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Exhibit
10.69
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL
TO:
WELLS FARGO BANK, NATIONAL
ASSOCIATION
Real Estate Group (AU #02955)
2030 Main Street, Suite 800
Irvine, CA 92614
Attn: Rhonda Friedly
Loan No. 105156
NOTICE OF CONFIDENTIALITY RIGHTS: IF
YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OF THE
FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED FOR
RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR
DRIVERS LICENSE NUMBER.
DEED OF
TRUST
WITH ABSOLUTE ASSIGNMENT
OF LEASES AND RENTS,
SECURITY AGREEMENT AND
FIXTURE FILING
THE PARTIES TO THIS DEED OF TRUST WITH
ABSOLUTE ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND
FIXTURE FILING (“Deed of Trust”), made as of
November 7, 2007, are KBS INDUSTRIAL PORTFOLIO, LLC, a
Delaware limited liability company (“Grantor”), PATRICK
J. MURPHY (“Trustee”), and WELLS FARGO BANK, NATIONAL
ASSOCIATION (“Beneficiary”).
ARTICLE 1. GRANT IN
TRUST
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1.1 |
GRANT . For the purposes of and upon the terms
and conditions in this Deed of Trust and to secure the full and
timely payment, performance and discharge of the Secured
Obligations (as herein defined), Grantor irrevocably GRANTS,
CONVEYS, ASSIGNS, BARGAINS and SELLS and has by these presents
GRANTED, CONVEYED, ASSIGNED, BARGAINED and SOLD to Trustee, in
trust for the benefit of Beneficiary, with power of sale and right
of entry and possession, all of that real property located in the
County of Tarrant, State of Texas, described on Exhibit A
attached hereto, together with all right, title, interest, and
privileges of Grantor in and to all streets, ways, roads, and
alleys used in connection with or pertaining to such real property
and any improvements thereon, all development rights or credits,
air rights, water, water rights and water stock related to the real
property, all timber, and all minerals, oil and gas, and other
hydrocarbon substances in, on or under the real property, and all
licenses, appurtenances, reversions, remainders, easements, rights
and rights of way appurtenant or related thereto; any and all
rights of Grantor, as a declarant, under any covenants, conditions,
and restrictions now or hereafter pertaining to the real property
described on Exhibit A , hereto, provided ,
however , that Beneficiary shall have no liability under
such covenants, conditions, and restrictions unless and until
Beneficiary forecloses on the real property; all buildings, other
improvements and fixtures now or hereafter located on the real
property, including, but not limited to, all apparatus, equipment,
and appliances used in the operation or occupancy of the real
property, it being intended by the parties that all such items
shall be conclusively considered to be a part of the real property,
whether or not attached or affixed to the real property (the
“Improvements”); all interest or estate which Grantor
may hereafter acquire in the property described above, and all
additions and accretions thereto, and the proceeds of any of the
foregoing; (all of the foregoing being collectively referred to as
the “Subject Property”). The listing of specific rights
or property shall not be interpreted as a limit of general terms;
TO HAVE AND TO HOLD the Subject Property unto Trustee, forever, and
Grantor does hereby bind itself, its successors and assigns, to
WARRANT AND FOREVER DEFEND the title to the Subject Property unto
Trustee against every person whomsoever lawfully claiming or to
claim the same or any part thereof; provided, however, that if
Grantor shall pay (or cause to be paid) and shall perform and
discharge (or cause to be performed and discharged) the Secured
Obligations on or before the date same are to be paid,
performed
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and discharged, then the
liens, security interests, estates, rights and titles granted by
this Deed of Trust shall terminate in accordance with the
provisions hereof, otherwise same shall remain in full force and
effect. A certificate or other written statement executed on behalf
of Trustee or Beneficiary confirming that the Secured Obligations
have not been fully and finally paid, performed or discharged shall
be sufficient evidence thereof for the purpose of reliance by third
parties on such fact.
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1.2 |
ADDRESS . The address of the subject property is
106D & 106E East Old Settlers Boulevard, Round Rock, TX
78664. However, neither the failure to designate an address nor any
inaccuracy in the address designated shall affect the validity or
priority of the lien of this Deed of Trust on the Subject Property
as described on Exhibit A . |
ARTICLE 2. OBLIGATIONS
SECURED
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2.1 |
OBLIGATIONS SECURED . Grantor makes this Deed of
Trust for the purpose of securing the following obligations
(“Secured Obligations”): |
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(a) |
Payment to Beneficiary of all sums at any time owing under that
certain Promissory Note (“Note”) of even date herewith,
in the principal amount of Five Million, Three Hundred Eighteen
Thousand Dollars ($5,318,000) executed by Grantor, as borrower
(“Borrower”), and payable to the order of Beneficiary,
as lender; and |
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(b) |
Payment and performance of all covenants and obligations of
Grantor under this Deed of Trust; and |
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(c) |
Payment and performance of all covenants and obligations on the
part of Borrower under that certain Loan Agreement (Non-Revolving)
(“Loan Agreement”) of even date herewith by and between
Borrower and Beneficiary, as lender, the Hazardous Materials
Indemnity Agreement, and all other “Loan Documents” as
defined in the Loan Agreement; and |
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(d) |
Payment and performance of all covenants and obligations, if
any, of any rider attached as an Exhibit to this Deed of Trust;
and |
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(e) |
Payment and performance of all future advances and other
obligations that the then record owner of all or part of the
Subject Property may agree to pay and/or perform (whether as
principal, surety or guarantor) for the benefit of Beneficiary,
when such future advance or obligation is evidenced by a writing
which recites that it is secured by this Deed of Trust;
and |
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(f) |
Payment and performance of all covenants and obligations of
Grantor under any interest rate swap agreement, or other interest
rate hedge agreement of any type executed by and between Grantor
and Beneficiary, which agreement is evidenced by a writing that
recites it is secured by this Deed of Trust; and |
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(g) |
All modifications, extensions and renewals of any of the
obligations secured hereby, however evidenced, including, without
limitation: (i) modifications of the required principal
payment dates or interest payment dates or both, as the case may
be, deferring or accelerating payment dates wholly or partly; or
(ii) modifications, extensions or renewals at a different rate
of interest whether or not in the case of a note, the modification,
extension or renewal is evidenced by a new or additional promissory
note or notes. |
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2.2 |
OBLIGATIONS . The term “obligations”
is used herein in its broadest and most comprehensive sense and
shall be deemed to include, without limitation, all interest and
charges, prepayment charges (if any), late charges and loan fees at
any time accruing or assessed on any of the Secured
Obligations. |
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2.3 |
INCORPORATION . All capitalized terms not defined
herein shall have the meanings given to them in the Loan Agreement.
All terms of the Secured Obligations and the documents evidencing
such obligations are incorporated herein by this reference. All
persons who may have or acquire an interest in the Subject Property
shall be deemed to have notice of the terms of the Secured
Obligations and to have notice, if provided therein, that:
(a) the Note or the Loan Agreement may permit borrowing,
repayment and re-borrowing so that repayments shall not reduce the
amounts of the Secured Obligations; and (b) the rate of
interest on one or more Secured Obligations may vary from time to
time. |
ARTICLE 3. ASSIGNMENT OF
LEASES AND RENTS
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3.1 |
ASSIGNMENT . Grantor hereby irrevocably assigns
to Beneficiary all of Grantor’s right, title and interest in,
to and under: (a) all leases of the Subject Property or any
portion thereof, and all other agreements of any kind relating to
the use or occupancy of the Subject Property or any portion
thereof, whether now existing or entered into after the date hereof
(“Leases”); and (b) the rents, revenue, income,
issues, deposits and profits of the Subject Property, including,
without limitation, all parking income and all amounts payable and
all rights and benefits accruing to Grantor under the Leases
(“Payments”). The term “Leases” shall also
include all guarantees of and security for the lessees’
performance thereunder, and all amendments, extensions, renewals or
modifications thereto which are permitted hereunder. This is a
present and absolute assignment, not an assignment for security
purposes only, and Beneficiary’s right to the Leases and
Payments is not contingent upon, and may be exercised without
possession of, the Subject Property. |
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3.2 |
GRANT OF LICENSE . Beneficiary confers upon
Grantor a license (“License”) to collect and retain the
Payments as they become due and payable, until the occurrence of a
Default (as hereinafter defined). Upon a Default, the License shall
be automatically revoked and Beneficiary may collect and apply the
Payments pursuant to Section 6.4 without notice and without
taking possession of the Subject Property. Grantor hereby
irrevocably authorizes and directs the lessees under the Leases to
rely upon and comply with any notice or demand by Beneficiary for
the payment to Beneficiary of any rental or other sums which may at
any time become due under the Leases, or for the performance of any
of the lessees’ undertakings under the Leases, and the
lessees shall have no right or duty to inquire as to whether any
Default has actually occurred or is then existing hereunder.
Grantor hereby relieves the lessees from any liability to Grantor
by reason of relying upon and complying with any such notice or
demand by Beneficiary. |
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3.3 |
EFFECT OF ASSIGNMENT . The foregoing irrevocable
assignment shall not cause Beneficiary to be: (a) a mortgagee
in possession; (b) responsible or liable for the control,
care, management or repair of the Subject Property or for
performing any of the terms, agreements, undertakings, obligations,
representations, warranties, covenants and conditions of the
Leases; or (c) responsible or liable for any waste committed
on the Subject Property by the lessees under any of the Leases or
any other parties; for any dangerous or defective condition of the
Subject Property; or for any negligence in the management, upkeep,
repair or control of the Subject Property resulting in loss or
injury or death to any lessee, licensee, employee, invitee or other
person. Beneficiary and Trustee shall not directly or indirectly be
liable to Grantor or any other person as a consequence of:
(i) the exercise or failure to exercise by Beneficiary or
Trustee, or any of their respective employees, agents, contractors
or subcontractors, any of the rights, remedies or powers granted to
Beneficiary or Trustee hereunder; or (ii) the failure or
refusal of Beneficiary to perform or discharge any obligation, duty
or liability of Grantor arising under the Leases. |
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3.4 |
REPRESENTATIONS AND WARRANTIES . Grantor
represents and warrants that, to the best of Grantor’s
knowledge: (a) Grantor has delivered to Beneficiary a rent
roll that, as of the date hereof, contains a true, accurate and
complete list of all Leases; (b) all existing Leases are in
full force and effect and are enforceable in accordance with their
respective terms, and no breach or default, or event which would
constitute a breach or default after notice or the passage of time,
or both, exists under any existing Leases on the part of any party;
(c) no rent or other payment under any existing Lease has been
paid by any lessee for more than one (1) month in advance; and
(d) none of the lessor’s interests under any of the
Leases has been transferred or assigned. |
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3.5 |
COVENANTS . Grantor covenants and agrees at
Grantor’s sole cost and expense to: (a) perform the
obligations of lessor contained in the Leases and enforce by all
appropriate remedies performance by the lessees of the obligations
of the lessees contained in the Leases; (b) give Beneficiary
prompt written notice of any material default which occurs with
respect to any of the Leases, whether the default be that of the
lessee or of the lessor; (c) exercise Grantor’s best
efforts to keep all portions of the Subject Property that are
capable of being leased leased at rental rates pursuant to the
terms of the Loan Agreement; (d) deliver to Beneficiary fully
executed, copies of each and every Lease that it is required to
deliver in accordance with the Loan Agreement; and (e) execute
and record such additional assignments of any Lease or, if required
by
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the terms of the Loan
Agreement, use commercially reasonable effort to obtain specific
subordinations (or subordination, attornment and non-disturbance
agreements executed by the lessor and lessee) of any Lease to the
Deed of Trust, in form and substance acceptable to Beneficiary, as
Beneficiary may request. Grantor shall not, without
Beneficiary’s prior written consent or as otherwise permitted
by any provision of the Loan Agreement: (i) to the extent
prohibited by the terms of the Loan Agreement, enter into any
Leases after the date hereof; (ii) execute any other
assignment relating to any of the Leases; (iii) to the extent
prohibited by the terms of the Loan Agreement, discount any rent or
other sums due under the Leases or collect the same in advance,
other than to collect rentals one (1) month in advance of the
time when it becomes due; (iv) to the extent prohibited by the
terms of the Loan Agreement, terminate, modify or amend any of the
terms of the Leases or in any manner release or discharge the
lessees from any obligations thereunder; (v) to the extent
prohibited by the terms of the Loan Agreement, consent to any
assignment or subletting by any lessee; or (vi) subordinate or
agree to subordinate any of the Leases to any other deed of trust
or encumbrance. Any such attempted action in violation of the
provisions of this Section 3.5 shall be null and void. Without
in any way limiting the requirement of Beneficiary’s consent
hereunder, any sums received by Grantor in consideration of any
termination (or the release or discharge of any lessee)
modification or amendment of any Lease shall be applied as set
forth in the Loan Agreement.
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3.6 |
ESTOPPEL CERTIFICATES . Within thirty
(30) days after written request by Beneficiary, Grantor shall
deliver to Beneficiary and to any party designated by Beneficiary
estoppel certificates executed by Grantor, and use its best efforts
to obtain such estoppel certificates executed by each of the
lessees, in each case in recordable form, certifying (if such be
the case): (a) that the foregoing assignment and the Leases
are in full force and effect; (b) the date of each
lessee’s most recent payment of rent; (c) that there are
no defenses or offsets outstanding, or stating those claimed by
Grantor or lessees under the foregoing assignment or the Leases, as
the case may be; and (d) any other information reasonably
requested by Beneficiary. |
ARTICLE 4. SECURITY
AGREEMENT AND FIXTURE FILING
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4.1 |
SECURITY INTEREST . Grantor hereby grants and
assigns to Beneficiary as of the date hereof a security interest,
to secure payment and performance of all of the Secured
Obligations, in all of the following described personal property in
which Grantor now or at any time hereafter has any interest
(collectively, the “Collateral”): |
All goods, building and other
materials, supplies, work in process, equipment, machinery,
fixtures, furniture, furnishings, signs and other personal property
and embedded software included therein, wherever situated, which
are or are to be incorporated into, used in connection with, or
appropriated for use on (i) the real property described on
Exhibit A attached hereto and incorporated by reference
herein (to the extent the same are not effectively made a part of
the real property pursuant to Section 1.1 above) or
(ii) the Improvements (which real property and Improvements
are collectively referred to herein as the Subject Property);
together with all rents (to the extent, if any, they are not
subject to Article 3); all inventory, accounts, cash receipts,
deposit accounts, accounts receivable, contract rights, licenses,
agreements, (including, without limitation, all acquisition
agreements with respect to the Subject Property); all of
Grantor’s rights under any interest rate swap agreement, or
other interest rate hedge agreement of any type executed by and
between Grantor and Beneficiary; all Contracts referenced in
Section 5.18 below (including property management and leasing
agreements), architects’ agreements, and/or construction
agreements with respect to the completion of any improvements on
the Subject Property), general intangibles, chattel paper (whether
electronic or tangible), instruments, documents, promissory notes,
drafts, letters of credit, letter of credit rights, supporting
obligations, insurance policies, insurance and condemnation awards
and proceeds, any other rights to the payment of money, trade
names, trademarks and service marks arising from or related to the
ownership, management, leasing or operation of the Subject Property
or any business now or hereafter conducted thereon by Grantor; all
permits, consents, approvals, licenses, authorizations and other
rights granted by, given by or obtained from, any governmental
entity with respect to the Subject Property; all deposits or other
security now or hereafter made with or given to utility companies
by Grantor with respect to the Subject Property; all advance
payments of insurance premiums made by Grantor with respect to the
Subject Property; all plans, drawings and specifications relating
to the Subject Property; all loan funds held by Beneficiary,
whether or not disbursed; all funds deposited with Beneficiary
pursuant to any loan agreement; all reserves, deferred
payments, deposits, accounts,
refunds, cost savings and payments of any kind related to the
Subject Property or any portion thereof; together with all
replacements and proceeds of, and additions and accessions to, any
of the foregoing; together with all books, records and files to the
extent relating to any of the foregoing.
As to all of the above
described personal property which is or which hereafter becomes a
“fixture” under applicable law, this Deed of Trust
constitutes a fixture filing under Article 9 of the Texas Business
and Commerce Code, as amended or recodified from time to time
(“UCC”), and is acknowledged and agreed to be a
“construction mortgage” under the UCC.
The filing of a financing
statement covering the Collateral shall not be construed to
derogate from or impair the lien or provisions of this Deed of
Trust with respect to any property described herein which is real
property or which the parties have agreed to treat as real
property. Similarly, nothing in such financing statement shall be
construed to alter any of the rights of Beneficiary under this Deed
of Trust or the priority of the Beneficiary’s lien created
hereby, and such financing statement is declared to be for the
protection of Beneficiary in the event any court shall at any time
hold that notice of Beneficiary’s priority of interest in any
property or interests described in this Deed of Trust must, in
order to be effective against a particular class of persons,
including but not limited to the federal government and any
subdivision, agency or entity of the federal government, be filed
in the Uniform Commercial Code records.
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4.2 |
REPRESENTATIONS AND WARRANTIES . Grantor
represents and warrants that: (a) Grantor has, as of the date
of recordation of this Deed of Trust, and will have, good title to
the Collateral; (b) Grantor has not previously assigned or
encumbered the Collateral, and no financing statement covering any
of the Collateral has been delivered to any other person or entity;
(c) Grantor’s principal place of business is located at
the address shown in Section 7.11; and
(d) Grantor’s legal name is exactly as set forth on the
first page of this Deed of Trust and all of Grantor’s
organizational documents or agreements delivered to Beneficiary are
complete and accurate in every respect. |
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4.3 |
COVENANTS . Grantor agrees: (a) to execute
and deliver such documents as Beneficiary deems necessary to
create, perfect and continue the security interests contemplated
hereby; (b) not to change its name, and as applicable, its
chief executive office, its principal residence or the jurisdiction
in which it is organized and/or registered without giving
Beneficiary prior written notice thereof; (c) to cooperate
with Beneficiary in perfecting all security interests granted
herein and in obtaining such agreements from third parties as
Beneficiary deems necessary, proper or convenient in connection
with the preservation, perfection or enforcement of any of its
rights hereunder; and (d) that Beneficiary is authorized to
file financing statements in the name of Grantor to perfect
Beneficiary’s security interest in Collateral. |
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4.4 |
RIGHTS OF BENEFICIARY . In addition to
Beneficiary’s rights as a “Secured Party” under
the UCC, Beneficiary may, but shall not be obligated to, at any
time without notice and at the expense of Grantor: (a) give
notice to any person of Beneficiary’s rights hereunder and
enforce such rights at law or in equity; (b) insure, protect,
defend and preserve the Collateral or any rights or interests of
Beneficiary therein; (c) inspect the Collateral; and
(d) endorse, collect and receive any right to payment of money
owing to Grantor under or from the Collateral. Notwithstanding the
above, in no event shall Beneficiary be deemed to have accepted any
property other than cash in satisfaction of any obligation of
Grantor to Beneficiary unless Beneficiary shall make an express
written proposal thereof under UCC §9.621, or other applicable
law, and the provisions of UCC §9.620 have been
satisfied. |
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4.5 |
RIGHTS OF BENEFICIARY ON DEFAULT . Upon the
occurrence of a Default (hereinafter defined) under this Deed of
Trust, then in addition to all of Beneficiary’s rights as a
“Secured Party” under the UCC or otherwise at
law: |
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(a) |
Beneficiary may (i) upon written notice, require Grantor
to assemble any or all of the Collateral and make it available to
Beneficiary at a place designated by Beneficiary; (ii) without
prior notice, enter upon the Subject Property or other place where
any of the Collateral may be located and take possession of,
collect, sell, lease, license and dispose of any or all of the
Collateral, and store the same at locations acceptable to
Beneficiary at Grantor’s expense; (iii) sell, assign and
deliver at any place or in any lawful manner all or any part of the
Collateral and bid and become the purchaser at any such
sales; |
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(b) |
Beneficiary may, for the account of Grantor and at
Grantor’s expense: (i) operate, use, consume, sell,
lease, license or dispose of the Collateral as Beneficiary deems
appropriate for the purpose of performing any or all of the Secured
Obligations; (ii) enter into any agreement, compromise, or
settlement, including insurance claims, which Beneficiary may deem
desirable or proper with respect to any of the Collateral; and
(iii) endorse and deliver evidences of title for, and receive,
enforce and collect by legal action or otherwise, all indebtedness
and obligations now or hereafter owing to Grantor in connection
with or on account of any or all of the Collateral; and |
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(c) |
In disposing of Collateral hereunder, Beneficiary may disclaim
all warranties of title, possession, quiet enjoyment and the like.
Any proceeds of any disposition of any Collateral may be applied by
Beneficiary to the payment of expenses incurred by Beneficiary in
connection with the foregoing, including reasonable
attorneys’ fees, and the balance of such proceeds may be
applied by Beneficiary toward the payment of the Secured
Obligations in such order of application as Beneficiary may from
time to time elect. |
Notwithstanding any other
provision hereof, Beneficiary shall not be deemed to have accepted
any property other than cash in satisfaction of any obligation of
Grantor to Beneficiary unless Beneficiary shall make an express
written proposal thereof under UCC §9621, or other
applicable law, and the provisions of UCC §9620 have been
satisfied. Grantor agrees that Beneficiary shall have no obligation
to process or prepare any Collateral for sale or other
disposition.
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4.6 |
POWER OF ATTORNEY . Grantor hereby irrevocably
appoints Beneficiary as Grantor’s attorney-in-fact (such
agency being coupled with an interest), and as such
attorney-in-fact Beneficiary may, without the obligation to do so,
in Beneficiary’s name, or in the name of Grantor, prepare,
execute and file or record financing statements, continuation
statements, applications for registration and like papers necessary
to create, perfect or preserve any of Beneficiary’s security
interests and rights in or to any of the Collateral, and, upon a
Default hereunder, take any other action required of Grantor;
provided , however , that Beneficiary as such
attorney-in-fact shall be accountable only for such funds as are
actually received by Beneficiary. |
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4.7 |
POSSESSION AND USE OF COLLATERAL . Except as
otherwise provided in this Section or the other Loan Documents (as
defined in the Loan Agreement), so long as no Default exists under
this Deed of Trust or any of the Loan Documents, Grantor may
possess, use, move, transfer or dispose of any of the Collateral in
the ordinary course of Grantor’s business and in accordance
with the Loan Agreement. |
ARTICLE 5. RIGHTS AND
DUTIES OF THE PARTIES
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5.1 |
TITLE . Grantor represents and warrants that,
except as disclosed to Beneficiary in a writing which refers to
this warranty, Grantor lawfully holds and possesses fee simple
title to the Subject Property without limitation on the right to
encumber, and that this Deed of Trust is a first and prior lien on
the Subject Property. Grantor hereby represents and warrants that
all of the Subject Property is a single tax parcel, and there are
no properties included in such tax parcel other than the Subject
Property. Grantor further covenants and agrees that it shall not
cause all or any portion of the Subject Property to be replatted or
for any lots or boundary lines to be adjusted, changed or altered
for either ad valorem tax purposes or otherwise, and shall not
consent to the assessment of the Subject Property in more than one
tax parcel or in conjunction with any property other than the
Subject Property. |
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5.2 |
TAXES AND ASSESSMENTS . |
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(a) |
Subject to
Grantor’s rights to contest in good faith payment of taxes as
provided in Section 5.2(b) below, Grantor shall pay prior to
delinquency all taxes, assessments, levies and charges imposed by
any public or quasi-public authority or utility company which are
or which may become a lien upon or cause a loss in value of the
Subject Property or any interest therein. Grantor shall also pay
prior to delinquency all taxes, assessments, levies and charges
imposed by any public authority upon Beneficiary by reason of its
interest in any Secured Obligation or in the Subject Property, or
by reason
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of any payment made to
Beneficiary pursuant to any Secured Obligation; provided ,
however , Grantor shall have no obligation to pay taxes
which may be imposed from time to time upon Beneficiary and which
are measured by and imposed upon Beneficiary’s net
income.
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(b) |
Grantor may contest in good faith any taxes or assessments if:
(i) Grantor pursues the contest diligently and in compliance
with applicable laws, in a manner which Beneficiary determines is
not prejudicial to Beneficiary, and does not impair the rights of
Beneficiary under any of the Loan Documents; and (b) Grantor
deposits with Beneficiary any funds or other forms of assurance
which Beneficiary in good faith determines from time to time
appropriate to protect Beneficiary from the consequences of the
contest being unsuccessful. Grantor’s compliance with this
Section shall operate to prevent such claim, demand, levy or
assessment from becoming a Default. |
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5.3 |
TAX AND INSURANCE IMPOUNDS . At any time
following the occurrence of a Default, at Beneficiary’s
option and upon its demand, but subject to Grantor’s right to
use cash from the Property to cover Permitted REIT Distributions
(as such term is defined in the Loan Agreement), Grantor shall,
until all Secured Obligations have been paid in full, pay to
Beneficiary monthly, annually or as otherwise directed by
Beneficiary an amount estimated by Beneficiary to be equal to:
(a) all taxes, assessments, levies and charges imposed by any
public or quasi-public authority or utility company which are or
may become a lien upon the Subject Property or Collateral and will
become due for the tax year during which such payment is so
directed; and (b) premiums for fire, hazard and insurance
required or requested pursuant to the Loan Documents when same are
next due. If Beneficiary determines that any amounts paid by
Grantor are insufficient for the payment in full of such taxes,
assessments, levies, charges and/or insurance premiums, Beneficiary
shall notify Grantor of the increased amounts required to pay all
amounts when due, whereupon Grantor shall pay to Beneficiary within
thirty (30) days thereafter the additional amount as stated in
Beneficiary’s notice. All sums so paid shall not bear
interest, except to the extent and in any minimum amount required
by law; and Beneficiary shall, unless Grantor is otherwise in
Default hereunder or under any Loan Document, apply said funds to
the payment of, or at the sole option of Beneficiary release said
funds to Grantor for the application to and payment of, such sums,
taxes, assessments, levies, charges, and insurance premiums. Upon
Default by Grantor hereunder or under any Loan Document,
Beneficiary may apply all or any part of said sums to any Secured
Obligation and/or to cure such Default, in which event Grantor
shall be required to restore all amounts so applied, as well as to
cure any other events or conditions of Default not cured by such
application. Upon assignment of this Deed of Trust, Beneficiary
shall have the right to assign in writing all amounts collected and
in its possession to its assignee whereupon Beneficiary and the
Trustee shall be released from all liability with respect thereto.
Within ninety-five (95) days following full repayment of the
Secured Obligations (other than full repayment of the Secured
Obligations as a consequence of a foreclosure or conveyance in lieu
of foreclosure of the liens and security interests securing the
Secured Obligations) or at such earlier time as Beneficiary may
elect, the balance of all amounts collected and in
Beneficiary’s possession shall be paid to Grantor and no
other party shall have any right or claim thereto. |
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5.4 |
PERFORMANCE OF SECURED OBLIGATIONS . Grantor
shall promptly pay and perform each Secured Obligation when
due. |
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5.5 |
LIENS, ENCUMBRANCES AND CHARGES . Grantor shall
immediately discharge any lien not approved by Beneficiary in
writing that has or may attain priority over this Deed of Trust.
Subject to the following sentence, Grantor shall pay when due all
obligations secured by or which may become liens and encumbrances
which shall now or hereafter encumber or appear to encumber all or
any part of the Subject Property or Collateral, or any interest
therein, whether senior or subordinate hereto. If a claim of lien
is recorded which affects the Subject Property or a bonded stop
notice is served upon Beneficiary, Grantor shall, within twenty
(20) calendar days of such recording or service or within five
(5) calendar days of Beneficiary’s demand, whichever
occurs first: (a) pay and discharge the claim of lien or
bonded stop notice; (b) effect the release thereof by
recording or delivering to Beneficiary a surety bond in sufficient
form and amount; or (c) provide Beneficiary with other
assurances which Beneficiary deems, in its sole discretion, to be
satisfactory for the payment of such claim of lien or bonded stop
notice and for the full and continuous protection of Beneficiary
from the effect of such lien or bonded stop notice. |
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5.6 |
DAMAGES; INSURANCE AND CONDEMNATION PROCEEDS
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(a) |
The following (whether now existing or hereafter arising) are
all absolutely and irrevocably assigned by Grantor to Beneficiary
and, at the request of Beneficiary, shall be paid directly to
Beneficiary: (i) all awards of damages and all other
compensation payable directly or indirectly by reason of a
condemnation or proposed condemnation for public or private use
affecting all or any part of, or any interest in, the Subject
Property or Collateral; (ii) all other claims and awards for
damages to, or decrease in value of, all or any part of, or any
interest in, the Subject Property or Collateral; (iii) all
proceeds of any insurance policies payable by reason of loss
sustained to all or any part of the Subject Property or Collateral;
and (iv) all interest which may accrue on any of the
foregoing. Subject to applicable law and Section 5.6(b) below,
and without regard to any requirement contained in
Section 5.7(d), Beneficiary may at its discretion apply all or
any of the proceeds it receives to its expenses in settling,
prosecuting or defending any claim and may apply the balance to the
Secured Obligations in any such order acceptable to Beneficiary,
and/or Beneficiary may release all or any part of the proceeds to
Grantor upon any conditions Beneficiary may impose. Beneficiary may
commence, appear in, defend or prosecute any assigned claim or
action and may adjust, compromise, settle and collect all claims
and awards assigned to Beneficiary; provided ,
however , in no event shall Beneficiary be responsible for
any failure to collect any claim or award, regardless of the cause
of the failure, including, without limitation, any malfeasance or
nonfeasance by Beneficiary or its employees or agents. |
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(b) |
Beneficiary shall permit insurance or condemnation proceeds
held by Beneficiary to be used for repair or restoration but may
condition such application upon reasonable conditions, including,
without limitation: (i) the deposit with Beneficiary of such
additional funds which Beneficiary determines are needed to pay all
costs of the repair or restoration, (including, without limitation,
taxes, financing charges, insurance and rent during the repair
period); (ii) the establishment of an arrangement for lien
releases and disbursement of funds acceptable to Beneficiary;
(iii) the delivery to Beneficiary of plans and specifications
for the work, a contract for the work signed by a contractor
acceptable to Beneficiary, a cost breakdown for the work and a
payment and performance bond for the work, all of which shall be
acceptable to Beneficiary; and (iv) the delivery to
Beneficiary of evidence acceptable to Beneficiary (aa) that
after completion of the work the income from the Subject Property
will be sufficient to pay all expenses and debt service for the
Subject Property; (bb) of the continuation of Leases
acceptable to and required by Beneficiary; (cc) that upon
completion of the work, the size, capacity and total value of the
Subject Property will be at least as great as it was before the
damage or condemnation occurred; (dd) that there has been no
material adverse change in the financial condition or credit of
Grantor since the date of this Deed of Trust; (ee) no Default shall
have occurred, and (ff) of the satisfaction of any additional
conditions that Beneficiary may reasonably establish to protect its
security. Grantor hereby acknowledges that the conditions described
above are reasonable, and, if such conditions have not been
satisfied within sixty (60) days of receipt by Beneficiary of
such insurance or condemnation proceeds, then Beneficiary may apply
such insurance or condemnation proceeds to pay the Secured
Obligations in such order and amounts as Beneficiary in its sole
discretion may choose. |
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(c) |
Notwithstanding the foregoing provisions of this
Section 5.6, if the insurance or condemnation proceeds equal
$1,000,000 or less, Beneficiary shall release such proceeds to
Grantor for repair or restoration of the Subject Property without
any additional requirements or conditions. |
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5.7 |
MAINTENANCE AND PRESERVATION OF THE SUBJECT
PROPERTY . Subject to the provisions of the Loan Agreement,
Grantor covenants: (a) to insure the Subject Property and
Collateral against such risks as Beneficiary may require pursuant
to the Loan Agreement and, at Beneficiary’s request (but not
more than fifteen (15) days prior to the termination date of
any existing coverage), to provide evidence of such insurance to
Beneficiary, and to comply with the requirements of any insurance
companies providing such insurance; (b) to keep the Subject
Property and Collateral in good condition and repair; (c) not
to remove or demolish the Subject Property or Collateral or any
part thereof, not to alter, restore or add to the Subject Property
or Collateral and not to initiate or acquiesce in any change in any
zoning or other land classification which affects the Subject
Property without Beneficiary’s prior written consent or as
provided in the Loan Agreement; (d) to complete or restore
promptly and in good and workmanlike manner the Subject Property
and Collateral, or any part thereof which may be damaged or
destroyed, without regard to whether
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Beneficiary elects to
require that insurance proceeds be used to reduce the Secured
Obligations as provided in Section 5.6; (e) to comply
with all laws, ordinances, regulations and standards, and all
covenants, conditions, restrictions and equitable servitudes,
whether public or private, of every kind and character which affect
the Subject Property or Collateral and pertain to acts committed or
conditions existing thereon, including, without limitation, any
work, alteration, improvement or demolition mandated by such laws,
covenants or requirements; (f) not to commit or permit waste
of the Subject Property or Collateral; and (g) to do all other
acts which from the character or use of the Subject Property or
Collateral may be reasonably necessary to maintain and preserve its
value.
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5.8 |
DEFENSE AND NOTICE OF LOSSES, CLAIMS AND ACTIONS
. At Grantor’s sole expense, Grantor shall protect, preserve
and defend the Subject Property and Collateral and title to and
right of possession of the Subject Property and Collateral, the
security hereof and the rights and powers of Beneficiary and
Trustee hereunder against all adverse claims. Grantor shall give
Beneficiary and Trustee prompt notice in writing of the assertion
of any claim, of the filing of any action or proceeding, of the
occurrence of any damage to the Subject Property or Collateral and
of any condemnation offer or action. |
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5.9 |
POWERS OF BENEFICIARY . Beneficiary may,
without affecting the personal liability of any person for payment
of any indebtedness or performance of any obligations secured
hereby and without liability therefor and without notice:
(a) release all or any part of the Subject Property;
(b) consent to the making of any map or plat thereof; and
(c) join in any grant of easement thereon, any declaration of
covenants and restrictions, or any extension agreement or any
agreement subordinating the lien or charge of this Deed of
Trust. |
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5.10 |
ACCEPTANCE OF TRUST; POWERS AND DUTIES OF TRUSTEE
. |
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(a) |
Trustee accepts this trust when this Deed of Trust is delivered
by Grantor to Beneficiary. Except as may be required by applicable
law, Trustee or Beneficiary may from time to time apply to any
court of competent jurisdiction for aid and direction in the
execution of the trust hereunder and the enforcement of the rights
and remedies available hereunder, and may obtain orders or decrees
directing or confirming or approving acts in the execution of said
trust and the enforcement of said remedies. |
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(b) |
Trustee shall not be required to take any action toward the
execution and enforcement of the trust hereby created or to
institute, appear in, or defend any action, suit, or other
proceeding in connection therewith where, in his opinion, such
action would be likely to involve him in expense or liability,
unless requested so to do by a written instrument signed by
Beneficiary and, if Trustee so requests, unless Trustee is tendered
security and indemnity satisfactory to Trustee against any and all
cost, expense, and liability arising therefrom. Trustee shall not
be responsible for the execution, acknowledgment, or validity of
the Loan Documents, or for the proper authorization thereof, or for
the sufficiency of the lien and security interest purported to be
created hereby, and Trustee makes no representation in respect
thereof or in respect of the rights, remedies, and recourses of
Beneficiary. |
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(c) |
With the
approval of Beneficiary, Trustee shall have the right to take any
and all of the following actions: (i) to select, employ, and
advise with counsel (who may be, but need not be, counsel for
Beneficiary) upon any matters arising hereunder, including the
preparation, execution, and interpretation of the Loan Documents,
and shall be fully protected in relying as to legal matters on the
advice of counsel, (ii) to execute any of the trusts and
powers hereof and to perform any duty hereunder either directly or
through his agents or attorneys, (iii) to select and employ,
in and about the execution of his duties hereunder, suitable
accountants, engineers and other experts, agents and
attorneys-in-fact, either corporate or individual, not regularly in
the employ of Trustee, and Trustee shall not be answerable for any
act, default, negligence, or misconduct of any such accountant,
engineer or other expert, agent or attorney-in-fact, if selected
with reasonable care, or for any error of judgment or act done by
Trustee in good faith, or be otherwise responsible or accountable
under any circumstances whatsoever, except for Trustee’s
gross negligence or bad faith, and (iv) any and all other
lawful action as Beneficiary may instruct Trustee to take to
protect or enforce Beneficiary’s rights hereunder. Trustee
shall not be personally liable in case of entry by Trustee, or
anyone entering by virtue of the powers herein granted to Trustee,
upon the Subject Property for debts contracted for or liability or
damages incurred in the management or operation of the Subject
Property. Trustee shall have the right to rely on any instrument,
document, or signature authorizing
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or supporting any action
taken or proposed to be taken by Trustee hereunder, believed by
Trustee in good faith to be genuine. Trustee shall be entitled to
reimbursement for expenses incurred by Trustee in the performance
of Trustee’s duties hereunder and to reasonable compensation
for such of Trustee’s services hereunder as shall be
rendered. GRANTOR WILL, FROM TIME TO TIME, PAY THE COMPENSATION
DUE TO TRUSTEE HEREUNDER AND REIMBURSE TRUSTEE FOR, AND INDEMNIFY
AND HOLD HARMLESS TRUSTEE AGAINST, ANY AND ALL LIABILITY AND
EXPENSES WHICH MAY BE INCURRED BY TRUSTEE IN THE PERFORMANCE OF
TRUSTEE’S DUTIES.
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(d) |
All moneys received by Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they
were received, but need not be segregated in any manner from any
other moneys (except to the extent required by applicable law) and
Trustee shall be under no liability for interest on any moneys
received by Trustee hereunder. |
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(e) |
Should any deed, conveyance, or instrument of any nature be
required from Grantor by any Trustee or substitute Trustee to more
fully and certainly vest in and confirm to the Trustee or
substitute Trustee such estates, rights, powers, and duties, then,
upon request by the Trustee or substitute Trustee, any and all such
deeds, conveyances and instruments shall be made, executed,
acknowledged, and delivered and shall be caused to be recorded
and/or filed by Grantor. |
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(f) |
By accepting or approving anything required to be observed,
performed, or fulfilled or to be given to Trustee pursuant to the
Loan Documents, including without limitation, any deed, conveyance,
instrument, officer’s certificate, balance sheet, statement
of profit and loss or other financial statement, survey, appraisal,
or insurance policy, Trustee shall not be deemed to have warranted,
consented to, or affirmed the sufficiency, legality, effectiveness,
or legal effect of the same, or of any term, provision, or
condition thereof, and such acceptance or approval thereof shall
not be or constitute any warranty or affirmation with respect
thereto by Trustee. |
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5.11 |
COMPENSATION; EXCULPATION; INDEMNIFICATION
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(a) |
Grantor shall pay Trustee’s fees and reimburse Trustee
for expenses in the administration of this trust, including
attorneys’ fees. Grantor shall pay to Beneficiary reasonable
compensation for services rendered concerning this Deed of Trust,
including without limit any statement of amounts owing under any
Secured Obligation. Beneficiary shall not directly or indirectly be
liable to Grantor or any other person as a consequence of
(i) the exercise of the rights, remedies or powers granted to
Beneficiary in this Deed of Trust; (ii) the failure or refusal
of Beneficiary to perform or discharge any obligation or liability
of Grantor under any agreement related to the Subject Property or
Collateral or under this Deed of Trust; or (iii) any loss
sustained by Grantor or any third party resulting from
Beneficiary’s failure (whether by malfeasance, nonfeasance or
refusal to act) to lease the Subje |
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