, strips and gores of land adjacent, belonging or appertaining to the Real Estate and Improvements; (iii) all rights of ingress and egress to and from the Real Estate and all adjoining property; (iv) storm and sanitary sewer, water, gas, electric, railway, telephone and all other utility services relating to the Real Estate and Improvements; (v) all land use, zoning, developmental rights and approvals, air rights, water, water rights, water stock, gas, oil, minerals, coal and other substances of any kind or character underlying or relating to the Real Estate or any part thereof; and (vi) each and all of the tenements, hereditaments, easements, appurtenances, other rights, liberties, reservations, allowances and privileges relating to the Real Estate or the Improvements or in any way now or hereafter appertaining thereto, including homestead and any other claim at law or in equity (collectively, the "Appurtenances");

 

(d)            all leasehold estates and the right, title and interest of ▇▇▇▇▇▇▇▇ in, to and under any and all leases, subleases, management agreements, arrangements, concessions or agreements, written or oral, relating to the use and occupancy of the Real Estate and Improvements or any portion thereof, now or hereafter existing or entered into together with all extensions, renewals, amendments, modifications, replacements and substitutions therefor, including any Major Leases and Minor Leases, each as defined in Section 3.18 (individually, a "Lease" and collectively, the "Leases");

 

 

(e)            all rents, issues, profits, proceeds, income, revenues, royalties, advantages, avails, claims against guarantors, security and other deposits (whether in the form of cash, letters of credit or other forms), advance rentals and any and all other payments or benefits now or hereafter derived, directly or indirectly, from the Real Estate and Improvements, whether under the Leases or otherwise (collectively, the "Rents"); subject, however, to the right, power and authority (the “License”) granted ▇▇▇▇▇▇▇▇ in the Assignment of ▇▇▇▇▇ and Leases executed by ▇▇▇▇▇▇▇▇ to and in favor of ▇▇▇▇▇▇ of even date herewith to collect and apply the Rents as provided therein;

 

(f)            all right, title and interest of Borrower in and to any and all contracts, written or oral, express or implied, now existing or hereafter entered into or arising, in any manner related to the improvement, use, operation, sale, conversion or other disposition of any interest in the Secured Property, including, without limitation, all options to purchase or lease the Real Estate or Improvements or any portion thereof or interest therein, or any other rights, interests or greater estates in the rights and properties comprising the Secured Property, now owned or hereafter acquired by Borrower (collectively, the "Contract Rights");

 

(g)            all general intangibles of ▇▇▇▇▇▇▇▇, including, without limitation, goodwill, trademarks, trade names, option rights, permits, licenses, insurance policies and proceeds therefrom, rights of action and books and records relating to the Real Estate or Improvements (collectively, the "Intangible Personal Property");

 

(h)            all right, title and interest of Borrower in and to all fixtures, equipment and tangible personal property of every kind, nature or description attached or affixed to or situated upon or within the Real Estate or Improvements, or both, provided the same are used, usable or intended to be used for or in connection with any present or future use, occupation, operation, maintenance, management or enjoyment of the Real Estate or Improvements (collectively, the "Tangible Personal Property");

 

(i)            all proceeds of the conversion, voluntary or involuntary, of any of the Secured Property into cash or other liquidated claims or that are otherwise payable for injury to, or the taking or requisitioning of the Secured Property, including all insurance and condemnation proceeds as provided in this Deed of Trust (collectively, the "Proceeds");

 

(j)            all Tax and Insurance Deposits (as defined in Section 3.3);

 

(k)            all of Borrower's right, power or privilege to further hypothecate or encumber all or any portion of the property, rights and interests described in this Article Two as security for any debt or obligation, it being intended by this provision to divest Borrower of the right, power and privilege to hypothecate or encumber, or to grant a mortgage upon or security interest in any of the property hypothecated in or encumbered by this Deed of Trust, as security for the payment of any debt or performance of any obligation without ▇▇▇▇▇▇'s prior written consent (collectively, the "Right to Encumber"); and

 

 

(l)            all other property, rights, interests, estates or claims of every name, kind, character or nature, both in law and in equity, which Borrower now has or may hereafter acquire in the Real Estate and Improvements and all other property, rights, interests, estates or claims of any name, kind, character or nature or properties now owned or hereafter acquired in the other properties, rights and interests comprising the Secured Property (collectively, the "Other Rights and Interests").

 

▇▇▇▇▇▇▇▇ AGREES that without the necessity of any further act of Borrower or Lender, the lien of and the security interest created in and by this Deed of Trust shall automatically extend to and include any and all renewals, replacements, substitutions, accessions, products or additions to and proceeds of the Secured Property and any real property acquired by Borrower which may be contiguous or attached to the Secured Property and may be required by law or by a tenant of the Secured Property to be used in or as part of the direct operation of the Secured Property.

 

TO HAVE AND TO HOLD the Secured Property unto Trustee, its successors and assigns in trust for the benefit of Lender and its successors and assigns, forever IN FEE SIMPLE, free from all rights and benefits under and by virtue of any homestead exemption laws or similar laws of the state or other jurisdiction in which the Secured Property is located (the "State") (which rights and benefits are hereby expressly released and waived) for the uses and purposes herein set forth.

 

AND without limiting any of the other provisions of this Deed of Trust, to the extent permitted by applicable law, Borrower expressly grants to Lender as secured party, a present and continuing lien upon and security interest in and to all of the portion of the Secured Property which is or may be subject to the provisions of the Uniform Commercial Code which are applicable to secured transactions; it being understood and agreed that the Improvements and the Tangible Personal Property that are so attached or affixed to the Real Estate or the Improvements as to constitute a fixture under the laws of Tennessee (collectively, the “Fixtures”) are part and parcel of the Real Estate (the Real Estate, the Improvements and the Fixtures collectively referred to as the “Real Property”) appropriated to the use thereof and, whether affixed or annexed to the Real Property or not, shall for the purposes of this Deed of Trust be deemed conclusively to be real estate and subject to this Deed of Trust.

 

BORROWER hereby covenants with and warrants to Lender and with the purchaser at any foreclosure sale that at the execution and delivery hereof, Borrower owns the Secured Property and has a good and indefeasible estate therein in fee simple; that the Secured Property is free from all encumbrances whatsoever (and any claim of any other Person (as defined below) thereto) other than those encumbrances set forth on Exhibit B attached hereto and made a part hereof (the "Permitted Encumbrances"); that ▇▇▇▇▇▇▇▇ has good and lawful right to sell, convey, mortgage and encumber the Secured Property; and that Borrower and its successors and assigns shall forever warrant and defend the title to the Secured Property against all claims and demands whatsoever. As used herein, "Person" means any natural person, corporation, limited liability company, partnership, firm, association, government, governmental agency or any other entity, whether acting in an individual, fiduciary or other capacity.

 

 

PROVIDED, HOWEVER, that this is a deed of trust; and if and when ▇▇▇▇▇▇▇▇ has paid all of the Indebtedness and has strictly performed and observed all of the agreements, terms, conditions, provisions and warranties contained in this Deed of Trust and in all of the other Loan Documents, the estate, right, title and interest of Trustee and Lender in and to the Secured Property shall be released at the cost of Borrower, but otherwise shall remain in full force and effect.

 

This Deed of Trust secures all present and future indebtedness of Borrower with respect to loan disbursements made by Lender, its successors or assigns, under the Loan Documents, and all other amounts from time to time owing to Lender, its successors or assigns, by Borrower under the Loan Documents.

 

ARTICLE Three
GENERAL AGREEMENTS

 

To protect the security of this Deed of Trust, Borrower further covenants and agrees as follows:

 

3.1            Recitals.

 

The recitals set forth above are true and correct and are material provisions of this Deed of Trust.

 

3.2            Payment of Indebtedness.

 

Borrower shall pay promptly the Indebtedness at the times and in the manner provided in the Loan Documents. All such sums payable by Borrower shall be paid without demand, counterclaim, offset, deduction or defense. Borrower hereby waives all rights now or hereafter conferred by statute or otherwise to any such demand, counterclaim, offset, deduction or defense.

 

3.3            Other Payments.

 

(a)            In addition to and concurrent with the monthly installment payments required by the Note, Borrower shall pay to Lender (or its designee) the following sums on a monthly basis until the Indebtedness is fully paid (collectively, the "Tax and Insurance Deposits"):

 

(i)            a sum equal to one-twelfth (1/12th) of the annual Taxes (as defined in Section 3.5) next due on the Secured Property, all as estimated by ▇▇▇▇▇▇ (the "Tax Deposits"); and

 

(ii)            a sum equal to one-twelfth (1/12th) of the annual premium or premiums next payable for the insurance herein required to be maintained on or with respect to the Secured Property (collectively, "Insurance Premiums"), all as demonstrated to or estimated by ▇▇▇▇▇▇ (the "Insurance Deposits").

 

(b)            Should the total Tax and Insurance Deposits on hand not be sufficient to pay all of the Taxes and Insurance Premiums, together with all penalties and interest thereon, when the same become due and payable, Borrower shall pay to Lender promptly on demand any amount necessary to make up the deficiency. If the total of such Tax and Insurance Deposits exceeds the amount required to pay the Taxes and Insurance Premiums, such excess shall be credited on subsequent payments to be made for such items.

 

  

(c)            All such Tax and Insurance Deposits:

 

(i)            shall be held by Lender or a depository designated by Lender with no obligation to segregate such payments and without any obligation arising for the payment of any interest thereon;

 

(ii)           shall be applied by Lender for the purposes for which made (as herein provided), subject, however, to the security interest granted Lender therein pursuant to Article Two; and

 

(iii)          shall not be subject to the direction or control of Borrower.

 

(d)            Provided that no Event of Default (as defined in Section 4.1) exists and there are sufficient funds in the Tax and Insurance Deposits, ▇▇▇▇▇▇ agrees to make the payment of the Taxes or Insurance Premiums with reasonable promptness following its receipt of appropriate tax and/or insurance bills therefor, or, alternatively, upon presentation by Borrower of receipted (i.e. paid) tax and/or insurance bills therefor, Lender shall reimburse Borrower for such Taxes and Insurance Premium payments made by Borrower.

 

(e)            Upon the occurrence of an Event of Default, Lender may, at its option, without being required to do so, apply any Tax and Insurance Deposits on hand to the payment of any of the Indebtedness, in such order and manner as Lender may elect. When the Indebtedness has been fully paid, any remaining Tax and Insurance Deposits shall be paid to Borrower.

 

3.4            Maintenance, Repair, Restoration, Prior Liens, Parking.

 

▇▇▇▇▇▇▇▇ shall and hereby agrees to:

 

(a)            promptly repair, restore, replace or rebuild any portion of the Improvements which may become damaged or destroyed, provided the proceeds of insurance are made available to Borrower pursuant to Section 3.10 hereof, with all replacements being at least equal in quality and condition as existed prior thereto, free from any security interest therein, encumbrances thereon or reservation of title thereto;

 

(b)            keep the Improvements in good condition and repair, without waste and free from mechanics', materialmen's or similar or other liens or claims of lien;

 

(c)            complete, within a reasonable time, any Improvements now or hereafter in the process of construction upon the Real Estate;

 

(d)            comply with all statutes, rules, regulations, orders, decrees and other requirements of any governmental body, whether federal, state or local, having jurisdiction over the Secured Property and the use thereof and observe and comply with any conditions and requirements necessary to preserve and extend any and all rights, licenses, permits (including without limitation zoning variances, special exceptions and nonconforming uses), privileges, franchises and concessions that are applicable to the Secured Property or its use and occupancy;

 

 

(e)            make no material alterations in or to the Improvements, except as required in subsection (d) hereof or otherwise with the prior written consent of Lender and in conformity with all applicable laws; provided, however, upon written notice to Lender, Borrower may make (i) such alterations required by the terms of any Major Lease provided that Lender has previously reviewed and approved such Major Lease and (ii) non-structural repairs or alterations required by the terms of any Minor Lease or structural alterations or structural repairs required by the terms of any Minor Lease costing in the aggregate less than $250,000 per year (▇▇▇▇▇▇’s consent to structural repairs in excess of $250,000 shall be limited to review and approval of the structural change, not approval or rejection of such Minor Lease);

 

(f)            not suffer nor permit any change in the general use (i.e. office/warehouse) of the Improvements without the prior written consent of Lender;

 

(g)            pay when due all operating costs of the Improvements;

 

(h)            not initiate nor acquiesce in any zoning reclassification with respect to the Secured Property without the prior written consent of ▇▇▇▇▇▇;

 

(i)            provide and thereafter maintain, clean, repair and adequately light all parking areas upon the Real Estate, such parking areas being of sufficient size to accommodate the greater of the amount of standard-size vehicles required (A) by law, ordinance or regulation; or (B) by the terms of any Leases, together with any sidewalks, aisles, streets, driveways and sidewalk cuts and sufficient paved areas for ingress, egress and rights-of-way to and from the adjacent thoroughfares necessary or desirable for the use thereof to the extent required by applicable law or any Lease; and

 

(j)            forever warrant and defend its title to the Secured Property and the validity, enforceability and priority of the lien and security interests granted in and by this Deed of Trust and the other Loan Documents against the claims and demands of all Persons.

 

3.5            Property Taxes and Contest of Liens.

 

Notwithstanding the Tax and Insurance Deposits required by Section 3.3, Borrower shall be responsible for the payment, when first due and owing and before delinquency and before any penalty attaches, of all real estate and personal property taxes and assessments (general or special), water charges, sewer charges and any other charges, fees, taxes, claims, levies, charges, expenses, liens and assessments, ordinary or extraordinary, governmental or nongovernmental, statutory or otherwise, that may be levied, assessed or asserted against the Secured Property or any part thereof or interest therein (collectively, "Taxes"). Notwithstanding anything contained herein to the contrary, Borrower may, in good faith and with reasonable diligence, contest the validity or amount of any Taxes as well as any mechanics', materialmen's or other liens or claims of lien upon the Secured Property (collectively, the "Contested Liens"), provided that:

 

(a)            such contest shall have the effect of preventing the collection of the Contested Liens and the sale or forfeiture of the Secured Property or any part thereof or interest therein to satisfy the same; and

 

 

(b)            ▇▇▇▇▇▇▇▇ shall first notify Lender in writing of the intention of Borrower to contest the same before any Contested Liens have been increased by any interest, penalties or costs.

 

3.6            Tax and Lien Payments by ▇▇▇▇▇▇.

 

(a)            Upon the failure of Borrower to pay the Tax Deposits as required in Section 3.3 or, in the event said payments are waived by ▇▇▇▇▇▇, to pay the Taxes required to be paid in Section 3.5 above (unless Borrower is contesting the Taxes as provided in Section 3.5 above), Lender is authorized, in its sole discretion, to make any payment of Taxes in accordance with any tax bill or statement from the appropriate public office without inquiry into the accuracy or validity of any Taxes, sales, forfeiture of title or claim relating thereto.

 

(b)            Lender is also authorized, in the place and stead of Borrower, upon ten (10) business days prior written notice to Borrower (unless Lender reasonably determines that sooner action is required in order to protect the priority of the lien of this Deed of Trust), to make any payment relating to any apparent or threatened adverse title, lien, claim of lien, encumbrance, claim, charge or payment otherwise relating to any other purpose but not enumerated in this Section, whenever, in Lender’s good faith judgment and discretion, such payment is necessary to protect the full security intended to be created by this Deed of Trust; provided, however, Lender shall not make any such payment on behalf of Contested Liens provided that Borrower satisfies the provisions of Sections 3.5(a) and (b) above.

 

(c)            All such payments authorized by this Section 3.6 that are not promptly reimbursed by Borrower shall constitute additional Indebtedness and shall be immediately due and payable by Borrower to Lender within ten (10) business days following written demand with interest at the Default Rate (as defined in the Note) from the date such payment is due until paid.

 

3.7            Insurance.

 

(a)            Borrower shall insure and keep insured the Secured Property and each and every part thereof with the following insurance policies:

 

(i)            Property insurance insuring against all risks of loss to the Secured Property customarily covered by "Causes of Loss—Special Form" policies, including the perils of acts of terrorism, wind/hail and named windstorm, in an amount at least equal to one hundred percent (100%) of the replacement cost value of the Improvements, without deduction for physical depreciation, with (A) a maximum deductible of $100,000 (provided that wind/hail losses may have a maximum deductible of three percent (3%) of the total insurable value of the Improvements and named windstorm losses may have a maximum deductible of five percent (5%) of the total insurable value of the Improvements) and (B) a provision that claims be settled on a replacement cost valuation basis;

 

 

(ii)           Equipment breakdown insurance in an amount equal to one hundred percent (100%) of the replacement cost value of the Improvements, if any steam boiler, machinery or other pressure-fired vessel is in operation at the Secured Property, (A) with a maximum deductible of $100,000 and (B) provides that claims will be settled on a replacement cost valuation basis. If coverage is provided via a separate policy than the coverage in clause (i) above, both policies shall include a joint loss agreement;

 

(iii)          Flood insurance, if any Improvements are situated in an area now or hereafter designated by the Federal Emergency Management Agency as a "Special Flood Hazard Area" (Zone A or Zone V), in an amount equal to the greater of (A) an amount equal to one hundred percent (100%) of the replacement cost value of such Improvements or (B) the maximum limit of coverage available for the Secured Property under the National Flood Insurance Program, with a maximum deductible of $100,000;

 

(iv)           Earthquake insurance on any Improvements situated in an area now or hereafter with a seismic Scenario Upper Loss (SUL) of sixteen percent (16%) or greater, in an amount equal to one hundred percent (100%) of the replacement cost value of such Improvements with a maximum deductible of five percent (5%) of the total insurable value of the Improvements;

 

(v)            Ordinance or law coverage in an amount equal to the following minimum percentages of the insurable replacement cost of the Improvements: (A) one hundred percent (100%) for loss to the undamaged portion of the building, (B) ten percent (10%) for demolition cost, and (C) ten percent (10%) for increased cost of construction;

 

(vi)           Rental value or business income insurance, including extra expense coverage, that provides coverage upon the occurrence of any of the perils in clauses (i), (ii), (iii) and (iv) above as applicable to the Secured Property in an amount equal to the total income or anticipated gross income from the Secured Property for a minimum of twelve (12) months with an extended period of indemnity endorsement for a period of at least one hundred eighty (180) days and a maximum deductible of $100,000 or a seventy-two (72) hour waiting period;

 

(vii)          Builder's risk insurance on any Improvements being constructed, added onto or altered by ten percent (10%) or more of the value of such Improvements. Coverage must be written on a "completed value form" in an amount equal to one hundred percent (100%) of the hard and soft costs of the project and (A) with a maximum deductible of $100,000 (provided that wind/hail losses may have a maximum deductible of three percent (3%) of the total insurable value of the Improvements and named windstorm losses may have a maximum deductible of five percent (5%) of the replacement cost value of all Improvements), (B) provide that claims will be settled on a replacement cost valuation basis, (C) include collapse during the course of construction as a covered peril, including for defective materials and methods and faulty design or workmanship, and (D) include coverage for delayed completion/opening. All Builder's Risk coverage terms and conditions are subject to ▇▇▇▇▇▇'s approval and must meet all conditions of clauses (i) – (vi) above as applicable.

 

(viii)        Commercial general liability insurance, including terrorism, for bodily injury, death and property damage and contractual liability in an amount of not less than the greater of (A) $1,000,000 per occurrence and $2,000,000 in the aggregate, per location or (B) the highest amount of coverage required to be carried by Borrower under the terms of any Major Lease or other contractual obligation, with a maximum deductible or self-insured retention of $10,000;

 

 

(ix)          Commercial automobile liability insurance, if the Secured Property involves the business use of any cars, trucks or vans, in an amount not less than a combined single limit of $1,000,000 each accident to include any auto or at a minimum all owned and non-owned autos;

 

(x)            Umbrella or excess liability insurance consistent with the terms of the coverage carried pursuant to clauses (viii) and (ix) in an amount of not less than the greater of (A) $5,000,000 per occurrence, (B) the highest amount of coverage required to be carried by Borrower under the terms of any Major Lease or other contractual obligation, or (C) such higher amount as Lender may require based on the occupancy, use or known physical (including environmental) or legal characteristics of the Secured Property, with a maximum deductible or self-insured retention of $10,000; and

 

(xi)          Such other insurance coverages on the Secured Property as may from time to time be required by ▇▇▇▇▇▇ (A) by reason of changes to the known physical (including environmental) or legal characteristics of the Secured Property, or (B) with respect to mortgage loans secured by industrial real estate projects.

 

(b)            All insurance policies required pursuant to Section 3.7(a) shall: (i) be in amounts and form to comply with all provisions of this Deed of Trust; (ii) be issued by companies satisfactory to Lender with a minimum A.M. Best Financial Strength rating of “A-“ and Financial Size Category of “VIII”; (iii) be for a policy term of not less than one year and paid in accordance with the carrier’s customary payment terms; (iv) name ▇▇▇▇▇▇▇▇ (with proper legal name) as Named Insured, Additional Named Insured or Additional Insured; and (v) only contain exclusions to coverage that are acceptable to Lender.

 

(c)            All insurance policies required pursuant to clauses (i)—(vii) of Section 3.7(a) shall include: (i) a standard non-contributory mortgagee's clause naming ▇▇▇▇▇▇ as first mortgagee; (ii) lender's loss payable endorsement for rent loss or business interruption insurance; (iii) either an agreed amount endorsement (to avoid the operation of any coinsurance provisions) or a waiver of any coinsurance or similar provisions, and (iv) a provision requiring not less than ten (10) days' prior written notice to Lender of any nonrenewal or cancellation for non-payment of premium and not less than thirty (30) days' prior written notice of cancellation for any other reason.

 

(d)            All insurance policies required pursuant to clauses (viii)—(x) of Section 3.7(a) shall: (i) name Lender as an additional insured, (ii) be written on an occurrence basis form, and (iii) require the carrier to endeavor to provide not less than ten (10) days' prior written notice to Lender of any nonrenewal or cancellation for non-payment of premium and not less than thirty (30) days' prior notice of cancellation for any other reason.

 

 

(e)            The insurance policies required in Section 3.7(a) may be satisfied by individual policies covering only the Secured Property or by blanket policies covering the Secured Property and other locations. If blanket policies are utilized, then (i) coverage needs to be equivalent or better than coverage that would be provided on a scheduled policy, (ii) a statement of values must be provided in an electronic spreadsheet for all properties covered by the blanket property coverage limit, which shall include, at a minimum, information as to the city, state, and value for each coverage type for each location, (iii) any Margin Clause, Per Location Limitation of Liability provision or similar clause tying the property coverage limit to a reported value must not reduce coverage on the Secured Property to less than one hundred percent (100%) of its insurable replacement value, (iv) the full blanket limit(s) must be reinstated following any loss, (v) if a layered policy program is utilized, all layers must coordinate to eliminate any gaps in coverage, and (vi) coverage may only include properties owned by Borrower and its affiliates.

 

(f)            The following evidence of the required property coverage shall be delivered to Lender at least fifteen (15) days prior to the current policy expiration: (i) a complete copy of the insurance policy, including all policy forms and endorsements; or (ii) an ▇▇▇▇▇ 28 (2003 version providing all of the rights and privileges of the policy), or a similar proprietary version. If (i) or (ii) cannot be provided prior to the current policy expiration, an ▇▇▇▇▇ 28 (Information Only version), or a similar proprietary version or an ▇▇▇▇▇ 75 Binder that includes all insurance requirements listed above, will be accepted temporarily until a complete copy of the policy can be provided, but no later than the Binder expiration or ninety (90) days, whichever is earlier.

 

(g)            The following evidence of the required liability coverage shall be delivered to Lender at least fifteen (15) days prior to the current policy expiration: (i) a complete copy of the insurance policy, including all policy forms and endorsements; or (ii) an ▇▇▇▇▇ 25 Certificate of Liability Insurance, in addition to the required Additional Insured endorsements. If (i) or (ii) cannot be provided prior to the current policy expiration, an ▇▇▇▇▇ 25 Certificate of Liability Insurance, or similar proprietary form or an ▇▇▇▇▇ 75 Binder that includes all insurance requirements above will be accepted temporarily until a complete copy of the policy or the required endorsements can be provided, but no later than the Binder expiration or ninety (90) days, whichever is earlier.

 

(h)            If property or liability coverage is provided via a multi-year policy, new certificates of insurance must be provided annually during the interim years of the policy and must note all current coverage limits and/or changes to coverage on the Secured Property since policy inception.

 

3.8            Insurance Premium Payment by Lender; Use of Proceeds.

 

(a)            In the event Borrower fails to make the Insurance Deposits as required by Section 3.3, or if such Insurance Deposits have been waived, upon ▇▇▇▇▇▇'s receipt of written notice (i) of an unpaid and overdue Insurance Premium; (ii) of a termination or cancellation of any required insurance policy; or (iii) that a required insurance policy is not to be renewed and Borrower fails to provide replacement coverage at least fifteen (15) days prior to the termination of existing coverage, Lender may, at its option, procure and substitute another policy of insurance in the amount required pursuant to the foregoing terms of this Deed of Trust with such companies as Lender may select, the cost of which shall be paid by Borrower upon demand should the amount available from the Insurance Deposits be insufficient to pay the premium therefor. All sums paid by Lender in procuring said insurance that are not promptly reimbursed by ▇▇▇▇▇▇▇▇ shall be additional Indebtedness and shall be immediately due and payable without notice, with interest thereon at the Default Rate from the date of such payment.

 

 

(b)            In the event of any damage to or destruction of the Improvements or any part thereof, Borrower shall promptly notify Lender and take such action necessary to preserve the undamaged portion of the Improvements. Borrower shall obtain ▇▇▇▇▇▇'s prior written consent to the settlement of any claim with respect to the Proceeds of any insurance in excess of $250,000. If, at the time of such damage or destruction,

 

(i)            no Event of Default is in existence and no event shall have occurred as of such date which, with the passage of time, the giving of notice or both, would constitute an Event of Default;

 

(ii)           the damage is such that it can be reasonably repaired within the time provided in the Major Leases (or Borrower has otherwise procured written waivers or adjustments from such tenants to conform with the timing of such completion), or Borrower obtains written commitments in form and substance reasonably satisfactory to Lender from tenants to lease space, upon completion of repairs, in the Secured Property at aggregate rentals equal to or exceeding the debt service of the Loan and the general operating expenses of the Secured Property;

 

(iii)          the Real Estate and/or Improvements can be restored to the condition at least equal to the condition in which they existed immediately prior to the date of such damage (with any post-closing improvements included in such Restoration (as defined in this Section 3.8)); and

 

(iv)           if required by ▇▇▇▇▇▇, a satisfactory report addressed to ▇▇▇▇▇▇ from an environmental engineer or other qualified professional satisfactory to Lender certifies that no adverse environmental impact to the Secured Property has resulted from the casualty;

 

then, any Proceeds paid to Lender in connection with such damage or destruction, after deducting therefrom any third party out of pocket expenses, including, without limitation, reasonable outside attorneys' fees, incurred by Lender in protecting the undamaged portion of the Improvements and in the collection of the Proceeds (the "Collection Expenses"), shall be applied to the cost of restoring, repairing, replacing or rebuilding (herein generally called "Restoration") the Real Estate and/or Improvements or any part thereof as set forth in Section 3.10.

 

Otherwise, in ▇▇▇▇▇▇'s sole discretion, all Proceeds, less Collection Expenses, shall be applied: (A) to the installments of the Indebtedness in the inverse order of their maturity; or (B) to the cost of Restoration as set forth in Section 3.10.

 

(c)            If Lender applies the Proceeds to the installments of the Indebtedness in the inverse order of their maturity, and provided no Event of Default is in existence, no premium or fee shall be payable in connection with any prepayment of the Indebtedness from the Proceeds. In addition, if the Proceeds are applied to the Indebtedness pursuant to the preceding sentence, and provided no Event of Default is in existence, Borrower may, at its option, pay the remaining Indebtedness in full (but not in part) without a premium or fee at any time within one hundred eighty (180) days after the date of such application.

 

 

3.9            Condemnation.

 

(a)            Borrower shall give Lender prompt notice of any proceedings, instituted or threatened, seeking condemnation or taking by eminent domain or any like process (a "Taking") of all or any part of the Real Estate or Improvements including any easement thereon or Appurtenances (including severance of, consequential damage to or change in grade of streets), and shall deliver to Lender copies of any and all papers served in connection with any such proceeding.

 

(b)            Borrower hereby assigns, transfers and sets over unto Lender the entire Proceeds of any and all awards resulting from any Taking. Lender is hereby authorized to collect and receive from the condemnation authorities the entire Proceeds and is further authorized to give appropriate receipts and acquittances therefor.

 

(c)            In the event of any such Taking, any and all such Proceeds shall be applied, after deducting therefrom any Collection Expenses, in ▇▇▇▇▇▇'s sole discretion, but subject to the further terms of this Section 3.9, to: (i) the installments of the Indebtedness in the inverse order of their maturity; or (ii) the cost of Restoration pursuant to Section 3.10.

 

(d)            If (i) the Proceeds of any Taking exceed the greater of (A) $1,000,000; or (B) 5% of the then value of the affected Secured Property (as determined by an M.A.I. Appraisal obtained by ▇▇▇▇▇▇ at the cost and expense of Borrower) but are less than the outstanding Indebtedness under the Loan as of the date of such Taking and are received at least one year prior to the Maturity Date; (ii) the requirements stated in Sections 3.8(b)(i), (ii) and (v) above are satisfied; and (iii) in Lender’s reasonable judgment, the remainder of the Secured Property can be operated (A) as an economically viable project at substantially the same level of operations which existed immediately prior to the Taking; and (B) at the functional equivalent of its condition (considering, without limitation, the effect of the Taking on the remaining leasable area, parking and access) prior to the Taking (the “Viability Requirements”); then, such Proceeds, after deducting therefrom the Collection Expenses, shall be applied to the cost of Restoration pursuant to Section 3.10.

 

(e)            If (i) the Proceeds of any Taking do not exceed the greater of (A) $1,000,000; or (B) 5% of the then value of the affected Secured Property (as determined by an M.A.I. Appraisal obtained by Lender at the cost and expense of Borrower); (ii) no Event of Default is in existence on the date of such Taking and no event shall have occurred as of such date which, with the passage of time, the giving of notice or both, would constitute an Event of Default; and (iii) the Viability Requirements are met; then, such Proceeds, after deducting therefrom the Collection Expenses, shall be applied to the cost of Restoration pursuant to Section 3.10.

 

(f)            If Lender applies the Proceeds to the installments of the Indebtedness in the inverse order of maturity, and provided no Event of Default is in existence and no event shall have occurred as of such date which, with the passage of time, the giving of notice or both, would constitute an Event of Default, no premium or fee shall be payable in connection with any prepayment of the Indebtedness from the Proceeds. In addition, if the Proceeds are applied to the Indebtedness because Lender has determined that the Viability Requirements have not been satisfied, and provided no Event of Default is in existence and no event shall have occurred as of the date of prepayment of the remaining Indebtedness in full which, with the passage of time, the giving of notice or both, would constitute an Event of Default, Borrower may, at its option, pay the remaining Indebtedness in full (but not in part) without a premium or fee at any time within one hundred eighty (180) days after the date of such application.

 

 

(g)            Notwithstanding anything contained herein to the contrary, in the event that the Taking is, in the opinion of a licensed reputable contractor and engineer selected by Borrower and reasonably approved by ▇▇▇▇▇▇, of such a nature that the Real Estate and the Improvements will not require Restoration, all Proceeds, after deducting therefrom the Collection Expenses, shall be paid as follows: (A) if Proceeds are equal to or less than One Hundred Fifty Thousand Dollars ($150,000.00) in the aggregate, to Borrower for its use and enjoyment, subject to the terms of the Loan Documents, and (B) if Proceeds are greater than One Hundred Fifty Thousand Dollars ($150,000.00) in the aggregate, to Lender, which shall be applied to installments of Indebtedness in the inverse order of their maturity, and provided no Event of Default is in existence, no premium or fee shall be payable in connection with any prepayment of the Indebtedness from the Proceeds.

 

3.10          Restoration Using Proceeds.

 

(a)            In the event Lender elects (or is required hereby) to make any Proceeds available for Restoration, Borrower shall complete, in form and with supporting documentation reasonably required by Lender, an estimate of the cost to repair or to restore the Real Estate and Improvements to a condition substantially equal to the condition in which they existed prior to such damage, destruction or Taking, free from any security interest in, lien or encumbrance on, or reservation of title to, such Real Estate and Improvements.

 

(b)            If the amount required to complete Restoration exceeds $250,000, then the Proceeds and, if applicable, other amounts payable by Borrower necessary to complete Restoration shall be held by Lender or, if Lender so desires, a disbursing agent selected by Borrower and acceptable to Lender and may be invested using Borrower’s taxpayer identification number in an interest bearing account mutually acceptable to Borrower and Lender. The reasonable costs and expenses of administering disbursements shall be paid by Borrower form Proceeds. In the event the amount of the Proceeds are insufficient to cover the cost of Restoration, Borrower shall pay to Lender within ten (10) business days following written demand, the cost of Restoration in excess of the Proceeds, such excess to be held by Lender with the Proceeds.

 

(c)            If the amount required to complete Restoration is $250,000 or less, then the Proceeds may be delivered directly to Borrower and shall be applied by Borrower to the cost of Restoration. Borrower shall complete such Restoration in a timely and workmanlike manner, free from any security interest in, mechanics' or materialmen's lien or encumbrance on, or reservation of title to, the Real Estate and Improvements.

 

(d)            Subject to ▇▇▇▇▇▇'s right to limit the number of disbursements, the Proceeds shall be disbursed from time to time upon ▇▇▇▇▇▇'s receipt of architect's certificates, waivers of lien, contractor's sworn statements and such other evidence as Lender or any disbursing agent may reasonably require to verify the cost and fact of the completion of the work included in said disbursement. Under no circumstances shall any portion of the Proceeds be released until ▇▇▇▇▇▇ has been reasonably assured that the Proceeds remaining after the requested disbursement will be sufficient to complete Restoration. No payment of Proceeds made prior to the final completion of Restoration shall exceed ninety percent (90%) of the value of the work performed from time to time. Any Proceeds remaining after Restoration shall be applied against the installments of Indebtedness in the inverse order of their maturity. In the event Lender elects (or is required hereby) to make any Proceeds available for Restoration, Borrower shall complete, in form and with supporting documentation reasonably required by Lender, an estimate of the cost to repair or to restore the Real Estate and Improvements to the condition at least equal to the condition in which they existed prior to such damage, destruction or Taking, free from any security interest in, lien or encumbrance on, or reservation of title to, such Real Estate and Improvements.

 

 

3.11          Restrictions on Transfer. The terms, conditions and agreements set forth in this Section are subject to the terms of that certain Agreement Regarding Second Funding, Permitted Releases, Substitutions and Transfers (“Agreement Regarding Permitted Releases”) executed and delivered in connection with the Loan. In the event of a conflict between the terms of this Deed of Trust and the Agreement Regarding Permitted Releases, the terms of the Agreement Regarding Permitted Releases shall control.

 

(a)            Without the prior written consent of ▇▇▇▇▇▇:

 

(i)            Borrower shall not create, effect, or consent to, nor shall Borrower suffer or permit, any transfer, assignment, collateral assignment, lien, pledge, mortgage, security interest or other hypothecation, encumbrance or alienation (or any agreement to do any of the foregoing) (the foregoing being herein, collectively, called a "Transfer") of the Secured Property, or any interest therein or title thereto (excepting, however, the sale or other disposition of Collateral (as defined in Section 6.1) no longer useful in connection with the operation of the Secured Property ("Obsolete Collateral")); provided, however, that prior to the sale or other disposition of Obsolete Collateral, such Obsolete Collateral shall have been replaced by Collateral of at least equal value and utility which is subject to the first and prior lien of this Deed of Trust, and further provided that nothing herein shall affect ▇▇▇▇▇▇▇▇'s rights with respect to Contested Liens;

 

(ii)           Borrower shall not fail to pay, when the same shall become due, all lawful claims and demands of mechanics, materialmen, laborers and others which, if unpaid, might result in or permit the creation of a lien on the Real Estate or Improvements or on the Rents arising therefrom except as permitted under Section 3.5;

 

(iii)          if Borrower is a land trustee (“Trustee Borrower”), any beneficiary of Borrower shall not Transfer such beneficiary’s beneficial interest in Borrower, it being specifically agreed that such beneficiary may not obtain mezzanine financing secured by beneficiary’s beneficial interest or otherwise;

 

(iv)           subject to the provisions of subsection (d) below and the Agreement Regarding Permitted Releases, upon the Transfer, if Borrower or any beneficiary of a Trustee Borrower is a corporation or limited liability company, any shareholder of such corporation or member of such limited liability company shall not Transfer any such shareholder’s shares of such corporation or member’s membership interest in such limited liability company (provided, however, that if such corporation is a corporation whose stock is publicly traded on a national securities exchange or on the “Over The Counter” market, this subsection (iv) shall be inapplicable), it being specifically agreed that any such shareholder or member may not obtain mezzanine financing secured by such shareholder’s shares or member’s membership interest or otherwise;

 

 

(v)            subject to the provisions of subsection (d) below and the Agreement Regarding Permitted Releases, upon the Transfer, if Borrower or any beneficiary of a Trustee Borrower is a partnership or joint venture, any general partner of such partnership or joint venturer of such joint venture shall not Transfer any such general partner’s interest in such partnership or joint venturer’s interest in such joint venture, it being specifically agreed that any such general partner or joint venturer may not obtain mezzanine financing secured by such partner’s partnership interest or joint venturer’s joint venture interest or otherwise; or

 

(vi)           subject to the provisions of subsection (d) below and the Agreement Regarding Permitted Releases, upon the Transfer, there shall not be any change in control (by way of Transfers of stock ownership, membership interests, partnership interests or otherwise) in any corporation, limited liability company or partnership constituting or included within Borrower which directly or indirectly controls any corporation, limited liability company or partnership constituting or included within Borrower that results in a change in the identity of the Person(s) in control of such entity.

 

(b)            The foregoing provisions of this Section 3.11 shall not apply (i) to liens securing the Indebtedness; (ii) to the lien of current Taxes not in default; or (iii) the Leases. The provisions of this Section 3.11 shall be operative with respect to, and shall be binding upon, any Person who, in accordance with the terms hereof or otherwise, shall acquire any part of or interest in or encumbrance upon the Secured Property, or such beneficial interest (whether stock, membership interest, partnership or joint venture interest or other beneficial interest) in Borrower or any beneficiary of a Trustee Borrower. Any waiver by ▇▇▇▇▇▇ of the provisions of this Section 3.11 must be in writing and shall not be deemed to be a waiver of the right of Lender in the future to insist upon strict compliance with the provisions of this Section 3.11.

 

(c)            Subject to the provisions of subsection (d) below and the Agreement Regarding Permitted Releases, upon the Transfer, without the prior written consent of Lender, of (i) all or any part of the Secured Property; or (ii) any beneficial interest in Borrower if such Transfer is prohibited by Section 3.11 above, Lender may, at its option, declare all of the sums secured by this Deed of Trust to be immediately due and payable.

 

(d)            Notwithstanding anything contained herein to the contrary, prior written consent shall not be required for any Transfer of an interest in Borrower subject to the following conditions:

 

(i) Except for Transfers resulting from (A) death of any interest holder or (B) so long as EQT Exeter Real Estate Income Trust, Inc. ("Exeter RE Trust") is a non-traded REIT registered with the SEC, Transfers as a result of the issuance or Transfer of non-traded shares in Exeter RE Trust to retail investors, sixty (60) days prior written notice of such proposed Transfer shall be delivered to Lender (provided that such notice shall be required only if such Transfer results in any individually owning more than fifteen percent (15%) of the direct or indirect ownership of Borrower where such person did not own more than fifteen percent (15%) of such interests prior to such proposed Transfer), together with (1) a statement showing the current ownership of Borrower; (2) copies of the Transfer documents pursuant to which the proposed Transfer is to be effected; (3) a certification from Borrower that Borrower remains in compliance with the ERISA provisions of the Loan Documents; (4) a certification from Borrower that Borrower remains in compliance with the representations, warranties and covenants in the Loan Documents relative to Executive Order 13224-Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism, as amended, and other anti-terrorism laws and regulations; and (5) any additional information reasonably requested by ▇▇▇▇▇▇ regarding the proposed Transfer and/or transferee if, as a result of such Transfer, such transferee owns at least a fifteen percent (15%) direct or indirect interest in Borrower;

 

 

(ii) Any such proposed sale or Transfer shall not be permitted to any Person who or which on the date of the proposed Transfer is in a bankruptcy, insolvency, reorganization or any other similar court or administrative proceeding or is subject to sanctions or otherwise restricted under OFAC (as herein defined) or similar programs;

 

(iii) No Event of Default shall be in existence under any of the Loan Documents on the date of such proposed sale or Transfer and no event be in existence as of such date which, with the passage of time, the giving of notice or both, would constitute an Event of Default under any of the Loan Documents; provided however this provision shall not apply in connection with any Transfer that is the result of the issuance or Transfer of non-traded shares in Exeter RE Trust to retail investors, so long as Exeter RE Trust is a non-traded REIT registered with the SEC;

 

(iv) Any such sale or Transfer, if and when consummated, shall not release any Person from any liability or obligation to which it is otherwise liable or obligated, if any, under the terms of the Loan Documents;

 

(v) Borrower shall pay all of ▇▇▇▇▇▇’s out of pocket expenses relating to the review and/or preparation of any documentation related to the proposed Transfer, including, without limitation, the reasonable fees and expenses of ▇▇▇▇▇▇’s outside counsel;

 

(vi) After any such Transfer, EQT Exeter Operating Partnership, LP ("EQT OPLP") must continue to maintain greater than fifty percent (50%) ownership and interest in Borrower;

 

(vii) After such Transfer, EQT OPLP shall continue to be advised by Exeter Property Group, LLC pursuant to an advisory agreement approved by Lender; and

 

(viii)  After such Transfer, EQT OPLP shall continue to manage, directly or indirectly, the day-to-day operations of the Borrower.

 

Upon any Transfer resulting from death, Borrower shall provide written notice of such Transfer to Lender within sixty (60) days after the occurrence of such Transfer, together with all of the information and documentation required under clauses (2)-(4) of Section 3.11(d)(i), above.

 

 

(e) As used in Section 3.11(d) above and if Borrower is comprised of more than one entity, a “Transfer of an interest in Borrower” shall also include a Transfer of undivided interests in the Secured Property to other entities comprising Borrower, subject to the same qualifications and limitations, and satisfaction of the same requirements, set forth in Section 3.11(d) with respect to Transfers of beneficial interests in entities.

 

3.12          ▇▇▇▇▇▇'s Dealings with Transferee.

 

In the event Lender gives its written consent to a Transfer, whether by operation of law, voluntarily or otherwise, Lender shall be authorized and empowered to deal with the any Person to whom the Secured Property or any part thereof shall have been transferred with regard to the Secured Property, the Indebtedness and any of the terms or conditions of this Deed of Trust as fully and to the same extent as it might with the original Borrower, without in any way releasing or discharging the original Borrower from any of its covenants under this Deed of Trust except as provided in the Agreement Regarding Permitted Releases.

 

3.13          Change in Tax Laws.

 

In the event of any change in, or change in the interpretation of, any applicable law regarding (a) the taxation of mortgages, deeds of trust or other security instruments or the debts secured thereby; or (b) the manner in which such taxes are collected, which change adversely affects Lender, this Deed of Trust or any other Loan Document or the Indebtedness, Borrower shall promptly pay any such tax and otherwise compensate Lender to the extent of such detriment; provided, however, that if Borrower fails to make such payment or if any such law prohibits Borrower from making such payment, Lender may elect, by notice in writing given to ▇▇▇▇▇▇▇▇, to declare all of the Indebtedness secured hereby to be and become due and payable, without any prepayment premium or fee, within ninety (90) days from the giving of such notice.

 

3.14          Inspection of Secured Property.

 

Borrower hereby grants to Lender, its agents, employees, consultants and contractors the right to enter upon the Secured Property upon reasonable prior notice (except in the case of emergencies) for the purpose of making any and all inspections, reports, tests, inquiries and reviews as Lender (in its sole and absolute discretion) deems reasonably necessary to assess the then current condition of the Secured Property or for the purpose of performing any other acts which Lender is authorized to perform under this Deed of Trust or under the Environmental Indemnification Agreement executed by ▇▇▇▇▇▇▇▇ in connection with the Loan (the "Environmental Indemnification Agreement"). Borrower will reasonably cooperate with Lender to facilitate each such entry and the accomplishment of such purposes.

 

3.15          Operating and Financial Statements.

 

Borrower shall deliver or cause to be delivered the following documents to Lender:

 

(a)

Within 120 days after December 31st in each fiscal year of Borrower during the term of the Loan (whether such fiscal year is a calendar year or otherwise), (i) annual operating statements showing all elements of income and expense of the Secured Property dated as of the last day of such period; and (ii) a current rent roll for the Secured Property;

 

 

(b)

Within 120 days after the end of each fiscal year of Borrower , annual financial statements (consisting of a balance sheet and an income and expense statement) for Borrower ;

 

(c)

Within 120 days after the end of each fiscal year of Borrower , annual financial statements (consisting of a balance sheet and an income and expense statement) for any tenant under a Lease that provides that such tenant may self-insure on any insurance otherwise required to be obtained by Borrower under this Deed of Trust;

 

(d)

Upon written request from ▇▇▇▇▇▇, any financial statements actually received by Borrower from any tenant under a Major Lease (to the extent not precluded by the terms of such Major Lease and so long as Lender executes a confidentiality agreement if required by any such Major Lease); and

 

(e)

Promptly after request therefor, such other information (financial or otherwise) concerning the Secured Property or Borrower or Borrower ’s constituent entities, as Lender may reasonably request.

 

All such financial statements and information shall be prepared in accordance with the income tax accrual method of accounting consistently applied or in another manner approved by Lender, shall otherwise be satisfactory to Lender and shall be certified by an authorized person, member, partner or officer of Borrower , approved by ▇▇▇▇▇▇.

 

3.16          Declaration of Subordination.

 

At the option of Lender, this Deed of Trust shall become subject and subordinate, in whole or in part (but not with respect to priority of entitlement to insurance proceeds or any Award) to any and all Leases of all or any part of the Secured Property upon the execution by ▇▇▇▇▇▇ and recording thereof, at any time hereafter and in the appropriate official records of the county wherein the Real Estate is situated, of a unilateral declaration to that effect.

 

3.17          Usury.

 

Lender intends that Borrower shall not be required to pay, and Lender shall not be entitled to receive or collect, interest in excess of the maximum legal rate permitted under applicable usury laws. In the event Lender or any court determines that any charge, fee or interest paid or agreed to be paid in connection with the Loan may, under applicable usury laws, cause the interest rate on the Loan to exceed the maximum rate permitted by law, such charges, fees or interest shall be reduced to the maximum rate permitted by law and any amounts actually paid in excess of such maximum rate permitted by law shall, at Lender's option, be applied by Lender to reduce the outstanding principal balance of the Loan or be repaid by Lender directly to Borrower.

 

 

3.18          Lease Obligations.

 

(a)            As further security for the payment of the Indebtedness, ▇▇▇▇▇▇▇▇ has, pursuant to this Deed of Trust and by separate Assignment of Rents and Leases of even date herewith, sold, transferred and assigned to Lender, its successors and assigns, all of ▇▇▇▇▇▇▇▇'s right, title and interest, as landlord, in, to and under the Leases.

 

(b)            The following definitions shall be applicable to all Leases of the Secured Property, now or hereafter existing:

 

(i)            "Major Leases": Leases in the Secured Property that demise 200,000 square feet or more, together with all extensions, renewals, amendments, modifications, replacements and substitutions therefor; provided, however, a replacement or substitution for a Major Lease shall in turn be deemed a “Major Lease” only if such replacement or substitution demises 200,000 square feet or more. As of the date hereof, the following Leases constitute Major Leases:

 

NAME OF TENANT		TOTAL SQUARE FOOTAGE
Shoals Technologies		638,330 square feet

 

(ii)           "Minor Leases": Leases that are not Major Leases; provided, however, if any Minor Lease, after modification, meets the definition of a Major Lease, such Minor Lease shall thereupon become a Major Lease.

 

(c)            Borrower shall be responsible for the payment of all fees and expenses of ▇▇▇▇▇▇’s outside counsel in the event Lender, in its reasonable sole discretion, shall determine that the assistance of outside counsel is necessary or appropriate.

 

(d)            Borrower covenants and agrees to keep, observe and perform and to require all tenants of the Secured Property to keep, observe and perform, in all material respects, the covenants, agreements and provisions of any present or future Leases of the Secured Property on their respective parts to be kept, observed and performed.

 

(e)            Borrower expressly covenants and agrees that if Borrower, as landlord under the Major Leases fails to perform and fulfill any material term, covenant, condition or provision in any Major Lease on its part to be performed or fulfilled, at the times and in the manner provided in such Major Lease beyond any applicable notice and cure period in such Major Lease and the tenant under such Major Lease has provided written notice to Lender of such breach and/or is exercising any of tenant’s remedies under such Major Lease; then, upon the occurrence of any such breach, at the option of Lender, and with written notice to Borrower, an Event of Default shall be deemed to have occurred hereunder and at the option of Lender, all unpaid Indebtedness secured by this Deed of Trust shall, notwithstanding anything in the Note, this Deed of Trust or the other Loan Documents to the contrary, become due and payable as in the case of other Events of Default.

 

 

3.19          Environmental Compliance.

 

Borrower hereby agrees to comply and cause all tenants of the Secured Property to comply with any and all federal, state or local laws, rules and regulations relating to environmental protection including, but not limited to, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”), as amended by the Superfund Amendments and Reauthorization Act of 1986 and such other legislation, rules and regulations as are in or may hereafter come into effect and apply to Borrower, Lender, the Loan or the Secured Property or any occupants thereof, whether as lessees, tenants, licensees or otherwise.

 

3.20          Further Assurances.

 

(a)            Borrower shall do all acts necessary to keep valid and effective the liens and security interests created by this Deed of Trust and the security intended to be afforded by the Loan Documents and to carry into effect their objectives.

 

(b)            Without limiting the generality of the foregoing, Borrower will promptly and, insofar as not contrary to applicable law, at Borrower's expense, execute, record, rerecord, file and refile in such offices, at such times and as often as may be necessary, this Deed of Trust, additional mortgages, security agreements and every other instrument in addition to or supplemental hereto, including applicable financing statements, continuation statements, affidavits or certificates as may be necessary to create, perfect, maintain, continue, extend and/or preserve the liens, encumbrances and security interests intended to be granted and created in and by the Loan Documents and the rights and remedies of Lender and Borrower thereunder. Upon written request of ▇▇▇▇▇▇, Borrower shall promptly supply evidence of fulfillment of the foregoing acts and further assurances.

 

3.21          Change of Name, Identity or Structure.

 

Except as may be expressly set forth in this Deed of Trust, without giving Lender at least thirty (30) days' prior written notice, Borrower shall not change: (a) its jurisdiction of organization; (b) the location of its place of business (or chief executive office if more than one place of business); or (c) its name or identity (including its trade name or names). In addition, if Borrower is an entity, Borrower shall not change its structure or legal status without first obtaining the prior written consent of Lender.

 

3.22          Intentionally omitted.

 

3.23          Management of Secured Property.

 

The Secured Property shall be managed in a first-class manner by either: (a) Borrower or an entity affiliated with Borrower and approved by Lender; or (b) a professional property management company approved by Lender. The management of the Secured Property by a Borrower-affiliated entity or a professional property management company (in either case, a "Manager") shall be pursuant to a written agreement approved by Lender (the "Management Agreement"). In no event shall any Manager be removed or replaced, or the terms of any Management Agreement materially modified or materially amended without the prior written consent of Lender, which consent shall not be unreasonably withheld, conditioned or delayed.

 

 

3.24          OFAC.

 

(a)            None of ▇▇▇▇▇▇▇▇, Guarantor (if any), or any director, officer, trustee, manager, employee, partner, member, shareholder or beneficiary of Borrower or Guarantor is a Prohibited Person and, during the term of the Loan, no such Person shall become a Prohibited Person. Borrower will not, directly or indirectly, use the proceeds of the Loan, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture, partner or other Person (i) to fund any activities or business of or with any Prohibited Person, (ii) to fund any activities or business in any country or territory that is, or whose government is, the subject of Sanctions, or (iii) in any other manner that would result in a violation of Sanctions by any Person. "Sanctions" means sanctions administered or enforced by the U.S. Department of Treasury's Office of Foreign Assets Control ("OFAC") or the U.S. Department of State or any other statute, regulation or executive order restricting or prohibiting the transaction of business with any Person, group of Persons or nation. "Prohibited Person" means any Person with whom ▇▇▇▇▇▇ is restricted or prohibited from doing business by OFAC or any Sanctions, including, but not limited to, those Persons named on OFAC's Specially Designated Nationals and Blocked Persons List.

 

(b)            In connection with any proposed sale or Transfer of a direct or indirect interest in Borrower, Borrower shall provide Lender with such information as Lender may request to perform OFAC searches with respect to the proposed transferee(s) of such interest(s).

 

3.25          Indemnification.

 

Without limiting Borrower's obligations set forth in other Sections of this Deed of Trust, Borrower shall indemnify, defend and hold Lender harmless from and against any and all liabilities, obligations, claims, actions, suits, costs, damages, losses, penalties, fines and expenses (including, but not limited to, all attorneys' fees) incurred by Lender (the "Indemnified Liabilities") arising out of, by reason of, in connection with or otherwise related to: (a) any action or claim of a third party related to Borrower, the Loan Documents or the Secured Property; (b) any action by Lender to enforce or preserve any rights under the Loan Documents or to the Secured Property; or (c) any accident, injury, death, or damage to any person or property occurring in, on, about, or in connection with the Secured Property; provided, however, Borrower shall have no obligation under this Section to the extent that the Indemnified Liabilities arise out of the gross negligence or willful misconduct of Lender.

 

3.26          Replacement of Prior Lien.

 

To the extent there is a lien on the Secured Property securing obligations that are to be satisfied out of the proceeds of the Loan, the security interest and lien granted in this Deed of Trust shall constitute a replacement of such lien.

 

 

ARTICLE Four
EVENTS OF DEFAULT

 

4.1            Defaults.

 

It shall constitute an event of default ("Event of Default") of and under this Deed of Trust and, at the option of Lender, under the other Loan Documents, if any of the following events shall occur:

 

(a)            Borrower shall fail to perform on the dates or within the times required any of the Indebtedness, including the payment of principal and/or interest under the Note, within any applicable grace and/or notice period expressly provided in the Loan Documents;

 

(b)            Borrower shall fail to timely observe, perform or discharge any of the non-monetary Obligations, other than a non-monetary obligation described in any other clause in this ARTICLE Four, and any such failure shall remain uncured for thirty (30) days or such lesser period as may be otherwise specified in the applicable Loan Document (the "Grace Period") after notice to Borrower of the occurrence of such failure; provided, however, if: (i) such default cannot reasonably be cured within such Grace Period, but can be cured within ninety (90) days; (ii) no lien or security interest created by the Loan Documents shall be impaired prior to the anticipated completion of such cure; and (iii) Lender's immediate exercise of any remedies provided in this Deed of Trust or by law is not necessary for the protection or preservation of the Secured Property or ▇▇▇▇▇▇'s security interest therein or lien thereon, and Borrower shall immediately commence and diligently pursue the cure of such default, then the applicable Grace Period shall be extended up to ninety (90) days in order for Borrower to effect such cure;

 

(c)            Borrower, as landlord or sublandlord, as the case may be, shall assign or otherwise encumber the Rents or any interest therein without first obtaining the written consent of ▇▇▇▇▇▇;

 

(d)            Borrower shall, after the expiration of all applicable grace or cure periods, default or be in default under any agreement, other than the Loan Documents, which (i) is secured by a lien on the Secured Property that is junior and subordinate to this Deed of Trust (regardless of whether such lien was obtained with the prior written consent of Lender); (ii) is secured by a lien on the respective interests of the general partner of Borrower (regardless of whether such lien was obtained with the prior written consent of Lender); or (iii) as a result of such default, subjects the Secured Property to any mechanics', materialmen's or other lien or claim of lien, other than a lien that constitutes a Contested Lien pursuant to Section 3.5 above;

 

(e)            Should any representation or warranty made by Borrower in, under or pursuant to any of the Loan Documents be false or misleading in any material respect as of the date on which such representation or warranty was made or deemed remade;

 

(f)            Should any of the Loan Documents cease to be in full force and effect or be declared null and void, or cease to constitute valid and subsisting liens and/or valid and perfected security interests in, to or upon the Secured Property as a result of any act or omission of Borrower;

 

 

(g)            Should any violation of Section 3.11 occur or should any other event occur which, under the terms of the Loan Documents, would permit Lender to accelerate the maturity of the Indebtedness;

 

(h)            Should Borrower fail at any time to satisfy the requirements of Section 3.7 and such failure shall continue for fifteen (15) days after written notice thereof;

 

(i)            Should any Liable Party (as defined in Section 5.1(h)): (A) generally not pay its debts as they become due; (B) admit in writing its inability to pay its debts; or (C) make a general assignment for the benefit of creditors;

 

(j)            Should any Liable Party commence any case, proceeding or other action seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of it and its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking to have an order for relief entered against it as debtor, or seeking appointment of a receiver for it or for all or any substantial part of its property (collectively, a "Proceeding");

 

(k)            Should any Liable Party take an action to authorize in writing any of the actions set forth above in subsections (i) or (j) of this Section 4.1;

 

(l)            Should any Proceeding be commenced against any Liable Party, and such Proceeding result in the entry of an order for relief against it which is not fully stayed within thirty (30) days after the entry thereof or remain undismissed for a period of sixty (60) days;

 

(m)            Should (i) a final judgment, other than a final judgment in connection with any condemnation, including any judgment or other final determination of any contest permitted by Section 3.5 of this Deed of Trust, be entered against Borrower that adversely affects the validity, enforceability or priority of the liens or security interests created in and by this Deed of Trust, or the other Loan Documents, or both; or (ii) execution or other final process issue on any judgment with respect to the Secured Property, and Borrower shall fail to discharge the same, or provide for its discharge in accordance with its terms, or procure a stay of execution thereon in any event within thirty (30) days from entry, or should Borrower not within such period, or such longer period during which execution on such judgment shall have been stayed, appeal therefrom or from the order, decree or process upon or pursuant to which such judgment shall have been entered and cause its execution to be stayed during such appeal, or if on appeal, such order, decree or process shall be affirmed and Borrower shall not discharge such judgment or provide for its discharge in accordance with its terms within thirty (30) days after the entry of such order or decree of affirmation, or if any stay of execution on appeal is released or otherwise discharged; or

 

(n)            An Event of Default shall occur under any of the other Mortgages (as defined in the Note).

 

 

ARTICLE Five
REMEDIES

 

5.1            Remedies.

 

(a)            Upon the occurrence of an Event of Default, Lender, at its option, may at any time thereafter declare the entire Indebtedness to be immediately due and payable and the same shall thereupon become immediately due and payable, without any further presentment, demand, protest or notice of any kind being required and Lender, at its option and in its sole discretion, shall also be entitled to do any of the following:

 

(i)            make any payments or take any other actions it deems necessary or desirable to preserve the Secured Property. Borrower shall, upon demand, reimburse Lender for all sums so advanced or expenses incurred by ▇▇▇▇▇▇, together with interest at the Default Rate from the date of advance or payment of the same, which sums shall be secured by this Deed of Trust. Lender may enter upon the Secured Property without prior notice to Borrower or judicial process and may take any action to enforce its rights hereunder without liability to Borrower;

 

(ii)           (A) in person, by agent or by a receiver, without regard to the adequacy of security, the solvency of Borrower or the condition of the Secured Property, without obligation to do so and without notice to or demand upon Borrower, enter upon and take possession of the Secured Property or any part thereof in its own name or in the name of a trustee and do any acts which Lender deems necessary to preserve the value or marketability of the Secured Property; (B) sue for or otherwise collect the Rents and apply the same, less costs and expenses of operation and collection, including reasonable attorneys' fees, against the Indebtedness, all in such order as Lender may determine; (C) appear in and defend any action or proceeding purporting to affect, in any manner whatsoever, the Indebtedness, the security hereof or the rights or powers of Lender; (D) pay, purchase or compromise any encumbrance, charge or lien that, in the judgment of ▇▇▇▇▇▇, is prior or superior hereto; and (E) in exercising any such powers, pay necessary expenses, employ counsel and pay reasonable attorneys' fees;

 

(iii)          as a matter of strict right and without notice to Borrower or anyone claiming under Borrower, and without regard to: (A) the solvency of Borrower; (B) whether there has been or may be any impairment of or diminution in the value of the Secured Property; or (C) whether the amount of the Indebtedness exceeds the then value of the Secured Property, apply ex parte to any court having jurisdiction to appoint a receiver to enter upon and take possession of the Secured Property, and Borrower hereby waives notice of any application therefor, provided, if required by law, a hearing to confirm such appointment with notice to Borrower is set within the time required by law (any such receiver shall have all the powers and duties of receivers in similar cases and all the powers and duties of Lender in case of entry as provided herein, and shall continue as such and exercise all such powers until the date of confirmation of sale, unless such receivership is sooner terminated);

 

 

(iv)           (A) require the Trustee, and the Trustee is hereby authorized and empowered, to enter and take possession of the Secured Property and to sell all or part of the Secured Property, at public auction, to the highest bidder for cash, free from equity of redemption, any statutory or common law right of redemption, homestead, dower, and all other rights and exemptions of every kind, all of which are hereby expressly waived, at the front door of any courthouse or other building in the county where any of the Secured Property is situated, after first giving notice of the time, place and terms of sale, (x) at least three (3) different times by publication in some newspaper published in the county in which the Secured Property is located, the first of which publications shall be at least twenty (20) days previous to said sale or (y) as otherwise required or permitted by applicable law , after first providing notice to Borrower and any co-debtor as required in Tennessee Code Annotated § 35-5-101(e) on or before the first date of publication. Said sale may be postponed or adjourned from time to time without re-advertising, and may be dismissed or not made. The acting Trustee is authorized to appoint an agent and auctioneer to make such sale in his absence, which sale shall be as valid as if made by said Trustee; and a cash deposit may be required as a condition for the acceptance of the bid. The owners of any part of the Indebtedness hereby secured may become the purchaser at any sale under this conveyance, and may apply all or any part of the Indebtedness as a set-off against its bid. The Trustee shall execute and deliver a deed of conveyance to the purchaser, and all statements of fact in such deed relating to the non-payment of the Indebtedness, the existence of the Indebtedness, notices of advertisement, sale, receipt of money and appointment of substituted Trustee shall be prima facie evidence of the truth of such statements. The sale or sales by Trustee of less than the whole of the Secured Property shall not exhaust the power of sale herein granted, and Trustee is specifically empowered to make successive sale or sales under such power until the whole of the Secured Property shall be sold; and if the proceeds of such sale or sales of less than the whole of the Secured Property shall be less than the aggregate of the Indebtedness and the expenses thereof, this Deed of Trust and the lien, security interest and assignment hereof shall remain in full force and effect as to the unsold portion of the Secured Property. Lender shall have the right to proceed with foreclosure (judicial or nonjudicial) of the liens and security interests hereunder without declaring the entire Indebtedness due, and in such event any such foreclosure sale may be made subject to the unmatured part of the Indebtedness; and any such sale shall not in any manner affect the unmatured part of the Indebtedness, but as to such unmatured part this Deed of Trust shall remain in full force and effect just as though no sale had been made. Several sales may be made hereunder without exhausting the right of sale for any unmatured part of the Indebtedness.

 

(B)            Alternatively, this Deed of Trust may be foreclosed by appropriate judicial proceedings, at the option of Lender.

 

(C)            If the Secured Property conveyed herein should be situated in two or more counties or in two judicial districts of the same county, then the Trustee or any successor in said trust shall have full power, in case he is directed to foreclose under this instrument to select in which county or judicial district the sale of the above Secured Property shall be made; and such selection shall be binding upon the Borrower and Lender and all persons claiming through or under them, whether by contract or by law.

 

(D)            The Trustee or any successors in trust shall have full power to fix the day, time, terms and place of sale and shall have full power to conduct any sale hereunder through an agent duly appointed by him for that purpose, but said appointment of an agent need not be recorded.

 

 

(v)            with respect to any Collateral, proceed as to both the real and personal property in accordance with ▇▇▇▇▇▇'s rights and remedies in respect of the Real Estate and Improvements, or proceed to sell said Collateral separately and without regard to the Real Estate and Improvements in accordance with ▇▇▇▇▇▇'s rights and remedies with respect to the Collateral.

 

(b)            In (i) any action to foreclose the lien of this Deed of Trust or enforce any other remedy of Lender under any of the Loan Documents; or (ii) any other proceeding whatsoever in connection with any of the Loan Documents or the Secured Property in which Lender is named as a party, there shall be allowed and included, as additional indebtedness in the judgment or decree for sale resulting therefrom, all expenses paid or incurred in connection with such proceeding by or on behalf of Lender including, without limitation, attorneys' and paralegals' fees, appraisers' fees, outlays for documentary and expert evidence, stenographers' charges, publication costs, land and environmental survey costs, and costs (which may be estimated as to items to be expended after entry of such judgment or decree) of procuring all abstracts of title, title certificates, title searches and examinations, title insurance policies, Torrens certificates and any similar data and assurances with respect to the title to the Secured Property as Lender may deem reasonably necessary either to prosecute or defend in such proceeding or to evidence to bidders at any sale pursuant to such decree the true condition of the title to or value of the Secured Property, incurred by ▇▇▇▇▇▇. All expenses and fees of the foregoing nature and such expenses and fees as may be incurred in the protection of the Secured Property and the maintenance of the lien of this Deed of Trust thereon in any litigation or proceeding affecting the Loan Documents or the Secured Property, including probate and bankruptcy proceedings, proceedings to obtain a receiver, or in preparation for the commencement or defense of any proceeding or threatened suit or proceeding in connection therewith, shall upon demand of Lender be immediately due and payable by Borrower with interest thereon at the Default Rate from the date of prepayment of such expenses and fees and shall become a part of the Indebtedness secured by this Deed of Trust.

 

(c)            Unless otherwise provided herein, if Borrower shall at any time fail to perform or comply with any of the terms, covenants and conditions required on ▇▇▇▇▇▇▇▇'s part to be performed and complied with under any of the Loan Documents or any other agreement that, under the terms of this Deed of Trust, Borrower is required to perform, Lender may, at its option and in its sole discretion:

 

i.            make any payments hereunder or thereunder payable by ▇▇▇▇▇▇▇▇, with interest on all such payments at the Default Rate; and/or

 

ii.           after the expiration of any applicable Grace Period and subject to ▇▇▇▇▇▇▇▇'s right to contest certain Obligations specifically granted in this Deed of Trust, perform any such other acts thereunder on part of Borrower to be performed and enter upon the Secured Property for such purpose.

 

(d)            In any foreclosure sale of the Secured Property, the Secured Property, including the Real Estate and Improvements, may be sold in one parcel (i.e. as a single entity) or in two or more parcels and, otherwise, in such manner or order as Lender, in its sole discretion, may elect or as the court having jurisdiction over such foreclosure sale may otherwise order or direct.

 

 

(e)            The proceeds of any foreclosure sale of the Secured Property shall be distributed and applied in accordance with the applicable law of the State of Tennessee or as otherwise directed by order of the court in which this Deed of Trust is foreclosed.

 

(f)            All remedies of Lender provided for herein are cumulative and shall be in addition to any and all other rights and remedies provided in the other Loan Documents or by law, including any right of offset. The exercise of any right or remedy by ▇▇▇▇▇▇ hereunder shall not in any way constitute a cure or waiver of any default or Event of Default hereunder or under the Loan Documents, invalidate any act done pursuant to any notice of default or prejudice Lender in the exercise of any of its rights hereunder or under the Loan Documents.

 

(g)            To the extent permitted by law, Borrower hereby waives its right of redemption in the event of foreclosure.

 

(h)            Notwithstanding anything herein to the contrary, and in addition to the remedies available to Lender in this Article Five, Borrower and Guarantor (individually, a "Liable Party" and collectively, the "Liable Parties") shall immediately and automatically be and become personally liable for the payment of the Indebtedness upon the occurrence of (i) a Transfer in violation of Section 3.11; and/or (ii) any of the bankruptcy-related Events of Default under Sections 4.1(i)(C), 4.1(j), 4.1(k) (solely with respect to authorizing the action set forth in Section 4.1(i)(C)) or 4.1(l) of this Deed of Trust.

 

ARTICLE Six
SECURITY AGREEMENT AND FIXTURE FILING

 

6.1            Security Agreement.

 

Borrower hereby assigns and grants to Lender a first priority present security interest in and to the Rents, Contract Rights, Intangible Personal Property, Tangible Personal Property, Proceeds, Right to Encumber and Other Rights and Interests described in Article Two and in and to any other part or component of the Secured Property which may not be deemed real property or which may not constitute a "fixture" (within the meaning of the Code as defined in this Section 6.1), and all replacements, substitutions and additions of, for and to the same and the proceeds thereof (collectively, the "Collateral") in order to secure payment of the Indebtedness and performance by Borrower of the other Obligations. This Deed of Trust shall constitute a Security Agreement within the meaning of the Uniform Commercial Code (the "Code") of the state in which the Real Estate is located.

 

6.2            Fixture Filing.

 

This Deed of Trust, upon recording or registration in the real estate records of the proper office, shall constitute a "fixture filing" within the meaning of the Code with respect to any and all fixtures included within the foregoing description and definition of the Secured Property and any Collateral that may now be or hereafter become "fixtures" within the meaning of the Code.

 

 

6.3            Remedies.

 

If any Event of Default occurs under this Deed of Trust, Lender, in addition to its other rights and remedies provided under this Deed of Trust, shall have all the rights and remedies available to a secured party under the Code, as well as all other rights and remedies available at law or in equity. Borrower, upon request by ▇▇▇▇▇▇, will assemble the Collateral and make it available to Lender at a place Lender designates to allow Lender to take possession or dispose of the Collateral. ▇▇▇▇▇▇▇▇ agrees that ten (10) days' prior written notice of the time and place of the sale of the Collateral, sent to Borrower in the manner provided for the mailing of notices herein, is reasonable notice to Borrower. The sale of the Collateral may be conducted by an employee or agent of Lender and any Person, including both Borrower and Lender, shall be eligible to purchase any part or all of the Collateral at the sale. The reasonable expenses of retaking, holding, preparing for sale, selling and the like incurred by Lender shall include, without limitation, attorneys' and paralegals' fees and legal expenses incurred by Lender, and shall be paid by ▇▇▇▇▇▇▇▇. If permitted by statute or court decision, the Collateral may be sold as part of any foreclosure sale of the Secured Property.

 

6.4            Waivers.

 

Borrower waives any right to require Lender to (a) proceed against any Person; (b) proceed against or exhaust any Collateral; or (c) pursue any other remedy in its power. Borrower further waives any defense arising by reason of any power and any defense arising by reason of any disability or other defense of Borrower or any other Person, or by reason of the cessation from any cause whatsoever of the liability of Borrower or any other Person. Until the Indebtedness shall have been paid in full, Borrower shall not have any right to subrogation and Borrower waives any right to enforce any remedy which Borrower now has or may hereafter have against Lender or against any other Person and Borrower further waives any benefit of and any right to participate in any Collateral or security whatsoever now or hereafter held by Lender for or with respect to the Indebtedness and/or the Obligations.

 

6.5            Authorization.

 

Borrower hereby authorizes ▇▇▇▇▇▇ at any time and from time to time during the life of the Loan, to file in any filing office in any Code jurisdiction any financing statements, amendments or addendums thereto and continuation statements (the "UCC Documents") in order to perfect or continue the perfection of any security interest granted under this Deed of Trust or any of the other Loan Documents. Lender may describe the Collateral in the UCC Documents as "all assets" of Borrower. ▇▇▇▇▇▇▇▇ agrees to provide any information needed to complete such UCC Documents to Lender promptly upon request.

 

Borrower shall pay to Lender, within thirty (30) days of written demand, any and all costs and expenses incurred by Lender in connection with the preparation, processing and filing of any such UCC Documents, including reasonable attorneys' fees and all disbursements. Such costs and expenses shall bear interest at the Default Rate from the date paid by ▇▇▇▇▇▇ until the date repaid by Borrower and such costs and expenses, together with such interest, shall be part of the Indebtedness and shall be secured by this Deed of Trust.

 

 

6.6            Preservation of ▇▇▇▇▇▇▇▇'s Existence.

 

Borrower shall do all things necessary to preserve and keep in full force and effect its existence, franchises, rights and privileges under the laws of the State of Delaware (the state of its formation) and, if applicable, of the State of Tennessee.

 

6.7            Notice of Change of Location of Collateral.

 

Without giving at least thirty (30) days' prior written notice to Lender, Borrower shall not add to or change any location at which any of the Collateral is stored, held or located.

 

ARTICLE Seven
MISCELLANEOUS

 

7.1            Notices, Consents, and Approvals.

 

Any notice, consent or approval that Lender or Borrower may desire or be required to give to the other shall be in writing and shall be mailed or delivered to the intended recipient thereof at its address set forth below or at such other address as such intended recipient may from time to time by notice in writing designate to the sender pursuant hereto. Any such notice, consent or approval shall be deemed effective if given (a) by nationally recognized overnight courier for next day delivery one (1) business day after delivery to such courier; (b) by United States mail (registered or certified), two (2) business days after such communication is deposited in the mail; or (c) in person, when written acknowledgment of receipt thereof is given. Except as otherwise specifically required herein, notice of the exercise of any right or option granted to Lender by this Deed of Trust is not required to be given.

 

a.            If to Lender:

 

State Farm Life Insurance Company

One State Farm Plaza

Bloomington, Illinois 61710

Attn: Corporate Law-Investments, A-3

Loan No. 15134

 

and

 

▇▇▇▇▇▇▇▇ & English, LLP

Four Gateway Center

▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇

Newark, New Jersey 07102

Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.

 

 

b.            If to Borrower:

 

EQRT 110 Southeast Inner Loop, L.P.

c/o EQT Exeter

Five Radnor Corporate Center

▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇

Radnor, Pennsylvania 19087

Attn: ▇▇▇▇▇ ▇. ▇▇▇▇

 

and

 

▇▇▇▇▇▇▇▇▇ LLC

Three ▇▇▇▇▇ Square

▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇^▇▇ ▇▇▇▇▇

Philadelphia, Pennsylvania 19103

Attn: ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, Esq.

 

c.            If to Trustee:

 

▇▇▇▇ ▇▇▇

First American Title Insurance Company

▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇

Nashville, TN 37219

 

7.2            Time of Essence.

 

It is specifically agreed that time is of the essence for all of the terms and provisions contained in this Deed of Trust and the other Loan Documents.

 

7.3            Covenants of Deed of Trust Run with Title to the Real Estate.

 

The Obligations set forth in this Deed of Trust are intended as, shall be deemed and are hereby declared to be covenants running with the title to the land which constitutes the Real Estate and any and all portions(s) thereof, and such Obligations shall be binding upon and enforceable by the owner and holder of this Deed of Trust personally against Borrower and any successor in title to Borrower who or which shall acquire and/or hold title to the Real Estate while the same is subject to and encumbered by this Deed of Trust. Every Person that shall have, claim, own, hold, accept or otherwise acquire title to the Real Estate, whether or not such title is reflected in the Public Records of the State and County in which the Real Estate is located, shall be conclusively presumed and deemed to have consented and agreed to personally perform each and every covenant and obligation of Borrower contained in this Deed of Trust, to the same extent as the original Borrower, whether or not any reference to this Deed of Trust is contained in the document or instrument pursuant to which such Person shall have acquired title to the Real Estate and whether or not such Person shall have expressly agreed in writing to assume or perform the Obligations of Borrower contained in this Deed of Trust.

 

7.4            Governing Law.

 

THIS DEED OF TRUST SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS; PROVIDED, HOWEVER, AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, PRIORITY, AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED PURSUANT HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TENNESSEE, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAWS OF STATE OF TENNESSEE, THE LAW OF THE STATE OF ILLINOIS SHALL OTHERWISE GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF THIS DEED OF TRUST. TO THE EXTENT THAT THIS DEED OF TRUST MAY OPERATE AS A SECURITY AGREEMENT UNDER THE CODE, LENDER SHALL HAVE ALL RIGHTS AND REMEDIES CONFERRED THEREIN FOR THE BENEFIT OF A SECURED PARTY.

 

 

7.5            Severability.

 

If any provision of this Deed of Trust, or any paragraph, sentence, clause, phrase or word, or the application thereof, in any circumstance, is held invalid, the validity of the remainder of this Deed of Trust shall be construed as if such invalid part were never included herein.

 

7.6            Headings.

 

The headings of articles, sections, paragraphs and subparagraphs in this Deed of Trust are for convenience of reference only and shall not be construed in any way to limit or define the content, scope or intent of the provisions hereof.

 

7.7            Grammar.

 

As used in this Deed of Trust, the singular shall include the plural, and masculine, feminine and neuter pronouns shall be fully interchangeable, where the context so requires.

 

7.8            Deed in Trust.

 

If title to the Secured Property or any part thereof is now or hereafter becomes vested in a trustee, any prohibition or restriction contained herein against the creation of any lien on the Secured Property shall be construed as a similar prohibition or restriction against the creation of any lien on or security interest in the beneficial interest of such trust.

 

7.9            Successors and Assigns.

 

This Deed of Trust and all provisions hereof shall be binding upon and enforceable against Borrower, its successors, assigns, legal representatives and all other Persons claiming under or through Borrower and the word "Borrower" when used herein shall include all such Persons and any others liable for the payment of the Indebtedness or any part thereof, whether or not they have executed the Note or this Deed of Trust. The word "Lender" when used herein shall include ▇▇▇▇▇▇'s successors, assigns and legal representatives, including all other holders, from time to time, of the Note.

 

7.10          No Oral Change.

 

This Deed of Trust may only be modified, amended or changed by an instrument in writing signed by ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ and may only be released, discharged or satisfied of record by an instrument in writing signed by ▇▇▇▇▇▇. No waiver of any term, covenant, condition or provision of this Deed of Trust shall be effective unless given in writing by ▇▇▇▇▇▇, and if so given by Lender shall only be effective in the specific instance in which given.

 

 

7.11          Entire Agreement.

 

This Deed of Trust and the other Loan Documents supersede, in all respects, all prior written or oral agreements between Borrower and Lender relating to the Loan, this Deed of Trust and the other Loan Documents (including, without limitation, the Loan Application submitted by Borrower to Lender in connection with the Loan) and there are no agreements, understandings, warranties or representations between the parties except as set forth in this Deed of Trust and the other Loan Documents.

 

7.12          Construction.

 

▇▇▇▇▇▇▇▇ acknowledges that ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇'s counsel have reviewed this Deed of Trust and the other Loan Documents and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party will not be employed in the construction or interpretation of this Deed of Trust or the other Loan Documents or any amendments or schedules to any of the foregoing.

 

7.13          Limitation of Liability.

 

In consideration of the security provided by Borrower to Lender for repayment of the Indebtedness, including, without limitation, the liens on and security interests in the Secured Property granted pursuant to this Deed of Trust and the assignment of the Rents and Leases made pursuant to the Assignment of Rents and Leases, upon the occurrence of an Event of Default under this Deed of Trust or under any of the other Loan Documents, ▇▇▇▇▇▇ agrees that it shall not, except as otherwise set forth in this Section, seek to enforce, nor shall Lender be entitled to enforce, any deficiency or monetary judgment against Borrower, any partner of Borrower, any member of Borrower, any shareholder of Borrower or any beneficiary of Borrower (individually, an "Exculpated Party", and collectively, the "Exculpated Parties"), personally, and shall not levy or execute judgment upon any property of the Exculpated Parties, other than the Secured Property; it being expressly agreed, acknowledged and understood, however, that the foregoing limitation of the liability of an Exculpated Party shall not apply to, and nothing contained herein shall in any manner or way release, affect or impair:

 

a.            The existence of the Indebtedness and Obligations created in and evidenced by the Loan Documents;

 

b.            The enforceability of the liens, security interests and assignments created in and granted by the Loan Documents against the Secured Property;

 

c.            The enforceability of the Environmental Indemnification Agreement and any Guaranty given to Lender; or

 

d.            The right of Lender to recover, jointly and severally, from the Liable Parties: (i) all Indebtedness as set forth in Section 5.1(h) of this Deed of Trust and (ii) all Losses (as defined in the Note) incurred by ▇▇▇▇▇▇ (whether directly or indirectly) as set forth in Section 5 of the Note.

 

 

7.14          Waiver of Trial by Jury.

 

BORROWER HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM FILED BY ANY PARTY, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THIS DEED OF TRUST OR ANY ACTS OR OMISSIONS OF BORROWER IN CONNECTION THEREWITH OR CONTEMPLATED THEREBY.

 

7.15          Servicing Fees and Expenses.

 

Borrower acknowledges and agrees that Lender shall impose certain reasonable administrative processing fees (the “Servicing Fees”), not to exceed $10,000 per Servicing Action, in connection with (a) the extension, renewal, modification, amendment and termination of the Loan Documents; (b) the release or substitution of collateral therefor (other than pursuant to the terms of the Agreement Regarding Permitted Releases, which Servicing Fees shall be paid in accordance therewith); (c) the consideration of any consents, waivers and approvals with respect to the Secured Property or Borrower; or (d) any other services provided by Lender or any of its agents to or on behalf of Borrower in connection with the Secured Property, the Loan Documents or the Indebtedness secured thereby (the occurrence of any of the foregoing shall hereafter be referred to as a “Servicing Action”). Lender shall not impose Servicing Fees for the review of any Lease or proposed Lease or the preparation or review of any tenant estoppel certificate or any subordination, nondisturbance and attornment agreement. Borrower hereby acknowledges and agrees to pay, immediately, upon demand, all such Servicing Fees, and any additional fees of a similar type or nature that may be imposed by ▇▇▇▇▇▇ from time to time in connection with a Servicing Action. For avoidance of doubt, the Servicing Fee shall not be charged to the extent that another fee is payable to Lender pursuant to the express terms of the Loan Documents (including, without limitation, the Agreement Regarding Permitted Releases). Borrower shall also be responsible for the payment of all reasonable fees and expenses of ▇▇▇▇▇▇’s outside counsel in the event that ▇▇▇▇▇▇, in its reasonable discretion, shall determine that the assistance of an outside attorney is necessary or appropriate to accomplish the Servicing Action.

 

7.16            Subrogation.

 

To the extent the proceeds of the Indebtedness are used to pay any outstanding lien, charge or encumbrance affecting the Secured Property (including, without limiting the generality of the foregoing, any prior lien), Lender shall be subrogated to all rights, interests and liens owned or held by any owner or holder of such outstanding liens, charges and encumbrances, irrespective of whether such liens, charges or encumbrances are released of record; provided, however, the terms and provisions hereof shall govern the rights and remedies of Lender and, to the extent permitted by law without impairing any of Lender's rights of subrogation, shall supersede the terms, provisions, rights and remedies under the lien or liens to which ▇▇▇▇▇▇ is subrogated hereunder.

 

 

7.17          Modifications and Extensions.

 

Borrower and ▇▇▇▇▇▇ may agree to (a) extend the time for payment of all or any part of the Indebtedness; (b) reduce, rearrange or otherwise modify the terms of payment thereof; (c) accept a renewal note or notes therefor; and (d) otherwise deal with the Secured Property or the Loan Documents, all without notice to or the consent of any junior lienholder or any other Person having an interest in the Secured Property and/or Collateral subordinate to the lien of this Deed of Trust and without the consent of Borrower if ▇▇▇▇▇▇▇▇ has then parted with title to the Secured Property and/or Collateral. No such extension, reduction, modification, renewal or dealing shall affect the priority of this Deed of Trust or release any liability of Borrower or any other Person or impair the security hereof in any manner whatsoever.

 

7.18          Use of Real Estate.

 

The Real Estate is used for commercial purposes as an industrial warehouse and related uses, and the Loan is for commercial purposes and has not been made for personal, family or household purposes.

 

ARTICLE Eight
TRUSTEE

 

8.1            Action by Trustee.

 

The Trustee named herein shall be clothed with full power to act when action hereunder shall be required, and to execute any conveyance of the Secured Property. In the event that the substitution of a Trustee shall become necessary for any reason, the substitution of one trustee in the place of those or any of those named herein shall be sufficient; however, more than one Trustee may be named. The term "Trustee" shall be construed to mean "Trustees" whenever the sense requires. Trustee is hereby released from all obligations imposed by statute which can be waived. The necessity of the Trustee herein named, or any successor in trust, making oath, filing an accounting or an inventory or giving bond as security for the execution of this trust, is expressly waived.

 

 

8.2            Employment of Agents.

 

The Trustee, or any one acting in his stead, shall have, in his discretion, authority to employ all proper agents and attorneys in the execution of this trust and/or in the conducting of any sale made pursuant to the terms hereof, and to pay for such services rendered out of the proceeds of the sale of the Secured Property, should any be realized; and if no sale be made or if the proceeds of sale be insufficient to pay the same, then Borrower hereby undertakes and agrees to pay the cost of such services rendered to said Trustee. The Trustee may rely on any document believed by him in good faith to be genuine. All money received by Trustee shall, until used or applied as herein provided, be held in trust, but need not be segregated (except to the extent required by law), and Trustee shall not be liable for interest thereon.

 

8.3            Indemnification of Trustee.

 

If the Trustee shall be made a party to or shall intervene in any action or proceeding affecting the Secured Property or the title thereto, or the interest of the Trustee or Lender under this Deed of Trust, the Trustee and Lender shall be reimbursed by ▇▇▇▇▇▇▇▇, immediately and without demand, for all reasonable costs, charges and attorneys' fees incurred by him or either of them in any such case, and the same shall be secured hereby as a further charge and lien upon the Secured Property.

 

8.4            Successor Trustee.

 

In the event of the death, refusal, or of inability for any cause, on the part of the Trustee named herein, or of any successor trustee, to act at any time when action under the foregoing powers and trust may be required, or for any other reason satisfactory to Lender, Lender is authorized, either in its own name or through an attorney or attorneys in fact appointed for that purpose, by written instrument duly registered, to name and appoint a successor or successors to execute this trust, such appointment to be evidenced by writing, duly acknowledged; and when such writing shall have been registered, the substituted trustee name therein shall thereupon be vested with all the right and title, and clothed with all the power of the Trustee named herein and such like power of substitution shall continue so long as any part of the Indebtedness secured hereby remains unpaid.

 

[Signature appears on the following page]

 

 

IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇ has caused this Deed of Trust to be executed as of the date first written above.

 

	BORROWER:
	EQRT 1500 SHOALS, L.P., a Delaware limited partnership
	By: EQRT 1500 Shoals GP, LLC, a Delaware limited liability
	company, its sole general partner
		By: EQT Exeter REIT Operating Partnership LP, a
		Delaware limited partnership, its sole member
			By EQT Exeter Real Estate Income Trust, Inc., a
			Maryland corporation, its sole general partner
				By:	/s/ ▇. ▇▇▇▇▇ ▇▇▇▇▇
				Name: ▇. ▇▇▇▇▇ ▇▇▇▇▇,
				Title: Chief Financial Officer

 

COMMONWEALTH OF PENNSYLVANIA	)
	)ss.:
COUNTY OF DELAWARE	)

 

On this the 12 day of August, 2024, before me, the undersigned officer, personally appeared ▇. ▇▇▇▇▇ ▇▇▇▇▇, Chief Financial Officer of EQT Exeter Real Estate Income Trust, Inc., a Maryland corporation, which is the sole general partner of EQT Exeter REIT Operating Partnership LP, a Delaware limited partnership, which is the sole member of and EQRT 1500 Shoals GP, LLC, a Delaware limited liability Company, which is the sole general partner of EQRT 1500 SHOALS, L.P., a Delaware limited partnership, and that he, as such officer, being authorized to do so, executed the foregoing instrument for the purposes therein contained by signing the name of the limited liability company by himself as Chief Financial Officer.

 

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

	/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
	NOTARY PUBLIC
	Print Name:	▇▇▇▇ ▇▇▇▇▇▇▇▇▇
	My commission expires:

 

[SEAL]

 

SIGNATURE AND ACKNOWLEDGEMENT PAGE

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING