EXHIBIT 10.61
LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT
WITH SOUTHTRUST BANK N.A.
RELATING TO THE MOTOROLA TEMPE BUILDING AND THE AVNET BUILDING
LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT
▇▇▇▇▇ Operating Partnership, L.P.
to
Old Republic Title Insurance Agency, Inc., as Trustee
For the Benefit of
SouthTrust Bank
Dated: December 15, 2000
This instrument was prepared by
the attorney described below in
consultation with counsel in the
State in which the Property
is located and, when recorded, the recorded
counterparts should be returned to:
▇▇▇▇ & ▇▇▇▇▇▇ LLP
One Georgia Center - Suite 1200
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
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THE PRINCIPAL INDEBTEDNESS SECURED HEREBY SHALL NOT EXCEED $19,003,000.00. THE
FINAL PAYMENT DATE OF THE INDEBTEDNESS SECURED HEREBY IS JUNE 10, 2002.
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Deed of Trust and Security Agreement - Page 1
Leasehold Deed Of Trust and Security Agreement
THIS LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT (this "Security
Instrument") is entered into on this 15/th/ day of December, 2000, by and
between ▇▇▇▇▇ OPERATING PARTNERSHIP, L.P., a Delaware limited partnership, as
grantor and debtor, whose address is c/▇ ▇▇▇▇▇ Real Estate Funds, ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as
"Borrower"), in favor of Old Republic Title Insurance Agency, Inc., an Arizona
corporation, whose address is ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as "Trustee," said term referring always
to the named Trustee and his successors in trust), for the use and benefit of
SOUTHTRUST BANK, an Alabama banking corporation, whose address is P.O. Box 2554,
Attention: Commercial Real Estate, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter
referred to as "Beneficiary," said term referring always to the lawful owner and
holder of the Secured Obligations (as herein defined)).
W i t n e s s e t h:
Borrower and Beneficiary have entered into a Revolving Loan Agreement of
even date herewith (as the same might hereafter be extended, renewed, modified,
consolidated, substituted, replaced, or restated pursuant to the applicable
provisions thereof, the "Loan Agreement") pursuant to which Beneficiary has
agreed to make a loan to Borrower in the principal sum of Nineteen Million Three
Thousand and No/100 Dollars ($19,003,000.00) in lawful money of the United
States of America (the "Loan"), which Loan will be evidenced by a Revolving Note
of even date herewith payable by Borrower to the order of Beneficiary in said
principal amount (as the same might hereafter be extended, renewed, modified,
consolidated, substituted, replaced, restated, or increased, the "Note"), with
interest thereon from the date of the Note at the rates set forth in the Note,
such principal and interest to be paid in installments as provided in the Loan
Agreement and the Note, with the final installment being due and payable on June
10, 2002.
As a condition precedent to making the Loan, Beneficiary has required that
Borrower execute and deliver this Security Instrument as security for the Loan
and the other Secured Obligations (as hereinafter defined).
Article I - Grants of Security
NOW THEREFORE, for and in consideration of the foregoing and other good and
valuable consideration, and the sum of One Hundred and No/100 Dollars ($100.00)
in hand paid, and the other considerations hereinafter mentioned, the receipt
and sufficiency whereof are hereby acknowledged, Borrower does hereby
irrevocably grant, bargain, sell, pledge, assign, warrant, transfer, and convey
to Trustee and Trustee's successors and assigns, the following property,
appurtenances, rights, interests, and Beneficiary in, the following property,
appurtenances, rights, interests, and estates of Borrower, whether now owned or
hereafter acquired by Borrower (all such property, appurtenances, rights,
interests, and estates being herein referred to collectively as the "Property"):
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Leasehold Deed of Trust and Security Agreement - Page 2
▇▇▇▇▇ Operating Partnership, L.P. - Revolving Loan
(Tempe, Maricopa County, Arizona)
(a) The leasehold estate (the "Leasehold Estate") in the real
property described in Exhibit A attached hereto and made a part hereof (the
"Land") created by virtue of the ASU Research Park Leases more particularly
described in Exhibit B annexed hereto and made a part hereof, and all
rights and privileges created thereunder (the "Ground SubLeases"), which in
turn were created by virtue of the Arizona State University Research Park
Ground Lease more particularly described in said Exhibit B, and all rights
and privileges created thereunder (the "Ground Prime Lease"), as the Ground
Subleases and the Ground Prime Lease have been modified and supplemented
pursuant to the Recognition, Non-Disturbance, and Attornment Agreement more
particularly described in said Exhibit B (the "Recognition Agreement") (the
Ground Subleases and the Ground Prime Lease, as so modified and
supplemented by the Recognition Agreement are each referred to hereinafter
as a "Ground Lease" and collectively as the "Ground Leases");
(b) All ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ and development rights hereafter
acquired by Borrower for use in connection with the Leasehold Estate or the
Land and the development of the Land and all additional lands and estates
therein which may, from time to time, by supplemental mortgage or otherwise
be expressly made subject to the lien of this Security Instrument;
(c) All buildings, structures, fixtures, additions, enlargements,
extensions, modifications, repairs, replacements, and improvements of every
nature whatsoever now or hereafter erected or located on the Land (the
"Improvements");
(d) All easements, rights-of-way, strips and gores of land, vaults,
streets, ways, alleys, passages, sewer rights, waters, water courses, water
rights and powers, air rights, and development rights, minerals, flowers,
shrubs, crops, trees, timber, and other emblements now or hereafter located
on, under, or above the Land or any part or parcel thereof, and all
estates, rights, titles, interests, privileges, liberties, tenements,
hereditaments, appurtenances, reversions, and remainders whatsoever in any
way belonging, relating, or appertaining to the Land and the Improvements
or any part thereof, or which hereafter shall in any way belong, relate, or
be appurtenant thereto, and all land lying in the bed of any street, road,
or avenue, opened or proposed, in front of or adjoining the Land, to the
center line thereof, and all the estates, rights, titles, interests, dower
and rights of dower, curtesy and rights of curtesy, property, possession,
claim, and demand whatsoever, both at law and in equity, of Borrower of,
in, and to the Land and the Improvements and every part and parcel thereof,
with the appurtenances thereto;
(e) All machinery, equipment, fixtures, appliances, and personal
property of every kind and nature whatsoever now or hereafter owned by
Borrower, or in which Borrower has or shall have an interest, now or
hereafter located in, on, or about the Land and the Improvements, or the
appurtenances thereof, or used or intended to be used with or in connection
with the present or future operation, occupancy, or enjoyment of the Land
and the Improvements (including, without limitation, appliances, machinery,
equipment, signs, artwork, office furnishings and
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Leasehold Deed of Trust and Security Agreement - Page 3
▇▇▇▇▇ Operating Partnership, L.P. - Revolving Loan
(Tempe, Maricopa County, Arizona)
equipment, all partitions, screens, awnings, shades, blinds, floor
coverings, hall and lobby equipment, heating, lighting, plumbing,
ventilating, refrigerating, incinerating, elevators, escalators, air
conditioning and communication plants or systems with appurtenant fixtures,
vacuum cleaning systems, call or beeper systems, security systems,
sprinkler systems and other fire prevention and extinguishing apparatus and
materials; all equipment, manual, mechanical or motorized, for the
construction, maintenance, repair and cleaning of, parking areas, walks,
underground ways, truck ways, driveways, common areas, roadways, highways
and streets), and all building equipment, materials, and supplies of any
nature whatsoever now or hereafter located in, on, or about the Land and
the Improvements, or the appurtenances thereof, and whether in storage or
otherwise, or used or intended to be used with or in connection with the
present or future operation, occupancy, or enjoyment of the Land and the
Improvements (hereinafter collectively referred to as the "Equipment"),
including the proceeds of any sale or transfer of the foregoing, and the
right, title and interest of Borrower in and to any of the Equipment which
may be subject to any security interests, as defined in the Uniform
Commercial Code, as adopted and enacted by the State or States where any of
the Property is located (the "UCC") superior in priority to the lien of
this Security Instrument. In connection with Equipment which is leased to
Borrower or which is subject to a lien or security interest which is
superior to the lien of this Security Instrument, this Security Instrument
shall also cover all right, title and interest of Borrower in and to all
deposits, and the benefit of all payments now or hereafter made with
respect to such Equipment
(f) All leases, subleases, subtenancies, licenses, occupancy
agreements, and concessions relating to the use and enjoyment of all or any
part of the Land or the Improvements heretofore or hereafter entered into
whether before or after the filing by or against Borrower of any petition
for relief under the United States Bankruptcy Code, 11 U.S.C. (S) 101 et
seq. (the "Bankruptcy Code"), as the same might be amended from time to
time (the "Leases"), and any and all guaranties and other agreements
relating to or made in connection with any of the Leases, and all right,
title, and interest of Borrower, its successors and assigns therein and
thereunder to secure the performance by the lessees of their obligations
thereunder and all rents, additional rents, revenues, issues, and profits
(including oil and gas or other mineral royalties and bonuses) from the
Land and the Improvements, whether paid or accruing before or after the
filing by or against Borrower of any petition for relief under the
Bankruptcy Code (the "Rents"), and all proceeds from the sale or other
disposition of the Leases and the right to receive and apply the Rents to
the payment of the Secured Obligations, and all of Borrower's claims and
rights to damages and any other remedies in connection with or arising from
the rejection of any Lease by the lessee or any trustee, custodian or
receiver pursuant to the Bankruptcy Code in the event that there shall be
filed by or against the lessee any petition, action or proceeding under the
Bankruptcy Code or under any other similar federal or state law now or
hereafter in effect;
(g) All proceeds, including all claims to and demands for them, of
the voluntary or involuntary conversion of any of the Land, the
Improvements, or any
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Leasehold Deed of Trust and Security Agreement - Page 4
▇▇▇▇▇ Operating Partnership, L.P. - Revolving Loan
(Tempe, Maricopa County, Arizona)
of the other Property into cash or liquidated claims, including proceeds of
all present and future fire, hazard, or casualty insurance policies and all
condemnation awards or payments now or hereafter to be made by any public
body or decree by any court of competent jurisdiction for any taking or in
connection with any condemnation or eminent domain proceeding, and all
causes of action and their proceeds for any damage or injury to the Land,
Improvements, or any of the other Property or any part of them, or breach
of warranty in connection with the construction of the Improvements,
including causes of action arising in tort, contract, fraud, or concealment
of a material fact;
(h) All rights to the payment of money, accounts, accounts
receivable, reserves, deferred payments, refunds, cost savings, payments
and deposits, whether now or hereafter to be received from third parties
(including all ▇▇▇▇▇▇▇ money deposits) or deposited by Borrower with
Beneficiary or third parties (including all utility deposits, accounts for
the deposit, collection, and/or disbursement of Rents, and all reserve
accounts provided for under any documentation entered into or delivered by
Borrower in connection with the Loan), chattel paper, instruments,
documents, notes, drafts and letters of credit, which arise from or relate
to construction on the Land, to any business now or hereafter to be
conducted on the Land, or to the Land and the Improvements generally;
(i) All franchises, trade names, trademarks, symbols, goodwill,
service marks, trade styles, books, records, development and use rights,
architectural and engineering plans, specifications and drawings, and as-
built drawings, contracts, licenses, approvals, applications, consents,
subcontracts, service contracts, management contracts, permits, and other
agreements of any nature whatsoever now or hereafter obtained or entered
into by Borrower, or any managing agent of the Property on behalf of
Borrower, with respect to the use, occupation, development, construction,
management, name and/or operation of the Property or any part thereof or
the activities conducted thereon or therein, or otherwise pertaining to the
Property or any part thereof, including, without limitation, (i) all rights
of Borrower to receive moneys due and to become due to it under or in
connection with any of the foregoing, (ii) all rights of Borrower to
damages arising out of or for a breach or default in respect thereof, and
(iii) all rights of Borrower to perform and to exercise all remedies
thereunder;
(j) All rights that Borrower now has or may hereafter acquire, to be
indemnified and/or held harmless from any liability, loss, damage, costs or
expense (including, without limitation, attorneys' fees and disbursements)
relating to the Property or any part thereof;
(k) All books and records pertaining to any and all of the property
described above, including computer-readable memory and any computer
hardware or software necessary to access and process such memory;
(l) All appurtenances in respect of or otherwise relating to the
Ground Leases, including, without limitation, renewal option and expansion
rights, and all estate and rights of Borrower of, in and to (i) all
modifications, extensions and
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Leasehold Deed of Trust and Security Agreement - Page 5
▇▇▇▇▇ Operating Partnership, L.P. - Revolving Loan
(Tempe, Maricopa County, Arizona)
renewals of the Ground Leases and all rights to renew or extend the term
thereof, (ii) all credits to and deposits of Borrower under the Ground
Leases, (iii) all other options, privileges and rights granted and demised
to Borrower under either Ground Lease, (iv) all of the right and privilege
of Borrower to terminate, cancel, abridge, surrender, merge, modify or
amend either Ground Lease, and (v) any and all possessory rights of
Borrower and other rights or privileges of possession, including, without
limitation, Borrower's right to elect to remain in possession of the
Property and the Leasehold Estate pursuant to Section 365(h)(1) of the
Bankruptcy Code;
(m) All of Borrower's claims and rights to damages and any other
remedies in connection with or arising from the rejection of either Ground
Lease by the lessor thereunder (such lessors under the Ground Leases,
including any successors and assigns thereof, being each referred to herein
as a "Ground Lessor" and collectively as the "Ground Lessors") or any
trustee, custodian or receiver appointed pursuant to the Bankruptcy Code in
the event that there shall be filed by or against either Ground Lessor any
petition, action or proceeding under the Bankruptcy Code or under any other
similar federal or state law now or hereafter in effect (collectively,
"Ground Lessor's Bankruptcy"); and
(n) All proceeds of, additions and accretions to, substitutions and
replacements for, and any changes in any of the property described above;
TO HAVE AND TO HOLD the Property and all parts, rights, members and
appurtenances thereof, to the use, benefit and behoof of Beneficiary, its
successors and assigns, as a leasehold estate forever.
Article II - Obligations Secured
This Security Instrument and the grants, assignments, and transfers made in
Article I hereof are given for the purpose of securing the following obligations
in any order of priority as Beneficiary may determine in its sole discretion
(the "Secured Obligations"):
(a) Payment of all indebtedness evidenced by the Note, including
principal, interest, default interest, late charges, prepayment
consideration, and other sums, as provided in the Note, and the
performance of all other obligations set forth in the Note;
(b) The full and prompt payment and performance of all of the
provisions, agreements, covenants and obligations herein contained and
contained in the Loan Agreement or any of the other Loan Documents (as
defined in the Loan Agreement) and the payment of all other sums therein
covenanted to be paid;
(c) Any and all additional advances made by Beneficiary pursuant to
this Security Instrument or the other Loan Documents to protect or preserve
the Property or the lien or security interest created hereby on the
Property, or for taxes, assessments or insurance premiums as hereinafter
provided or for performance of
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Leasehold Deed of Trust and Security Agreement - Page 6
▇▇▇▇▇ Operating Partnership, L.P. - Revolving Loan
(Tempe, Maricopa County, Arizona)
any of Borrower's obligations hereunder or under the other Loan Documents
or for any other purpose provided herein or in the other Loan Documents
(whether or not the original Borrower remains the owner of the Property at
the time of such advances); and
(d) Payment and performance of all modifications, amendments,
extensions, consolidations, and renewals, however evidenced, of any of the
obligations described in (a) through (c) above.
Article III - Covenants
3.01. Payment of Secured Obligations. Borrower will perform, observe and
comply with the provisions hereof and of each of the other Loan Documents and
duly and punctually will pay to Beneficiary the sum of money expressed in the
Note with interest thereon and all other sums required to be paid by the
Borrower pursuant to the provisions of this Security Instrument, all without any
deduction or credit for taxes or other similar charges paid by the Borrower.
3.02. Incorporation by Reference. All the covenants, conditions, and
agreements contained in the Loan Agreement, the Note, and all of the other Loan
Documents are hereby made a part of this Security Instrument to the same extent
and with the same force as if fully set forth herein.
3.03. Warranty of Title. Borrower is lawfully seized of an indefeasible
leasehold estate in the Property hereby conveyed and has good title to all other
Property in which a security interest is herein granted, and Borrower has good
right, full power, and lawful authority to sell, convey, and grant a security
interest in the same in the manner and form aforesaid. Except for the Permitted
Encumbrances described in the Loan Agreement, the Property is free and clear of
all liens, charges, and encumbrances whatsoever, including conditional sales
contracts, chattel mortgages, security agreements, financing statements, and
anything of a similar nature, and that Borrower shall and will warrant and
forever defend the title thereto unto the Beneficiary, its successors and
assigns, against the lawful claims of all persons whomsoever. Borrower shall not
acquire any portion of the Property subject to any security interest,
conditional sales contract, title retention arrangement, or other charge or lien
taking precedence over the security interest and lien of this Security
Instrument.
3.04. Taxes, Utilities, and Other Charges.
(a) Borrower will pay or cause to be paid, on or before the due date
thereof, all taxes, assessments, levies, license fees, permit fees, dues,
charges, fines, and impositions (in each case whether general or special,
ordinary or extraordinary, or foreseen or unforeseen) of every character
whatsoever (including all penalties and interest thereon) now or hereafter
levied, assessed, confirmed, or imposed on, or in respect of, or which might
constitute a lien upon the Property, or any part thereof, or any estate, right,
or interest therein, or upon the rents, issues, income, or profits thereof, and
shall submit to Beneficiary such evidence of the due and punctual payment of all
such taxes, assessments, and other fees and charges as Beneficiary might
require. Borrower shall have the right, before any such tax, assessment, fee,
or charges become delinquent, to contest or object
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Leasehold Deed of Trust and Security Agreement - Page 7
▇▇▇▇▇ Operating Partnership, L.P. - Revolving Loan
(Tempe, Maricopa County, Arizona)
to the amount or validity of any such tax, assessment, fee, or charge by
appropriate legal proceedings, provided that said right shall not be deemed or
construed in any way as relieving, modifying, or extending Borrower's covenant
to pay any such tax, assessment, fee, or charge at the time and in the manner
provided herein unless (i) Borrower has given prior written notice to
Beneficiary of Borrower's intent to so contest or object, (ii) Borrower shall
demonstrate to Beneficiary's satisfaction that the legal proceedings shall
conclusively operate to prevent the sale of the Property, or any part thereof,
to satisfy such tax, assessment, fee, or charge prior to final determination of
such proceedings, (iii) Borrower shall furnish a good and sufficient bond or
surety as requested by and satisfactory to Beneficiary, and (iv) Borrower shall
have provided a good and sufficient undertaking as might be required or
permitted by law to accomplish a stay of such proceedings.
(b) Borrower will pay or cause to be paid, on or before the due date
thereof, (i) all premiums on policies of insurance covering, affecting, or
relating to the Property, as required pursuant to the Loan Agreement, (ii) all
ground rentals, other lease rentals, and other sums, if any, owing by Borrower
and becoming due under any lease or rental contract affecting the Property, and
(iii) all utility charges that are incurred by Borrower for the benefit of the
Property, or which might become a charge or lien against the Property for gas,
electricity, water, sewer services, and the like furnished to the Property, and
all other public or private assessments or charges of a similar nature affecting
the Property or any portion thereof, whether or not the nonpayment of same might
result in a lien thereon. Borrower shall submit to Beneficiary such evidence of
the due and punctual payment of all such premiums, rentals, and other sums as
Beneficiary might require.
(c) Borrower shall not suffer any mechanic's, materialman's, laborer's,
statutory, or other lien (except as expressly permitted by the Loan Agreement)
to be created or remain outstanding against the Property; provided that Borrower
may contest any such lien in good faith by appropriate legal proceedings
provided the lien is bonded off and removed as an encumbrance upon the Property.
Beneficiary has not consented and will not consent to the performance of any
work or the furnishing of any materials that might be deemed to create a lien or
liens against the Property that is superior to the lien and security interest
hereof.
(d) Borrower will pay, on or before the due date thereof, all taxes,
assessments, charges, expenses, costs, and fees that might now or hereafter be
levied upon, or assessed or charged against, or incurred in connection with, the
Note, the Secured Obligations, this Security Instrument, or any of the other
Loan Documents, including, without limitation, any sales or use tax that might
be imposed on Beneficiary with respect to the Secured Obligations (but excluding
taxes calculated solely based upon the income derived by Beneficiary from the
Secured Obligations). In the event of the passage of any state, federal,
municipal, or other governmental law, order, rule, or regulation, subsequent to
the date hereof, in any manner changing or modifying the laws now in force
governing the taxation of deeds to secure debt or security agreements, or debts
secured thereby, or in the manner of collecting such taxes, so as to adversely
affect Beneficiary (excluding any tax upon Beneficiary's income derived from the
Secured Obligations), Borrower will pay any such tax on or before the due date
thereof. If Borrower fails to make such prompt payment or if, in the opinion of
Beneficiary, any such state, federal, municipal, or other governmental law,
order, rule, or regulation prohibits Borrower from making such payment or would
penalize Borrower if Borrower makes such payment, or if, in the opinion of
Beneficiary, the making of such payment might result in the imposition of
interest beyond the maximum amount permitted by applicable law,
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Leasehold Deed of Trust and Security Agreement - Page 8
▇▇▇▇▇ Operating Partnership, L.P. - Revolving Loan
(Tempe, Maricopa County, Arizona)
then the entire Secured Obligations will, at the option of Beneficiary, become
immediately due and payable.
3.05. Insurance.
(a) Borrower shall cause the Property at all times during the entire
term of this Security Instrument to be insured for the mutual benefit of
Borrower and Beneficiary against loss or damage by fire and against loss or
damage by other risks and hazards covered by a standard "all risk" insurance
policy. The amount of such insurance shall be not less than one hundred percent
(100%) of the full replacement cost of the Improvements, furniture, furnishings,
fixtures, equipment and other items (whether personalty or fixtures) included in
the Property and owned by Borrower from time to time, without reduction for
depreciation, but excluding footings and foundations and parts of the Property
to the extent not insurable. The determination of the replacement cost amount
shall be adjusted annually to comply with the requirements of the insurer
issuing such coverage or, at Beneficiary's election, by reference to such
indices, appraisals or information as Beneficiary determines in its reasonable
discretion. Full replacement cost, as used herein, means, with respect to the
Improvements, the cost of replacing the Improvements without regard to deduction
for depreciation, exclusive of the cost of excavations, foundations and footings
below the lowest basement floor, and means, with respect to such furniture,
furnishings, fixtures, equipment and other items, the cost of replacing the
same, in each case, with inflation guard coverage to reflect the effect of
inflation. Each such policy or policies, if so required, shall contain a
replacement cost endorsement and either an agreed amount endorsement (to avoid
the operation of any co-insurance provisions) or a waiver of any co-insurance
provisions, all subject to Beneficiary's reasonable approval. The premiums for
the policies of insurance carried in accordance with this Section shall be paid
annually in advance.
(b) Borrower, at its sole cost and expense, for the mutual benefit of
Borrower and Beneficiary, shall also obtain and maintain or cause to be obtained
and maintained during the entire term of this Security Instrument the following
insurance policies:
(i) Flood insurance if any part of the Improvements is located in
an area identified by the Federal Emergency Management Agency as an area
having special flood hazards and in which flood insurance has been made
available under the National Flood Insurance Act of 1968 (and any successor
act thereto) in an amount equal to at least the then full replacement value
of the Property or the amount of flood insurance available under said Act,
whichever is less;
(ii) Comprehensive general liability insurance, including broad form
property damage, blanket contractual and personal injuries (including death
resulting therefrom) coverages on an "occurrence basis" with minimum
combined single limit coverage of not less than $10,000,000.00;
(iii) Insurance covering the major components of the central heating,
air conditioning and ventilating systems, boilers, other pressure vessels,
sprinkler systems, high pressure piping and machinery, elevators and
escalators, if any, and other similar equipment installed in the
Improvements, in an amount equal to one hundred percent (100%) of the full
replacement cost of the Improvements which
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Leasehold Deed of Trust and Security Agreement - Page 9
▇▇▇▇▇ Operating Partnership, L.P. - Revolving Loan
(Tempe, Maricopa County, Arizona)
policies shall insure against physical damage to and loss of occupancy and
use of the Improvements arising out of an accident or breakdown covered
thereunder;
(iv) During the period of any construction of the Improvements or
renovation or alteration of the Improvements, a so-called "Builder's All-
Risk Completed Value" or "Course of Construction" insurance policy in non-
reporting form for any Improvements under construction, renovation or
alteration in an amount reasonably approved by Beneficiary and Worker's
Compensation Insurance covering all persons engaged in such construction,
renovation or alteration;
(v) Loss of rents or loss of business income insurance in
amounts sufficient to compensate Borrower for all Rents during a period of
not less than one (1) year in which the Improvements may be damaged or
destroyed; and
(vi) Such other insurance as may from time to time be reasonably
and customarily required by Beneficiary in order to protect its interests
in the Property.
(c) All insurance policies required pursuant to this Section (the
"Policies") (i) shall be issued by an insurer satisfactory to Beneficiary in its
sole discretion, (ii) shall contain the standard New York mortgagee or
equivalent non-contribution clause naming Beneficiary as the person to which all
payments made by such insurance company shall be paid, (iii) shall be maintained
throughout the term of this Security Instrument without cost to Beneficiary,
(iv) a certificate thereof shall be delivered to Beneficiary, (v) shall contain
such provisions as Beneficiary deems reasonably necessary or desirable to
protect its interest including, without limitation, endorsements providing that
neither Borrower, Beneficiary nor any other party shall be a coinsurer under the
Policies and that Beneficiary shall receive at least thirty (30) days prior
written notice of any modification or cancellation, and (vi) shall be reasonably
satisfactory in form and substance to Beneficiary and shall be reasonably
approved by Beneficiary as to amounts, form, risk coverage, deductibles, loss
payees and insureds. Not later than ten (10) days prior to the expiration date
of each of the Policies, Borrower shall deliver to Beneficiary satisfactory
evidence of the renewal of each Policy.
(d) Beneficiary is hereby authorized and empowered, at its option, to
adjust or compromise any loss under any Policies and to collect and receive the
proceeds from any such Policies. Each insurance company is hereby authorized
and directed to make payment for all such losses directly to Beneficiary as its
interest might appear, instead of to Borrower and Beneficiary jointly. If any
insurance company fails to disburse directly and solely to Beneficiary but
instead disburses either solely to Borrower or to Borrower and Beneficiary
jointly, Borrower agrees immediately to endorse and transfer such proceeds to
Beneficiary to the extent of Beneficiary's interest therein. Upon the failure
of Borrower to endorse and transfer such proceeds as aforesaid, Beneficiary may
execute such endorsements or transfers for and in the name of Borrower, and
Borrower hereby irrevocably appoints Beneficiary as Borrower's agent and
attorney-in-fact so to do. Beneficiary shall not be held responsible for any
failure to collect any insurance proceeds due under the terms of any policy
regardless of the cause of such failure. The proceeds of any insurance
collected by Beneficiary arising from any casualty affecting the Property shall
be applied and disbursed in accordance with, and subject to the conditions of,
Section 3.07 of this Security Instrument.
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3.06. Condemnation. Borrower shall promptly give Beneficiary written
notice of the actual or threatened commencement of any condemnation or eminent
domain proceeding affecting the Property and shall deliver to Beneficiary copies
of any and all papers served in connection with such proceedings. No taking by
any public or quasi-public authority through eminent domain or otherwise
(including but not limited to any transfer made in lieu of or in anticipation of
the exercise of such taking) shall limit or otherwise affect Borrower's
obligations under the Loan Agreement, this Security Instrument, or any of the
other Loan Documents to which Borrower is a party. Beneficiary is authorized, at
its option, to commence, appear in, and prosecute, through counsel selected by
Beneficiary, in its own or in Borrower's name, any action or proceeding relating
to any such condemnation, provided that, if Beneficiary's determines that the
compensation, award, or payment or relief to be collected from such action or
proceeding will likely be less than the Casualty Benchmark (as defined in
Section 3.07 below), then Beneficiary shall not unreasonably withhold its
consent to permitting Borrower the sole right to prosecute any such action or
proceeding. If an Event of Default exists, Beneficiary shall have the sole and
exclusive right to compromise or settle any claim for compensation. All such
compensation, awards, damages, claims, rights of action, and proceeds and the
right thereto are hereby assigned by Borrower to Beneficiary, and Beneficiary is
authorized, at its option, to collect and receive all such compensation, awards,
or damages and to give proper receipts and acquittances therefor without any
obligation to question the amount of any such compensation, awards, or damages.
Beneficiary will be entitled to all compensation, awards, and other payments or
relief therefor; provided that if the amount of such compensation, awards, and
other payments or relief is equal to or less than the Casualty Benchmark,
Borrower may collect same. Beneficiary shall not be limited to the interest paid
on the award by the condemning authority but shall be entitled to receive out of
the award interest at the rate or rates provided herein and in the Note. Any
such compensation, awards, and other payments received by Beneficiary, after
deducting therefrom all of Beneficiary's expenses incurred in the collection and
administration of such sums, including reasonable attorney's fees actually
incurred, shall be applied and disbursed in accordance with Section 3.07 below.
If the Property is sold, through foreclosure or otherwise, prior to the receipt
by Beneficiary of such award or payment, Beneficiary shall have the right,
whether or not a deficiency judgment on the Note shall have been sought,
recovered or denied, to receive said award or payment, or a portion thereof
sufficient to pay the Secured Obligations. Borrower shall file and prosecute or
cause to be filed and prosecuted its claim or claims for any such award or
payment in good faith and with due diligence and cause the same to be paid over
to Beneficiary, and hereby irrevocably authorizes and empowers Beneficiary, in
the name of Borrower or otherwise, to collect and receive any such award or
payment and to file and prosecute such claim or claims, and although it is
hereby expressly agreed that the same shall not be necessary in any event,
Borrower shall, upon demand of Beneficiary, make, execute and deliver any and
all assignments and other instruments sufficient for the purpose of assigning
any such award or payment to Beneficiary, free and clear of any encumbrances of
any kind or nature whatsoever.
3.07. Restoration and Repair of Property. In the event of a casualty or
a taking by eminent domain of all or other portion of the Property, the
following provisions shall apply in connection with the repair and restoration
of the Property (a "Restoration"):
(a) In the event that (i) the net proceeds of insurance received
by Beneficiary as a result of damage or destruction of the Property, or in
the case of condemnation, the net amount of all awards and payments
received by Beneficiary
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with respect to such taking, after deduction of Beneficiary's reasonable
costs and expenses (including, but not limited to, reasonable legal costs
and expenses actually incurred), in collecting the same, whichever the case
may be (the "Net Proceeds") do not exceed $250,000.00 (the "Casualty
Benchmark"), (ii) the costs of completing the Restoration, as reasonably
estimated by Beneficiary, shall be less than or equal to the Casualty
Benchmark, (iii) no Event of Default shall have occurred and be continuing,
(iv) the Property and the use thereof after the Restoration shall be in
compliance with, and permitted under, all Legal Requirements (as defined in
the Loan Agreement), (v) such fire or other casualty or taking, as
applicable, does not materially impair access to the Land or to the
Improvements, then Beneficiary shall disburse the entire Net Proceeds
directly to Borrower, and Borrower shall commence and diligently prosecute
to completion the Restoration to as nearly as possible the condition the
Property was in immediately prior to such fire or other casualty or to such
taking or to such other condition as may be agreed upon between Borrower
and Beneficiary. Borrower shall segregate the Net Proceeds from other funds
of Borrower to be used to pay for the cost of the Restoration in accordance
with the terms hereof.
(b) If the Net Proceeds are greater than the Casualty Benchmark, such
Net Proceeds shall be held by Beneficiary in a segregated account to be
made available to Borrower for the Restoration in accordance with the
provisions of this Section. Borrower shall commence and diligently
prosecute to completion the Restoration of the Property (in the case of a
taking, to the extent the Property is capable of being restored). The Net
Proceeds shall be made available to Borrower for payment of, or
reimbursement of Borrower's expenses in connection with, the Restoration,
subject to the following conditions:
(1) No Event of Default shall have occurred and be continuing;
(2) Beneficiary shall, within a reasonable period to time prior
to request for initial disbursement of the Net Proceeds, be furnished
with an estimate of the cost of the Restoration accompanied by an
independent architect's certification as to such costs and appropriate
plans and specifications for the Restoration;
(3) The Net Proceeds, together with any cash or cash equivalent
deposited by Borrower with Beneficiary, are sufficient to cover the
cost of the Restoration as such costs are certified by the independent
architect;
(4) Beneficiary shall be satisfied that any operating deficits,
including all Monthly Payments, that shall be incurred with respect to
the Property as a result of the occurrence of any such fire or other
casualty or taking, whichever the case may be, shall be covered out of
the Net Proceeds or other funds of Borrower;
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(5) Beneficiary shall be satisfied that, upon the completion of
the Restoration and related lease-up, the Lease Documents (as defined
in the Loan Agreement) shall remain in full force and affect with no
abatement of rent except to the extent covered by business
interruption insurance and/or condemnation proceeds and the net cash
flow and value of the Property shall otherwise be restored to levels
that existed prior to such casualty or condemnation;
(6) The Restoration can reasonably be completed on or before the
earlier to occur of (i) six (6) months prior to the maturity of the
Note and (ii) the date required pursuant to Legal Requirements (as
defined in the Loan Agreement);
(7) The Property and the use thereof after the Restoration shall
be in compliance with, and permitted under, all Legal Requirements;
and
(8) Such fire or other casualty or taking, as applicable, does
not materially impair access to the Land or the Improvements.
(b) The Net Proceeds shall be held by Beneficiary, and until
disbursed in accordance with the provisions of this Section, shall
constitute additional security for the Obligations. The Net Proceeds shall
be disbursed by Beneficiary to, or directed by, Borrower from time to time
during the course of the Restoration, in accordance with the Loan Agreement
as if the Net Proceeds constituted the original proceeds of the Loan.
(c) Beneficiary shall have the use of the plans and specifications
and all permits, licenses and approvals required or obtained in connection
with the Restoration. The identity of the contractors, subcontractors and
materialmen engaged in the Restoration, as well as the contracts under
which they have been engaged, shall be subject to prior review and
acceptance by Beneficiary and Beneficiary's Consultant, which acceptance
shall not be unreasonably withheld or delayed more than fifteen (15) days
after submission to Beneficiary and Beneficiary's Consultant. All costs
and expenses incurred by Beneficiary in connection with making the Net
Proceeds available for the Restoration including, without limitation,
reasonable counsel fees and disbursements and Beneficiary's Consultant's
fees, shall be paid by Borrower.
(d) In no event shall Beneficiary be obligated to make disbursements
of the Net Proceeds in excess of an amount equal to the costs actually
incurred from time to time for work in place as part of the Restoration, as
certified by Beneficiary's Consultant, minus a reasonably retainage. The
retainage shall in no event, and notwithstanding anything to the contrary
set forth above in this Section, be less than the amount actually held back
by Borrower from contractors, subcontractors, and materialmen engaged in
the Restoration. The retainage shall not be released until
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Beneficiary's Consultant certifies to Beneficiary that the Restoration has
been completed in accordance with the provisions of this Section and that
all approvals necessary for the re-occupancy and use of the Property have
been obtained from all appropriate governmental and quasi-governmental
authorities, and Beneficiary receives evidence satisfactory to Beneficiary
that the costs of the Restoration have been paid in full or shall be paid
in full out of the retainage.
(e) If at any time the Net Proceeds or the undisbursed balance
thereof shall not, in the opinion of Beneficiary, be sufficient to pay in
full the balance of the costs which are estimated by Beneficiary's
Consultant to be incurred in connection with the completion of the
Restoration, Borrower shall deposit the deficiency (the "Net Proceeds
Deficiency") with Beneficiary before any further disbursement of the Net
Proceeds shall be made. The Net Proceeds Deficiency deposited with
Beneficiary shall be held by Beneficiary and shall be disbursed for costs
actually incurred in connection with the Restoration on the same conditions
applicable to the disbursement of the Net Proceeds, and until so disbursed
pursuant to this Section shall constitute additional security for the
Obligations.
(f) The excess, if any, of the Net Proceeds and the remaining
balance, if any, of the Net Proceeds Deficiency deposited with Beneficiary
after Beneficiary's Consultant certifies to Beneficiary that the
Restoration has been completed in accordance with the provisions of this
Section and the receipt by Beneficiary of evidence satisfactory to
Beneficiary that all costs incurred in connection with the Restoration have
been paid in full, shall be remitted by Beneficiary to Borrower, provided
no Event of Default shall have occurred and be continuing.
(g) Any Net Proceeds not required (i) to be made available for the
Restoration or (ii) to be returned to Borrower as excess Net Proceeds
pursuant to the preceding subsection shall be retained and applied by
Beneficiary toward the payment of the Obligations, whether or not then due
and payable, in such order, priority, and proportions as Beneficiary in its
discretion shall deem proper or, at the discretion of Beneficiary, the same
shall be paid, either in whole or in part, to Borrower.
3.08. Care of Property.
(a) Borrower will preserve and maintain the Property in good condition
and repair, will not commit or suffer any waste, and will not do or suffer to be
done anything that will increase the risk of fire or other hazard to the
Property or any part thereof. Borrower will maintain the insurance required by
the Loan Agreement. Beneficiary is hereby authorized to enter upon and inspect
the Property at any time during normal business hours. Borrower will comply
promptly with all present and future laws, ordinances, rules, and regulations of
any governmental authority affecting the Property or any part thereof,
including, without limitation, the Americans with Disabilities Act and
regulations thereunder, and all laws, ordinances, rules and regulations relating
to zoning, building codes, set back requirements, and environmental matters.
(b) No Improvements, Equipment, or other part of the Property shall be
removed, demolished, or substantially altered without the prior written consent
of Beneficiary. Borrower may,
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Tempe, Maricopa County, Arizona)
free from the lien and security interest of this Security Instrument, sell or
consume Inventory in the ordinary course of business and, provided no Default or
Event of Default then exists, sell or otherwise dispose of Equipment that might
become worn out, undesirable, obsolete, disused or unnecessary for use in the
operation of the Property upon replacing the same by, or substituting for the
same, other Equipment not necessarily of the same character, but of at least
equal value to Borrower and costing not less than the amount realized from the
Equipment sold or otherwise disposed of, which shall forthwith become, without
further action, subject to the lien and security interest of this Security
Instrument.
(c) If the Property or any part thereof is damaged by fire or any other
cause or through condemnation, Borrower will give immediate written notice of
the same to Beneficiary. Upon the occurrence of any such casualty or
condemnation and provided that Beneficiary makes any insurance proceeds or
condemnation awards collected as a result of such casualty or condemnation
available to Borrower pursuant to the provisions of the Loan Agreement, then
Borrower will restore promptly the Property to the equivalent of its original
condition, regardless of whether such insurance proceeds or condemnation awards
shall be sufficient in amount therefor.
3.09. Leases and Management Agreements. Borrower shall not, without the
prior written consent and approval of Beneficiary, enter into any Lease or
permit any tenancy of or affecting the Property except for Leases conforming to
the requirements of the Loan Agreement, or enter into or permit any management
agreement, of or affecting the Property, except as expressly permitted by the
Loan Agreement.
3.10. Expenses. Borrower will pay or reimburse Beneficiary for all
reasonable attorneys' fees, costs and expenses incurred by Beneficiary in any
proceedings involving the estate of a decedent or an insolvent, or in any
action, legal proceeding or dispute of any kind in which Beneficiary is made a
party, or appears as party plaintiff or defendant, affecting the Secured
Obligations, this Security Instrument or the interest created herein, or the
Property, including but not limited to the exercise of any power of sale of this
Security Instrument, any condemnation action involving the Property, any dispute
or other matter involving a Lease or any tenant thereunder, or any action to
protect the security hereof, and any such amounts paid by Beneficiary shall be
added to the Secured Obligations.
3.11. Further Assurances; After Acquired Property. At any time, and from
time to time, upon request by Beneficiary, Borrower will make, execute and
deliver or cause to be made, executed and delivered, to Beneficiary, any and all
other further instruments, certificates, and other documents as may, in the
reasonable opinion of Beneficiary, be necessary or desirable to (i) perfect and
protect the lien and security interest created or purported to be created
hereby, (ii) enable Beneficiary to exercise and enforce any and all rights and
remedies hereunder in respect of the Property, or (iii) effect otherwise the
purposes of this Security Instrument, including, without limitation, (A)
executing and filing such financing or continuation statements, or amendments
thereto, as may be necessary or desirable or that Beneficiary might request to
perfect and preserve the security interest created by this Security Instrument
as a first and prior security interest upon and security title in and to all of
the Property, whether now owned or hereafter acquired by Borrower, (B) if
certificates of title are now or hereafter issued or outstanding with respect to
any of the Property, by immediately causing the interest of Beneficiary to be
properly noted thereon at Borrower's expense, and (C) furnishing to Beneficiary
from time to time statements and schedules
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further identifying and describing the Property and such other reports in
connection with the Property as Beneficiary might request, all in reasonable
detail. Upon any failure by Borrower so to do, Beneficiary may make, execute,
and record any and all such instruments, certificates, and documents for and in
the name of Borrower, and Borrower hereby irrevocably appoints Beneficiary the
agent and attorney in fact of Borrower so to do, which power of attorney is
coupled with an interest and irrevocable. The lien and security interest hereof
shall attach automatically without any further act or deed required of Borrower
or Beneficiary to all after-acquired property of the kind described herein
attached to or used in connection with the operation of the Property or any part
thereof.
3.12. Indemnification of Expenses.
(a) Borrower will pay, reimburse, and indemnify Trustee and Beneficiary
for all reasonable attorney's fees, costs, and expenses incurred by Trustee or
Beneficiary in any suit, action, trial, appeal, bankruptcy or other legal
proceeding or dispute of any kind in which Trustee or Beneficiary is made a
party or appears as party plaintiff or defendant, affecting the Secured
Obligations, this Security Instrument or the interests created herein, or the
Property, or any appeal thereof, including, but not limited to, any foreclosure
action, any condemnation action involving the Property or any action to protect
the security hereof, any bankruptcy or other insolvency proceeding commenced by
or against Borrower, any lessee of the Property (or any part thereof), or any
guarantor of any of the Secured Obligations, and any such amounts paid by
Trustee or Beneficiary shall be added to the Secured Obligations and shall be
secured by this Security Instrument. Borrower will indemnify and hold Trustee
and Beneficiary harmless from and against all claims, damages, and expenses,
including reasonable attorney's fees and court costs, resulting from any action
by a third party against Trustee or Beneficiary relating to this Security
Instrument or the interests created herein, or the Property, including, but not
limited to, any action or proceeding claiming loss, damage or injury to person
or property, or any action or proceeding claiming a violation of any national,
state or local law, rule or regulation, provided Borrower shall not be required
to indemnify Trustee or Beneficiary for matters directly and solely caused by
the willful misconduct or gross negligence of Trustee or Beneficiary or for
matters occurring after the title to the Property is for any reason transferred
to Beneficiary.
(b) Borrower acknowledges that it has undertaken the obligation to pay
all intangibles taxes and documentary taxes now or hereafter due in connection
with the Secured Obligations and the Loan Documents, and Borrower agrees to
indemnify and hold Beneficiary harmless from any intangibles taxes and
documentary stamp taxes, and any interest or penalties, that Beneficiary might
hereafter be required to pay in connection with the Secured Obligations or Loan
Documents. The agreements of this subsection (b) shall expressly survive
satisfaction of this Security Instrument and the repayment of the Secured
Obligations.
3.13. Estoppel Certificates.
(a) Borrower shall use commercially reasonable efforts to obtain and
deliver to Beneficiary within twenty (20) days after written demand by
Beneficiary, an estoppel certificate from one or both Ground Lessors setting
forth (i) the name of the lessee and the lessor under the applicable Ground
Lease, (ii) that the applicable Ground Lease is in full force and effect and has
not been modified or, if it has been modified, the date of each modification
(together with copies
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of each such modification), (iii) the basic rent payable under the applicable
Ground Lease, (iv) the date to which all rental charges have been paid by the
lessee under the applicable Ground Lease, (v) whether a notice of default has
been received by Ground Lessor which has not been cured, and if such notice has
been received, the date it was received and the nature of the default, (vi)
whether there are any alleged defaults of the lessee under the applicable Ground
Lease and, if there are, setting forth the nature thereof in reasonable detail,
and (vii) if the lessee under the applicable Ground Lease shall be in default,
the default.
(b) If requested by Beneficiary, Borrower shall use commercially
reasonable efforts to obtain and promptly deliver to Beneficiary, duly executed
estoppel certificates from any one or more tenants as required by Beneficiary
attesting to such facts regarding the Leases as Beneficiary may require,
including, but not limited to attestations that each Lease covered thereby is in
full force and effect with no defaults thereunder or on the part of any party,
that none of the Rents have been paid more than one month in advance, except as
security, and that the tenant claims no defense or offset against the full and
timely performance of its obligations under the Lease.
3.14. Splitting of Security Instrument. This Security Instrument and the
Note shall, at any time until the same shall be fully paid and satisfied, at the
sole election of Beneficiary, be split or divided into two or more notes and two
or more security instruments, each of which shall cover all or a portion of the
Property upon written request of Beneficiary, shall execute, acknowledge and
deliver to Beneficiary and/or its designee or designees substitute notes and
security instruments in such principal amounts, aggregating not more than the
then unpaid principal amount secured by this Security Instrument, and containing
terms, provisions and clauses no less favorable to Borrower than those contained
herein and in the Note, and such other documents and instruments as may be
required by Beneficiary to effect the splitting of the Note and this Security
Instrument.
3.15. Replacement Documents. Upon receipt of an affidavit of an officer
of Beneficiary as to the loss, theft, destruction or mutilation of the Note or
any other Loan Document which is not of public record, and, in the case of any
such mutilation, upon surrender and cancellation of such Note or other Loan
Document which is not of public record, and, in the case of any such mutilation,
upon surrender and cancellation of such Note or other Loan Document, Borrower
will issue, in lieu thereof, a replacement note or other Loan Document, dated
the date of such lost, stolen, destroyed or mutilated note or other Loan
Document in the same principal amount thereof and otherwise of like tenor.
3.16. Subrogation. Beneficiary shall be subrogated to the claims and
liens of all parties whose claims or liens are discharged or paid by Beneficiary
in order to protect or preserve the Property and the value thereof as security
for Secured Obligations.
3.17. Limit of Validity. To the extent the fulfillment of any provision
of this Security Instrument at the time such provision is to be performed shall
involve transcending the limit of validity presently prescribed by any
applicable usury or similar law, the obligation to be fulfilled under such
provision shall ipso facto be reduced to the limit of such validity.
3.18. Hazardous Material.
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(a) Borrower hereby represents and warrants to Beneficiary that, as of the
date hereof Borrower has received no written notice (i) that the Property is in
direct or indirect violation of any local, state or federal law, rule or
regulation pertaining to environmental regulation, contamination or clean-up
(collectively, "Hazardous Material Laws"), including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42
U.S.C. (S)9601 et seq. and 40 CFR (S)302.1 et seq.), the Resource Conservation
and Recovery Act of 1976 (42 U.S.C. (S)6901 et seq.), The Federal Water
Pollution Control Act (33 U.S.C. (S)1251 et seq. and 40 CFR (S)116.1 et seq.),
and the Hazardous Materials Transportation Act (49 U.S.C. (S)1801 et seq.), and
the regulations promulgated pursuant to said laws, all as amended; and any
similar laws and regulations of the state having jurisdiction over the Property;
(ii) of any hazardous, toxic or harmful substances, wastes, materials,
pollutants or contaminants (including, without limitation, asbestos,
polychlorinated biphenyls, petroleum products, flammable explosives, radioactive
materials, infectious substances or raw materials which include hazardous
constituents) or any other substances or materials which are included under or
regulated by Hazardous Material Laws (collectively, "Hazardous Material") are
located on or have been handled, generated, stored, processed or disposed of on
or released or discharged at, onto or under from the Property (including
underground contamination) except for those substances used by Borrower in the
ordinary course of its business and in compliance with all Hazardous Material
Laws; (iii) that the Property is subject to any private or governmental lien or
judicial or administrative notice or action relating to Hazardous Material; (iv)
of any existing or closed underground storage tanks or other underground storage
receptacles for Hazardous Material located on the Property; (v) of any
investigation, action, proceeding or claim by any agency, authority or unit of
government or by any third party which could result in any liability, penalty,
sanction or judgment under any Hazardous Material Laws with respect to any
condition, use or operation of the Property nor does Borrower know of any basis
for such a claim; and (vi) of any claim by any party that any use, operation or
condition of the Property violates any Hazardous Material Laws.
(b) Borrower shall keep or cause the Property to be kept free from
Hazardous Material (except those substances used by Borrower or tenants of the
Property in the ordinary course of their respective business and in compliance
with all Hazardous Material Laws) and in compliance with all Hazardous Material
Laws, shall not install or use any underground storage tanks, shall expressly
prohibit the use, generation, handling, storage, production, processing and
disposal of Hazardous Material (except those substances used by Borrower or
tenants of the Property in the ordinary course of their respective business and
in compliance with all Hazardous Material Laws) by all lessees of space in the
Improvements, and, without limiting the generality of the foregoing, during the
term of this Security Instrument, shall not install in the Improvements or
permit to be installed in the Improvements asbestos or any substance containing
asbestos.
(c) Borrower shall promptly notify Beneficiary if Borrower shall become
aware of the possible existence of any Hazardous Material (except those
substances used by Borrower or tenants of the Property in the ordinary course of
their respective business and in compliance with all Hazardous Material Laws) on
the Property or if Borrower shall become aware that the Property is or may be in
direct or indirect violation of any Hazardous Material Laws. Further,
immediately upon receipt of the same, Borrower shall deliver to Beneficiary
copies of any and all orders, notices, permits, applications, reports, and other
communications, documents and instruments received by Borrower pertaining to the
actual, alleged or potential presence or existence of any such Hazardous
Material at, on, about, under, within, near or in connection with the Property.
Borrower shall,
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(Tempe, Maricopa County, Arizona)
promptly and when and as required by any Hazardous Material Laws, at Borrower's
sole cost and expense, take, or cause Lessee to take, all actions as shall be
necessary or advisable for the clean-up of any and all portions of the Property
or other affected property, including, without limitation, all investigative,
monitoring, removal, containment and remedial actions in accordance with all
applicable Hazardous Material Laws (and in all events in a manner satisfactory
to Beneficiary), and shall further pay or cause to be paid, at no expense to
Beneficiary, all clean-up, administrative and enforcement costs of applicable
governmental agencies which may be asserted against the Property. In the event
Borrower fails to do so, Beneficiary may, but shall not be obligated to, cause
the Property or other affected property to be freed from any Hazardous Material
(except those substances used by Borrower or tenants of the Property in the
ordinary course of their respective business and in compliance with all
Hazardous Material Laws) or otherwise brought into conformance with Hazardous
Material Laws and any and all costs and expenses incurred by Beneficiary in
connection therewith, together with interest thereon at the Default Rate (as
defined in the Loan Agreement) from the date incurred by Beneficiary until
actually paid by Borrower, shall be immediately paid by Borrower on demand and
shall be secured by this Security Instrument and by all of the other Loan
Documents securing all or any part of the indebtedness evidenced by the Note.
Borrower hereby grants to Beneficiary and its agents and employees access to the
Property and a license to remove any Hazardous Material (except those substances
used by Borrower or tenants of the Property in the ordinary course of their
respective business and in compliance with all Hazardous Material Laws) and to
do all things Beneficiary shall deem necessary to bring the Property in
conformance with Hazardous Material Laws. Borrower covenants and agrees, at
Borrower's sole cost and expense, to indemnify, defend (at trial and appellate
levels, and with attorneys, consultants and experts acceptable to Beneficiary),
and hold Beneficiary harmless from and against any and all liens, damages,
losses, liabilities, obligations, settlement payments, penalties, assessments,
citations, directives, claims, litigation, demands, defenses, judgments, suits,
proceedings, costs, disbursements or expenses of any kind or of any nature
whatsoever (including, without limitation, reasonable attorneys', consultants'
and experts' fees and disbursements actually incurred in investigating,
defending, settling or prosecuting any claim, litigation or proceeding) which
may at any time be imposed upon, incurred by or asserted or awarded against
Beneficiary or the Property, and arising directly or indirectly from or out of
(i) the presence, release or threat of release of any Hazardous Material on, in,
under or affecting all or any portion of the Property or any surrounding areas,
regardless of whether or not caused by or within control of Borrower; (ii) the
violation of any Hazardous Material Laws relating to or affecting the Property,
caused by Borrower; (iii) the failure by Borrower to comply fully with the terms
and conditions of this Section; (iv) the breach of any representation or
warranty contained in this Section; or (v) the enforcement of this Section,
including, without limitation, the cost of assessment, containment and/or
removal of any and all Hazardous Material from all or any portion of the
Property or any surrounding areas, the cost of any actions taken in response to
the presence, release or threat of release of any Hazardous Material on, in,
under or affecting any portion of the Property or any surrounding areas to
prevent or minimize such release or threat of release so that it does not
migrate or otherwise cause or threaten danger to present or future public
health, safety, welfare or the environment, and costs incurred to comply with
the Hazardous Material Laws in connection with all or any portion of the
Property or any surrounding areas. The indemnity set forth in this Section shall
also include any diminution in the value of the security afforded by the
Property or any future reduction in the sales price of the Property by reason of
any matter set forth in this Section. Beneficiary's rights under this paragraph
shall survive payment in full of the Secured Obligations and shall be in
addition to all other rights of Beneficiary under this Security Instrument,
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the Loan Agreement, the Note and the other Loan Documents. The foregoing
indemnity shall specifically not include any such costs relating to Hazardous
Materials that are initially placed on, in or under the Property after title
thereto is for any reason transferred to Trustee or Beneficiary, or which result
directly and solely from the willful misconduct or gross neglect of Trustee or
Beneficiary.
(d) Upon Beneficiary's request, at any time after the occurrence and
during the continuation of an Event of Default hereunder or at such other time
as Beneficiary has reasonable grounds to believe that Hazardous Material (except
those substances used by Borrower or tenants of the Property in the ordinary
course of their respective business and in compliance with all Hazardous
Material Laws) are or have been released, stored or disposed of on or around the
Property or that the Property may be in violation of the Hazardous Material
Laws, Borrower shall provide, at Borrower's sole cost and expense, an inspection
or audit of the Property prepared by a hydrogeologist or environmental engineer
or other appropriate consultant approved by Beneficiary indicating the presence
or absence of Hazardous Material on the Property or an inspection or audit of
the Improvements prepared by an engineering or consulting firm approved by
Beneficiary in writing indicating the presence or absence of friable asbestos or
substances containing asbestos on the Property. If Borrower fails to provide
such inspection or audit within forty-five (45) days after such request,
Beneficiary may order the same, and Borrower hereby grants to Beneficiary and
its employees and agents access to the Property and a license to undertake such
inspection or audit. The cost of such inspection or audit, together with
interest thereon at the Default Rate from the date incurred by Beneficiary until
actually paid by Borrower, shall be immediately paid by Borrower on demand and
shall be secured by this Security Instrument and by all of the other Loan
Documents.
(e) Without limiting the foregoing, where recommended by a "Phase I" or
"Phase II" assessment (an "Environmental Report"), Borrower shall establish and
comply with an operations and maintenance program relative to the Property, in
form and substance acceptable to Beneficiary, prepared by an environmental
consultant acceptable to Beneficiary, which program shall address any Hazardous
Material (including asbestos containing material or lead based paint) that may
now or in the future be detected on the Property. Without limiting the
generality of the preceding sentence, Beneficiary may require (i) periodic
notices or reports to Beneficiary in form, substance and at such intervals as
Beneficiary may specify to address matters raised in the Environmental Report,
(ii) an amendment to such operations and maintenance program to address changing
circumstances, laws or other matters, (iii) at Borrower's sole expense,
supplemental examination of the Property by consultants specified by Beneficiary
to address matters raised in the Environmental Report, (iv) access to the
Property, by Beneficiary, its agents or servicer, to review and assess the
environmental condition of the Property and Borrower's compliance with any
operations and maintenance program, and (v) variation of the operations and
maintenance program in response to the reports provided by any such consultants.
(f) If any action shall be brought against Beneficiary based upon any of
the matters for which Beneficiary is indemnified under this Section, Beneficiary
shall notify Borrower in writing thereof and Borrower shall promptly assume the
defense thereof, including, without limitation, the employment of counsel
acceptable to Beneficiary and the negotiation of any settlement; provided,
however, that any failure of Beneficiary to notify Borrower of such matter shall
not impair or reduce the obligations of Borrower hereunder. Beneficiary shall
have the right, at the expense of Borrower
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(which expense shall be included in the costs described in subsection (c)
above), to employ separate counsel in any such action and to participate in the
defense thereof. In the event Borrower shall fail to discharge or undertake to
defend Beneficiary against any claim, loss or liability for which Beneficiary is
indemnified hereunder, Beneficiary may, at its sole option and election, defend
or settle such claim, loss or liability. The liability of Borrower to
Beneficiary hereunder shall be conclusively established by such settlement,
provided such settlement is made in good faith, the amount of such liability to
include both the settlement consideration and the costs and expenses, including,
without limitation attorneys' fees and disbursements, incurred by Beneficiary in
effecting such settlement. In such event, such settlement consideration, costs
and expenses shall be included in costs described in subsection (c) above and
Borrower shall pay the same as provided in this Section. Beneficiary's good
faith in any such settlement shall be conclusively established if the settlement
is made on the advice of independent legal counsel for Beneficiary.
Article IV - Events of Default and Remedies
4.01. Events of Default. As used in this Security Instrument, the term
"Event of Default" shall mean the occurrence of any one or more of the following
events:
(a) The default or failure of Borrower properly and
timely to comply with the terms and conditions of this Security
Instrument that is not cured within applicable cure periods set
forth herein or, if no cure period is specified therefor, is not
cured within thirty (30) days after notice is sent by Beneficiary
to Borrower specifying such default;
(b) The occurrence of any Event of Default (as therein
defined) under the Loan Agreement, the Note, or any of the other
Loan Documents and not cured within any applicable cure period;
(c) The sale, transfer, lease, assignment, or other
disposition, voluntarily or involuntarily, of the Property, or
any part thereof or any interest therein, including a sale or
transfer in lieu of condemnation, or, except for Permitted
Encumbrances, any further encumbrance of the Property, unless
expressly permitted by the Loan Agreement or unless the prior
written consent of Beneficiary is obtained (which consent may be
withheld with or without cause in Beneficiary's discretion);
(d) if any event or omission shall occur which, with the
giving of notice or the passage or time, or both, would
constitute a default under either Ground Lease which could permit
any party to the Ground Lease validly to terminate such Ground
Lease, or if either Ground Lease otherwise terminates for any
reason whatsoever, provided that occurrence of a default under,
or the termination of, the Ground Prime Lease shall not
constitute an Event of Default so long as the Ground Lessor under
the Ground Prime Lease recognizes and agrees to be bound by the
Ground SubLeases in accordance with the terms of the Recognition
Agreement); or
(e) if a default beyond any applicable notice or grace
period, if any, occurs under any fee mortgage with respect to the
Land, or if Borrower or
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Beneficiary shall be made a party in any action or proceeding in
connection with any such fee mortgage, including, without
limitation, a foreclosure or similar proceeding, unless the
holder of such fee mortgage has agreed not to disturb the rights
of Borrower under the applicable Ground Lease.
4.02. Acceleration of Maturity. If an Event of Default has occurred,
Beneficiary may declare all of the Secured Obligations to be forthwith due and
payable, whereupon all the Secured Obligations shall become and be forthwith due
and payable, without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by Borrower, and Beneficiary may
immediately enforce payment of all such amounts and exercise any or all of its
rights and remedies under this Security Instrument, the Loan Agreement, and the
other Loan Documents. No delay or omission on the part of Beneficiary to
exercise such option when entitled so to do shall be considered as a waiver of
such right.
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4.03. Right of Beneficiary to Enter and Take Possession.
(a) If an Event of Default has occurred, Borrower, upon demand of
Beneficiary, shall forthwith surrender to Beneficiary the actual possession of
the Property and, if and to the extent permitted by law, Beneficiary itself, or
by such officers or agents as it may appoint, may enter and take possession of
all or any part of the Property without the appointment of a receiver or an
application therefor, and may exclude Borrower and its agents and employees
wholly therefrom, and take possession of the books, papers and accounts of
Borrower.
(b) If Borrower shall for any reason fail to surrender or deliver the
Property or any part thereof after such demand by Beneficiary, Beneficiary may
obtain a judgment or decree conferring upon Beneficiary the right to immediate
possession or requiring Borrower to deliver immediate possession of the Property
to Beneficiary. Borrower will pay to Beneficiary, upon demand, all expenses of
obtaining such judgment or decree, including compensation to Beneficiary, its
attorneys and agents, and all such expenses and compensation shall, until paid,
become part of the Secured Obligations and shall be secured by this Security
Instrument.
(c) Upon every such entering upon or taking of possession, Beneficiary
may hold, store, use, operate, manage and control the Property and conduct the
business thereof, and, from time to time (i) make all necessary and proper
repairs, renewals, replacements, additions, betterments, and improvements
thereto and purchase or otherwise acquire additional fixtures, personalty, and
other property; (ii) insure or keep the Property insured; (iii) manage and
operate the Property and exercise all the rights and powers of Borrower, in its
name or otherwise, with respect to the same, and (iv) enter into any and all
agreements with respect to the exercise by others of any of the powers herein
granted Beneficiary, all as Beneficiary may from time to time determine to be to
its best advantage. Beneficiary may collect and receive all Rents and Accounts,
including those past due as well as those accruing thereafter, and after
deducting (aa) all expenses of taking, holding, managing, and operating the
Property (including compensation for the services of all persons employed for
such purposes), (bb) the cost of all such maintenance, repairs, renewals,
replacements, additions, betterments, improvements, purchases, and acquisitions,
(cc) the cost of such insurance, (dd) such taxes, assessments, and other charges
as Beneficiary may reasonably determine to pay, (ee) other proper charges upon
the Property or any part thereof, and (ff) the compensation and expenses of
attorneys and agents of Beneficiary, Beneficiary shall apply the remainder of
the money so received to the other Secured Obligations in such order, priority,
and proportions as Beneficiary may elect. Beneficiary's sole duty with respect
to the custody, safekeeping, and physical preservation of the Property shall be
to deal with it in the same manner as Beneficiary deals with similar property
for its own account. For the purpose of carrying out the provisions of this
Section, Borrower hereby constitutes and appoints Beneficiary the true and
lawful attorney in fact of Borrower, which power of attorney is coupled with an
interest and irrevocable, to do and perform, from time to time, any and all
actions necessary and incidental to such purpose and does, by these presents,
ratify and confirm any and all actions of said attorney in fact on the Property.
Anything in this Section to the contrary notwithstanding, Beneficiary shall not
be obligated to discharge or perform the duties of a landlord to any tenant or
incur any liability as a result of any exercise by Beneficiary of its rights
under this Security Instrument, and Beneficiary shall be liable to account only
for the Rents actually received by Beneficiary.
(d) Whenever all the Secured Obligations shall have been paid and all
Events of Default shall have been cured, Beneficiary shall surrender possession
of the Property to Borrower and its
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successors or assigns. The same right of taking possession, however, shall exist
if any subsequent Event of Default shall occur and be continuing.
4.04. Performance by Beneficiary. If Borrower defaults in the payment of
any tax, lien, assessment, or charge levied or assessed against the Property, or
in the payment of any utility charge, whether public or private, or in the
payment of any insurance premium, or in the procurement of insurance coverage
and the delivery of the insurance policies required in the Loan Agreement, or in
the performance or observance of any other covenant, condition, or term of this
Security Instrument, then Beneficiary, at its option, may perform or observe the
same, and all payments made or costs incurred by Beneficiary in connection
therewith shall constitute Secured Obligations and shall be, without demand,
immediately repaid by Borrower to Beneficiary with interest thereon at the
Default Rate specified in the Loan Agreement. Beneficiary shall be the sole
judge of the legality, validity, and priority of any such tax, lien, assessment,
charge, claim, and premium, of the necessity for any such actions, and of the
amount necessary to be paid in connection therewith. Beneficiary is hereby
empowered to enter and to authorize others to enter upon the Property or any
part thereof for the purpose of performing or observing any such defaulted
covenant, condition, or term, without thereby becoming liable to Borrower.
4.05. Appointment of a Receiver. If an Event of Default has occurred,
Beneficiary, upon application to a court of competent jurisdiction, shall be
entitled, without regard to the adequacy of any security for the Secured
Obligations or the solvency of any party bound for its payment, to the
appointment of a receiver to take possession of and to operate the Property and
to collect the rents, profits, issues and revenues thereof. Borrower will pay to
Beneficiary upon demand all expenses, including, without limitation, all
receivers' fees, reasonable attorneys' fees, and agent's compensation, incurred
pursuant to the provisions of this Section, and all such expenses shall
constitute Secured Obligations.
4.06. Beneficiary's Power of Enforcement. If an Event of Default shall
occur and be continuing, in addition to any or all of the remedies specified
herein:
(a) Beneficiary may, or Trustee may upon written or oral
request of Beneficiary, proceed by suit or suits, at law or in
equity, to enforce the payment and performance of the Secured
Obligations in accordance with the terms hereof and of the Note
or other instruments evidencing the Secured Obligations, to
foreclose the liens of this Security Instrument as against all or
any part of the Property, and to have all or any part of the
Property sold under the judgment or decree of a court of
competent jurisdiction.
(b) In the event a foreclosure hereunder should be
commenced by Trustee in accordance with the powers of sale
granted in this Security Instrument, Beneficiary may at any time
before the sale, orally or in writing, direct Trustee to abandon
the sale, and may then institute suit for the collection of the
Secured Obligations, and/or for the foreclosure of the liens
hereof. If Beneficiary should institute a suit for the collection
of the Secured Obligations, and/or for a foreclosure of the liens
hereof, Beneficiary may at any time before the entry of a final
judgment in such suit dismiss such suit (either totally or as to
the counts thereof for judicial foreclosure), and require Trustee
to sell the Property, or any part thereof, in accordance with the
provisions of this Security Instrument.
(c) Exercise all other rights and remedies provided
herein, in any Loan Document or other document or agreement now
or hereafter securing or guarantying all or any portion of the
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Secured Obligations, or by law, including, without limitation,
the rights and remedies provided in A.R.S. Section 33-702.B.
4.07. Exercise of Power of Sale. If an Event of Default shall have
occurred and be continuing and Beneficiary elects to exercise the power of sale
herein contained, Beneficiary shall deliver to Trustee a written statement of
breach, notice of default and election to cause Borrower's interest in the
Property to be sold and shall deposit with Trustee this Security Instrument and
the Note and such receipts and evidence of expenditures made and secured hereby
as Trustee may require.
(a) Upon receipt of such statement and notice from
Beneficiary, Trustee shall cause to be recorded, published and
delivered to Borrower such notice of sale as then required by law
(herein, the "Notice of Sale"). Trustee shall, without demand on
Borrower, after lapse of such time as may then be required by law
and after recordation of such Notice of Sale and Notice of Sale
having been given as required by law, sell the Property at the
time and place of sale fixed by it in said Notice of Sale, either
as a whole, or in separate lots or parcels or items as Trustee
shall deem expedient, and in such order as it may determine, at
public auction to the highest bidder for cash in lawful money of
the United States payable at the time of sale. Trustee shall
deliver to such purchaser or purchasers thereof its good and
sufficient deed or deeds conveying the property so sold, but
without any covenant or warranty, express or implied. The
recitals in such deed of any matters or facts shall be conclusive
proof of the truthfulness thereof. Any person, including, without
limitation, Borrower, Trustee or Beneficiary, may purchase at
such sale and Borrower hereby covenants to warrant and defend the
title of such purchaser or purchasers.
(b) After deducting all costs, fees and expenses of
Trustee and of this Security Instrument, including, without
limitation, Trustee's fees and reasonable attorney's fees, and
costs of evidence of title in connection with sale, Trustee shall
apply the proceeds of sale in the following priority, to payment
of: (i) first all sums expended under the terms of the Loan
-----
Documents, not then repaid, with accrued interest at the rate of
two percent (2%) in excess of the rate set forth in the Note, but
not exceeding the maximum rate permitted by applicable law; (ii)
second, all sums due under the Note; (iii) all other sums, then
------
secured hereby; and (iv) the remainder, if any, to the person or
persons legally entitled thereto or as provided in A.R.S. Section
33-812 or any similar or successor statute.
(c) Subject to A.R.S. Section 33-810.B, Trustee may
postpone sale of all or any portion of the Property by public
announcement at such time and place of sale, and from time to
time thereafter may postpone such sale by public announcement or
subsequently noticed sale, and without further notice make such
sale at the time fixed by the last postponement, or may, in its
discretion, give a new notice of sale.
(d) In the event of the resignation or death of Trustee,
or Trustee's failure, refusal, or inability, for any reason, to
make any such sale or to perform any of the trusts herein
declared, or, at the option of Beneficiary, without cause, then
Beneficiary may appoint, in writing, a substitute trustee, who
shall thereupon succeed to all the Property, and trusts herein
granted to and vested in Trustee. If Beneficiary is a
corporation, such appointment may be made on behalf of such
Beneficiary by any person who is an authorized officer or agent
of Beneficiary. In the event of the resignation or death of any
such substitute trustee, or Trustee's failure, refusal, or
inability to make any such sale or perform such trusts, or, at
the option of Beneficiary, without cause, successive substitute
trustees may thereafter, from time to time, be appointed in the
same manner. Wherever herein the word "Trustee" is used, the same
shall mean the person who is the duly appointed trustee or
substitute trustee hereunder at the time in questions.
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4.08. UCC Remedies. This Security Instrument is a "security agreement"
within the meaning of the UCC. The Property includes both real and personal
property and all other rights and interests, whether tangible or intangible in
nature, of Borrower in the Property. Borrower by executing and delivering this
Security Instrument has granted and hereby grants to Borrower, as security for
the Secured Obligations, a security interest in the Property to the full extent
that the Property may be subject to the UCC (said portion of the Property so
subject to the UCC being referred to in this Security Instrument as the
"Collateral"). If an Event of Default occurs, Beneficiary may exercise, in
addition to all other rights and remedies granted to it in this Security
Instrument and in any other Loan Document, all rights and remedies of a secured
party under the UCC. Without limiting the generality of the foregoing,
Beneficiary, without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except any notice required by law
referred to below) to or upon Borrower or any other person (all and each of
which demands, defenses, advertisements and notices are hereby waived), may in
such circumstances forthwith collect, receive, appropriate and realize upon the
Collateral , or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker's
board or office of Beneficiary or elsewhere upon such terms and conditions as it
may deem advisable and at such prices as it may deem best, for cash or on credit
or for future delivery without assumption of any credit risk. Beneficiary shall
have the right upon any such public sale or sales, and, to the extent permitted
by law, upon any such private sale or sales, to purchase the whole or any part
of the Collateral so sold, free of any right or equity of redemption in
Borrower, which right or equity is hereby waived or released. Borrower further
agrees, at Beneficiary's request, to assemble the Collateral and make it
available to Beneficiary at places which Beneficiary shall reasonably select,
whether at Borrower's premises or elsewhere. If any notice of a proposed sale or
other disposition of the Collateral shall be required by law, such notice shall
be deemed reasonable and proper if given at least ten (10) days before such sale
or other disposition.
4.09. Purchase by Beneficiary. Upon any foreclosure or other sale of or
any portion of the Property, Beneficiary may bid for and purchase the Property
or any part thereof and shall be entitled to apply all or any part of the
Secured Obligations as a credit to the purchase price.
4.10. Application of Proceeds of Sale. Any purchase money, proceeds, and
avails of any sale or other disposition of the Property, or any part thereof, or
any other sums collected by Beneficiary pursuant to this Security Instrument,
the Note, or the other Loan Documents may be applied by Beneficiary to the
payment of the Secured Obligations in such priority and proportions as
Beneficiary in its discretion shall deem proper.
4.11. Borrower as Tenant Holding Over. If any sale of the Property or any
part thereof occurs pursuant to this Security Instrument, Borrower shall be
deemed a tenant holding over and shall forthwith deliver possession to the
purchaser or purchasers at such sale or be summarily dispossessed according to
provisions of law applicable to tenants holding over.
4.12. Discontinuance of Proceedings; Restoration of Parties. If
Beneficiary proceeds to enforce any right of remedy under this Security
Instrument by receiver, entry, or otherwise and such proceedings are
discontinued or abandoned for any reason or are determined adversely to
Beneficiary, then and in every such case Borrower and Beneficiary shall be
restored to their former positions and rights hereunder, and all rights, powers
and remedies of Beneficiary shall continue as if no such proceeding had been
taken.
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4.13. Remedies Cumulative. No right, power, or remedy conferred upon or
reserved to Beneficiary by this Security Instrument or any of the other Loan
Documents is intended to be exclusive of any other right, power, or remedy, but
each and every such right, power, and remedy shall be cumulative and concurrent
and shall be in addition to any other right, power, and remedy given under this
Security Instrument, any such other Loan Document, or now or hereafter existing
at law or in equity or by statute. The exercise by Beneficiary of any such
right, power, and remedy shall not operate as an election of remedies by
Beneficiary and shall not preclude the exercise by Beneficiary of any or all
other such rights, powers, or remedies. If the sale of all or any part of the
Property is permitted hereunder, then such sale of the Property may be in one or
more parcels and in such manner and order as Beneficiary, in its sole
discretion, may elect, it being expressly understood and agreed that the right
of sale arising out of an Event of Default shall not be exhausted by any one or
more sales, but other and successive sales may be made until all of the Property
has been sold or until the Secured Obligations have been fully satisfied.
4.14. Waiver of Appraisement, Valuation, Exemption, Etc. Borrower
agrees, to the full extent permitted by law, that in case of an Event of Default
hereunder, neither Borrower nor anyone claiming through or under Borrower will
set up, claim or seek to take advantage of any appraisement, valuation, stay,
extension, exemption, or laws now or hereafter in force, in order to prevent or
hinder the enforcement or foreclosure of this Security Instrument, or the
absolute sale of the Property or any part thereof, or the delivery of possession
thereof immediately after such sale to the purchaser at such sale, and Borrower,
for itself and all who may at any time claim through or under Borrower, hereby
waives to the full extent that it may lawfully so do, the benefit of all such
laws, and any and all right to have the assets subject to the lien and security
interest of this Security Instrument marshaled upon any foreclosure or sale
under the power herein granted.
4.15. Suits to Protect the Property. Beneficiary shall have power (i) to
institute and maintain such suits and proceedings as it may deem expedient to
prevent any impairment of the Property by any acts which may be unlawful or any
violation of this Security Instrument, (ii) to preserve or protect its interest
in the Property and in the Rents, and (iii) to restrain the enforcement of or
compliance with any legislation or other governmental enactment, rule, or order
that may be unconstitutional or otherwise invalid, if the enforcement of or
compliance with such enactment, rule, or order would impair the security
hereunder or be prejudicial to the interest of Beneficiary.
4.16. Delay or Omission No Waiver. No delay or omission of Beneficiary
or of any holder of the Note to exercise any right, power, or remedy accruing
upon any Event of Default shall exhaust or impair any such right, power, or
remedy or shall be construed to be a waiver of any such Event of Default, or
acquiescence therein, and every right, power, and remedy given by this Security
Instrument to Beneficiary may be exercised from time to time and as often as may
be deemed expedient by Beneficiary.
4.17. No Waiver of Event of Default to Affect Another, etc. No waiver of
any Event of Default hereunder shall extend to or shall affect any subsequent or
any other then existing Event of Default or shall impair any rights, powers, or
remedies consequent thereon. If Beneficiary (i) grants forbearance or an
extension of time for the payment of any of the Secured Obligations, (ii) takes
other or additional security for the payment of the Secured Obligations, (iii)
waives or does not exercise any right granted in the Note, this Security
Instrument, or any of the other Loan Documents, (iv) releases any part of the
Property from the lien and interest of this Security
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Instrument or otherwise changes any of the terms of the Note, this Security
Instrument, or any of the other Loan Documents, (v) consents to the filing of
any map, plat, or replat pertaining to the Property, (vi) consents to the
granting of any easement or license affecting the Property, or (vii) makes or
consents to any agreement subordinating the lien and interest of this Security
Instrument, then any such act or omission shall not release, discharge, modify,
change, or affect the original liability under the Note, this Security
Instrument, or otherwise of Borrower or any subsequent purchaser of the Property
or any part thereof, or any maker, co-signer, endorser, surety, or guarantor,
nor shall any such act or omission preclude Beneficiary from exercising any
right, power, or privilege herein granted or intended to be granted in the event
of any other Event of Default then made or of any subsequent Event of Default,
nor, except as otherwise expressly provided in an instrument or instruments
executed by Beneficiary, shall the lien and security interest of this Security
Instrument be altered thereby. In the event of the sale or transfer by operation
of law or otherwise of all or any part of the Property, Beneficiary, at its
option, without notice to any person or entity, hereby is authorized and
empowered to deal with any such vendee or transferee with reference to the
Property or the Secured Obligations, or with reference to any of the terms or
conditions hereof, as fully and to the same extent as it might deal with the
original parties hereto and without in any way releasing or discharging any of
the liabilities or undertakings hereunder.
4.18. Proofs of Claim. In the case of any receivership, insolvency,
bankruptcy, reorganization, arrangement, adjustment, composition or other
proceedings affecting Borrower or its creditors or property, Beneficiary, to the
extent permitted by law, shall be entitled to file such proofs of claim and
other documents as may be necessary or advisable in order to have the claims of
Beneficiary allowed in such proceedings for the entire amount due and payable by
Borrower under this Security Instrument at the date of the institution of such
proceedings and for any additional amount which may become due and payable by
Borrower hereunder after such date.
Article V - Financing Statements and Fixture Filing
5.01. Financing Statements. Borrower covenants and agrees to execute,
file, and refile such financing statements, continuation statements, or other
documents as Beneficiary shall require from time to time with respect to the
Collateral. Borrower agrees that the filing of financing statement(s) in the
records normally having to do with the Collateral shall not in any way affect
the agreement of Borrower that everything used in connection with the production
of income from the Property or adapted for use therein or that is described or
reflected in this Security Instrument is, and at all times and for all purposes
and in all proceedings, both legal or equitable, shall be, regarded as part of
the Land conveyed hereby regardless of whether (i) any such item is physically
attached to the Improvements, (ii) serial numbers are used for the better
identification of certain items capable of being thus identified in an exhibit
to this Security Instrument, or (iii) any such item is referred to or reflected
in any such financing statement(s) so filed at any time. Similarly, the mention
in any such financing statement(s) of the rights in and to (aa) the proceeds of
any insurance policy, (bb) any award in condemnation proceedings for taking or
for loss of value, or (cc) Borrower's interest as lessor in any present or
future Leases or Rents shall not in any way alter any of the rights of
Beneficiary as determined by this Security Instrument or affect the priority of
Beneficiary's security interest granted hereby or by any other recorded
document, it being understood and agreed that such mention in such financing
statement(s) is solely for the protection of Beneficiary in the event any court
shall at any time hold, with respect to the foregoing items (aa), (bb), or (cc),
that notice of Beneficiary's priority of interest, to be effective against a
particular class
________________________________________________________________________________
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(Tempe, Maricopa County, Arizona)
of persons, must be filed in the UCC records. This Security Instrument may be
filed as a financing statement in any office where Beneficiary deems such filing
necessary or desirable, and Borrower will promptly upon demand reimburse
Beneficiary for the costs therefor.
5.02. Fixture Filing. To the extent that the Property includes items of
personal property that are or are to become fixtures under applicable law, and
to the extent permitted under applicable law, the filing of this Security
Instrument in the real estate records of the county in which such Property is
located shall also operate from the time of filing as a fixture filing with
respect to such Property, and the following information is applicable for the
purpose of such fixture filing:
________________________________________________________________________________
Leasehold Deed of Trust and Security Agreement - Page 29
▇▇▇▇▇ Operating Partnership, L.P. - Revolving Loan
(Tempe, Maricopa County, Arizona)
(1) Name and address of the debtor:
▇▇▇▇▇ Operating Partnership, L.P.
c/▇ ▇▇▇▇▇ Real Estate Funds
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(2) Name and address of the secured party:
SouthTrust Bank
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(3) This documents covers goods or items of personal property which are
or are to become fixtures upon the real estate described herein.
(4) The name of the record owner of the real estate on which such
fixtures are or are to be located is ▇▇▇▇▇ Operating Partnership,
L.P.
Article VI - Defeasance
6.01. Defeasance Upon Payment of the Secured Obligations. This Security
Instrument shall cease, terminate, and thereafter be of no further force and
effect in the event that all of the Secured Obligations shall have been paid,
performed, and satisfied in full. Upon such termination and at Borrower's
request and expense, Beneficiary shall execute, acknowledge, and deliver to
Borrower an instrument, in proper form for recording, without warranty,
releasing the lien and security interest of this Security Instrument and
reconveying to Borrower the Property.
6.02. [Intentionally Omitted]
Article VII - Local Law Provisions
7.01. Inconsistencies. In the event of any inconsistencies or dichotomies
between the terms and conditions of this Article VI and the other provisions of
this Security Instrument, the terms and conditions of this Article VI shall be
controlling.
7.02. No Oral Agreements/Notice under Tex. Bus. & Com. Code ▇▇▇. (S)
26.02. The Security Documents executed in connection herewith represent the
final agreement between the parties and may not be contradicted by evidence of
prior, contemporaneous or subsequent oral agreements of the parties. There are
no unwritten oral agreements between the parties.
Article VIII - Document Protocols
________________________________________________________________________________
Leasehold Deed of Trust and Security Agreement - Page 30
▇▇▇▇▇ Operating Partnership, L.P. - Revolving Loan
(Tempe, Maricopa County, Arizona)
This Security Instrument is governed by the Document Protocols set forth in
Exhibit A attached to the Loan Agreement, which are specifically incorporated
herein as if fully set forth herein.
Article IX - Deed of Trust Provisions
9.01. Concerning Trustee. Trustee shall be under no duty to take any
action hereunder except as expressly required hereunder or by law or to perform
any act which would involve Trustee in any expense or liability or to institute
or defend any suit in respect hereof, unless properly indemnified to Trustee's
reasonable satisfaction. Trustee, by acceptance of this Security Instrument,
covenants to perform and fulfill the trusts herein created. Trustee shall not
be answerable or accountable hereunder except for its own willful misconduct or
gross negligence, and Borrower agrees to indemnify, defend and hold Trustee
harmless from and against any cost, loss, damage, liability or expense
(including, without limitation, reasonable attorney's fees and disbursements)
which Trustee may incur or sustain in the exercise or performance of its powers
and duties hereunder. Trustee hereby waives any statutory fee and agrees to
accept reasonable compensation, in lieu thereof, for any services rendered by
Trustee in accordance with the terms hereof. Trustee may resign at any time
upon giving at least thirty (30) days' notice to Borrower and Beneficiary. In
the event of the death, removal, resignation, refusal or inability to act of
Trustee, or in its sole discretion for any reason whatsoever, Beneficiary may,
without notice and without specifying any reason therefor and without applying
to any court, select and appoint a successor trustee, by an instrument recorded
wherever this Security Instrument is recorded, and all powers, rights, duties
and authority of Trustee, as aforesaid, shall thereupon become vested in such
successor. Such substitute trustee shall not be required to give bond for the
faithful performance of the duties of Trustee hereunder unless required by
Beneficiary. The procedure provided for in this paragraph for substitution of
Trustee shall be in addition to and not in exclusion of any other provisions for
substitution, by law or otherwise.
9.02. Trustee's Fees. Borrower shall pay all reasonable costs, fees and
expenses incurred by Trustee and Trustee's agents and counsel in connection with
the performance by Trustee of Trustee's duties hereunder, and all such costs,
fees and expenses shall be secured by this Security Instrument.
9.03. Certain Rights. Trustee shall not be personally liable in case of
entry by Trustee, or anyone entering by virtue of the powers herein granted to
Trustee, upon the Property for debts contracted for or liability or damages
incurred in the management or operation of the Property. Trustee shall have the
right to rely on any instrument, document, or signature authorizing or
supporting an action taken or proposed to be taken by Trustee hereunder, which
is believed by Trustee in good faith to be genuine.
9.04. Retention of Money. All moneys received by Trustee shall, until used
or applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated in any manner from any other moneys
(except to the extent required by applicable law), and Trustee shall be under no
liability for interest on any moneys received by Trustee hereunder.
________________________________________________________________________________
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(Tempe, Maricopa County, Arizona)
9.05. Perfection of Appointment. If any deed, conveyance or other
instrument of any nature be required from Borrower by Trustee or any substitute
trustee to more fully and certainly vest in and confirm to Trustee or such
substitute trustee the estates rights, powers, and duties conferred hereunder
unto Trustee, then, upon request by Trustee or such substitute trustee, any and
all such deeds, conveyances and instruments shall be made, executed,
acknowledged, and delivered and shall be caused to be recorded and/or filed by
Borrower at its sole expense.
9.06. Succession Instruments. Any substitute trustee appointed pursuant
to any of the provisions hereof shall, without any further act, deed or
conveyance, become vested with all the estates, properties, rights, powers, and
trusts of its predecessor in the rights hereunder with like effect as if
originally named as Trustee herein; but nevertheless, upon the written request
of Beneficiary or of the substitute trustee, the predecessor trustee ceasing to
act shall execute and deliver any instrument transferring to such substitute
trustee, upon the trusts herein expressed, all of the estates, properties,
rights, powers and trusts of such predecessor trustee so ceasing to act, and
shall duly assign, transfer and deliver any of the property and moneys held by
such trustee to such substitute trustee.
9.07. Conveyance by Trustee. Upon receipt by Trustee of written notice
from Beneficiary that the Secured Obligations have been fully paid as provided
in Section 6.01 above, Trustee shall reconvey the Property, without warranty, to
Borrower or such Person or Persons lawfully entitled thereto.
Article X - Leasehold Mortgage Provisions
10.01. Leasehold Representations, Warranties, and Covenants. Borrower
hereby represents, warrants and covenants as follows:
(1) the Ground SubLeases and, to the best knowledge of
Borrower, the Ground Prime Lease, are in full force and effect,
unmodified by any writing or otherwise, and Borrower has not
waived, canceled or surrendered any of its rights thereunder;
(2) all rent, additional rent and/or other charges
reserved in or payable under the Ground SubLeases and, to the
best knowledge of Borrower, the Ground Prime Lease, have been
paid to the extent that they are payable to the date hereof;
(3) Borrower enjoys the quiet and peaceful possession of
the Leasehold Estate;
(4) Borrower has not delivered or received any notices
of default under either Ground Lease and is not in default under
any of the terms of the Ground SubLeases, and there are no
circumstances which, with the passage of time or the giving of
notice, or both, would constitute a default under the Ground
SubLeases or, to the best knowledge of Borrower, the Ground Prime
Lease;
________________________________________________________________________________
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(Tempe, Maricopa County, Arizona)
(5) Ground Lessor is not in default under any of the terms of
the Ground SubLeases or, to the best knowledge of Borrower, the Ground
Prime Lease on its part to be observed or performed;
(6) Borrower has delivered to Beneficiary a true, accurate and
complete copy of the Ground Leases;
(7) Borrower promptly shall pay the rent and all other sums and
charges mentioned in, and payable under, the Ground SubLeases;
(8) Borrower promptly shall perform and observe all of the
terms, covenants and conditions required to be performed and observed
by the lessee under the Ground SubLeases, the breach of which could
permit any party to the Ground SubLeases validly to terminate the
Ground SubLeases (including, without limitation, all payment
obligations), shall do all things necessary to preserve and to keep
unimpaired its rights under the Ground SubLeases, shall not waive,
excuse or discharge any of the obligations of Ground Lessor without
Beneficiary's prior written consent in each instance, and shall
diligently and continuously enforce the obligations of Ground Lessor;
(9) Borrower shall not do, permit or suffer any event or
omission as a result of which there could occur a default under the
Ground SubLeases or any event which, with the giving of notice or the
passage or time, or both, would constitute a default under the Ground
SubLeases which could permit any party to the Ground SubLeases validly
to terminate the Ground SubLeases (including, without limitation, a
default in any payment obligation), and Borrower shall obtain the
consent or approval of Ground Lessor to the extent required pursuant
to the terms of the Ground SubLeases;
(10) Borrower shall not cancel, terminate, surrender, modify or
amend or in any way alter, surrender all or any portion of the
Property, permit the alteration of any of the provisions of the Ground
SubLeases or agree to any termination, amendment, modification or
surrender of the Ground SubLeases without Beneficiary's prior written
consent in each instance, provided however, Borrower may negotiate an
extension of the term of the Ground SubLeases at the then current fair
market rent;
(11) Borrower shall deliver to Beneficiary copies of any notice
of default by any party under the Ground Leases, or of any notice from
either Ground Lessor of its intention to terminate the applicable
Ground Lease or to re-enter and take possession of the Property,
immediately upon delivery or receipt of such notice, as the case may
be;
(12) Borrower shall promptly furnish to Beneficiary copies of
such information and evidence as Beneficiary may request concerning
Borrower's due observance, performance and compliance with the terms,
covenants and conditions of the Ground SubLeases;
________________________________________________________________________________
Leasehold Deed of Trust and Security Agreement - Page 33
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(Tempe, Maricopa County, Arizona)
(13) Borrower knows of no adverse claim to the title or
possession of Borrower or either Ground Lessor;
(14) Borrower shall not consent to the subordination of
either Ground Lease to any mortgage or other lease of the fee
interest in the Property; and
(15) Borrower, at its sole cost and expense, shall execute
and deliver to Beneficiary, within five (5) days after request,
such documents, instruments or agreements as may be required to
permit Beneficiary to cure any default under either Ground Lease.
10.02. Cure by Beneficiary. In the event of a default by Borrower in
the performance of any of its obligations under the Ground SubLeases, including,
without limitation, any default in the payment of any sums payable thereunder,
then, in each and every case, Beneficiary may, at its option, cause the default
or defaults to be remedied and otherwise exercise any and all of the rights of
Borrower thereunder in the name of and on behalf of Borrower. Borrower shall,
on demand, reimburse Beneficiary for all advances made and expenses incurred by
Beneficiary in curing any such default (including, without limitation,
reasonable attorneys' fees and disbursements), together with interest thereon
computed from the date that such advance is made to and including the date the
same is paid to Beneficiary.
10.03. Options to Renew or Extend the Ground SubLeases. Borrower shall give
Beneficiary written notice of its intention to exercise each and every option,
if any, to renew or extend the term of the Ground SubLeases, at least thirty
(30) days prior to the expiration of the time to exercise such option under the
terms thereof. If required by Beneficiary, Borrower shall duly exercise any
renewal or extension option with respect to the Ground SubLeases if Beneficiary
reasonably determines that the exercise of such option is necessary to protect
Beneficiary's security for the Loan. If Borrower intends to renew or extend the
term of the Ground SubLeases, it shall deliver to Beneficiary, with the notice
of such decision, a copy of the notice of renewal or extension delivered to
Ground Lessor, together with the terms and conditions of such renewal or
extension. If Borrower does not renew or extend the term of the Ground
SubLeases, Beneficiary may, at its option, exercise the option to renew or
extend in the name of and on behalf of Borrower. Borrower hereby irrevocably
appoints Beneficiary as its attorney-in-fact, coupled with an interest, to
execute and deliver, for and in the name of Borrower, all instruments and
agreements necessary under the Ground SubLeases or otherwise to cause any
renewal or extension of the Ground SubLeases.
10.04. Additional Ground Lease Covenants.
(a) In the event either Ground Lease shall be terminated by reason of a
default thereunder by Borrower or any other party, and Beneficiary shall require
from Ground Lessor a new ground lease, Borrower hereby waives any right, title
and interest in and to such new ground lease or the leasehold estate created
thereby, waiving all rights of redemption now or hereafter operable under any
law.
________________________________________________________________________________
Leasehold Deed of Trust and Security Agreement - Page 34
▇▇▇▇▇ Operating Partnership, L.P. - Revolving Loan
(Tempe, Maricopa County, Arizona)
(b) Borrower shall not elect to treat either Ground Lease as terminated,
canceled or surrendered pursuant to the applicable provisions of the Bankruptcy
Code (including, without limitation, Section 365(h)(1) thereof) without
Beneficiary's prior written consent in the event of Ground Lessor's Bankruptcy.
In addition, Borrower shall, in the event of Ground Lessor's Bankruptcy,
reaffirm and ratify the legality, validity, binding effect and enforceability of
the applicable Ground Lease and shall remain in possession of the Land and the
Leasehold Estate, notwithstanding any rejection thereof by Ground Lessor or any
trustee, custodian or receiver.
(c) Borrower shall give Beneficiary not less than thirty (30) days prior
written notice of the date on which Borrower shall apply to any court or other
governmental authority for authority and permission to reject the Ground
SubLeases in the event that there shall be filed by or against Borrower any
petition, action or proceeding under the Bankruptcy Code or under any other
similar federal or state law now or hereafter in effect and if Borrower
determines to reject the Ground SubLeases. Beneficiary shall have the right, but
not the obligation, to serve upon Borrower within such thirty (30) day period a
notice stating that (i) Beneficiary demands that Borrower assume and assign the
Ground SubLeases to Beneficiary subject to and in accordance with the Bankruptcy
Code, and (ii) Beneficiary covenants to cure or provide reasonably adequate
assurance thereof with respect to all defaults reasonably susceptible of being
cured by Beneficiary and of future performance under the Ground SubLeases. If
Beneficiary serves upon Borrower the notice described above, Borrower shall not
seek to reject the Ground SubLeases and shall comply with the demand provided
for in clause (i) above within fifteen (15) days after the notice shall have
been given by Beneficiary.
(d) During the continuance of an Event of Default, Beneficiary shall have
the right, but not the obligation, (i) to perform and comply with all
obligations of Borrower under the Ground SubLeases without relying on any grace
period provided therein, (ii) to do and take, without any obligation to do so,
such action as Beneficiary deems necessary or desirable to prevent or cure any
default by Borrower under the Ground SubLeases, including, without limitation,
any act, deed, matter or thing whatsoever that Borrower may do in order to cure
a default under the Ground SubLeases and (iii) to enter in and upon the Land or
any part thereof to such extent and as often as Beneficiary deems necessary or
desirable in order to prevent or cure any default of Borrower under the Ground
SubLeases. Borrower shall, within five (5) days after written request is made
therefor by Beneficiary, execute and deliver to Beneficiary or to any party
designated by Beneficiary, such further instruments, agreements, powers,
assignments, conveyances or the like as may be reasonably necessary to complete
or perfect the interest, rights or powers of Beneficiary pursuant to this
Section or as may otherwise be required by Beneficiary.
(e) In the event of any arbitration under or pursuant to the Ground
SubLeases in which Beneficiary elects to participate, Borrower hereby
irrevocably appoints Beneficiary as its true and lawful attorney-in-fact (which
appointment shall be deemed coupled with an interest) to exercise, during the
continuance of an Event of Default, all right, title and interest of Borrower in
connection with such arbitration, including, without limitation, the right to
appoint arbitrators and to conduct arbitration proceedings on behalf of Borrower
and Beneficiary. All costs and expenses incurred by Beneficiary in connection
with such arbitration and the settlement thereof shall be borne solely by
Borrower, including, without limitation, attorneys' fees and disbursements.
Nothing contained in this Section shall obligate Beneficiary to participate in
any such arbitration.
________________________________________________________________________________
Leasehold Deed of Trust and Security Agreement - Page 35
▇▇▇▇▇ Operating Partnership, L.P. - Revolving Loan
(Tempe, Maricopa County, Arizona)
(f) Beneficiary shall have the right, but not the obligation, to proceed
in respect of any claim, suit, action or proceeding relating to the rejection of
either Ground Lease by Ground Lessor as a result of Ground Lessor's Bankruptcy,
including, without limitation, the right to file and prosecute any and all
proofs of claims, complaints, notices and other documents in any case in respect
of Ground Lessor under and pursuant to the Bankruptcy Code.
10.05. No Liability. Anything contained herein to the contrary
notwithstanding, this Security Instrument shall not constitute an assignment of
either Ground Lease within the meaning of any provision thereof prohibiting its
assignment and Beneficiary shall have no liability or obligation thereunder by
reason of its acceptance of this Security Instrument. Beneficiary shall be
liable for the obligations of the lessee arising under the Ground SubLeases for
only that period of time which Beneficiary is in possession of the Property or
has acquired, by foreclosure or otherwise, and is holding all of Borrower's
right, title and interest therein.
10.06. No Merger. It is hereby agreed that the fee title to the Land and
the Leasehold Estate shall not merge but shall always be kept separate and
distinct, notwithstanding the union of said estates in either Ground Lessor,
Borrower, or a third party, whether by purchase or otherwise. If Borrower shall
acquire fee title to the Land or any other estate, title or interest in the Land
or any portion thereof, then, immediately upon Borrower's acquisition thereof,
this Security Instrument automatically shall spread to cover Borrower's interest
in such leased property on the same terms, covenants and conditions as set forth
herein. Upon such acquisition, Borrower, at it's sole cost and expense, shall
deliver to Beneficiary an ALTA Form B Mortgage Title Insurance Policy issued by
a title insurance company acceptable to Beneficiary insuring that this Security
Instrument as so spread to cover Borrower's interest in such leased property, is
a valid first lien on Borrower's interest therein, subject only to the Permitted
Exceptions. It is the intention of Borrower and Beneficiary that no documents,
instruments or agreements shall be necessary to confirm the foregoing spread of
this Security Instrument to cover Borrower's interest in such leased property,
as aforesaid, and that such spreading shall occur automatically upon the
consummation of Borrower's acquisition of such estate, title or interest to such
leased property. Notwithstanding the foregoing, Borrower shall make, execute,
acknowledge and deliver to Beneficiary or so cause to be made, executed,
acknowledged and delivered to Beneficiary, in form satisfactory to Beneficiary,
all such further or other documents, instruments, agreements or assurances as
may be required by Beneficiary to confirm the foregoing spread of this Security
Instrument to cover Borrower's interest in such leased property. Borrower shall
pay all reasonable expenses incurred by Beneficiary in connection with the
preparation, execution, acknowledgment, delivery and/or recording of any such
documents, including, without limitation, all filing, registration and recording
fees and charges, documentary stamps, mortgage taxes, intangible taxes, and
reasonable attorneys' fees, costs and disbursements.
[THE REMAINDER OF THIS PAGE WAS LEFT BLANK INTENTIONALLY]
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Leasehold Deed of Trust and Security Agreement - Page 36
▇▇▇▇▇ Operating Partnership, L.P. - Revolving Loan
(Tempe, Maricopa County, Arizona)
IN WITNESS WHEREOF, Borrower has caused this Security Instrument to be
signed and sealed by its duly authorized representative as of the day and year
first above written.
▇▇▇▇▇ OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership
By: ▇▇▇▇▇ Real Estate Investment Trust, Inc., a
Maryland corporation,
Its sole General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Title: Executive Vice President
--------------------------------------
[Affix corporate seal]
Acknowledgment
STATE OF GEORGIA )
COUNTY OF GWINNETT )
Before me a Notary Public in and for the State of GEORGIA, on this day
personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, the Executive Vice President of ▇▇▇▇▇
Real Estate Investment Trust, Inc., a Maryland corporation, which is the sole
general partner of ▇▇▇▇▇ Operating Partnership, L.P., a Delaware limited
partnership, known to me to be the person and officer whose name is subscribed
to the foregoing instrument, and acknowledged to me that he executed said
instrument as the act and deed of such limited partnership, for the purposes and
consideration therein expressed, and in the capacity therein stated.
Given under my hand and seal of office this 13/th/ day of December, 2000.
[SEAL]
/s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
-----------------------------------
NOTARY PUBLIC in and for the State of GEORGIA
------------
Name (print): ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
------------------------------------
My Commission expiry: 6-24-2004
----------------------------
________________________________________________________________________________
Leasehold Deed of Trust and Security Agreement - Page 37
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(Tempe, Maricopa County, Arizona)
Exhibit B
Description of Leases
________________________________________________________________________________
Leasehold Deed of Trust and Security Agreement - Page 38
▇▇▇▇▇ Operating Partnership, L.P. - Revolving Loan
(Tempe, Maricopa County, Arizona)