DEED OF TRUST, SECURITY AGREEMENT, FINANCING STATEMENT, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING

 

(a)                                   All buildings, structures, and improvements now or hereafter located on such tract or tracts, as well as all rights-of-way, easements, and other appurtenances thereto;

 

(b)                                  All of Grantor’s right, title and interest in any land lying between the boundaries of such tract or tracts and the center line of any adjacent street, road, avenue, or alley, whether opened or proposed;

 

(c)                                   All of the rents, income, receipts, revenues, issues and profits of and from such tract or tracts and improvements, whether such rents, income, receipts, revenues, issues or profits are attributable to the period, or are collected, prior to or subsequent to any default by Grantor;

 

(d)                                  All (i) water and water rights (whether decreed or undecreed; tributary, nontributary or not nontributary, surface or underground, or appropriated or unappropriated); (ii) ditches and ditch rights; (iii) springs and spring rights; (iv) reservoirs and reservoir rights; and (v) shares of stock in water, ditch and canal companies and all other evidence of such rights, which are now owned or hereafter acquired by Grantor and which are appurtenant to or which have been used in connection with such tract or tracts or improvements;

 

(e)                                   All minerals, crops, timber, trees, shrubs, flowers, and landscaping features now or hereafter located on, under or above such tract or tracts;

 

(f)                                     All machinery, apparatus, equipment, fittings, and fixtures now or hereafter owned by Grantor (whether actually or constructively attached, and including all trade, domestic, and ornamental fixtures) and now or hereafter located in, upon, or under such tract or tracts or improvements and used or usable in connection with any present or future operation thereof, including, without limitation: all heating, air conditioning, freezing, lighting, laundry, incinerating and power equipment; engines; pipes; pumps; tanks; motors; conduits; switchboards; plumbing, lifting, cleaning, fire prevention, fire extinguishing, refrigerating, ventilating, cooking, and communications apparatus; boilers, water heaters, ranges, furnaces, and burners; appliances; vacuum cleaning systems; elevators; escalators; shades; awnings; screens; storm doors and windows; stoves; refrigerators; attached cabinets; partitions; ducts and compressors; rugs and carpets; draperies; and all additions thereto and replacements therefor;

 

(g)                                  All development rights associated with such tract or tracts, whether previously or subsequently transferred to such tract or tracts from other real property or now or hereafter susceptible of transfer from such tract or tracts to other real property;

 

(h)                                  All awards and payments, including interest thereon, resulting from the exercise of any right of eminent domain or any other public or private taking of, casualty or injury to, or decrease in the value of, any of such property, including, without limitation, any and all insurance payments and proceeds relating to such property;

 

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(i)                                      All other and greater rights and interests of every nature in such tract or tracts and in the possession or use thereof and income therefrom, whether now owned or subsequently acquired by Grantor; and

 

1.6                                Chattels.  All goods, fixtures, inventory, equipment, building and other materials, supplies, and other tangible personal property of every nature now owned or hereafter acquired by Grantor and used, intended for use, or reasonably required in the construction, development, or operation of the Property, together with all accessions thereto, replacements and substitutions therefor, and proceeds thereof.

 

1.7                                Intangible Personalty.  The right to use all trademarks and trade names and symbols or logos used in connection therewith, or any modifications or variations thereof, in connection with the operation of the improvements existing or to be constructed on the Property, together with all monies in the possession of Beneficiary (including, without limitation, proceeds from insurance, retainages and deposits for taxes and insurance), permits, licenses, certificates and authorizations necessary for the beneficial development, ownership, use, occupancy, operation and maintenance of the Property; security deposits, deposit accounts, reserve accounts and other bank or similar accounts of Grantor (together with all amounts in any such accounts) (including, without limitation, any and all of Grantor’s accounts maintained with Beneficiary), income: revenues, contract rights and general intangibles, in each case whether now owned or hereafter acquired, and including proceeds thereof, relating in any way to, or arising in any manner from, Grantor’s ownership, use, operation, leasing, or sale of all or any part of the Property, specifically including but in no way limited to any right which Grantor may have or acquire to transfer any development rights from the Property to other real property, and any development rights which may be so transferred. Without limiting the generality of the foregoing, the following rights shall be included within the term “Intangible Personalty”:

 

(a)                                   All of Grantor’s right, title and interest in and to all agreements and contracts now or hereafter entered into by Grantor with any and all architects, contractors, subcontractors, materialmen, laborers and other persons or entities, which relate in any way to the construction of improvements on any part of the Property and any and all agreements and contracts entered into by Grantor; and

 

(b)                                  All of Grantor’s right, title and interest in and to all plans and specifications used or which may be used to design and construct improvements on any part of the Property.

 

Nothing herein shall be construed as imposing on Beneficiary, or as constituting an assumption by Beneficiary of, any obligation of Grantor under any of the foregoing contracts, agreements or documents.

 

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1.8                                Loan Documents.  The Loan Agreement of even date herewith between Beneficiary and Grantor (the “Loan Agreement”), the Note, all of the deeds of trust, mortgages and other instruments and documents securing the Note, including this Deed of Trust, the Environmental Indemnity Agreement, the Limited Guaranty Agreement, the Absolute Assignment of Leases and Rents, and each other document executed or delivered in support of the transaction pursuant to which the Note has been executed and delivered.  The term “Loan Documents” also includes all modifications, extensions, renewals, and replacements of each document referred to above.

 

1.9                                Indebtedness.  All of the following:

 

(a)                                   Note .  The principal of, interest on, or other sums now and hereafter evidenced by the Note and any and all modifications, extensions, renewals and rearrangements of the Note.

 

(b)                                  Advances .  Any and all sums, together with interest thereon, which may hereafter be advanced by Beneficiary or otherwise due under the terms of this Deed of Trust or the other Loan Documents, it being the parties’ intent that this Deed of Trust hereby secures all advances made by Beneficiary, both obligatory and optional, up to the maximum principal amount of $23,500,000.00, any protective advances made by Beneficiary and any other advances made by Beneficiary and permitted under C.R.S. Section 38-39-106.

 

(c)                                   Other Loan Documents .  All present and future obligations which constitute indebtedness of Grantor or any other party under the Loan Documents.

 

(d)                                  Environmental Indemnity Agreement .  All obligations of Grantor under the Environmental Indemnity Agreement dated the date hereof between Grantor and Beneficiary.

 

Any term used or defined in the Colorado Uniform Commercial Code, as in effect from time to time, and not defined in this Deed of Trust has the meaning given to the term in the Colorado Uniform Commercial Code, as in effect from time to time, when used in this Deed of Trust.

 

ARTICLE 2

GRANTING CLAUSE

 

2.1                                Grant to Trustee . As security for the Indebtedness, Grantor hereby grants, bargains, sells, and conveys the Property to Trustee, in trust for the use and benefit of Beneficiary, with power of sale, and subject to all provisions hereof.

 

2.2                                Security Interest to Beneficiary . As additional security for the Indebtedness, Grantor hereby grants to Beneficiary a security interest in the Chattels and in the Intangible

 

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Personalty.  To the extent any of the Chattels or the intangible Personalty may be or have been acquired with funds advanced by Beneficiary under the Loan Documents, this security interest is a purchase money security interest. This Deed of Trust constitutes a Security Agreement under the Uniform Commercial Code of the state in which the Property is located (the “Code”) with respect to any part of the Property, Chattels and Intangible Personalty that may or might now or hereafter be or be deemed to be personal property, fixtures or property other than real estate (all collectively hereinafter called “Collateral”); all of the terms, provisions, conditions and agreements contained in this Deed of Trust pertain and apply to the Collateral as fully and to the same extent as to any other property comprising the Property, and the following provisions of this Section 2.2 shall not limit the generality or applicability of any other provisions of this Deed of Trust but shall be in addition thereto:

 

(a)                                   The Collateral shall be used by Grantor solely for business purposes, being installed upon the real estate comprising part of the Property for Grantor’s own use or as the equipment and furnishings furnished by Grantor, as landlord, to tenants of the Property;

 

(b)                                  All tangible personal property constituting part of the Collateral shall be kept at the real estate comprising a part of the Property, and shall not be removed therefrom without the consent of Beneficiary (being the Secured Party as that term is used in the Code); and the Collateral may be affixed to such real estate but shall not be affixed to any other real estate;

 

(c)                                   No financing statement covering any of the Collateral or any proceeds thereof is on file in any public office; and Grantor will, at its cost and expense, upon demand, furnish to Beneficiary such further information and will execute and deliver to Beneficiary such financing statements and other documents in form satisfactory to Beneficiary and will do all such acts and things as Beneficiary may at any time or from time to time reasonably request or as may be necessary or appropriate to establish and maintain a perfected security interest in the Collateral as security for the Indebtedness, subject to no adverse liens or encumbrances; and Grantor will pay the cost of filing the same or filing or recording such financing statements or other documents and this instrument in all public offices wherever filing or recording is deemed by Beneficiary to be necessary or desirable;

 

(d)                                  The terms and provisions contained in this Section 2.2 and in Section 7.6 of this Deed of Trust shall, unless the context otherwise requires, have the meanings and be construed as provided in the Code; and

 

(e)                                   This Deed of Trust constitutes a financing statement filed as a fixture filing under the Code with respect to the Collateral. As such, this Deed of Trust covers all items of the Collateral that are or are to become fixtures. Grantor is the “Debtor” and Beneficiary is the

 

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“Secured Party” (as those terms are defined and used in the Code) insofar as this Deed of Trust constitutes a financing statement.

 

ARTICLE 3

GRANTOR’S TITLE AND AUTHORITY

 

3.1                                Warranty of Title . Grantor represents and warrants to Beneficiary that Grantor has good and marketable title to the Property in fee simple absolute, subject only to the lien of general taxes for the current year, payable the following year, and those additional matters, if any, set forth in Exhibit B attached hereto (the “Permitted Exceptions”). Grantor further represents and warrants to Beneficiary that Grantor is the absolute owner of the Chattels and the Intangible Personalty, free of any liens, encumbrances, security interests and other claims whatsoever, except insofar as the Chattels may be encumbered by the lien of general taxes for the current year, payable in the following year, or by any of the Permitted Exceptions.  Grantor, for itself and its successors and assigns, hereby agrees to warrant and forever defend, all and singular, all of the property and property interest granted and conveyed in trust pursuant to this Deed of Trust, against every person whomsoever lawfully claiming, or to claim, the same or any part thereof, subject only to the Permitted Exceptions.  The warranties contained in this Section 3.1 shall survive foreclosure of this Deed of Trust, and shall inure to the benefit of and be enforceable by any person who may acquire title to the Property, the Chattels, or the Intangible Personalty pursuant to any such foreclosure.

 

3.2                                Waiver of Homestead and Other Exemptions . To the extent permitted by law, Grantor hereby waives all rights to any homestead or other exemption to which Grantor would otherwise be entitled under any present or future constitutional, statutory, or other provision of applicable state or federal law.

 

3.3                                Due Authorization . If Grantor is other than a natural person, then each individual who executes this document on behalf of Grantor represents and warrants to Beneficiary that such execution has been duly authorized by all necessary corporate, partnership, or other action on the part of Grantor.

 

ARTICLE 4

GRANTOR’S AFFIRMATIVE COVENANTS

 

4.1                                Payment of Note . Grantor will pay all principal, interest, and other sums payable under the Note, on the dates when such payments are due, without notice or demand.

 

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4.2                                Performance of Other Obligations . Grantor will promptly and strictly perform and comply with all other covenants, conditions, and prohibitions required of Grantor by the terms of the Loan Documents.

 

4.3                                Other Encumbrances . Subject to the provisions of the Loan Agreement, Grantor will promptly and strictly perform and comply with all covenants, conditions, and prohibitions required of Grantor in connection with any other encumbrance affecting the Property, the Chattels, or the Intangible Personalty, or any part thereof, or any interest therein, regardless of whether such other encumbrance is superior or subordinate to the lien hereof.

 

4.4                                Payment of Taxes.

 

(a)                                   Property Taxes .  Grantor will duly pay and discharge, or cause to be paid and discharged, all taxes and assessments, general or special, which may be levied or imposed at any time against Grantor’s interest and estate in the Property, the Chattels, or the Intangible Personalty, in accordance with Section 5.4 of the Loan Agreement.

 

(b)                                  Reserve for Taxes . If Beneficiary shall at any time so request, following any Event of Default (whether or not such Event of Default is subsequently cured) Grantor will create a fund or reserve for the payment of taxes, assessments and similar governmental charges referred to in this Section 4.4 in accordance with Section 6.5 of the Loan Agreement.

 

(c)                                   Intangible Taxes . If by reason of any statutory or constitutional amendment or judicial decision adopted or rendered after the date hereof, any tax, assessment or similar charge is imposed against the Note, against Beneficiary, or against any interest of Beneficiary in any real or personal property encumbered hereby (but excluding franchise taxes, income taxes and excise taxes imposed on Beneficiary), Grantor will pay such tax, assessment or other charge before delinquency and will indemnify Beneficiary against all loss, expense, or diminution of income in connection therewith.

 

In the event Grantor is unable to do so, either for economic reasons or because the legal provisions or decisions creating such tax, assessment or charge forbid Grantor from doing so, then the Note will, at Beneficiary’s option, become due and payable in full upon thirty (30) days’ notice to Grantor.

 

(d)                                  Right to Contest . Notwithstanding any other provision of this Section 4.4, Grantor will not be deemed to be in default solely by reason of Grantor’s failure to pay any tax, assessment or similar governmental charge so long as, in Beneficiary’s judgment, each of the following conditions is satisfied:

 

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(i)                                      Grantor is engaged in and diligently pursuing in good faith administrative or judicial proceedings appropriate to contest the validity or amount of such tax, assessment or charge;

 

(ii)                                   Grantor’s payment of such tax, assessment or charge would necessarily and materially prejudice Grantor’s prospects for success in such proceedings;

 

(iii)                                Nonpayment of such tax, assessment or charge will not result in the loss or forfeiture of any property encumbered hereby or any interest of Beneficiary therein; and

 

(iv)                               When requested by Beneficiary, Grantor deposits with Beneficiary, as security for such payment which may ultimately be required, a sum equal to the amount of the disputed tax, assessment or charge plus the interest, penalties, advertising charges, and other costs which Beneficiary estimates are likely to become payable if Grantor’s contest is unsuccessful.

 

If Beneficiary determines that any one or more of such conditions is not satisfied or is no longer satisfied, Grantor will pay the tax, assessment or charge in question, together with any interest and penalties thereon, within ten (10) days after Beneficiary gives notice of such determination.  Beneficiary will make any security posted with Beneficiary pursuant to this Section 4.4 available to pay any amount Grantor is determined to be liable for or is requested to pay in respect of any such tax, assessment or other charges, and, absent an Event of Default, will release any excess to Grantor.

 

4.5                                Maintenance of Insurance .  Grantor shall, at Grantor’s expense, maintain in force and effect on the Mortgaged Property (as defined in the Loan Agreement) at all times while the Loan Agreement continues in effect insurance in accordance with Section 5.6 of the Loan Agreement.

 

4.6                                Maintenance and Repair of Property and Chattels . Grantor will at all times maintain the Property and the Chattels in accordance with Sections 5.5 and 5.8 of the Loan Agreement.

 

4.7                                Performance of Lease Obligations . As used herein, the term “Tenant Leases” refers to any and all present and future leases, subleases and other agreements under the terms of which any person other than Grantor has or acquires any right to occupy or use the Property or any part thereof. Grantor shall at all times comply with all obligations in the Loan Documents with respect to Grantor’s performance under the Tenant Leases.

 

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4.8                                Eminent Domain; Private Damage . The provisions of Article 6 of the Loan Agreement relating to the taking of or any damage to all or any part of the property encumbered hereby are incorporated herein by this reference.

 

4.9                                Mechanics’ Liens . Grantor will keep the Property free and clear of all liens and claims of liens by contractors, subcontractors, mechanics, laborers, materialmen, and other such persons, and will cause any recorded statement of any such lien to be released of record within thirty (30) days after the recording thereof.  Notwithstanding the preceding sentence, however, Grantor will not be deemed to be in default under this Section 4.9 if and so long as Grantor (a) contests in good faith the validity or amount of any asserted lien and diligently prosecutes or defends an action appropriate to obtain a binding determination of the disputed matter, and (b) provides Beneficiary with such security or title insurance protection as Beneficiary may require to protect Beneficiary against all loss, damage, and expense, including attorneys’ fees and expenses, which Beneficiary or Grantor may incur if the asserted lien is determined to be valid.

 

4.10                         Defense of Actions . Grantor will defend, at Grantor’s expense, any action, proceeding or claim which affects any property encumbered hereby or any interest of Beneficiary in such property or in the Indebtedness, and will indemnify and hold Beneficiary harmless from all loss, damage, cost, or expense, including attorneys’ fees, which Beneficiary may incur in connection therewith.

 

4.11                         Expenses of Enforcement . Grantor will pay all costs and expenses, including attorneys’ fees, which Beneficiary may incur in connection with any effort or action (whether or not litigation or foreclosure is involved) to enforce or defend Beneficiary’s rights and remedies under any of the Loan Documents, including, without limitation, all attorneys’ fees, appraisal fees, consultants’ fees, and other expenses incurred by Beneficiary in securing title to or possession of, and realizing upon, any security for the Indebtedness. All such costs and expenses shall constitute part of the Indebtedness, and may be included in the computation of the amount owed to Beneficiary for purposes of foreclosing or otherwise enforcing this Deed of Trust.

 

4.12                         Financial Reports . Grantor will furnish or cause to be furnished to Beneficiary all financial reports or statements required under any of the Loan Documents.

 

4.13                         Priority of Leases . To the extent Grantor has the right, under the terms of any Tenant Lease, to make such Tenant Lease subordinate to the lien hereof, Grantor will, at Beneficiary’s request and Grantor’s expense, take such action as may be required to effect such subordination. Conversely, Grantor will, at Beneficiary’s request and Grantor’s expense, take such action as may be necessary to subordinate the lien hereof to any future Tenant Lease designated by Beneficiary.

 

4.14                         Inventories; Assembly of Chattels .  Grantor will from time to time at the request of Beneficiary, supply Beneficiary with a current inventory of the Chattels and the Intangible

 

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Personalty, in such detail as Beneficiary may reasonably require.  Upon the occurrence and during the continuation of any Event of Default hereunder, Grantor will at Beneficiary’s request assemble the Chattels and make them available to Beneficiary at any place designated by Beneficiary which is reasonably convenient to both parties.

 

4.15                         Further Assurances; Estoppel Certificates . Grantor will execute and deliver to Beneficiary upon demand, and pay the costs of preparation and recording thereof, any further documents which Beneficiary may request to confirm or perfect the liens and security interests created or intended to be created hereby or to confirm or perfect any evidence of the Indebtedness.  Grantor will also, within ten (10) days after any request by Beneficiary, deliver to Beneficiary a signed and acknowledged statement certifying to Beneficiary, or to any proposed transferee of the Indebtedness, (a) the balance of principal, interest, and other sums then outstanding under the Note, and (b) whether Grantor claims to have any offsets or defenses with respect to the Indebtedness and, if so, the nature of such offsets or defenses.

 

ARTICLE 5

 

GRANTOR’S NEGATIVE COVENANTS

 

5.1                                Waste and Alterations . Grantor will not commit or permit any waste with respect to the Property or the Chattels. Grantor shall not cause or permit any part of the Property, including, without limitation, any building, structure, parking lot, driveway, landscape scheme, timber, or other ground improvement, to be removed, demolished, or materially altered without the prior written consent of Beneficiary.

 

5.2                                Zoning and Private Covenants . Grantor will not initiate, join in, or consent to any change in any zoning ordinance or classification, any change in the “zone lot” or “zone lots” (or similar zoning unit or units) presently comprising the Property, any transfer of development rights, any change in any private restrictive covenant, or any change in any other public or private restriction limiting or defining the uses which may be made of the Property or any part thereof, without the express written consent of Beneficiary. If under applicable zoning provisions the use of all