AFTER RECORDING PLEASE RETURN TO:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇
North Point
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
THIS PROPERTY IS ONE OF SEVERAL PROPERTIES SECURING A LOAN
DESCRIBED IN THE LOAN AGREEMENT DESCRIBED HEREIN, AND FOR
PURPOSES OF SECTION 12-105(a) OF THE TAX-PROPERTY ARTICLE OF THE
CODE OF MARYLAND AND CALCULATION OF RECORDATION TAX, THE PRO RATA
AMOUNT OF THE TOTAL DEBT AS EVIDENCED BY THE NOTE WHICH IS
PROPERLY ALLOCABLE TO THIS PROPERTY IS $3,112,500.
THE AGGREGATE PRINCIPAL AMOUNT TO BE SECURED BY THIS INSTRUMENT
AT ANY ONE TIME IS $27,990,000.
Deed of Trust and Security Agreement
AIP PROPERTIES #3, L.P., a Delaware limited partnership,
Grantor, having an office at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
to
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee,
for the benefit of
Life Investors Insurance Company of America, an Iowa corporation,
Beneficiary, having an office
c/o AEGON USA Realty Advisors, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
Cedar Rapids, Iowa 52499
Loan Amount: $27,990,000
Premises: Parcel E, Block A, Patapsco Industrial Resubdivision,
▇▇▇▇ Arundel County,
Loan Number 87489
Patapsco Industrial Center
Deed of Trust and Security Agreement
(with UCC Financing Statement for Fixture Filing)
This Deed of Trust and Security Agreement is made and given this
___ day of November, 1996 by AIP Properties #3, L.P., a limited
partnership organized under the laws of Delaware, having an
office at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-
▇▇▇▇ ("Grantor"), to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as Trustee, whose
mailing address is c/o Jones, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, Metropolitan
Square, ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-2088
("Trustee"), for the benefit of Life Investors Insurance Company
of America, a corporation organized under the laws of Iowa,
having an office c/o AEGON USA Realty Advisors, Inc., ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
("Beneficiary"). The definitions of capitalized terms used in
this Deed of Trust may be found either in Section 3 below, or
through the cross-references provided in that Section.
1. RECITALS
Under the terms of a commercial mortgage Revised Mortgage
Loan Application and Commitment dated July 18, 1996 (the
"Commitment"), AEGON USA Realty Advisors, Inc. ("AEGON"), as
agent for Beneficiary, agreed to fund a loan in an original
principal amount to be determined in accordance with
procedures described in the Commitment (the "Loan").
Beneficiary has funded the Loan in the principal amount of
$27,990,000 in accordance with the Commitment, and to
evidence the Loan Grantor has executed and delivered to
Beneficiary ten promissory notes in the aggregate amount of
$27,990,000.
The Commitment requires that the Loan be secured by certain
real property and by certain tangible and intangible
personal property.
2. GRANTING CLAUSE
To secure the repayment of the Indebtedness, and in
consideration of the sum of ten dollars ($10.00) and other
valuable consideration, the receipt and sufficiency of which
are acknowledged, Grantor grants, bargains, sells, warrants,
conveys, alienates, releases, assigns, sets over and
confirms to Trustee, in trust with the power of sale for the
benefit of Beneficiary, and to his successors and assigns
forever, the Real Property, the Leases, the Rents, the
Assigned Rights, the Condemnation Proceeds, and the
Insurance Proceeds, and grants to Beneficiary a security
interest in the Personal Property.
3. DEFINED TERMS
Appurtenant Easements
means the declarations, easements, covenants,
restrictions and agreements, if any, identified on
the attached Exhibit A.
Assigned Rights
means all of Grantor's rights (whether presently
existing or arising in the future) under all
contracts, claims and licenses that relate to the
Real Property and may benefit its owner, including
air rights, mineral rights, water rights, claims
against third parties for damages to the Property,
construction, roof and equipment guarantees and
warranties, building licenses and permits,
management contracts, service contracts, leases of
Fixtures or of Personal Property, and all of
Grantor's right, title and interest (whether
presently existing or arising in the future) in
and to unearned insurance premiums, any greater
estate in the Real Property, trade names, property
management files, accounting books and records,
trademarks, tradestyles, service marks,
copyrights, accounting books and records, site
plans, surveys, blueprints, and construction
drawings, plans and specifications, and the work
product of architects, environmental consultants,
property tax consultants, engineers, and any other
third party contractors whose services benefit the
Real Property.
Assignment of Leases and Rents
means the Loan Document bearing this heading.
Business Day
means any day when state and federal banks are
open for business in Cedar Rapids, Iowa.
Condemnation Proceeds
means all money or other property that has been,
or is in the future, awarded or agreed to be paid
or given in connection with any taking by eminent
domain of all or any part of the Real Property
(including a taking through the vacation of any
street dedication or through a change of grade of
such a street), either permanent or temporary, or
in connection with any purchase in lieu of such a
taking, or as a part of any related settlement.
Conditional Grace Period
means a period of thirty (30) days, except when
applicable to a failure of any term, condition, or
provision under this Deed of Trust which arises
from facts, circumstances, acts, or omissions
which are not the fault of Grantor, in which in
which case Conditional Grace Period shall mean a
period of sixty (60) days.
Default
means any of the acts, omissions, or circumstances
specified in Section 10 below.
Environmental Indemnity Agreement
means each of the documents captioned
"Environmental Indemnity Agreement" executed with
respect to the Real Property and the real property
encumbered by the Other Deeds of Trust.
Environmental Laws
means all present and future laws, statutes,
ordinances, rules, regulations, orders, and
determinations of any Governmental Authority
pertaining to health, underground storage tank
regulation or removal, protection of the
environment, natural resources, wetlands,
conservation, wildlife, waste management,
regulation of activities involving Hazardous
Substances, and pollution, or relating to waste
disposal or environmental protection with respect
to the exposure to, or manufacture, possession,
presence, use, generation, storage,
transportation, treatment, release, emission,
discharge, disposal, abatement, cleanup, removal,
remediation or handling of any Hazardous
Substances, including, without limitation, the
Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. 9601
et seq., the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C.
9601(20)(D), the Resource Conservation and
Recovery Act, 42 U.S.C. 6901 et seq., the Federal
Water Pollution Control Act, as amended by the
Clean Water Act , 33 U.S.C. 1251 et seq., the
Clean Air Act , 42 U.S.C. 7401 et seq. and the
Toxic Substances Control Act, 15 U.S.C. 2601 et
seq., all as amended from time to time.
ESA
means the written environmental site assessment of
the Real Property prepared by a consultant hired
directly by Beneficiary under the terms of the
Commitment.
Escrow Expenses
means those expenses in respect of Insurance
Premiums and Impositions that Beneficiary elects
to pay directly from the Escrow Fund using moneys
accumulated through the collection of Monthly
Escrow Payments.
Escrow Fund
means the accounting entry maintained on the books
of Beneficiary as funds available for the payment
of Escrow Expenses under the terms of this Deed of
Trust.
Financing Statements
means the Uniform Commercial Code financing
statements filed to perfect the security interests
securing the Indebtedness, as amended or extended
from time to time.
Fixtures
means all materials, supplies, equipment,
apparatus and other items now or hereafter
attached to or installed on the Real Property in a
manner that causes them to become fixtures under
the law of Maryland, including all built-in or
attached furniture or appliances, elevators,
escalators, heating, ventilating and air
conditioning system components, emergency
electrical generators and related fuel storage or
delivery systems, septic system components, storm
windows, doors, electrical equipment, plumbing,
water conditioning, lighting, cleaning, snow
removal, lawn, landscaping, irrigation, security,
incinerating, firefighting, sprinkler or other
fire safety equipment, bridge cranes or other
installed materials handling equipment, satellite
dishes or other telecommunication equipment, built-
in video conferencing equipment, sound systems or
other audiovisual equipment, and cable television
distribution systems. Fixtures do not include
trade fixtures, office furniture and office
equipment owned by tenants and neither necessary
nor desirable for the operation of the Real
Property as income-producing commercial real
estate.
Governmental Authority
means any political entity with the legal
authority to impose any requirement on the
Property, including the governments of the United
States, the State of Maryland, ▇▇▇▇ Arundel
County, and any other entity with jurisdiction to
decide, regulate, or affect the ownership,
construction, use, occupancy, possession,
operation, maintenance, alteration, repair,
demolition or reconstruction of any portion or
element of the Real Property.
Hazardous Substances
means: (A) any hazardous wastes or toxic
chemicals, materials, substances or wastes as
defined by the Environmental Laws; (B) any "oil,"
as defined by the Clean Water Act and regulations
promulgated thereunder (including crude oil or any
fraction of crude oil); (C) any substance, the
presence of which is now or in the future
prohibited, regulated or controlled by any
Environmental Law or any other law, regulation,
statute or ordinance of any Governmental
Authority; (D) any asbestos or asbestos containing
materials, (E) any polychlorinated biphenyls
("PCBs"), (E) urea formaldehyde, (F) atmospheric
radon at levels over four picocuries per cubic
liter; (G) any solid, liquid, gaseous or thermal
irritant or contaminant, such as smoke, vapor,
soot, fumes, alkalis, acids, chemicals,
pesticides, herbicides, sewage, industrial sludge
or similar wastes, and (H) any industrial, nuclear
or medical by-products. However, "Hazardous
Substances" include neither (a) immaterial
quantities of automotive motor oil leaked
inadvertently from vehicles in the ordinary course
of the operation of the Real Property and cleaned
up in accordance with reasonable property
management procedures and any applicable law nor
(b) immaterial quantities of substances
customarily and prudently used in the cleaning and
maintenance of the Real Property in accordance
with any applicable law.
Impositions
means all real and personal property taxes;
general or special assessments; ground rent;
water, gas, sewer, vault, electric or other
utility rates and charges; common charges; owners'
association dues or fees; ground rent; personal
and ad valorem property taxes; fees for any
easement, license or agreement maintained for the
benefit of the Property; and any and all other
taxes, levies, user fees, claims, charges and
assessments whatsoever that at any time may be
assessed, levied or imposed on the Property or
upon its ownership, use, occupancy or enjoyment,
and any related costs, interest or penalties.
Improvements
means all buildings and improvements of any kind
erected or placed on the Land now or in the
future, including the Fixtures, together with all
appurtenant rights, privileges, easements,
tenements, hereditaments, titles, reversions,
remainders and other interests.
Indebtedness
means all sums that are owed or become due
pursuant to the terms of the Notes, this Deed of
Trust, or any of the other Loan Documents,
including scheduled principal payments, scheduled
interest payments, default interest, late charges,
prepayment premiums, accelerated or matured
principal balances, advances, collection costs,
receivership costs, fees and costs of the Trustee
and all other financial obligations of Grantor
incurred in connection with the Loan transaction.
Indemnity Agreements
means each of the documents captioned "Indemnity
Agreement" executed by American Industrial
Properties REIT of even date herewith.
Insurance Premiums
means all premiums or other charges required to
maintain in force any and all insurance policies
that this Deed of Trust requires that Grantor
maintain.
Insurance Proceeds
means all proceeds of all insurance now or
hereafter carried by or payable to Grantor with
respect to the Property, or the interruption of
rents or income derived from the Property, all
unearned insurance premiums and all related claims
or demands.
Land
that certain tract of land located in ▇▇▇▇ Arundel
County, Maryland, which is described on the
attached Exhibit A, together with all
appurtenances, including all Grantor's right,
title and interest to and in the air space above
the Land and all alley, party wall, drainage,
sewer, mineral, water, oil and gas, vault and
other rights, estates, titles, interests,
privileges, easements, tenements, hereditaments,
titles, royalties, reversions, remainders and
other interests.
Leases
means all leases, subleases, licenses,
concessions, extensions, renewals and other
agreements (whether written or oral, and whether
presently effective or made in the future) through
which Grantor grants any possessory interest in
and to, or any right to occupy or use, all or any
part of the Real Property, and any related
guaranties.
Legal Requirements
means all laws, statutes, rules, regulations,
ordinances, judicial decisions, administrative
decisions, building permits, development permits,
certificates of occupancy, or other requirements
of any Governmental Authority.
Loan Agreement
means that certain Loan Agreement of even date
herewith, by and among, Grantor, Beneficiary, and
American Industrial Properties REIT, wherein
Beneficiary agrees to make the Loan to Grantor.
Loan Documents
means all documents evidencing the Loan or
delivered in connection with the Loan (including
the Notes, this Deed of Trust, and the Other Deeds
of Trust), whether entered into at the closing of
the Loan or in the future, other than the
Environmental Indemnity Agreements and the
Indemnity Agreements, which are not Loan Documents
and are not secured hereby.
Monthly Escrow Payment
means the sum of the Monthly Imposition
Requirement, the Monthly Insurance Premium
Requirement, and the Monthly Reserve Requirement.
Monthly Imposition Requirement
means one-twelfth of the annual amount that
Beneficiary estimates (based on available
historical data and, if future Impositions are as
yet undetermined, on a 5% annual inflation factor)
will be required to permit the timely payment of
the Impositions by Beneficiary.
Monthly Insurance Premium Requirement
means one-twelfth of the annual amount that
Beneficiary estimates (based on available
historical data and using, if future Insurance
Premiums are as yet undetermined, a 5% inflation
factor) will be required to permit the timely
payment of the Insurance Premiums by Beneficiary.
Monthly Reserve Requirement
means the amount that Beneficiary estimates will,
over the subsequent twelve months, result in the
accumulation of a surplus in the Escrow Fund equal
to one-sixth of the sum of the Annual Imposition
Requirement and the Annual Insurance Premium
Requirement.
Note
means any one of the ten promissory notes made by
Grantor in the aggregate amount of $27,990,000,
together with all extensions and modifications. .
Notes
means the ten promissory notes made by Grantor in
the aggregate amount of $27,990,000, together with
all extensions and modifications of any one or
more of them.
Notice
means a notice given in accordance with the
provisions of Subsection 25.10.
Obligations
means all of the obligations required to be
performed under the terms and conditions of any of
the Loan Documents by any person other than the
Trustee or Beneficiary.
Obligor
means Grantor or any other natural person, trust
or business organization that is liable under the
Loan Documents for the payment of any portion of
the Indebtedness, or the performance of any other
Obligation, under any circumstances.
Other Deeds of Trust
means the three other Deeds of Trust and Security
Agreements executed by Grantor of even date
herewith for the benefit of Beneficiary as
security for the Notes and encumbering, inter
alia, real property owned by Grantor in the States
of California and Texas.
Permitted Encumbrances
means the encumbrances or other matters listed on
Exhibit B.
Permitted Transfer
means a transfer specifically described in Section
11 as permitted.
Personal Property
means all materials, appliances, equipment or
items located at the Real Property now or in the
future and that may be incorporated in the Real
Property through construction, attachment, or
installation, or that are used, or are capable of
being used, in the operation of the Real Property
as commercial real estate, including (i)
appliances, equipment or items required under any
lease to be provided by Grantor to any tenant,
(ii) materials or equipment for use in the
maintenance, alteration, landscaping or repair of
the Real Property, including snow removal, lawn,
landscaping, irrigation, security, incineration,
and hazardous waste storage, monitoring, testing,
containment or abatement supplies and equipment;
(iii) electrical lights and fixtures (whether or
not permanently wired), backup generators and
related fuel storage and delivery systems, (iv)
rugs, carpeting, office furnishings, art work,
decorations, window treatments and equipment
located in any on-site leasing office, located in
any lobby, hall or other common area, or used in
connection with any "executive suites" operation,
(v) vehicles used to transport prospective tenants
or to maintain or operate the Real Property, (vi)
components of heating, ventilation and air
conditioning systems and air quality testing
equipment, (vii) spare or detached parts for
elevators, escalators or other mechanical systems,
(viii) all site or building plans and
specifications, construction records, and
architectural or engineering drawings relating to
the Real Property, (ix) sewer or septic system
components, (x) water ▇▇▇▇▇, whether for purposes
of water supply or groundwater testing or
sampling, (xi) components of plumbing and water
conditioning systems, (xii) firefighting,
sprinkler or other fire safety equipment, (xiii)
central telephone switches, antennae, satellite
dishes or other telecommunication equipment, and
(xiv) video conferencing equipment, audio
equipment and cable television distribution
systems.
Property
means the Real Property, the Personal Property,
the Leases, the Rents, the Assigned Rights, the
Condemnation Proceeds and the Insurance Proceeds.
Real Property
means the Land, the Improvements, the Fixtures,
and all of Grantor's right, title and interest to
all appurtenant rights, privileges, tenements,
hereditaments, easements, or other interests that
run with the Land, including any Appurtenant
Easements, benefits of railroad sidings, drainage
rights, sewer rights and rights of ingress and
egress.
Recourse Obligations
means the recourse obligations, or "carveouts,"
that are defined in the Notes and in Section 21.
Rents
means all rents, lease termination fees, proceeds
of letters of credit or other devices securing
future rental payments, revenues, income,
proceeds, royalties, profits and other benefits
paid or payable for using, leasing, licensing,
possessing, operating from or in, residing in,
selling, mining, extracting, or otherwise enjoying
the Real Property, whether presently existing or
arising in the future, to which Grantor may now or
hereafter become entitled or may demand or claim.
Threshold Number
means $250,000.
Trustee
means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and his successors and
assigns.
4. TITLE
Grantor represents to and covenants with Beneficiary and
with its successors and assigns, that at the point in time
of the grant of the lien created by this Deed of Trust,
Grantor is well seized of good and indefeasible estate to
the Real Property, in fee simple absolute, subject to no
lien or encumbrance except the Permitted Encumbrances.
Grantor has good and merchantable title to the Personal
Property, and has the uncontestable right to grant a first
priority security interest in the Personal Property, free of
any rights of lessors or of sellers under conditional sales
contracts or other financing arrangements. Grantor warrants
this estate and title to Beneficiary and to its successors
and assigns forever, against all lawful claims and demands.
Grantor shall maintain mortgagee title insurance from a
solvent carrier, insuring Beneficiary in the amount of
$3,112,500 or such lesser amount agreed upon by Beneficiary,
that the Deed of Trust constitutes the first and best lien
on the Real Property. This Deed of Trust is and shall
remain a valid and enforceable first lien on the Real
Property, and if the validity or enforceability of this
first lien is attacked or called into question, Grantor
shall diligently and continuously defend it through
appropriate proceedings. Should it fail to do so,
Beneficiary may at Grantor's expense take all necessary and
proper action, including the engagement and compensation of
legal counsel, the prosecution or defense of litigation, and
the compromise or discharge of claims. Grantor shall defend,
indemnify and hold Beneficiary harmless in any suit or
proceeding brought to challenge or attack the validity,
enforceability or priority of the lien granted by this Deed
of Trust. If a prior mechanics' or materialmen's lien on
the Real Property arises by operation of statute during any
construction or repair of the Improvements, Grantor shall
either cause the lien to be discharged by paying when due
any amounts owed to such persons, or shall comply with
Section 12 of this Deed of Trust.
5. REPRESENTATIONS AND WARRANTIES
Grantor (i) represents to Beneficiary, and to its successors
and assigns, that the following statements are true as of
the date of this Deed of Trust, and (ii) warrants to
Beneficiary, and to its successors and assigns, that the
following statements shall remain true during the term of
the Loan:
5.1 Formation and Existence
Grantor is a limited partnership duly formed and
validly existing under the laws of Delaware, is duly
qualified to do business in and is in good standing
under, the laws of Maryland, and has obtained all
licenses and permits and filed all statements of
fictitious name and registrations necessary for the
lawful operation of its business.
5.2 Power and Authority
Grantor has full power and authority to carry on its
business as presently conducted, to own the Property,
to execute and deliver the Loan Documents that it has
executed, and to perform its obligations under them.
5.3 Due Authorization
The Loan transaction and the performance of all of
Grantor's obligations under the Loan Documents have
been duly authorized by all requisite partnership
action, and each individual executing any Loan Document
on behalf of Grantor has been duly authorized to do so.
5.4 No Default or Violations
The execution and performance of Grantor's obligations
under the Loan Documents will not result in any breach
of, or constitute a default under, any contract,
agreement, document or other instrument to which
Grantor is a party or by which Grantor may be bound or
affected, and do not and will not violate or contravene
any law to which Grantor is subject; nor do any such
other instruments impose or contemplate any obligations
which are or will be inconsistent with the Loan
Documents.
5.5 No Further Approvals or Actions Required
No approval by, authorization of, or filing with any
federal, state or municipal or other governmental
commission, board or agency or other governmental
authority is necessary in connection with the
authorization, execution and delivery of the Loan
Documents by Grantor.
5.6 Due Execution and Delivery
Each of the Loan Documents to which Grantor is a party
has been duly executed and delivered on behalf of
Grantor.
5.7 Legal, Binding, Valid and Enforceable
Each of the Loan Documents to which Grantor is a party
constitutes the legal, valid and binding obligation of
Grantor, enforceable against Grantor in accordance with
its terms, except to the extent that its enforceability
may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar laws
affecting the enforceability of creditors' rights
generally or by equitable principles of general
application (whether considered in an action at law or
in equity).
5.8 Accurate Financial Information
All financial information furnished by Grantor to
Beneficiary in connection with the application for the
Loan is true, correct and complete in all material
respects and does not omit to state any fact or
circumstance necessary to make the statements in them
not misleading, and there has been no material adverse
change in the financial condition of Grantor since the
date of such financial information.
5.9 Compliance with Legal Requirements
All governmental approvals, and licenses required in
order for Grantor to conduct its business and maintain
and operate the Real Property in compliance with
applicable law are in full force and effect, and the
Real Property currently is being operated in compliance
with all applicable legal requirements in all material
respects.
5.10 Contracts and Franchises
All contracts and franchises necessary in order for
Grantor to conduct its business and operate the Real
Property in accordance with good commercial practice
are in force.
5.11 No Condemnation Proceeding
The Grantor has no knowledge of any present, pending or
threatened condemnation proceeding or award affecting
the Real Property.
5.12 No Casualty
No damage to the Real Property by any fire or other
casualty has occurred and remained unrepaired.
5.13 Complete Lots and Tax Parcels
The Land is comprised exclusively of tax parcels that
are entirely included within the Land, and of
subdivision lots that are entirely included within the
Land.
6. COVENANTS
6.1 Payment and Performance
Grantor shall pay the Indebtedness and perform all of
its other obligations under the Loan Documents, as and
when the Loan Documents require such payment and
performance.
6.2 Payment of Impositions
The Grantor shall pay the Impositions on or before the
last day on which they may be paid without penalty or
interest, and shall, within thirty days of such
payment, furnish Beneficiary with a paid receipt or a
canceled check as evidence of payment. If Beneficiary
does not receive such evidence, Beneficiary may secure
it directly. If it does so, Beneficiary will charge
Grantor an administrative fee of $250 for securing the
evidence of payment. This fee will be a demand
obligation under the terms of this Deed of Trust. The
Grantor may meet the requirements of this Subsection by
remitting the Monthly Escrow Payments when due, by
immediately providing notice to Beneficiary of any new
Imposition or increased Imposition unknown to
Beneficiary, and by paying to Beneficiary on demand any
amount required to increase the Escrow Fund to an
amount sufficient to permit Beneficiary to pay all
Impositions from the Escrow Fund on time. If Grantor
wishes to contest the validity or amount of an
Imposition, it may do so by complying with Section 12.
If any new Legal Requirement taxes the Deed of Trust so
that the yield on the Indebtedness would be reduced,
and Grantor may lawfully pay the tax or reimburse
Beneficiary for its payment, Grantor shall do so.
6.3 Maintenance of the Real Property
Grantor shall not commit or permit any waste of the
Real Property as a physical or economic asset, and
agrees to maintain in good repair the Improvements,
including structures, roofs, mechanical systems,
parking lots or garages, and other components of the
Real Property that are necessary or desirable for the
use of the Real Property, or which Grantor as landlord
under any Lease is required to maintain for the benefit
of any tenant. In its performance of this obligation,
Grantor shall promptly and in a good and workmanlike
manner repair or restore any elements of the
Improvements that are damaged or destroyed as required
under Subsection 6.4. The Grantor shall also replace
roofs, parking lots, mechanical systems, and other
elements of the Real Property requiring periodic
replacement. The Grantor shall carry out such
replacements no less frequently than would any
commercially reasonable owner intending to maintain the
maximum income-generating potential of the Real
Property over its reasonable economic life. Grantor
shall not, without the prior written consent of
Beneficiary, demolish, reconfigure, or materially alter
the Improvements, but Beneficiary agrees that any
request for its consent to such an action shall be
deemed given if Beneficiary declines to respond within
fifteen (15) Business Days to any written request for
such a consent, if the request is accompanied by all
materials required to permit Beneficiary to analyze the
proposed action.
6.4 Use of the Real Property
Grantor shall cause the Real Property to be used as a
service center, office, or warehouse property and for
no other purpose.
6.5 Independence of the Real Property
The Grantor shall maintain the independence of the Real
Property from other land and improvements not included
within or located on the Land. In fulfilling this
covenant, Grantor shall neither take any action which
would make it necessary to own or control any property
other than the Real Property in order to meet the
obligations of the landlord under any Lease, or in
order to comply with the Legal Requirements, nor take
any action which would cause any land or improvements
other than the Land and the Improvements to rely upon
the Land or the Improvements for those purposes, nor
impair the integrity of the Land as one or more
complete subdivided lots and tax parcels.
6.6 Rebuilding upon Casualty and Remediation of Effect of
Condemnation
If a casualty occurs, Grantor shall rebuild the
Improvements. If any portion of the Real Property is
taken by power of eminent domain, Grantor shall remedy
its effects. In either case, the rebuilding or
remediation shall restore the Real Property's value and
potential to generate income in proportion to the
amount of the Indebtedness remaining after any
application of Insurance Proceeds or Condemnation
Proceeds to the Indebtedness.
6.7 Performance of Landlord Obligations
Grantor shall perform its obligations as landlord under
the Leases, and shall neither take any action, nor fail
to take any action, if the action or failure would be
inconsistent with the commercially reasonable
management of the property for the purpose of enhancing
its long-term performance and value. Grantor shall
not, without Beneficiary's written consent, extend,
modify, terminate or enter into any lease of the Real
Property, except in compliance with the Agreement
Regarding Leasing, which Beneficiary and Grantor have
entered into today, and which grants certain rights,
personally, to Grantor.
6.8 Financial reports and Operating Statements
During the term of the Loan, Grantor shall maintain
complete and accurate accounting and operational
records, including copies of all Leases and other
written contracts relating to the Real Property, copies
of all tax statements, and evidence to support the
payment of all material property-related expenses.
Within 120 days of the end of each fiscal year, Grantor
shall deliver to Beneficiary (A) copies of the
consolidated financial statements of Grantor and its
general partner, prepared by an independent certified
public accountant in accordance with generally accepted
accounting principles, consistently applied, (B) a
complete and accurate operating statement for the Real
Property, and (C) a complete rent roll (listing
tenants, unit numbers, square feet occupied and leased,
rents, delinquencies, vacancies, other income received
and expenses), all certified as true and correct by
Grantor and in form satisfactory to Beneficiary. If
Grantor fails to deliver the items required in this
Subsection, Beneficiary may engage an accounting firm
to prepare the required items. In connection with the
engagement of this firm and its supervision, Grantor
shall pay Beneficiary an administrative fee of $1,000.
Grantor shall cooperate fully with any investigative
audit required to permit the accounting firm to produce
these items, and the fees and expenses incurred in
connection with their preparation shall be paid by
Grantor on demand.
7. INSURANCE REQUIREMENTS
At all times until the Indebtedness is paid in full, Grantor
shall maintain insurance coverage and administer insurance
claims in compliance with this Section.
7.1 Required Coverages
(a) All Risk/Open Perils Special Form Property
The Grantor shall maintain coverage of 100% of the
replacement cost of all insurable elements of the
Real Property all tangible Personal Property. If
a coinsurance clause is in effect, an agreed
amount endorsement is required. Blanket policies
must include limits by property location.
Coverage shall extend to the Real Property and to
all tangible Personal Property.
(b) Broad Form Boiler and Machinery
If any such item is located on or about the Real
Property, Grantor shall maintain this coverage,
including a form of business income coverage.
(c) Flood
If the Real Property is located in a special flood
hazard area according to the most current flood
insurance rate map issued by the Federal Emergency
Management Agency and if flood insurance is
available, Grantor shall maintain flood insurance
coverage of all insurable elements of Real
Property and of all tangible Personal Property.
(d) Business Interruption
The Grantor shall maintain a form of business
income coverage in the amount of 80% of one year's
business income from the Property. Blanket
policies must include limits by property location.
(e) Comprehensive/general liability
The Grantor shall maintain such coverage (which
may be in the form of umbrella/excess liability
insurance) with a $1,000,000 combined single limit
per occurrence and a minimum aggregate limit of
$2,000,000.
(f) Liquor liability
The Grantor shall maintain such coverage, if
applicable law may impose liability on those
selling, serving, or giving alcoholic beverages to
others and if such beverages will be sold, served
or given on the Real Property by Grantor.
(g) Elective coverages
Beneficiary may require additional coverages
appropriate to the property type and site
location. Additional coverages may include
earthquake, mine subsidence, sinkhole, personal
property, supplemental liability, or coverages of
other property-specific risks.
7.2 How Beneficiary Should Be Named
On all property policies and coverages (including
coverage against loss of business income), Beneficiary
must be named as "first mortgagee" under a standard
mortgage clause. On all liability policies and
coverages, Beneficiary must be named as an "additional
insured." Beneficiary should be referred to verbatim as
follows: "Life Investors Insurance Company of America
and its successors, assigns, and affiliates; as their
interest may appear; c/o AEGON USA Realty Advisors,
Inc.; Mortgage Loan Dept.; ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇., ▇▇; ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇."
7.3 Rating
Each insurance carrier must be rated A, Class XII, or
better by Best's Rating Service, without regard to its
parent's or any reinsurer's rating.
7.4 Deductible
The maximum deductible on all coverages and policies is
$25,000.
7.5 Notices, Changes and Renewals.
All policies must require the insurance carrier to give
Beneficiary a minimum of thirty (30) days notice in the
event of cancellation or non-renewal. Grantor shall
report to Beneficiary immediately any vacancy, change
of title, tenant occupancy or use, physical damage,
additional improvements or other factors affecting any
insurance contract. An original or certified copy of
each policy is required upon renewal. If no such copy
is available, Beneficiary will accept a binder for a
period not to exceed 90 days. All binders,
certificates of insurance, and original or certified
copies of policies must name Beneficiary as a named
insured, or as an additional insured, must include the
complete and accurate property address and must bear
the original signature of the issuing insurance agent.
7.6 Unearned Premiums
If this Deed of Trust is foreclosed, Beneficiary may at
its discretion cancel any of the insurance policies
required under this Section and apply any unearned
premiums to the Indebtedness.
7.7 Forced Placement
If Grantor fails to comply with the requirements of
this Section, the Beneficiary may, at its discretion,
procure any required insurance. Any premiums paid for
such insurance, or the allocable portion of any premium
paid by Beneficiary under a blanket policy for such
insurance, shall be a demand obligation under this Deed
of Trust, and any unearned premiums under such
insurance shall comprise Insurance Proceeds and
therefore a portion of the Property.
8. INSURANCE AND CONDEMNATION PROCEEDS
8.1 Adjustment of Insurance Claims and Compromise of
Condemnation Awards
The Grantor may settle any insurance claim or
condemnation proceeding if the effect of the casualty
or the condemnation may be remediated for $50,000 or
less. If a greater sum is required, Grantor may not
settle any such claim or proceeding without the advance
written consent of Beneficiary. If a Default exists,
Grantor may not settle any insurance claim or
condemnation proceeding without the advance written
consent of Beneficiary.
8.2 Direct Payment to Beneficiary of Proceeds
If the Insurance Proceeds received in connection with a
casualty or the Condemnation Proceeds received in
respect of a condemnation exceed $50,000, or if there
is a Default, then such proceeds shall be paid directly
to Beneficiary. Beneficiary shall have the right to
endorse instruments that evidence proceeds which it is
entitled to receive directly.
8.3 Availability to Grantor of Proceeds
Grantor shall have the right to use the Insurance
Proceeds or the Condemnation Proceeds to rebuild the
Improvements following a casualty, or the remedy the
effect on the Real Property of any condemnation, if the
amount received is less than the Threshold Number,
provided (a) no condition of Default then exists, (b)
no Default with respect to any payment obligation under
any of the Loan Documents shall have occurred during
the preceding twelve months, (c) no nonmonetary default
shall have occurred, been noticed and remained uncured
beyond the applicable cure period and (d) the proceeds
received by Beneficiary, together with any additional
funds deposited with Beneficiary by Grantor, are then
sufficient, in Beneficiary's discretion, to restore the
Improvements to their condition before the casualty, or
to remedy the effect on the Real Property of the
condemnation. Beneficiary may condition disbursements
on approval of plans and specifications, minimum
disbursement requirements, submittal of certificates of
occupancy and other appropriate evidence of completion,
updating of Beneficiary's mortgagee title insurance
coverage to insure the absence of mechanics' or
materialmen's liens, disbursement on a percentage of
completion basis with a ten percent holdback on all
disbursements pending final completion, and other
customary safeguards for construction lenders. All
transactional expenses shall be paid by Grantor. If
the amount received in respect of a casualty or
condemnation equals or exceeds the Threshold Number,
then such proceeds may, at Grantor's option, be used to
rebuild or to remedy subject to all of the provisions
and procedures described above, but only if the Loan-to-
Value ratio of the Property on completion will be 75%
or less, as determined by Beneficiary based on its
appraisal review, as determined by repeating the
appraisal procedure described in Section 4.2.1 of the
Commitment. If necessary, Grantor shall make a
prepayment of the Loan, without premium, sufficient to
achieve this Loan-to-Value ratio. The independent fee
appraisal shall be at Grantor's expense, and Grantor
shall pay Beneficiary an administrative fee of $2,500
in connection with its review. Beneficiary may require
that Grantor deposit $10,000 with Beneficiary as
security for these expenses or may pay the fee
appraiser's and administrative fees from the proceeds
at its sole discretion.
Unless Grantor has the right to use the Insurance
Proceeds or the Condemnation Proceeds under the
foregoing paragraph, Beneficiary may, in its sole and
absolute discretion, either apply them to the Loan
balance or disburse them for the purposes of repair and
reconstruction, or to remedy the effects of the
condemnation. No prepayment premium will be charged on
amounts applied to reduce the principal balance of the
Loan.
9. ESCROW FUND
The Grantor shall pay the Monthly Escrow Payment on the
first day of every month, commencing January 1, 1997. Any
Monthly Escrow Payment received after the tenth day of the
month in which it is due shall be subject to a late charge
of five percent, which shall not be applied to the Escrow
Fund. Beneficiary shall hold Monthly Escrow Payments in a
fund from which Beneficiary will pay Escrow Expenses that
Beneficiary has anticipated will become payable on a regular
basis during the Loan's term, and on which Beneficiary has
based its determination of the Monthly Imposition
Requirement, the Monthly Insurance Premium Requirement and
the Monthly Reserve Requirement. The Escrow Fund will be
maintained as an accounting entry in Beneficiary's general
account, where it may be commingled with Beneficiary's other
funds. Beneficiary may reanalyze the projected Escrow
Expenses from time to time and shall advise Grantor of any
change in the amount of the Monthly Escrow Payment. Grantor
hereby grants to Beneficiary a security interest in the
Escrow Fund and agrees that, upon the foreclosure of the
Deed of Trust, the delivery of a deed in lieu of
foreclosure, or the payoff of the Loan, Beneficiary may
apply amounts in the Escrow Fund, net of accrued Escrow
Expenses, to the Indebtedness. Beneficiary shall remit any
amounts in excess of the Indebtedness to Grantor.
10. DEFAULT
10.1 Existence of Default
A Default shall exist immediately upon the occurrence
of any of the acts, omissions or circumstances
specified in Subsection 10.2 or in Subsection 10.4.
Upon the occurrence of any of the acts, omissions or
circumstances specified in Subsection 10.3, Beneficiary
may deliver written Notice to Grantor of the existence
of such an act, omission or circumstance, and that such
an act, omission or circumstance shall, if uncured
within the Conditional Grace Period, constitute a
Default under the Loan Documents. A Default shall
exist if the act, omission or circumstance has not been
cured prior to expiration of the Conditional Grace
Period, or if, following such NoticeGrantor either
ceases to pursue the cure of such an act, omission or
circumstance with diligence, or repudiates its
obligation to effect such a cure.
10.2 Monetary Defaults
A monetary default shall exist upon any of the
following:
(a) Monthly Principal and Interest Payments
The Grantor's failure to pay, or to cause to be
paid, any regular monthly payment of principal and
interest due under any of the Notes, or any
required Monthly Escrow Payment, so that
Beneficiary receives the payment on or before the
tenth day of the month in which the payment is
due;
(b) Matured Indebtedness
The Grantor's failure to pay, or to cause to be
paid, the Indebtedness when the Loan matures by
acceleration under Section 13, because of a
transfer or encumbrance under Section 16, or by
lapse of time;
(c) Demand Obligations
The Grantor`s failure to pay, or to cause to be
paid, within five Business Days of Beneficiary's
written demand, any other amount due under this
Deed of Trust or any of the other Loan Documents;
10.3 Curable Nonmonetary Default
A curable nonmonetary default shall exist upon any of
the following:
(a) Entry of a Material Judgment
The entry of any judgment against Grantor or any
other Obligor, if the judgment may materially and
adversely affect the value, use or operation of
the Real Property;
(b) Tax Lien
The filing of any federal, state or local tax lien
against Grantor or any other Obligor, or against
the Real Property.
(c) Failure of Warranty
Any representation made in Section 5 or warranted
in any other Loan Document shall become untrue or
misleading in any material respect.
(d) Other Defaults
The Grantor's failure to observe any promise or
covenant made in this Deed of Trust or any other
Loan Document, if the failure is not described in
Subsection 10.2, in Subsection 10.4, or elsewhere
in this Subsection 10.3.
10.4 Incurable Nonmonetary Default
An incurable nonmonetary default shall exist upon any
of the following:
(a) Material Untruth or Misrepresentation
Beneficiary`s discovery that any representation
made by Grantor or by any other Obligor in any
Loan Document in connection with the Loan was
untrue or misleading in any material respect at
the time it was made.
(b) Voluntary Bankruptcy Filing
The filing by Grantor or by any other Obligor of a
petition in bankruptcy or for relief from
creditors under any present or future law that
affords general protection from creditors.
(c) Involuntary Bankruptcy or Similar Filing
The Grantor or any other Obligor becomes the
subject of an involuntary petition in bankruptcy
or of any other action that may result in a
composition of its debts, that may provide for the
marshaling of its assets for the satisfaction of
Grantor's or such other Obligor's debts, or that
may result in the judicially ordered sale of the
its assets for the purpose of satisfying its
obligations to creditors, unless a motion for the
dismissal of the petition or other action is filed
within ten days and results in its dismissal
within sixty days of the filing of the petition or
other action.
(d) Insolvency
An adjudication that Grantor or any other Obligor
is insolvent.
(e) Receivership
The appointment of a receiver or trustee to take
possession of any of the assets of Grantor or of
any other Obligor unless a motion for the
dismissal of the appointment is filed within ten
days and results in dismissal of the receiver or
trustee within thirty days of the filing of the
petition or other action.
(f) ▇▇▇▇ or Attachment
The taking or seizure of any material portion of
the Property under levy of execution or attachment
unless a motion for the dismissal of the petition
or other action is filed within ten days and
results in its dismissal within ten days of the
filing of the petition or other action.
(g) Death, Dissolution or Liquidation
The dissolution or liquidation of any Obligor that
is not a natural person, or the cessation of its
legal existence shall cease, or the death of any
Obligor who is a natural person (unless the
dissolution, liquidation, cessation or death
results in a Permitted Transfer).
(h) Abandonment
The Grantor's abandonment of the Real Property.
(i) Impairment of the Lien by Legal Requirement
The promulgation by any Governmental Authority of
a Legal Requirement, or a ruling by a court of
competent jurisdiction, if the effect of the Legal
Requirement or ruling is to make the payment of
the Indebtedness unlawful or usurious, to prevent
Grantor or any other Obligor from legally
performing any material obligation under any Loan
Documents, to materially impair the right of
Beneficiary to accelerate the Indebtedness upon
the occurrence of a material Default, or to
materially impair the right of Beneficiary, upon
the failure of Grantor to pay the Indebtedness at
its maturity through acceleration or lapse of
time, to cause the sale of the Real Property and
the to apply the proceeds of the sale to the
Indebtedness.
(j) Impairment of Yield through Taxation
The promulgation of any Legal Requirement that
taxes the Deed of Trust so that the yield on the
Indebtedness would be reduced, if Grantor may
neither lawfully pay the tax nor lawfully
reimburse Beneficiary for its payment.
(k) Proceeding to Contest Lien
The Grantor's institution of any proceeding to
contest the validity of Beneficiary's lien on the
Property.
11. RIGHT TO CURE
Upon Default or upon the failure of Grantor, following a
notice given under Subsection 10.3, to diligently pursue the
cure of any act, omission or circumstance that may cause
Default, Beneficiary shall have the right to cure the
Default or the act, omission or circumstance. The expenses
of doing so shall be part of the Indebtedness, and Grantor
shall pay them to Beneficiary on demand.
12. CONTEST RIGHTS
The Grantor may secure the right to contest Impositions and
mechanics' or materialmen's liens, through appropriate
proceedings conducted in good faith, by depositing with
Beneficiary an amount equal to 125% of the amount of the
Imposition or the lien, or by depositing a bond or other
security acceptable to Beneficiary in its sole discretion.
If the contest of the related Imposition or lien is
unsuccessful, Beneficiary shall use the amount deposited, or
the proceeds of the bond or other security, to pay the
Imposition or to satisfy the obligation from which the lien
has arisen. Any surplus shall be refunded to Grantor.
13. DUE ON TRANSFER OR ENCUMBRANCE
Except as expressly permitted by the terms of the Loan
Agreement, upon the sale of any portion of the Real
Property, or upon any other conveyance, transfer or vesting
of any direct or indirect interest in Grantor or the
Property, including (i) the direct or indirect transfer of,
or the granting of a security interest in, the ownership of
Grantor, (ii) any encumbrance (other than a Permitted
Encumbrance) of the Real Property and (iii) the granting of
any security interest in the Property, the Indebtedness
shall, at Beneficiary's option, become immediately due and
payable without notice, unless the sale, conveyance,
transfer or vesting is a Permitted Transfer.
14. PERMITTED TRANSFER
14.1 Certain Transfers of Limited Partnership Interests
Transfers of limited partnership interests in the
Borrower that do not result in a loss of American
Industrial Properties REIT's majority control of the
Borrower shall constitute Permitted Transfers.
14.2 Transfer to an Approved Purchaser
The Grantor shall have the right, on one occasion
during the term of the Loan, to sell or transfer the
Property (together with all other real and personal
property then securing the Notes) in a transaction
approved by Beneficiary. Beneficiary agrees to approve
a transfer if the following conditions are satisfied:
(a) No Default
No Default shall exist, and no act, omission or
circumstance shall exist which, if uncured
following notice and the passage of time, would
become a Default.
(b) Request and Supporting Materials
Beneficiary shall receive a written request for
its approval at least sixty days in advance notice
of the proposed transfer. The request shall
specify the identity of the proposed transferee
and the terms of the transaction, and shall be
accompanied by the financial statements, tax
returns, and organizational documents of the
proposed transferee and its principals.
(c) Criteria to be Considered
The financial strength, credit history and
demonstrated property management expertise of the
proposed transferee and its principals shall be
satisfactory to Beneficiary in its sole
discretion. Beneficiary expressly reserves the
right to withhold its approval of the proposed
transfer if the proposed transferee or any of its
principals is or has been the subject of any
bankruptcy, insolvency, or similar proceeding.
(d) Assumption Agreement
Under the terms of the proposed transfer, the
proposed transferee shall assume the Loan, without
modification, under the terms of an assumption
agreement and additional documentation
satisfactory to Beneficiary in form and substance.
(e) Retention of Recourse Obligations
Under the terms of the assumption agreement and
additional documentation, liability for Recourse
Obligations arising after the date of the transfer
and assumption shall be assumed by the principals
of the proposed transferee, and liability for
Recourse Obligations arising before or in
connection with the transfer shall be retained by
those liable for them before the transfer.
(f) Title Insurance Endorsement
The Grantor shall agree to provide an endorsement
to Beneficiary's mortgagee title insurance policy,
insuring the continued validity and priority of
the Deed of Trust following the assumption.
(g) Assumption Fee
Beneficiary shall receive an assumption fee of
1.25 percent of the outstanding balance of the
Loan at the time of the sale or transfer, and
Grantor shall agree to reimburse Beneficiary's out-
of-pocket expenses incurred in connection with the
proposed transfer, including title, recording, and
attorneys' fees, regardless of whether the
transfer is consummated.
15. NOTICE OF ASSIGNMENT OF LEASES AND RENTS
Under the Assignment of Leases and Rents, Grantor has
assigned to Beneficiary, and to its successors and assigns,
all of Grantor's right and title to, and interest in, the
Leases, including all rights under the Leases and all
benefits to be derived from them. The rights assigned
include all authority of Grantor to modify or terminate
Leases, or to exercise any remedies, and the benefits
assigned include all Rents. This assignment is present and
absolute, but under the terms of the Assignment of Leases
and Rents, Beneficiary has licensed Grantor to collect and
use the Rents, and to exercise the rights assigned in this
paragraph, in any way that is consistent with its
obligations under the Loan Documents, under its terms. This
license, however, expires upon the maturity of the Loan by
acceleration or by lapse of time. Beneficiary may terminate
the license by written notice upon either (i) Default or
(ii) the occupancy of more than one-half of the leasable
space in the Improvements by a single tenant that is the
subject of a petition under the Bankruptcy Code, that has
threatened to file such a petition, or whose insolvency is
imminent. If the license to collect rents is terminated
under clause (ii) and there is no Default, then Beneficiary
shall collect the Rent directly, apply it to that portion of
the Indebtedness then due and payable, and promptly remit
any excess amount to Grantor. Grantor shall promptly remit
to Beneficiary any Rents it receives after the expiration or
termination of Grantor's license to collect the Rents.
16. ACCELERATION
Under the terms of the Notes, if a Default exists,
Beneficiary may, at its option, without Notice to Grantor,
declare the Indebtedness to be immediately due and payable.
17. RIGHTS OF ENTRY AND TO OPERATE
17.1 Entry on Property
If a Default exists, Beneficiary may without notice
enter upon the Real Property and take exclusive
possession of the Real Property and of all books,
records and accounts, all without notice and without
being guilty of trespass. If Grantor remains in
possession of all or any part of the Property after
Default and without Beneficiary's prior written
consent, Beneficiary may, without notice to Grantor,
invoke any and all legal remedies to dispossess
Grantor.
17.2 Operation of Property
If a Default exists, Beneficiary may hold, lease,
manage, operate or otherwise use or permit the use of
the Real Property, either itself or by other persons,
firms or entities, in such manner, for such time and
upon such other terms as Beneficiary may deem to be
prudent and reasonable under the circumstances (making
such repairs, alterations, additions and improvements
thereto and taking any and all other action with
reference thereto, from time to time, as Beneficiary
deems necessary or desirable), and apply all Rents and
other amounts collected by Beneficiary in accordance
with the provisions of the Assignment of Leases and
Rents.
18. RECEIVERSHIP
If a Default exists, Beneficiary may apply to a court of
competent jurisdiction for the appointment of a receiver of
the Property, whether or not the value of the Property
exceeds the Indebtedness, whether or not waste or
deterioration of the Real Property has occurred, and whether
or not other arguments based on equity would justify the
appointment. Grantor irrevocably consents to such an
appointment. Any such receiver shall have all the rights
and powers customarily given to receivers in Maryland,
including the rights and powers granted to Beneficiary by
this Deed of Trust, the power to maintain, lease and operate
the Real Property on terms approved by the court, and the
power to collect the Rents and apply them to the
Indebtedness or otherwise as the court may direct. Once
appointed, a receiver may at Beneficiary's option remain in
place until the Indebtedness has been paid in full.
19. FORECLOSURE
Upon the existence of Default, Beneficiary may immediately
proceed to foreclose the lien of this Deed of Trust against
all or part of the Real Property by foreclosure sale in
accordance with the laws of Maryland.
Specifically, Grantor declares that, upon the occurrence of
Default, Grantor assents to the passing of a decree for the
sale of all or part of the Property in accordance with the
Real Property Article of the Code of Public General laws of
Maryland and subtitle W of the Maryland Rules, as amended or
supplemented, and the Trustee, or any other person
designated by the Beneficiary shall have the power to and
may, and at the request of Beneficiary, shall sell, assign,
transfer and deliver, all or any part of the Property, at
such time and place in ▇▇▇▇ Arundel County, Maryland, as the
Beneficiary shall deem advantageous and proper and without
regard to any right of Grantor or any other person to the
marshaling of assets, for cash, on credit or for other
property, for immediate or future delivery, and for such
price or prices and on such terms and after such advertising
as Beneficiary shall deem advantageous and proper, after
filing any necessary papers in the appropriate court of ▇▇▇▇
Arundel County, Maryland, posting any necessary bond, giving
public notice and giving notice to Grantor in the manner and
at the address specified in Subsection 25.10, all subject to
and in accordance with the requirements of applicable law.
The Real Property shall be sold at public sale, in one
parcel or in such parcels, manner or order as Beneficiary
may elect, and any Fixtures or Personal Property encumbered
by this Deed of Trust may be sold at the same sale as the
Real Property or in one or more separate sales. Beneficiary
may require a deposit in the amount of ten percent (10%) of
the unpaid principal indebtedness then secured hereby or One
Hundred Thousand Dollars ($100,000.00), whichever is
greater, to accompany each bid at foreclosure sale or sale
in lieu thereof. Any such public sale may be adjourned to
another time and place by Beneficiary by announcement at the
time and place originally appointed for such sale, without
further notice or publication. Upon compliance with the
terms of the sale, Beneficiary shall convey by trustee's
deed, to and at the cost of the purchaser, the Property so
sold, free and clear from all estate, right, title or
interest of Grantor at law or in equity. The purchaser
shall have no responsibility to see to the application of
the purchase money. The proceeds of the sale shall be
applied in the following order of priority: (i) to pay all
expenses of the sale (including reasonable attorneys' fees
and disbursements and a commission to Trustee(s) of not more
than five percent (5%) of the bid price ), (ii) to pay all
accrued Impositions and receivership costs, and to reimburse
the Beneficiary and for amounts advanced to protect the lien
and the Property from the effect of any Default, or to
enforce the Loan Documents, with interest at the Default
Rate, (iii) to amounts owed under the Notes, and (iv) to
satisfy any debts secured by liens inferior to the lien of
this Deed of Trust. Any surplus shall be paid to Grantor,
or to any other person lawfully entitled to receive it, upon
the surrender and delivery to the purchaser of possession of
the Property sold and conveyed, less any expense of
obtaining possession. If all or part of the Property is
advertised for sale under the provisions of this Deed of
Trust but is not sold, Grantor will pay all expenses of and
attending such advertisement and intended sale, including
reasonable attorneys' fees, expenses and a Trustee's
commission of not more than two percent (2%) of the
Indebtedness then due, and the payment of these expenses
shall be secured by this Deed of Trust.
Beneficiary or any of its affiliates may purchase all or
part of the Property at any public or judicial sale without
forfeiting its right to collect any deficiency from Grantor
in respect of Recourse Obligations, and Beneficiary may
"credit bid" all or part of the Indebtedness at the sale.
Beneficiary, upon any such purchase, shall acquire good
title to the properties so purchased, free of the lien of
this Deed of Trust, free of all rights of redemption in
Grantor and free of all liens and encumbrances subordinate
to this Deed of Trust.
20. WAIVERS
To the maximum extent permitted by law, Grantor irrevocably
and unconditionally WAIVES and RELEASES any present or
future rights (a) of redemption (b) that may exempt the
Property from any civil process, (c) to appraisal or
valuation of the Property, (d) to extension of time for
payment, (e) that may subject Beneficiary's exercise of its
remedies to the administration of any decedent's estate or
to any partition or liquidation action, (f) to any homestead
exemption and (g) that in any way would delay or defeat the
right of Beneficiary to cause the sale of the Real Property
for the purpose of satisfying the Indebtedness. ▇▇▇▇▇▇▇
agrees that the price paid at a lawful foreclosure sale,
whether by Beneficiary or by a third party, and whether paid
through cancellation of all or a portion of the Indebtedness
or in cash, shall conclusively establish the value of the
Real Property.
21. EXCULPATION CLAUSE AND RECOURSE ("CARVEOUT") OBLIGATIONS
Beneficiary agrees that it shall not seek to enforce any
monetary judgment against Grantor except through recourse to
the Property and any other property now or hereafter
securing all or any part of the Indebtedness, unless the
obligation from which the judgment arises is a Recourse
Obligation. Recourse Obligations include Beneficiary's
costs, expenses (including reasonable attorneys' fees),
losses and actual damages caused by (i) waste, not including
ordinary wear and tear, unless Grantor fails to maintain
Real Property with ordinary care; (ii) fraud or written
material misrepresentation by Grantor; (iii) failure to pay
taxes, assessments, ground rent or any other lienable
impositions as required under the Loan Documents; (iv)
misapplication of tenant security deposits, insurance
proceeds or condemnation proceeds, or the unavailability to
the Beneficiary of condemnation proceeds because a lease of
the Real Property grants a tenant the right to a portion of
the owner's award (unless that portion is specifically
allocated to the tenant's interest by the condemning
authority); (v) failure while in monetary default to pay to
Beneficiary all rents, income and profits, net of reasonable
and customary operating expenses; (vi) failure to perform
under the environmental covenants or indemnifications set
forth in the Loan Documents; (vii) destruction or removal
from the Real Property of fixtures or personal property
securing the Loan, unless replaced by items of equal value;
(viii) terminating, amending or entering into a lease of the
Real Property in violation of the Loan Documents; (ix)
willful or grossly negligent violation of applicable law; or
(x) collection of the Loan, including the costs of
enforcement of the Loan Documents after the Notes mature by
acceleration or lapse of time. Grantor may also assume
recourse liability under Loan Documents or other agreements
that expressly provide for such personal liability, and such
Loan Documents or agreements, if any, shall not be subject
to the exculpation from personal liability set forth in this
Paragraph.
In addition, the Grantor shall have personal liability for
the entire indebtedness if the Grantor (a) voluntarily
transfers or encumbers the Property in violation of the Loan
Documents, or (b) files a voluntary petition for
reorganization under the Bankruptcy Code and has not
offered, prior to the filing, to enter into the
Beneficiary's choice of either an agreement to permit an
uncontested foreclosure or an agreement to deliver a deed in
lieu of foreclosure, within sixty days of Beneficiary's
acceptance of the offer. Following Beneficiary's acceptance
of such an offer, default by the Grantor shall trigger
personal liability for the entire indebtedness. No such
offer shall be conditioned on any payment by the
Beneficiary, on the release of any obligor from any recourse
obligation, or on any other concession.
22. SECURITY AGREEMENT AND FIXTURE FILING
22.1 Security Agreement
This Deed of Trust shall be self-operative and shall
constitute a Security Agreement pursuant to the
provisions of the Maryland Uniform Commercial Code (the
"Code") with respect to those items comprising Property
that may be subject to a security interest under the
Code. Grantor, as debtor, hereby grants Beneficiary,
as secured party, a security interest in those items
and in all related additions, replacements,
substitutions and proceeds, for the purpose of securing
the Indebtedness. ▇▇▇▇▇▇▇ hereby agrees to execute and
deliver on demand, and irrevocably constitutes and
appoints Beneficiary the attorney-in-fact of Grantor,
to execute, deliver and, if appropriate, to file with
the appropriate filing officer or office, such security
agreements, financing statements or other instruments
as Beneficiary may require in order to create, perfect,
or continue this security interest. Grantor shall pay
all related filing fees and costs, all reasonable costs
and expenses of any record searches (or their
continuations), as Beneficiary may reasonably require.
Without the prior written consent of Beneficiary,
Grantor shall not create or suffer the creation of any
other lien on or security interest in any of the
Property subject to the security interest. Upon
Default, Beneficiary shall have the rights and remedies
of a secured party under the Code as well as all other
rights and remedies available at law or in equity, and,
at Beneficiary's option, Beneficiary may also invoke
the remedies provided elsewhere in this Deed of Trust
as to such property. ▇▇▇▇▇▇▇ and Beneficiary agree
that the rights granted to Beneficiary as secured party
under this Section 21 are in addition to rather than a
limitation on any of Beneficiary's other rights under
this Deed of Trust with respect to the Personal
Property. No failure to mention any item in a
financing statement shall limit the scope of Grantor's
assignment of any Property, impair the priority of
Beneficiary`s lien on any Personal Property, or alter
Beneficiary's rights to Insurance Proceeds and
Condemnation Proceeds, except to the extent that a
court holds that mention of the item in the Code
records was required in order for Beneficiary's
interest to enjoy priority over the interests of third
parties.
22.2 Fixture Filing
This Deed of Trust constitutes a financing statement
filed as a fixture filing in the Official Records of
the County Recorder of ▇▇▇▇ Arundel County, Maryland
with respect to any and all fixtures comprising
Property. The "debtor" is AIP Properties #3, L.P., a
limited partnership organized under Delaware law, the
"secured party" is Life Investors Insurance Company of
America, a corporation organized under the laws of
Iowa, the collateral is as described in Section 22.1
above and the granting clauses in this Deed of Trust,
and the addresses of the debtor and secured party are
the addresses stated in Subsection 25.10 of this Deed
of Trust for notices to such parties.
23. ENVIRONMENTAL MATTERS
23.1 Representations
The Grantor represents as follows:
(a) No Hazardous Substances
To the best of Grantor's knowledge following due
inquiry as a duly diligent property owner, and
except as disclosed in the ESA, the Real Property
has been, and is, free of contamination from
Hazardous Substances, and no Hazardous Substances
have been released on or about the Real Property.
(b) Compliance with Environmental Laws
The Real Property and its current use and
presently contemplated uses comply with all
Environmental Laws and, in connection with the
ownership, operation and use of the Real Property,
all necessary permits, licenses, authorizations,
and other consents and approvals have been
obtained, and all necessary notices, publications,
and filings have been made and given, with respect
to the storage, use, and disposal of any Hazardous
Substances in, on, or about the Real Property.
(c) No Actions or Proceedings
There is no present or, to the best of Grantor's
knowledge following due inquiry as a duly diligent
property owner, no past or threatened action,
proceeding or investigation by any governmental
authority or agency related to any suspected or
actual violation of any Environmental Law with
respect to, or the presence of any Hazardous
Material on, the Real Property.
23.2 Covenants
Grantor covenants as follows:
(a) Compliance with Environmental Laws
Grantor shall, and Grantor shall cause all
employees, agents, contractors, and tenants of
Grantor and any other persons present on or
occupying the Real Property, to keep and maintain
the Real Property in compliance with all
Environmental Laws.
(b) Notices, Actions and Claims
The Grantor shall immediately advise Beneficiary
in writing of (i) any notices from any
governmental or quasi-governmental agency or
authority of violation or potential violation of
any Environmental Law received by Grantor, (ii)
any and all enforcement, cleanup, removal or other
governmental or regulatory actions instituted,
completed or threatened pursuant to any
Environmental Law, (iii) all claims made or
threatened by any third party against Grantor or
the Real Property relating to damage,
contribution, cost recovery, compensation, loss or
injury resulting from any Hazardous Substances,
and (iv) discovery by Grantor of any occurrence or
condition on any real property adjoining or in the
vicinity of the Real Property that could cause the
Real Property to become contaminated by or with
Hazardous Substances.
23.3 Beneficiary's Right to Control Claims
Beneficiary shall have the right (but not the
obligation) to join and participate in, as a party if
it so elects, any legal proceedings or actions
initiated in connection with any Hazardous Substances
and to have its related and reasonable attorneys' and
consultants' fees paid by Grantor upon demand.
23.4 Indemnification
Grantor shall be solely responsible for, and shall
indemnify, defend, and hold harmless Beneficiary,
Trustees, and their respective directors, officers,
employees, agents, successors and assigns from and
against, any loss, damage, cost, expense or liability
of whatever kind or nature, known or unknown,
contingent or otherwise, directly or indirectly arising
out of or attributable to the use, generation, storage,
release, threatened release, discharge, disposal, or
presence (whether prior to or after the date of this
Deed of Trust) of Hazardous Substances on, in, under or
about the Real Property (whether by Grantor, a
predecessor in title, any tenant, or any employees,
agents, contractor or subcontractors of any of the
foregoing or any third persons at any time occupying or
present on the Real Property), including, without
limitation: (i) personal injury; (ii) death; (iii)
damage to property; (iv) all consequential damages; (v)
the cost of any required or necessary repair, cleanup
or detoxification of the Real Property, including the
soil and ground water thereof, and the preparation and
implementation of any closure, remedial or other
required plans; (vi) damage to any natural resources;
and (vii) all reasonable costs and expenses incurred by
Beneficiary or Trustee in connection with clauses (i)
through (vi), including but not limited to reasonable
attorneys' and consultants' fees; provided, however,
that nothing contained in this Section shall be deemed
to preclude Grantor from seeking indemnification from,
or otherwise proceeding against, any third party
including, without limitation, any tenant or
predecessor in title to the Real Property. The
covenants, agreements, and indemnities set forth in
this Section shall be binding upon Grantor and its
heirs, successors and assigns, and shall survive
repayment of the Indebtedness, foreclosure of the
Security, and ▇▇▇▇▇▇▇'s granting of a deed in lieu of
foreclosure of the Security. Any costs or expenses
incurred by Beneficiary or Trustee for which Grantor is
responsible or for which ▇▇▇▇▇▇▇ has indemnified
Beneficiary shall be paid to Beneficiary on demand,
with interest at the Default Rate from the date
incurred by Beneficiary until paid in full, and shall
be secured by this Deed of Trust. Without the prior
written consent of Beneficiary, Grantor shall not enter
into any settlement agreement, consent decree, or other
compromise in respect to any claims relating to
Hazardous Substances.
23.5 Environmental Audits
At such times as Beneficiary reasonably determines that
an environmental audit of the Real Property for the
presence of Hazardous Substances is necessary in order
to determine whether the value of the Real Property has
been or may in the future be impaired by the presence
of Hazardous Substances on, about or under the Real
Property (but no more often than annually unless
Beneficiary has reason to believe that Hazardous
Substances may be present), Grantor shall retain, upon
request of Beneficiary, or Beneficiary may retain
directly, at the sole cost and expense of Grantor, a
licensed geologist, industrial hygienist or an
environmental consultant (the "Environmental
Consultant") acceptable to Beneficiary to conduct an
environmental audit of the Real Property. Grantor
shall afford any person conducting an environmental
audit access to the Real Property and all materials
reasonably requested in connection with the
environmental audit. In light of the possible passage
of title to Beneficiary as a result of Default, any
requirement of an environmental audit by Beneficiary
shall be deemed reasonable if a Default exists. Such a
requirement shall also be deemed reasonable if
Beneficiary has received notice of the likely existence
of Hazardous Substances on, about or under the Real
Property. Grantor shall pay the actual and reasonable
cost and expenses of any environmental audit obtained
by Beneficiary within five days of written demand.
Grantor shall at Beneficiary's request comply, at its
sole cost and expense in the most commercially
reasonable manner determined by Grantor, with all
recommendations contained in the environmental audit
required to bring the Real Property into compliance
with all Environmental Laws, or for additional testing
and studies to further determine the location, quantity
and types of Hazardous Substances detected by an
environmental audit.
24. CONCERNING THE TRUSTEE
24.1 No Liability
Trustee will not be liable for any error of judgment or
act, or be otherwise responsible or accountable under
any circumstances. If the Trustee or anyone acting by
virtue of Trustee's powers enters the Real Property,
the Trustee will not be personally liable for debts
contracted or for liability or damages incurred in the
management or operation of the Real Property. Trustee
will have the right to rely on any instrument, document
or signature authorizing or supporting any action taken
or proposed to be taken by Trustee or believed by
Trustee in good faith to be genuine. Trustee will be
entitled to reimbursement for expenses incurred by
Trustee in the performance of Trustee's duties and to
reasonable compensation for services rendered. Grantor
shall, from time to time, pay compensation due Trustee
under this Deed of Trust and reimburse Trustee for and
save and hold Trustee harmless from and against any and
all loss, cost, liability, damage and expense
whatsoever incurred by Trustee in the performance of
Trustee's duties.
24.2 Retention of Money
All money received by Trustee must, until used or
applied, be held in trust for the purposes for which it
was received, but need not be segregated in any manner
from any other money (except to the extent required by
law) and Trustee will have no liability for interest on
any money received.
24.3 Successor Trustees
Trustee may resign by giving of notice of such
resignation in writing to Beneficiary. If Trustee
dies, resigns or becomes disqualified from acting in
the execution of this Trust or fails or refuses to
exercise the same when requested by Beneficiary so to
do or if for any reason and without cause Beneficiary
prefers to appoint a substitute trustee to act instead
of the original Trustee, or any prior successor or
substitute trustee, Beneficiary will have full power to
appoint a substitute trustee and, if preferred, several
substitute trustees in succession who shall succeed to
all the estates, rights, powers and duties of the
Trustee.
24.4 Succession Instruments
Any new Trustee appointed will, without any further
act, deed or conveyance, become vested with all the
estates, properties, rights, powers and trusts of
Trustee's predecessor. Upon the written request of
Beneficiary or of any successor trustee, Trustee
ceasing to act shall execute and deliver an instrument
transferring to such successor trustee all the estates,
properties, rights, powers and trusts of Trustee so
ceasing to act, and shall duly assign, transfer and
deliver any of the property and money held by Trustee
to the successor trustee so appointed in Trustee's
place.
24.5 Performance of Duties by Agents
Trustee may authorize one or more parties to act on
Trustee's behalf to perform Trustee's ministerial
functions, including, without limitation, the
transmittal and posting of any notices.
25. MISCELLANEOUS
25.1 Survival of Obligations
Each and all of the Obligations shall survive the
execution and delivery of the Loan Documents and will
continue in full force and effect until the
Indebtedness and the Obligations have been paid and
satisfied in full.
25.2 Further Assurances
Grantor, upon the request of Beneficiary or Trustee,
shall complete, execute, acknowledge, deliver and
record or file such further instruments and do such
further acts as may be necessary, desirable or proper
to carry out more effectively the purposes of this Deed
of Trust, to subject any property intended to be
covered by this Deed of Trust to the liens and security
interests it creates, to place third parties on notice
of those liens and security interests, or to correct
any defects which may be found in any Loan Document.
Grantor irrevocably appoints Beneficiary as its agent
to complete, execute, deliver and record or file all
such instruments.
25.3 Recording and Filing
Grantor shall cause this Deed of Trust and all
amendments, supplements, and substitutions to be
recorded, filed, re-recorded and refiled in such manner
and in such places as Beneficiary may reasonably
request. ▇▇▇▇▇▇▇ and will pay all recording filing, re-
recording and refiling taxes, fees and other charges.
25.4 No Waiver
No deliberate or unintentional failure by Beneficiary
to require strict performance by Grantor of any
Obligation shall be deemed a waiver, and Beneficiary
shall have the right at any time to require strict
performance by Grantor of any Obligation.
25.5 Expenses
Grantor shall pay all filing and recording fees, and
all expenses incident to the execution and
acknowledgment of this Deed of Trust, any supplements
or amendments, and any instrument entered into under
Subsection 25.2. Grantor shall pay or reimburse
Beneficiary, upon demand, for all costs and expenses,
including appraisal and reappraisal costs of the
Property and reasonable attorneys' and legal
assistants' fees, which Beneficiary may incur in
connection with enforcement proceedings hereunder, and
reasonable attorneys' and legal assistants' fees
incurred by Beneficiary in any other suit, action,
legal proceeding or dispute of any kind in which
Beneficiary is made a party or appears as party
plaintiff or defendant, affecting the Indebtedness,
this Deed of Trust, or the Property, or required to
protect or sustain the lien of this Deed of Trust.
Grantor shall be obligated to pay (or to reimburse
Beneficiary) for such fees, costs and expenses and
shall indemnify and hold Beneficiary and Trustee
harmless from and against any and all loss, cost,
expense, liability, damage and claims and causes of
action, including reasonable attorneys' fees, incurred
or accruing by reason of Grantor's failure to promptly
repay any such fees, costs and expenses.
25.6 Covenants Running with the Land
All Obligations are intended by the parties to be and
shall be construed as covenants running with the Land.
25.7 Successors and Assigns
All of the terms of the Loan Documents shall apply to,
be binding upon and inure to the benefit of the
successors and assigns of the parties.
25.8 Severability
The Loan Documents are intended to be performed in
accordance with, and only to the extent permitted by,
all applicable Legal Requirements. Any provision of
the Loan Documents that is prohibited or unenforceable
in any jurisdiction shall nevertheless be construed and
given effect to the extent possible. The invalidity or
unenforceability of any provision in a particular
jurisdiction shall neither invalidate nor render
unenforceable any other provision of the Loan Document
in that jurisdiction, and shall not affect the validity
or enforceability of that provision in any other
jurisdiction. If a provision is held to be invalid or
unenforceable as to a particular person or under a
particular circumstance, it shall nevertheless be
presumed valid and enforceable as to others, or under
other circumstances.
25.9 Usury
The parties intend that no provision of the Notes or
the Loan Documents be interpreted, construed, applied,
or enforced so as to permit or require the payment or
collection of interest in excess of the highest rate of
interest (the "Maximum Permitted Rate") permitted to be
paid or collected by applicable law with respect to
this transaction. In this regard, Grantor and
Beneficiary each stipulate and agree that it is their
common and overriding intent to contract in strict
compliance with applicable usury laws. Accordingly,
none of the terms of this Deed of Trust, the Notes or
any of the other Loan Documents shall ever be construed
to create a contract to pay, as consideration for the
use, forbearance or detention of money, interest at a
rate in excess of the Maximum Permitted Rate. Grantor
shall never be liable for interest in excess of the
Maximum Permitted Rate. Therefore, (a) in the event
that the Indebtedness and Obligations are prepaid or
the maturity of the Indebtedness and Obligations is
accelerated by reason of an election by Beneficiary,
unearned interest shall be canceled and, if theretofore
paid, shall either be refunded to Grantor or credited
on the Indebtedness evidenced by the Notes, as
Beneficiary may elect; (b) the aggregate of all
interest and other charges constituting interest under
applicable laws and contracted for, chargeable or
receivable under the Notes and the other Loan Documents
or otherwise in connection with the transaction
contemplated thereby shall never exceed the maximum
amount of interest, nor produce a rate in excess of the
Maximum Permitted Rate and (c) if any excess interest
is provided for, it shall be deemed a mistake, and the
same shall, at the option of the holder of the Notes,
either be refunded to Grantor or credited on the unpaid
principal amount (if any), and the Indebtedness
evidenced by the Notes shall be automatically reformed
so as to permit only the collection of the interest at
the Maximum Permitted Rate. Furthermore, if any
provision of the Notes or any of the other Loan
Documents is interpreted, construed, applied, or
enforced, in such a manner as to provide for interest
in excess of the Maximum Permitted Rate, then the
parties intend that such provision automatically shall
be deemed reformed nunc pro tunc so as to require
payment only of interest at the Maximum Permitted Rate.
If, for any reason whatsoever, interest paid or
received during the full term of the applicable
indebtedness produces a rate which exceeds the Maximum
Permitted Rate, then the amount of such excess shall be
deemed credited nunc pro tunc in reduction of the then
outstanding principal amount of the Indebtedness,
together with interest at such Maximum Permitted Rate.
Beneficiary shall credit against the principal of such
Indebtedness (or, if such Indebtedness shall have been
paid in full, shall refund to the payor of such
interest) such portion of said interest as shall be
necessary to cause the interest paid to produce a rate
equal to the Maximum Permitted Rate. All sums paid or
agreed to be paid to Beneficiary for the use,
forbearance or detention of money shall, to the extent
permitted by applicable law, be amortized, prorated,
allocated and spread in equal parts throughout the full
term of the applicable indebtedness, so that the
interest rate is uniform throughout the full term of
such indebtedness. In connection with all calculations
to determine the Maximum Permitted Rate, the parties
intend that all charges be excluded to the extent they
are properly excludable under applicable usury laws, as
they from time to time are determined to apply to this
transaction. The provisions of this Section shall
control all agreements, whether now or hereafter
existing and whether written or oral, between Grantor
and Beneficiary.
25.10 Entire Agreement.
The Loan Documents contain the entire agreements
between the parties relating to the financing of the
Real Property, and all prior agreements which are not
contained in the Loan Documents, other than in any
Environmental Agreement, are terminated. The Loan
Documents 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.
The Loan Documents may be amended, revised, waived,
discharged, released or terminated only by a written
instrument or instruments executed by the party against
which enforcement of the amendment, revision, waiver,
discharge, release or termination is asserted. Any
alleged amendment, revision, waiver, discharge, release
or termination that is not so documented shall be null
and void.
25.11 Notices.
All notices demands, consents, approvals and other
communications given pursuant to this Deed of Trust
must be in writing and must be sent by hand, or by
telecopy (with a duplicate copy sent by ordinary mail,
postage prepaid), or by postage prepaid, certified or
registered mail, return receipt requested, or by
reputable overnight courier service, postage prepaid,
addressed to the party to be notified as set forth
below:
if to Beneficiary:
Life Investors Insurance Company of America
c/o AEGON USA Realty Advisors, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
Cedar Rapids, Iowa 52499-5223
Attn. Mortgage Loan Department
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
if to Grantor:
AIP Properties #3, L.P.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Notices will be deemed given when delivered to
Beneficiary or to Grantor, as applicable (regardless of
whether delivered to the persons stated above to
receive copies), by hand or when a legible copy is
received by telecopier (provided receipt is verified by
telephone confirmation or one of the other permitted
means of giving Notices under this Subsection), or if
mailed, three (3) days after mailing (or on the date of
delivery for overnight courier service), with failure
to accept delivery constituting delivery for this
purpose. The parties agree to use reasonable efforts
to provide the copies of Notices required above, but
delivery of such copies shall not be required for
effective delivery of Notice. Actual notice, however
and from whomever given or received, will always be
effective Notice when received. Beneficiary may change
its address for Notices set forth above by giving at
least ten (10) days' prior Notice of such change in
writing to Grantor. Grantor may change the addresses
for Notices set forth above by giving at least thirty
(30) days' prior Notice of such change in writing to
Beneficiary.
25.12 Counterparts.
This Deed of Trust may be executed in any number of
counterparts, each of which shall be an original, but
all of which together shall constitute but one
instrument.
25.13 Applicable Law.
This Deed of Trust will be interpreted, construed,
applied, and enforced according to, and will be
governed by, the laws of the State of Maryland, without
regard to any choice of law principles which, but for
this provision, would require the application of the
law of another jurisdiction and regardless of where
executed or delivered, where payable or paid, where any
cause of action accrues in connection with this
transaction, where any action or other proceeding
involving this Deed of Trust is instituted or pending,
or whether the laws of the State of Maryland otherwise
would apply the laws of another jurisdiction.
25.14 Headings and General Application.
The section, subsection, and paragraph headings of this
Deed of Trust are provided for convenience of reference
only and shall in no way affect, modify or define, or
be used in construing, the text of the sections ,
subsections or paragraphs. If the text requires, words
used in the singular shall be read as including the
plural, and pronouns of any gender shall include all
genders.
25.15 Sole Benefit.
This Deed of Trust and the other Loan Documents have
been executed for the sole benefit of Grantor and
Beneficiary and the successors and assigns of
Beneficiary. No other party shall have rights
thereunder or be entitled to assume that the parties
thereto will insist upon strict performance of their
mutual obligations hereunder, any of which may be
waived from time to time. Grantor shall have no right
to assign any of its rights under the Loan Documents to
any party whatsoever.
25.16 Subrogation.
If any or all of the proceeds of the Indebtedness or
Obligations have been used to extinguish, extend or
renew any indebtedness heretofore existing against the
Property or to satisfy any indebtedness or obligation
secured by a lien or encumbrance of any kind (including
liens securing the payment of any Impositions), such
proceeds have been advanced by Beneficiary at Grantor's
request, and to the extent of such funds so used, the
Indebtedness and Obligations in this Deed of Trust
shall be subrogated to and extend to all of the rights,
claims, liens, titles and interests heretofore existing
against the Property pursuant thereto to secure the
indebtedness or obligation so extinguished, paid,
extended or renewed, and the rights, claims, liens,
titles and interests of Beneficiary pursuant thereto,
shall not be waived but rather shall be continued in
full force and effect and in favor of Beneficiary and
shall be merged with the lien and security interest
created herein as cumulative security for the repayment
of the Indebtedness and satisfaction of the
Obligations.
25.17 Release of Claims.
Grantor hereby RELEASES, DISCHARGES and ACQUITS forever
Beneficiary and ▇▇▇▇▇▇▇ and their officers, directors,
trustees, agents, employees and counsel (in each case,
past, present or future) from any and all Claims
existing as of the date hereof (or the date of actual
execution hereof by ▇▇▇▇▇▇▇, if later). As used
herein, the term "Claim" shall mean any and all
liabilities, claims, defenses, demands, actions, causes
of action, judgments, deficiencies, interest, liens,
costs or expenses (including court costs, penalties,
attorneys' fees and disbursements, and amounts paid in
settlement) of any kind and character whatsoever,
including claims for usury, breach of contract, breach
of commitment, negligent misrepresentation or failure
to act in good faith, in each case whether now known or
unknown, suspected or unsuspected, asserted or
unasserted or primary or contingent, and whether
arising out of written documents, unwritten
undertakings, course of conduct, tort, violations of
laws or regulations or otherwise.
25.18 No Partnership.
Nothing contained in the Loan Documents is intended to
create any partnership, joint venture or association
between Grantor and Beneficiary, or in any way make
Beneficiary a co-principal with Grantor with reference
to the Property.
25.19 Payoff Procedures
If Grantor pays or causes to be paid to Beneficiary all
of the Indebtedness, then the Trustee's interest in the
Real Property shall cease, and upon receipt by
Beneficiary of such payment, Beneficiary shall either
(a) assign the Loan Documents and endorse the Notes (in
either case without recourse or warranty of any kind)
to a takeout lender, upon payment of an administrative
fee of $750, or (b) release this Deed of Trust.
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇ has executed and delivered this
Deed of Trust as of the date first set forth above.
AIP PROPERTIES #3, L.P.,
a Delaware limited
partnership
By AIP Properties #3 GP,
Inc.,
a Texas corporation,
its General Partner
By
________________[SEAL]
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
STATE OF )
) SS.
COUNTY OF )
I HEREBY CERTIFY that on this ___ day of November,
1996, before me, _____________________________, a Notary Public
in and for the State and County aforesaid, personally appeared
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, who acknowledged himself to be Vice President of
AIP Properties #3 GP, Inc., a corporation organized under the
laws of Delaware and the General Partner of AIP Properties #3,
L.P., a limited partnership organized under the laws of Delaware,
and that, being authorized to do so, executed the foregoing
instrument for the purposes therein contained by signing the name
of the limited partnership by himself as such Vice President of
AIP Properties #3 GP, Inc.
IN WITNESS WHEREOF, I hereunto set my hand and official
seal.
_________________________________
Notary Public
My Commission Expires:
(NOTARIAL SEAL)
ATTORNEY'S CERTIFICATION
I HEREBY CERTIFY that the foregoing document was
prepared by or under the supervision of the undersigned, an
attorney duly licensed to practice before the Court of Appeals of
Maryland.
_________________________________
, Attorney
EXHIBIT A
EXHIBIT B