EXHIBIT 10.29
PROMISSORY NOTE
Bedford (AZ)
19806.311
$7,475,000 July 27, 2000
FOR VALUE RECEIVED, the undersigned, BEDFORD PROPERTY INVESTORS,
INC., a Maryland corporation ("Maker"), hereby promises to pay to the
order of SECURITY LIFE OF DENVER INSURANCE COMPANY, a Colorado
corporation, or any subsequent holder hereof ("Payee"), at the office of
Payee, c/o ING Investment Management LLC, 5780 Powers Ferry Road, NW,
Suite 300, Atlanta, Georgia 30327-4349, or at such other place as Payee
may from time to time designate in writing, the principal sum of SEVEN
MILLION FOUR HUNDRED SEVENTY-FIVE THOUSAND AND NO/100 DOLLARS
($7,475,000) and interest thereon from and after the date of disbursement
hereunder at the interest rate determined in accordance with this Note
("Note Rate"), both principal and interest to be paid in lawful money of
the United States of America, as follows:
(i) Interest only from and including the date of
disbursement of the loan proceeds through and including the
last day of the month, shall be paid on the first day of the
month following the date hereof or, at the option of Payee,
on the date hereof; and
(ii) Payments of principal and interest (the "Monthly
Payments") shall be made in 300 successive monthly
installments commencing on the first day of September, 2000,
and continuing on the first day of each and every calendar
month thereafter up to and including the first day of August,
2025 (the "Maturity Date"). Each of the Monthly Payments
shall be based upon an amortization period of 25 years from
and after the Amortization Date (the "Amortization Period")
at the then applicable Note Rate, except that the final
installment payable on the Maturity Date shall be in the full
amount of outstanding principal of this Promissory Note
("Note"), interest and all other sums remaining unpaid
hereunder. The initial Monthly Paymewnts due hereunder,
commencing on the Amortization Date shall be in the amount of
$57,792.33.
I. Interest Rate Alternatives.
The Note Rate shall be determined in accordance with the following
two options and shall be either the variable rate described below (the
"Variable Rate") or, if affirmatively elected in accordance with the
following terms, a fixed rate (the "Fixed Rate"). The premium assessed
for a prepayment and the options of Payee to call this Note shall vary
depending on whether the Variable Rate or the Fixed Rate is applicable,
as set forth herein.
A. Variable Rate.
1. Interest Rate. The Note Rate shall be determined as
follows, unless the Fixed Rate Option (defined below) is exercised. The
initial Note Rate shall be 8.02%. Commencing September 1, 2000, and on
the first day of every calendar month thereafter during the term of this
Note, upon a change in the LIBOR, as hereinafter defined (hereinafter an
"Interest Adjustment Date"), the Note Rate to be paid by Maker hereunder
shall be adjusted to a rate of interest (the "Adjusted Rate") equal to
one hundred forty (140) basis points plus the applicable LIBOR on such
Interest Adjustment Date, and the principal balance of the Indebtedness
evidenced hereby outstanding on the Interest Adjustment Date shall be
reamortized by Payee over the remaining term of the Amortization Period
at the Adjusted Rate to determine the Monthly Payment of principal and
interest necessary to pay the remaining principal Indebtedness in full
on the Maturity Date in substantially equal installments (the "Adjusted
Monthly Payment"). Commencing on the first day of each calendar month
following each Interest Adjustment Date and continuing on the first day
of each month through and including the next Interest Adjustment Date,
Maker's Monthly Payments due hereunder shall be in the amount of the then
applicable Adjusted Monthly Payment. The "LIBOR," as referred to herein,
shall mean the 30-day London Interbank Offered Rate, as reported in The
Wall Street Journal, or if not available or no longer published, as
provided by the Federal Reserve Bank of New York. In the event the LIBOR
ceases to be published or is otherwise unascertainable, Payee shall
select a comparable reference rate as the next index for purposes of
calculating the Adjusted Rate hereunder. Notwithstanding anything else
contained herein, the determination of the adjustment in the Note Rate
hereunder shall occur five (5) London banking days prior to each Interest
Adjustment Date.
2. Call Provisions. Notwithstanding any provisions of this Note
to the contrary, the Payee reserves the right to declare the entire
amount of outstanding principal of this Note, interest and all other sums
remaining unpaid hereunder and under the Deed of Trust (as hereinafter
devined) to be due and payable on any of the following dates (each
referred to as a "Call Date"):
(a) the first day of September, 2005; or
(b) the first day of September, 2010; or
(c) the first day of September, 2015; or
(d) the first day of September, 2020.
The period of time from the date hereof until the first Call Date, and
thereafter the period of time between each Call Date or between the last
Call Date and the Maturity Date, is referred to herein as a "Call
Period"). Such right shall be exercised by Payee, in its sole and
absolute discretion, by giving written notice to Maker at least six (6)
months prior to the Call Date as to which Payee is electing, which notice
shall refer to this Note and state the Call Date elected by Payee. The
exercise of such right by Payee shall not relieve Maker of its obligation
to make scheduled payments hereunder, or to pay any other sums due and
owing hereunder, between the date of such notice and the elected Call
Date. The exercise of such right by Payee will result in the original
principal amount of this Note not having been fully amortized by the
payment of the monthly installments hereunder prior to the exercised Call
Date, and Maker shall be obligated to make a payment of the entire
amount of outstanding principal of this Note and interest and all other
sums remaining unpaid hereunder and under the Deed of Trust on the Call
Date.
3. Prepayment. Except as expressly stated in this Note,
there shall be no right to prepay the principal portion of the
Indebtedness. Maker reserves, however, the privilege to prepay, in full
but not in part, the principal portion of the Indebtedness on any
installment payment date, upon sixty (60) days prior written notice to
the Payee and payment of a premium (the "Prepayment Premium") equal to
a percentage of the outstanding principal balance of this Note as of the
date of prepayment determined as follows: two percent (2%) as of the
first day of any Call Period (to include the partial month from the date
hereof to the Amortization Date for the first Call Period) and reducing
thereafter by one fifty-eighth (1/58th) as of the first day of each
calendar month, such that the Prepayment Premium shall be zero during the
last two months of a Call Period, and then re-setting to two (2%) percent
as of the first day of the next Call Period.
In the event of acceleration of the Note at any time and subsequent
involuntary or voluntary prepayment (even if during the period in which
no prepayment is permitted), the Prepayment Premium shall be payable
except (a) for a prepayment which results from application of proceeds
from insured damage, condemnation or other taking of the Premises when
no Event of Default (as hereinafter defined) exists, and (b) as to any
prepayment which is made within sixty (60) days prior to the Maturity
Date or a Call Date. In the event the Prepayment Premium were ever
construed by a court having jurisdiction thereof to be an interest
payment, the Prepayment Premium shall not exceed an amount equal to the
excess, if any, of (i) interest calculated at the highest rate permitted
by applicable law, as construed by courts having jurisdiction thereof,
on the principal balance of the Note from time to time outstanding from
the date thereof to the date of such payment, less (ii) interest
theretofore paid on the Note. If Maker shall have paid any amount
construed to be in excess of the highest amount payable by law calculated
as aforesaid, as determined by a court of competent jurisdiction, such
excess shall promptly be refunded to Maker.
B. Fixed Rate.
1. Interest Rate. Maker shall have the right, exercisable
during the period commencing on the date hereof and ending August 31,
2003, to fix the Note Rate in accordance with the following (the "Fixed
Rate Option"): Provided that no Event of Default, (as hereinafter
defined) exists, the Maker may, upon written notice (the "Election
Notice") to Payee stating Maker's election to change to a fixed rate and
electing a term of years not fewer than three nor more than ten years
(the "Fixed Term"), and payment of a conversion fee equal to one-quarter
of one percent (0.25%) of the outstanding principal balance as of the
Fixed Rate Adjustment Date (as defined below), elect to fix the Note Rate
at the highest of (i) one hundred ninety (190) basis points plus the rate
applicable to U.S. Treasury obligations for a term corresponding to the
Fixed Term, as of the Determination Date (defined below), (ii) the
Merrill Lynch index, U.S. Corporates, BBB-A rated, 5-10 years with an
inception date of December 31, 1972, as reported by Bloomberg whose
ticker on Bloomberg is C6C0, as of the Determination Date, and (iii)
6.75%. The Note Rate shall be adjusted to a fixed rate determined in
accordance with the foregoing ("Fixed Rate") to be effective as of the
first day of the second full calendar month following Payee's receipt of
Maker's Election Notice ("Fixed Rate Adjustment Date"). The Fixed Rate
shall be established by Payee within three (3) business days of Payee's
receipt of Maker's Election Notice ("Determination Date"), and Payee
shall notify Maker of the Fixed Rate so determined (the "Rate Notice").
Unless Maker gives a written notice of objection to Payee within three
(3) business days after Payee has given Maker such Rate Notice, setting
forth the basis of the objection and the calculation as determined by
Maker, the Fixed Rate set forth in the Rate Notice shall be deemed to
have been concurred in by Maker. If Maker objects to the Fixed Rate so
determined, the Variable Rate (and the Call Dates and Prepayment Premium
provisions applicable to the Variable Rate) shall continue until Maker
and Payee have agreed upon the Fixed Rate and the Fixed Rate Adjustment
Date shall be the first day of the second full calendar month following
the date of such agreement as to the Fixed Rate. The outstanding
principal balance shall be reamortized as of the Fixed Rate Adjustment
Date over the then-remaining Amortization Period and the Monthly Payments
shall be adjusted, effective as of the first day of the first calendar
month immediately following the Fixed Rate Adjustment Date, so that the
outstanding principal balance as of the Fixed Rate Adjustment Date shall
bear interest at the Fixed Rate and be repaid in full by equal monthly
installments of principal and interest by the Maturity Date ("Fixed Rate
Installments"). The 0.25% conversion fee shall be due and payable no
later than the Fixed Rate Adjustment Date. Maker shall also pay all
third party costs and expenses incurred by Payee to document the
conversion to the Fixed Rate, including legal fees. Failure to pay such
conversion fee and costs and expenses shall constitute an Event of
Default hereunder, and in no event shall the Fixed Rate be applicable
unless the same have been fully paid. If Payee does not exercise a Fixed
Call Option, the Fixed Rate shall remain in effect through the Maturity
Date.
2. Call Provisions. In the event Maker exercises the Fixed
Rate Option and satisfies the conditions set forth above, the Maturity
Date shall remain unchanged. However, the Call Dates provided above with
respect to the Variable Rate shall be inoperative and Payee shall have
the following option:
Payee shall have the option (the "Fixed Call Option") exercisable
in its sole and absolute discretion to declare the entire amount of the
then outstanding principal and all unpaid interest thereon to be
immediately due and payable on any one of the following dates (the "Fixed
Call Dates"): On the date which is the number of years after the due date
of the first installment of principal and interest under the Fixed Rate
(which would be the first day of the first calendar month following the
Fixed Rate Adjustment Date) equal to the Fixed Term, and on every fifth
(5th) anniversary of such date thereafter. Such Fixed Call Option shall
be exercised by Payee by giving written notice to Maker at least six (6)
months prior to the applicable Fixed Call Date. The exercise of such
right by Payee shall not relieve Maker of its obligation to make
scheduled payments hereunder, or to pay any other sums due and owing
hereunder, between the date of such notice and the elected Fixed Call
Date. The exercise of such right by Payee will result in the original
principal amount of this Note not having been fully amortized by the
payment of the monthly installments hereunder prior to the exercised
Fixed Call Date, and Maker shall be obligated to make a payment of the
entire amount of outstanding principal of this Note and interest and all
other sums remaining unpaid hereunder and under the Deed of Trust on the
Fixed Call Date.
3. Prepayment Premium. In the event Maker exercises the
Fixed Rate Option, the Prepayment Premium set forth in the Variable Rate
provisions shall be inoperative and the following shall apply:
Except as expressly stated in this Note, there shall be no right
to prepay the principal portion of the Indebtedness. Maker reserves,
however, the privilege to prepay, in full but not in part, the principal
portion of the Indebtedness on any installment payment date, upon sixty
(60) days prior written notice to the Payee and payment of a premium (the
"Prepayment Premium") equal to the greater of:
(a) an amount (the "Treasury Obligation Amount")
equal to the sum of (i) the present value of the
scheduled monthly installments on this Note from the
date of prepayment to the Maturity Date or, if earlier,
the next applicable Fixed Call Date, and (ii) the
present value of the amount of principal and interest
due on the Maturity Date or, if earlier, the next
applicable Fixed Call Date (assuming all scheduled
monthly installments due prior thereto were made when
due) minus (iii) the outstanding principal balance of
this Note as of the date of prepayment. The present
values described in clauses (i) and (ii) shall be
computed on a monthly basis as of the date of
prepayment, discounted at the yield of the U.S. Treasury
obligation closest in maturity to the Maturity Date or,
if earlier, the next applicable Fixed Call Date, as
reported in The Wall Street Journal (or if not then
published, any successor or similar publication of
similar repute in the financial markets) or as available
from the Federal Reserve Bank of New York, on the fifth
(5th) day prior to the date of prepayment or, if such
fifth day is not a business day, then the next preceding
day which is a business day. The Treasury Obligation
Amount is intended to be that amount which, together
with the amount prepaid, shall be sufficient to enable
Payee to invest in a U.S. Treasury obligation for the
remaining term of this Note to provide the same
effective yield on the amount paid from the date of
prepayment to the Maturity Date or, if earlier, the next
applicable Fixed Call Date as would have been the yield
on such amount under this Note if such amount had not
been prepaid; or
(b) one percent (1.0%) of the outstanding
principal balance of this Note as of the prepayment
date.
Except as provided in the next sentence, in no event shall the
amount prepaid be less than the total amount of the then outstanding
principal and accrued and unpaid interest thereon plus one percent (1%)
of the then outstanding principal. In the event of acceleration of the
Note at any time and subsequent involuntary or voluntary prepayment (even
if during the period in which no prepayment is permitted), the Prepayment
Premium shall be payable except (aa) for a prepayment which results from
application of proceeds from insured damage, condemnation or other taking
of the Premises when no Event of Default exists, and (bb) as to any
prepayment which is made within sixty (60) days prior to the Maturity
Date or a Fixed Call Date. In the event the Prepayment Premium were ever
construed by a court having jurisdiction thereof to be an interest
payment, the Prepayment Premium shall not exceed an amount equal to the
excess, if any, of (i) interest calculated at the highest rate permitted
by applicable law, as construed by courts having jurisdiction thereof,
on the principal balance of the Note from time to time outstanding from
the date thereof to the date of such payment, less (ii) interest
theretofore paid on the Note. If Maker shall have paid any amounts
construed to be in excess of the highest amount payable by law,
calculated as aforesaid, as determined by a court of competent
jurisdiction, such excess shall promptly be refunded to Maker.
II. General Terms and Provisions.
All payments on account of the Indebtedness shall be applied: (i)
first, to further advances, if any, made by the Payee as provided in the
Loan Documents (as hereinafter defined); (ii) next, to any Late Charge
(as hereinafter defined); (iii) next, to interest at the Default Rate (as
hereinafter defined), if applicable; (iv) next, to the Prepayment Premium
(as hereinafter defined), if applicable; (v) next, to interest at the
applicable Note Rate on the unpaid principal balance of this Note unless
interest at the Default Rate is applicable; and (vi) last, to reduce the
unpaid principal balance of this Note. Interest shall be calculated on
the basis of a year consisting of 360 days and with twelve thirty-day
months, except that interest due and payable for less than a full month
shall be calculated by multiplying the actual number of days elapsed in
such period by a daily interest rate based on a 360-day year.
In the event any installment of principal or interest due
hereunder, or any escrow fund payment for real estate taxes, assessments,
other similar charges or insurance premiums due under the Deed of Trust
shall be more than fifteen (15) days overdue, Maker shall pay to the
holder hereof a late charge ("Late Charge") of four cents ($.04) for each
dollar so overdue or, if less, the maximum amount permitted under
applicable law, in order to defray part of the cost of collection and of
handling delinquent payments.
The terms of this Note are expressly limited so that in no event
whatsoever shall the amount paid or agreed to be paid to the Payee exceed
the highest lawful rate of interest permissible under applicable law.
If, from any circumstances whatsoever, fulfillment of any provision
hereof or any other documents securing the Indebtedness at the time
performance of such provision shall be due, shall involve the payment of
interest exceeding the highest rate of interest permitted by law which
a court of competent jurisdiction may deem applicable hereto, then, ipso
facto, the obligation to be fulfilled shall be reduced to the highest
lawful rate of interest permissible under applicable law; and if for any
reason whatsoever Payee shall ever receive as interest an amount which
would be deemed unlawful, such interest shall be applied to the payment
of the last maturing installment or installments of the principal portion
of the Indebtedness (whether or not then due and payable) and not to the
payment of interest.
Payment of this Note is secured by a Deed of Trust, Security
Agreement, Financing Statement and Fixture Filing (the "Deed of Trust")
dated on or about this same date by Maker, as Trustor , for the benefit
of Payee, as Beneficiary, encumbering certain real estate and other
property interests situated in Maricopa County, Arizona and more
particularly described in the Deed of Trust (the "Premises"). This Note,
the Deed of Trust, and all other instruments now or hereafter evidencing,
securing or guarantying the loan evidenced hereby are sometimes
collectively referred to as the "Loan Documents". The Deed of Trust
contains "due on sale or further encumbrance" provisions which, together
with all other terms of the Deed of Trust, are incorporated herein by
this reference.
Payment of this Note is further secured by the "Other Security
Documents" as defined in the Cross-Collateralization Rider, which is
attached to the Deed of Trust as Exhibit B.
NOTWITHSTANDING ANYTHING ELSE CONTAINED IN THIS NOTE, OR IN THE
OTHER LOAN DOCUMENTS, THIS NOTE MAY NOT BE PREPAID WITHOUT A SIMULTANEOUS
PREPAYMENT, IN FULL, OF THE OTHER NOTE, AS DEFINED IN THE DEED OF TRUST
(TOGETHER WITH ANY APPLICABLE PREPAYMENT PREMIUM THEREON).
In the event Payee applies any insurance proceeds or condemnation
proceeds to the reduction of the principal portion of the Indebtedness
in accordance with the terms of the Deed of Trust, and if at such time
no Event of Default exists hereunder and no event has occurred which with
the passage of time or the giving of notice would be or become an Event
of Default, then no Prepayment Premium shall be due or payable as a
result of such application.
If the maturity of the Indebtedness is accelerated by Payee as a
consequence of the occurrence of an Event of Default, or in the event the
right to foreclose the Deed of Trust shall otherwise accrue to Payee, the
Maker agrees that an amount equal to the Prepayment Premium (determined
as if prepayment were made on the date of acceleration) shall be added
to the balance of unpaid principal and interest then outstanding, and
that the Indebtedness shall not be discharged except: (i) by payment of
such Prepayment Premium, together with the balance of principal and
interest and all other sums then outstanding, if the Maker tenders
payment of the Indebtedness prior to completion of a non-judicial
foreclosure sale (if applicable in Arizona), judicial order or judgment
of foreclosure sale; or (ii) by inclusion of such Prepayment Premium as
a part of the Indebtedness in any such completion of a non-judicial
foreclosure sale (if applicable in Arizona), judicial order or judgment
of foreclosure.
It is hereby expressly agreed by Maker that time is of the essence
in the performance of this Note and that each of the following
occurrences shall constitute a default ("Event of Default") under this
Note:
(i) The failure of the Maker to:
(a) make any payment of principal or interest under this
Note within ten (10) days after the same shall fall due, or
(b) comply with any of the other terms of this Note within
thirty (30) days after written notice of such failure has
been given by Payee to Maker or within such longer period
of time, not to exceed an additional thirty (30) days, or
such longer period of time as agreed to by Payee, as may be
reasonably necessary to cure such non-compliance if Maker
is diligently and with continuity of effort pursuing such
cure and the failure is susceptible of cure within such
additional thirty-day period.
(ii) The failure of Maker to make payment of any amount due the
Payee under any Loan Document other than this Note, on the date the
same shall fall due (including any applicable grace period).
(iii) The occurrence of any breach, default, event of default
or failure of performance (however denominated) under any Loan
Document other than this Note, and the expiration of any applicable
cure period without the same having been cured.
(iv) The occurrence of an Event of Default under any of the
"Other Note" or the "Other Security Documents" as such terms are
defined in the Cross-Collateralization Rider, attached to the Deed of
Trust as Exhibit B.
From and after the date of the occurrence of any Event of Default and
continuing until such Event of Default is fully cured (if Maker is entitled
under this Note to cure such default) or until this Note is paid in full, the
Maker promises to pay interest on the principal balance of this Note then
outstanding at the rate (the "Default Rate") equal to the Note Rate plus five
percentage points per annum or, if less, the maximum rate permitted under
applicable law. Interest at the Default Rate shall accrue on the amount of any
judgment rendered hereon or in connection with any foreclosure of the Deed of
Trust. The Maker agrees that such additional interest which has accrued
shall be paid at the time of and as a condition precedent to the curing of
such Event of Default. Notwithstanding anything herein to the contrary, during
the existence of any such Event of Default Payee may apply payments received
on any amounts due hereunder or under the terms of any of the Loan Documents
as Payee shall determine.
Payee shall have the following rights, powers, privileges, options and
remedies whenever any Event of Default shall occur under this Note:
(i) To foreclose, or exercise any power of sale under, the Deed
of Trust.
(ii) To accelerate the maturity of the Indebtedness and declare
the entire unpaid principal balance of, and any unpaid interest then
accrued on, this Note, together with any Prepayment Premium, without
demand or notice of any kind to the Maker or any other person, to be
immediately due and payable.
(iii) To exercise any and all rights, powers, privileges,
options and remedies available at law or in equity and as provided in
any of the Loan Documents.
Upon the occurrence of an Event of Default, the Maker expressly agrees to
pay all costs of collection and enforcement of every kind, including without
limitation, all reasonable attorneys' fees and expenses, court costs, costs of
title evidence and insurance, inspection and appraisal costs and expenses of
every kind reasonably incurred by Payee in connection with the protection or
realization of any or all of the security for this Note, whether or not any
lawsuit is filed with respect thereto. The occurrence of an Event of Default
under this Note shall constitute a default under each and all of the other
Loan Documents.
The rights, powers, privileges, options and remedies of Payee, as provided
in this Note, in any of the Loan Documents, or otherwise available at law or in
equity shall be cumulative and concurrent, and may be pursued singly,
successively or together at the sole discretion of Payee, and may be exercised
as often as occasion therefor shall occur. No delay or discontinuance in the
exercise of any right, power, privilege, option or remedy hereunder shall be
deemed a waiver of such right, power, privilege, option or remedy, nor shall
the exercise of any right, power, privilege, option or remedy be deemed an
election of remedies or a waiver of any other right, power, privilege, option
or remedy. Without limiting the generality of the foregoing, the failure of
the Payee after the occurrence of any Event of Default to exercise Payee's right
to declare the Indebtedness remaining unmatured hereunder to be immediately due
and payable shall not constitute a waiver of such right in connection with any
future Event of Default. Acceleration of maturity, once elected by Payee, may
be, in Payee's sole and absolute discretion rescinded by Payee's written
acknowledgment to that effect, but without limiting the foregoing, the tender
and acceptance of partial payment or partial performance shall not, by itself,
in any way affect or rescind such acceleration.
Maker waives presentment for payment, demand, notice of nonpayment, notice
of dishonor, protest of any dishonor, notice of protest, notice of intent to
accelerate, notice of acceleration of maturity, and all other notices in
connection with the delivery, acceptance, performance, default or enforcement of
the payment of this Note, except as otherwise provided herein, and agrees that
if more than one the liability of each of them hereunder shall be joint,
several and unconditional without regard to the liability of any other party
and shall not be in any manner affected by any indulgence, extension of time,
renewal, waiver or modification granted or consented to by Payee; and Maker
consents to any and all extensions of time, renewals, waivers or
modifications that may be granted by Payee with respect to the payment or
other provisions of this Note, and to the release of any collateral given to
secure the payment hereof, or any part thereof, with or without substitution,
and agrees that additional makers or guarantors may become parties hereto
without notice to any of them or affecting any of their
liability hereunder.
Neither Payee nor Maker shall by any acts of omission or commission be
deemed to have waived any rights or remedies hereunder unless such waiver is in
writing and signed by Payee or Maker, and then only to the extent specifically
set forth therein; a waiver in respect of one event shall not be construed as
continuing or as a bar to the exercise or waiver of such right or remedy in
respect of a subsequent event.
All notices, demands, requests, and other communications desired or
required to be given hereunder ("Notices") shall be in writing and shall be
given by: (i) hand delivery to the address for Notices; (ii) delivery by
overnight courier service to the address for Notices; or (iii) sending the same
by United States mail, postage prepaid, certified mail, return receipt
requested, addressed to the address for Notices.
All Notices shall be deemed given and effective upon the earliest to occur
of: (x) the hand delivery of such Notice to the address for Notices; (y) one
business day after the deposit of such Notice with an overnight courier service
by the time deadline for next day delivery addressed to the address for Notices;
or (z) three business days after depositing the Notice in the United States mail
, postage prepaid, as set forth in (iii) above. All Notices shall be addressed
to the following addresses:
Maker: Bedford Property Investors, Inc.
270 Lafayette Circle
Lafayette, CA 94549
Attn: Chief Financial Officer
Payee: Security Life of Denver Insurance Company
c/o ING Investment Management LLC
5780 Powers Ferry Road, NW, Suite 300
Atlanta, Georgia 30327-4349
Attention: Mortgage Loan Servicing Department
and
ING Investment Management LLC
5780 Powers Ferry Road, NW, Suite 300
Atlanta, Georgia 30327-4349
Attention: Real Estate Law Department
With a copy to: Nyemaster, Goode, Voigts, West,
Hansell & O'Brien, P.C.
700 Walnut, Suite 1600
Des Moines, Iowa 50309
or to such other persons or at such other place as any party hereto may by
Notice designate as a place for service of Notice. Provided, that the "copy to"
Notice to be given as set forth above is a courtesy copy only; and a Notice
given to such person is not sufficient to effect giving a Notice to the
principal party, nor does a failure to give such a courtesy copy of a Notice
constitute a failure to give Notice to the principal party.
This Note shall be governed by and construed in accordance with the laws
(excluding conflicts of laws rules) of Arizona.
Subject to the terms of the next succeeding paragraph and notwithstanding
anything to the contrary otherwise contained in this Note, but without in any
way releasing, impairing or otherwise affecting this Note or any of the other
Loan Documents (including without limitation any guaranties or indemnification
agreements) or the certain Environmental Indemnification Agreement to which
Maker is a party, or the validity hereof or thereof, or the lien of the Deed of
Trust, it is agreed that Payee's source of satisfaction of the Indebtedness and
Maker's other obligations hereunder and under the Loan Documents other than any
separate guaranty agreement or the Environmental Indemnification Agreement is
limited to (a) the Premises and proceeds thereof, (b) rents, income, issues,
proceeds and profits arising out of the Premises, and (c) any separate guaranty
or indemnification agreements guarantying or indemnifying Payee with respect to
the payment of any amounts due hereunder and under the Loan Documents and/or
Maker's performance hereunder and under the Loan Documents; provided, however,
that nothing herein contained shall be deemed to be a release or impairment of
said Indebtedness or the security therefor intended by the Deed of Trust, or be
deemed to preclude Payee from foreclosing the Deed of Trust or from enforcing
any of Payee's rights or remedies in law or in equity thereunder, or in any way
or manner affecting Payee's rights and privileges under any of the Loan
Documents or any separate guaranty or indemnification agreements guarantying
Maker's payment and/or performance hereunder and/or under the Loan Documents.
PROVIDED, HOWEVER, NOTWITHSTANDING ANYTHING IN THIS NOTE TO THE CONTRARY, MAKER
SHALL PAY, AND THERE SHALL AT NO TIME BE ANY LIMITATION ON MAKER'S PERSONAL
LIABILITY FOR THE PAYMENT TO PAYEE OF:
(i) rents, security deposits, or other income, issues, profits,
and revenues derived from the Premises after the occurrence of an
Event of Default to the extent applied to anything other than (a)
normal and necessary operating expenses of the Premises or (b) the
Indebtedness evidenced by the Note. It is understood that any rents
collected more than one month in advance as of the time of the Event
of Default shall be considered to have been collected after the Event
of Default;
(ii) any loss, cost or damages arising out of or in connection
with fraud or material misrepresentations to Payee by Maker (or by any
of its general partners, officers, shareholders, members, or their
agents, if applicable);
(iii) any loss, cost or damages arising out of or in connection
with Maker's use or misapplication of (a) any proceeds paid under any
insurance policies by reason of damage, loss or destruction to any
portion of the Premises, or (b) proceeds or awards resulting from the
condemnation or other taking in lieu of condemnation of any portion of
the Premises, for purposes other than those set forth in the Deed of
Trust;
(iv) any loss, cost or damages arising out of or in connection
with any waste of the Premises or any portion thereof and all
reasonable costs incurred by Payee in order to protect the Premises;
(v) any taxes, assessments and insurance premiums for which
Maker is liable under the Note, the Deed of Trust or any of the other
Loan Documents and which are paid by Payee, other than out of Maker's
contributions to escrow accounts maintained for that purpose (but not
the proportionate amount of any such taxes, assessments and insurance
premiums which accrue following the date of foreclosure [plus any
applicable redemption period] or acceptance of a deed in lieu of
foreclosure);
(vi) any loss, cost or damages arising out of or in connection
with the Maker's environmental covenants, warranties and
representations contained in Paragraph 30 of the Deed of Trust;
(vii) any loss, cost or damages arising out of or in connection
with any construction lien, mechanic's lien, materialman's lien or
similar lien against the Premises arising out of acts or omissions of
Maker;
(viii) any loss, cost or damages arising out of or incurred in
order to cause the Improvements to comply with the accessibility
provisions of The Americans with Disabilities Act and each of the
regulations promulgated thereunder, as the same may be amended from
time to time and which are required by any governmental authority;
(ix) the total Indebtedness in the event that (a) Payee is
prevented from acquiring title to the Premises after any Event of
Default because of failure of Maker's title under federal, state or
local laws, less any recovery received by Payee from any title
insurance policy it holds in connection with the Premises, or (b)
Maker or any guarantor of any of Maker's obligations hereunder
voluntarily files a petition in bankruptcy or commences a case or
insolvency proceeding under any provision or chapter of the Federal
Bankruptcy Code;
(x) any loss, cost, damages, expense and liability, including,
but not limited to, reasonable attorneys' fees and costs, resulting
from any act of Maker or its general partners, shareholders,
beneficiaries, or members, as the case may be, to obstruct, delay or
impede Payee from exercising any of its rights or remedies under the
Loan Documents;
(xi) the total Indebtedness in the event that (a) Maker makes
an unpermitted transfer of an interest in the Maker or in the Premises
without the prior written approval of Payee, or (b) Maker makes an
unpermitted encumbrance on the Premises or on an interest in Maker, in
either case without the prior written approval of Payee;
(xii) all costs and fees, including without limitation reasonable
attorney fees and costs, incurred by Payee in the enforcement of
subparagraphs (i) through (xi) above.
With the exception of those items of liability specifically set forth in items
(i) through (xii) above, the lien of any judgment against Maker in any
proceeding instituted on, under or in connection with this Note shall not extend
to any property now or hereafter owned by Maker other than the interest of the
Maker in the Premises and the other security for the payment of this Note.
This Note, together with the other Loan Documents and the certain
Environmental Indemnification Agreement executed by Maker, constitute the entire
agreement between the parties hereto pertaining to the subject matters hereof
and thereof and supersede all negotiations, preliminary agreements and all
prior or contemporaneous discussions and understandings of the parties hereto in
connection with the subject matters hereof and thereof.
All fees, including attorneys' fees, charges, goods, things in action, or
any other sums or things of value or other contractual obligations
(collectively, the "Additional Sums") paid by Maker to the Payee or other holder
of this Note, whether pursuant to this Note or otherwise with respect to the
Indebtedness evidenced hereby, or with respect to the Deed of Trust securing
this Note, or any other document or instrument in any way pertaining to such
Indebtedness, which, under the law of the State of Arizona may be deemed to be
interest with respect to such Indebtedness, shall, for the purpose of any laws
of the State of Arizona which may limit the maximum rate of interest to be
charged with respect to such Indebtedness, be payable by Maker as, and shall
be deemed to be, interest, and for such purposes only, Maker agrees to an
effective contracted for rate of interest equal to the rate of interest
resulting from the payment of any Additional Sums. Maker understands and
believes that this transaction complies with the usury laws
of Arizona; however, if any interest or other charges are ever deemed to exceed
the maximum amount permitted by law, then: (a) the amount of interest or charges
payable hereunder by Maker shall be reduced to the maximum amount permitted by
law; and (b) any excess amount previously collected from Maker which exceed the
maximum amount permitted by law will be credited against the outstanding
principal Indebtedness. If the principal Indebtedness has already been paid,
the excess amount paid will be refunded to Maker.
THE PARTIES HERETO, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO
CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY
IN ANY LITIGATION BASED ON OR ARISING OUT OF THIS AGREEMENT OR INSTRUMENT, OR
ANY RELATED INSTRUMENT OR AGREEMENT, OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS, WHETHER ORAL OR WRITTEN,
OR ACTION OF ANY PARTY HERETO. NO PARTY SHALL SEEK TO CONSOLIDATE BY
COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN
WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN
WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY
RESPECT OR RELINQUISHED BY ANY PARTY HERETO EXCEPT BY A WRITTEN INSTRUMENT
EXECUTED BY ALL PARTIES.
Maker acknowledges receipt of a copy of this instrument at the time it was
signed.
IN WITNESS WHEREOF, the Maker has executed and delivered this Promissory
Note as of the date first above written.
BEDFORD PROPERTY INVESTORS, INC., a Maryland
corporation
By: /s/Hanh Kihara_
Hanh Kihara
Senior Vice President and Chief
Financial Officer
STATE OF _________________)
) SS:
COUNTY OF ________________)
On this ____ day of ______________________, 2000, before me, a notary
public, personally appeared Hanh Kihara , to me personally known, who being by
me duly sworn did say that she is the Senior Vice President and Chief Financial
Officer, of Bedford Property Investors, Inc., a corporation; that (no seal has
been procured by) (the seal affixed thereto is the seal of) said corporation;
the foregoing instrument was signed (and sealed) on behalf of said corporation
by authority of its Board of Directors; and that the said Hanh Kihara, as such
officer, acknowledged the execution of the foregoing instrument to be the
voluntary act and deed of said corporation, by it and by her voluntarily
executed.
_____________________________________
Notary Public
Seal
<PAGE>
Instrument Prepared By, And
When Recorded Return To:
Nyemaster, Goode, Voigts, West,
Hansell & O'Brien, P.C.
700 Walnut, Suite 1600
Des Moines, Iowa 50309
Attention: Bradford L. Austin
Bedford (AZ)
19806.311
DEED OF TRUST, SECURITY AGREEMENT, FINANCING
STATEMENT AND FIXTURE FILING
THIS DEED OF TRUST, SECURITY AGREEMENT, FINANCING STATEMENT AND FIXTURE
FILING ("Deed of Trust") is made as of July 27, 2000, by BEDFORD PROPERTY
INVESTORS, INC., a Maryland corporation ("Trustor"), with the mailing address of
270 Lafayette Circle, Lafayette, California 94549, to FIRST AMERICAN TITLE
INSURANCE COMPANY,, with the address of c/o First American Title Guaranty
Company, its Agent, 1850 Mount Diablo Boulevard, Walnut Creek, California 94596,
Attn: Pamela Nicolini, as Trustee ("Trustee") for the benefit of SECURITY LIFE
OF DENVER INSURANCE COMPANY, a Colorado corporation ("Beneficiary") with the
mailing address of c/o ING Investment Management LLC, 5780 Powers Ferry Road,
NW, Suite 300, Atlanta, Georgia 30327-4349.
W I T N E S S E T H:
WHEREAS, Trustor has executed and delivered to Beneficiary a Promissory
Note dated on or about this same date in the principal amount of SEVEN MILLION
FOUR HUNDRED SEVENTY-FIVE THOUSAND AND NO/100 DOLLARS ($7,475,000), (which
Promissory Note, together with all notes issued and accepted in substitution or
exchange therefor, and as any of the foregoing may from time to time be
modified, extended, renewed, consolidated, restated or replaced, is
hereinafter sometimes referred to as the "Note"), which Note provides, among
other things, for election of a variable rate of interest, as described in
Exhibit "C" attached hereto, and for final payment of principal and
interest under the Note, if not sooner paid or
payable as provided therein, to be due on or before the first day of August,
2025, the Note by this reference thereto being incorporated herein; and
WHEREAS, Beneficiary is desirous of securing the prompt payment of the Note
together with interest, charges and prepayment fees, if any, thereon in
accordance with the terms of the Note, and any additional indebtedness
accruing to Beneficiary on account of any future payments, advances or
expenditures made by Beneficiary pursuant to the Note or this Deed of Trust
and any additional sums with interest thereon which may be loaned to Trustor
by Beneficiary or advanced under the Loan Documents (as hereinafter defined)
(all hereinafter sometimes collectively referred to as the "Indebtedness"); and
WHEREAS, Trustor is desirous of further securing the prompt payment of the
"Other Note," as such term is defined in the Cross-Collateralization Rider
attached hereto as Exhibit B.
NOW, THEREFORE, Trustor, to secure payment of the Note, the Other Note, and
the performance of the covenants and agreements herein contained to be performed
by Trustor, for good and valuable consideration in hand paid, the receipt and
adequacy whereof are hereby acknowledged, and intending to be legally bound,
hereby agrees and covenants as follows:
1. Granting Clauses. Trustor hereby irrevocably and absolutely does by
these presents GRANT AND CONVEY, WARRANT, SET OVER, TRANSFER, ASSIGN, BARGAIN
AND SELL to Trustee, and its successors in trust, for the benefit of
Beneficiary, its successors and assigns, with all powers of sale (if any)
and all statutory rights under the laws of Arizona, and grants to Trustee, for
the benefit of Beneficiary, a security interest in, all of Trustor's present
and hereafter acquired estate, right, title and interest in, to and under the
following (collectively referred to herein as the "Premises"):
(a) That certain real property situated in Maricopa County, Arizona, and
more particularly described in Exhibit "A" attached hereto and incorporated
herein by this reference (the "Land"), together with all buildings,
structures and improvements now or hereafter erected on the Land, together with
all fixtures and items that are to become fixtures thereto (collectively, the
"Improvements");
(b) All and singular the easements, rights-of-way, licenses, permits,
rights of use or occupancy, privileges, tenements, appendages, hereditaments and
appurtenances and other rights and privileges attached or belonging to the Land
or Improvements or in any way pertaining thereto, whether now or in the future,
and all the rents, issues and profits from the Land or Improvements;
(c) The land lying within any street, alley, avenue, roadway or right-of-
way open or proposed or hereafter vacated in front of or adjoining the Land; and
all right, title and interest, if any, of Trustor in and to any strips and gores
adjoining the Land;
(d) All machinery, apparatus, equipment, goods, systems, building
materials, carpeting, furnishings, fixtures and property of every kind and
nature whatsoever, now or hereafter located in or upon or affixed to the Land or
Improvements, or any part thereof, or used or usable in connection with any
construction on or any present or future operation of the Land or Improvements,
now owned or hereafter acquired by Trustor, including, but without limitation of
the generality of the foregoing: all heating, lighting, refrigerating,
ventilating, air-conditioning, air-cooling, fire extinguishing, plumbing,
cleaning, telephone, communications and power equipment, systems and apparatus;
and all elevators, switchboards, motors, pumps, screens, awnings, floor
coverings, cabinets, partitions, conduits, ducts and compressors; and all cranes
and craneways, oil storage, sprinkler/fire protection and water service
equipment; and also including any of such property stored on the Land or
Improvements or in warehouses and intended to be used in connection with or
incorporated into the Land or Improvements or for the pursuit of any other
activity in which Trustor may be engaged on the Land or Improvements, and
including without limitation all tools, musical instruments and systems, audio
or video equipment, cabinets, awnings, window shades, venetian blinds, drapes
and drapery rods and brackets, screens, carpeting and other window and floor
coverings, decorative fixtures, plants, cleaning apparatus, and cleaning
equipment, refrigeration equipment, cables, computers and computer equipment,
software, books, supplies, kitchen equipment, appliances, tractors, lawn mowers,
ground sweepers and tools, swimming pools, whirlpools, recreational or play
equipment together with all substitutions, accessions, repairs, additions and
replacements to any of the foregoing; it being understood and agreed that all
such machinery, equipment, apparatus, goods, systems, fixtures, and property
are a part of the Improvements and are declared to be a portion of the security
for the Indebtedness (whether in single units or centrally controlled, and
whether physically attached to said real estate or not),
excluding, however, personal property owned by tenants of the Land or
Improvements; and
(e) Any and all awards, payments or insurance proceeds, including interest
thereon, and the right to receive the same, which may be paid or payable with
respect to the Land or Improvements or other properties described above as a
result of: (1) the exercise of the right of eminent domain or action in lieu
thereof; or (2) the alteration of the grade of any street; or (3) any fire,
casualty, accident, damage or other injury to or decrease in the value of the
Land or Improvements or other properties described above, to the extent of all
amounts which may be secured by this Deed of Trust at the date of receipt of
any such award or payment by Trustor or Beneficiary, and of the reasonable
counsel fees, costs and disbursements incurred by Trustor or Beneficiary in
connection with the collection of such award or payment. Trustor agrees to
execute and deliver, from time to time, such further instruments as may be
requested by Beneficiary to confirm such assignment to Beneficiary of any
such award or payment.
The parties intend the definition of Premises to be broadly construed and
in the case of doubt as to whether a particular item is to be included in the
definition of Premises, the doubt should be resolved in favor of inclusion.
TO HAVE AND TO HOLD the Premises with all rights, privileges and
appurtenances thereunto belonging, and all income, rents, royalties, revenues,
issues, profits and proceeds therefrom, unto Beneficiary, its successors and
assigns, forever, for the uses and purposes herein expressed.
THIS DEED OF TRUST IS GIVEN TO SECURE PAYMENT OF THE FOLLOWING all of which
shall be included in the term "Indebtedness", as initially defined above):
Payment of the Note; payment of such additional sums with interest thereon which
may hereafter be loaned to Trustor by Beneficiary pursuant to the Note, the
Other Note, or the Deed of Trust or otherwise advanced under the Loan Documents
(the "Loan), including without limitation advances made by Beneficiary to
protect the Premises or the lien of this Deed of Trust or to pay taxes,
assessments, insurance premiums, and all other amounts that Trustor has agreed
to pay pursuant to the provisions hereof or that Beneficiary has incurred by
reason of the occurrence of an Event of Default (as hereinafter defined),
including without limitation, advances made to enable the completion of the
Improvements or any restoration thereof, even though the aggregate
amount outstanding at any time may exceed the
original principal balance stated herein and in the Note; and the due, prompt
and complete performance of each and every covenant, condition and agreement
contained in this Deed of Trust, the Note, and every other agreement,
document and instrument to which reference is expressly made in this Deed of
Trust or which at any time evidences or secures the Indebtedness evidenced by
the Note (this Deed of Trust, the Note and all such other agreements, documents
and instruments, but excluding the certain Environmental Indemnification
Agreement executed by Trustor, are hereinafter sometimes collectively
referred to as the "Loan Documents"), and
payment of the Other Note and other obligations related thereto, as set forth in
the Cross-Collateralization Rider attached hereto as Exhibit B. Trustor hereby
warrants that Trustor has good and marketable title to the Premises, is lawfully
seized and possessed of the Premises and every part thereof, and has the right
to convey same; that Trustor will forever warrant and defend the title to the
Premises unto Beneficiary against the claims of all persons whomsoever; and that
the Premises are unencumbered except as set forth on Beneficiary's title
insurance policy dated on or about even date herewith regarding the Premises.
2. Maintenance, Repair and Restoration of Improvements, Payment of Prior
Liens, etc. Trustor shall: (a) promptly repair, restore or rebuild any
Improvements now or hereafter on the Premises which may become damaged or be
destroyed, such Improvements to be of at least equal value and substantially the
same character as prior to such damage or destruction; (b) keep the Premises in
good condition and repair, without waste, and free from mechanics' liens or
other liens or claims for lien (except the lien of current general taxes
duly levied and assessed but not yet due and payable);
(c) immediately pay when due or within any
applicable grace period any indebtedness which may be secured by a lien or
charge on the Premises (no such lien, except for current general taxes
duly levied and assessed but not yet payable, to be permitted hereunder), and
upon request exhibit satisfactory evidence to Beneficiary of the discharge of
such lien; (d) complete within a reasonable time any Improvements now or at any
time in process of erection upon the Land; (e) comply in all material respects
with all requirements of law (including, without limitation, pollution control
and environmental protection laws and laws relating to the accommodation of
persons with disabilities), ordinance or other governmental regulation in
effect from time to time affecting the Premises and the use thereof, and
covenants, easements and restrictions of record with respect to
the Premises and the use thereof; (f) make
no material alterations in the Premises; (g) suffer or permit no material change
in the general nature of the use of the Premises, without Beneficiary's written
consent; (h) initiate or acquiesce in no zoning reclassification or variance
with respect to the Premises without Beneficiary's written consent; and
(i) pay each item of Indebtedness when due according to the terms hereof or
of the Note.
3. Payment of Taxes. Trustor shall pay thirty (30) days before any
delinquency or any penalty or interest attaches all general taxes, special
taxes, special assessments, water charges, sewer service charges, and all
other charges against the Premises of any nature whatsoever when due, and shall,
upon written request, furnish to Beneficiary duplicate receipts therefor.
3A. Contest of Impositions.
Notwithstanding anything contained herein to the contrary, Trustor shall not
be required to pay or discharge any taxes, assessments or other charges of the
nature referred to in Paragraphs 2 and 3 so long as the Trustor shall in good
faith contest the same or the validity thereof by appropriate legal proceedings
which shall operate to prevent the collection of the levy, lien or imposition so
contested and the sale of the Premises, or any part thereof, to satisfy any
obligation arising therefrom, provided that the Trustor shall give such security
as may be demanded by Beneficiary to insure such payments and prevent any sale \
or forfeiture of the Premises by reason of such nonpayment, failure of
performance or contest by Trustor. Any such contest shall be prosecuted with
due diligence and the Trustor shall promptly after final determination thereof
pay the amount of any levy, lien or imposition so determined, together with all
interest and penalties, which may be payable in connection therewith.
Notwithstanding the provisions of this Paragraph, Trustor shall (and if Trustor
shall fail so to do, Beneficiary may but shall not be required to)
pay any such levy, lien or imposition notwithstanding such contest
if in the reasonable opinion of the Beneficiary, the Premises shall be in
jeopardy or in danger of being forfeited or foreclosed.
4. Tax Deposits. Upon written request of Beneficiarty, Trustor covenants and
agrees to deposit with such depositary as the Beneficiary from time to time may
in writing appoint, and in the absence of such appointment, then at the office
of Beneficiary, c/o ING Investment Management LLC, 5780 Powers Ferry Road, NW,
Suite 300, Atlanta, Georgia 30327-4349, Attention: Mortgage Loan Servicing
Department, commencing on the date of disbursement of the loan secured hereby
and on the first day of each month following the month in which said
disbursement occurred until the Indebtedness is fully paid, a sum equal to
one-twelfth (1/12th) of the last total annual taxes and assessments for the
last ascertainable year (if the current year's taxes and assessments are not
yet ascertainable) (general and special) on the Premises (unless said
taxes are based upon assessments which exclude the Improvements or any
part thereof now constructed or to be constructed,
in which event the amount of such deposits shall be based upon the Beneficiary's
reasonable estimate as to the amount of taxes and assessments to be levied and
assessed). Such deposits are to be held without any allowance of interest
(unless local law requires otherwise) and are to be used for the payment of
taxes and assessments (general and special) on the Premises next due and
payable when they become due. Upon demand by such depositary, Trustor shall
deliver and pay over to such depositary from time to time such additional sums
or such additional security as are necessary to make up any deficiency in the
amount necessary to enable such depositary to fully pay any of the items
hereinabove mentioned as they become payable. If the funds so deposited
exceed the amount required to pay such items hereinabove mentioned for any
year, the excess shall be applied on a subsequent deposit or deposits
(or refunded to Trustor if in last year of loan).
Said deposits need not be kept separate and apart from any other funds of
Beneficiary or such depositary.
Trustor may deliver a letter of credit to Beneficiary in lieu of escrow
deposits, which letter of credit shall be drawn on an institution and contain
such terms as are satisfactory to Beneficiary in its sole discretion.
If any such taxes or assessments (general or special) shall be levied,
charged, assessed or imposed upon or for the Premises, or any portion thereof,
and if such taxes or assessments shall also be a levy, charge, assessment or
imposition upon or for any other property not covered by the lien of this Deed
of Trust, then the computation of any amount to be deposited under this
Paragraph 4 shall be based upon the entire amount of such taxes or assessments,
and Trustor shall not have the right to apportion the amount of any such taxes
or assessments for the purposes of such computation.
5. Beneficiary's Interest In and Use of Deposits. Upon the occurrence of
an Event of Default, Beneficiary may at its option, without being required to do
so, apply any monies at the time on deposit pursuant to Paragraphs 4 and 7
hereof, on any of Trustor's obligations herein or in the Note or any of the
Loan Documents contained, in such order and manner as the Beneficiary may
elect. When the Indebtedness has been fully paid, any remaining deposits shall
be paid to Trustor or to the then owner or owners of the Premises. A security
interest within the
meaning of the Arizona Uniform Commercial Code ("UCC") is hereby granted to the
Beneficiary in and to any monies at any time on deposit pursuant to Paragraphs 4
and 7 hereof and such monies and all of Trustor's right, title and interest
therein are hereby assigned to Beneficiary, all as additional security for the
Indebtedness and shall in the absence of the occurrence of an Event of Default
be applied by the depositary for the purposes for which made
hereunder and shall not be subject to the direction or control
of Trustor; provided, however, that neither Beneficiary nor
said depositary shall be liable for any failure to apply to the
payment of taxes and assessments and insurance premiums any amount so deposited.
Neither Beneficiary nor any depositary hereunder shall be liable for any act or
omission taken in good faith or pursuant to the instruction of any party but
only for its willful misconduct.
6. Insurance.
(a) Until the Indebtedness is fully paid, the Improvements and all
fixtures, equipment and property therein contained or installed shall be kept
unceasingly insured against loss and damage by such hazards, casualties and
contingencies in such amounts and for such periods as may from time to time be
required by Beneficiary. All insurance shall be written in policies and by
insurance companies approved by Beneficiary which approval shall not be
unreasonably withheld so long as a Best Class rating of at least A XII is
maintained and the policy otherwise conforms to the terms hereof. All policies
of insurance and renewals thereof shall contain standard noncontributory
mortgagee loss payable clauses to Beneficiary
and shall provide for at least thirty (30) days prior written
notice of cancellation to Beneficiary as well as a waiver of
subrogation endorsement, all as required by Beneficiary, in form and content
acceptable to Beneficiary. All policies (or duplicate originals thereof) shall,
with all premiums fully paid, be delivered to Beneficiary as issued at least
thirty (30) days before the expiration of existing policies and shall be held by
Beneficiary until all sums hereby secured are fully paid. Upon request by
Beneficiary, Trustor shall furnish Beneficiary evidence of the replacement cost
of the Improvements. Beneficiary shall not by reason of accepting, rejecting,
approving or obtaining insurance incur any liability for payment of losses.
(b) Without in any way limiting the generality of the foregoing, Trustor
covenants and agrees to maintain insurance coverage on the Premises which shall
include: (i) all risk coverage property insurance (insuring against special
causes of loss) for an amount equal to one hundred percent (100%) of the full
replacement cost of the Improvements, written on a replacement cost basis and
with a replacement cost endorsement (without depreciation),
with no co-insurance (or with an agreed amount endorsement
deleting the co-insurance clause), and containing a mortgagee
clause in Beneficiary's favor; and if at any time a dispute
arises with respect to replacement cost, Trustor agrees to provide at Trustor's
expense, an insurance appraisal prepared by an insurance appraiser approved by
Beneficiary, establishing the full replacement cost in a manner satisfactory to
the insurance carrier; (ii) rent loss insurance insuring against loss arising
out of the perils insured against in the policy or policies referred to in
clause (i) above, in an amount equal to not less than gross
revenue from the Premises for twelve (12) months from the
operation and rental of all Improvements now or hereafter
forming part of the Premises, based upon one hundred percent (100%)
occupancy of such Improvements, less any allocable charges and expenses which do
not continue during the period of restoration and naming Beneficiary in a
standard mortgagee loss payable clause thereunder;
(iii) commercial general liability insurance with a broad
form coverage endorsement for an amount as required from
time to time by the Beneficiary but not less than an aggregate amount of Three
Million and No/100 Dollars ($3,000,000.00) with a single occurrence limit of not
less than Three Million and No/100 Dollars ($3,000,000.00) for claims
arising from any one (1) accident or occurrence in or upon the
Premises and naming Beneficiary as an additional insured thereunder;
(iv) flood insurance whenever in Beneficiary's judgment such
protection is necessary and is available and in such case in an
amount acceptable to Beneficiary and naming Beneficiary as the loss
payee thereunder; (v) insurance covering pressure vessels, pressure piping and
machinery, if any, and all major components of any centralized heating or air-
conditioning systems located in the Improvements, in an amount satisfactory to
Beneficiary, such policies also to insure against physical damage to such
buildings and improvements arising out of peril covered thereunder; (vi)
earthquake insurance; and (vii) such other insurance that may be reasonably
required from time to time by Beneficiary. The earthquake coverage shall be in
the amount of $20,000,000 in total, with a deductible of $100,000 for any of the
Premises located outside California, and the greater of 10% of the loss or
$200,000 for any of the Premises in California constructed prior to 1975, and
the greater of 6% of the loss or $100,000 for any of the Premises constructed in
California during or after 1975.
(c) Trustor shall not take out separate insurance concurrent in form or
contributing in the event of loss with that required to be maintained hereunder.
7. Insurance Premium Deposits. It is further covenanted and agreed that
for the purpose of providing funds with which to pay the premiums as the same
become due on the policies of insurance as herein covenanted to be furnished by
the Trustor, Trustor shall deposit with Beneficiary or the depositary referred
to in Paragraph 4 hereof on the date of disbursement of the proceeds of the loan
secured hereby and on the first day of each month following the month in which
said disbursement occurred, an amount equal to the annual premiums that will
next become due and payable on such policies less any amount then on
deposit with the Beneficiary or such depositary, divided by the number of
months to elapse thirty (30) days prior to the date when such
premiums become delinquent. No interest shall be allowed to Trustor
on account of any deposit or deposits made hereunder and said deposits
need not be kept separate and apart from any other funds of Beneficiary
or such depositary. Trustor may deliver a letter of credit to
Beneficiary in lieu of escrow deposits, which letter of credit shall be drawn on
an institution and contain such terms as are satisfactory to Beneficiary in the
sole discretion.
8. Adjustment of Losses with Insurer and Application of Proceeds of
Insurance.
(a) In case of loss or damage by fire or other casualty, Trustor shall
immediately give Beneficiary and the insurance companies that have insured
against such risks written notice of such occurrence.
(b) In case of loss or damage by fire or other casualty, Trustor shall, if
no Event of Default then exists hereunder, have the reasonable right to settle,
compromise or adjust any claim under, and receive, for the purpose of rebuilding
and restoration, the proceeds arising from, any and all losses payable under
insurance policies to the extent the amount thereof does not exceed One Hundred
Thousand and No/100 Dollars ($100,000), and all claims for losses in excess of
said amount shall be settled, compromised or adjusted only with the mutual
agreement of Trustor and Beneficiary and the proceeds paid as hereinafter
provided. In the event insurance proceeds in excess of One Hundred Thousand and
No/100 Dollars ($100,000) are payable or if an Event
of Default exists hereunder, then in either of such events,
Beneficiary is authorized to collect and receipt
for any insurance proceeds. Insurance proceeds collected by Beneficiary as
aforesaid, after deducting therefrom any expenses incurred in the collection
thereof, shall, if requested by Trustor in writing within thirty (30) days after
the proceeds of insurance covering such damage or destruction become available,
be made available to Trustor for the purpose of paying the cost of rebuilding or
restoring of the Improvements if (i) the Premises, in Beneficiary's reasonable
discretion is capable of being restored to that condition which existed
immediately prior to the damage or loss, (ii) the insurance proceeds, together
with all other funds which are to be provided by Trustor, are sufficient to
restore the Premises, (iii) Beneficiary determines that income from the Premises
shall not be materially affected following the completion of the restoration or
rebuilding; and (iv) no Event of Default then exists hereunder or under any
other Loan Document, and no circumstance or condition exists
that would constitute an Event of Default upon the giving of
notice or the passage of time, or both. In the
event that Beneficiary makes said proceeds available to Trustor to pay the cost
of rebuilding or restoring of the Improvements, such proceeds shall be made
available in the manner and under the conditions that the Beneficiary may
reasonably require to assure proper application of such proceeds. In the event
such insurance proceeds are made available by the Beneficiary, the Trustor shall
pay all costs incurred by Beneficiary in connection with the application of such
insurance proceeds (including but not limited to reasonable costs incurred by
Beneficiary, and a title company or agent approved by Beneficiary in overseeing
the disbursement of such insurance proceeds). The Improvements shall be
restored or rebuilt so as to be of at least equal value and
substantially the same character as prior to such damage or destruction.
If the projected cost of rebuilding, repairing or restoring
of the Improvements exceeds the sum of One Hundred Thousand
and No/100 Dollars ($100,000), then insurance proceeds shall not
be made available to Trustor unless and until Beneficiary has approved plans and
specifications for the proposed rebuilding and restoration, which approval shall
not be unreasonably withheld. If the proceeds are to be made available by
Beneficiary to Trustor to pay the cost of said rebuilding or restoration, any
surplus which may remain out of said insurance proceeds after payment of the
costs of rebuilding or restoring the Premises shall, at the option of the
Beneficiary, be applied on account of the Indebtedness or be paid to
any party entitled thereto under such conditions as Beneficiary may
reasonably require. No interest shall be allowed to Trustor on any
proceeds of insurance held by Beneficiary.
(c) In the event proceeds of insurance are not made available to Trustor
for the purpose of paying the cost of the rebuilding or restoring of the
Improvements, Beneficiary, after deducting the costs of any collection,
adjustment and compromise, shall apply such insurance
proceeds in accordance with terms of
the Note upon the Indebtedness, provided that any amount so applied by
Beneficiary in reduction of the outstanding
principal balance of the Note shall be credited
to installments of principal in the inverse order of their maturity but no such
application shall delay or postpone any installment payment of principal and
interest under the Note.
9. Stamp Tax. If, by the laws of the United States of America, or of any
state having jurisdiction over Trustor, any tax is due or becomes due in respect
of the issuance of the Note hereby secured and this Deed of Trust, Trustor
covenants and agrees to pay such tax in the manner required by any such law.
Trustor further covenants to reimburse Beneficiary for any sums which
Beneficiary reasonably expends by reason of the imposition of any tax on the
issuance of the Note secured hereby and this Deed of Trust.
10. Observance of Lease Assignment.
(a) As additional security for the payment of the Note secured hereby and
for the faithful performance of the terms and conditions contained herein,
Trustor, as landlord, has assigned to Beneficiary, by that certain Assignment of
Rents and Leases dated on or about this same date (the "Assignment of Rents"),
all of Trustor's right, title and interest as landlord in and to all leases or
other rights of use and or occupancy of any part of the Premises, both present
and future (hereinafter collectively referred to as the "Leases") and all of the
rents, issues and profits from the Leases or guaranties thereof (hereinafter
collectively referred to as the "Rents").
(b) All Leases entered into after the date hereof shall be bona fide arms-
length transactions with a third party,
(c) Trustor will not, without Beneficiary's prior written consent: (i)
execute an assignment or pledge of any Rents and/or any Leases other than the
Assignment of Rents; or (ii) accept any prepayment of any installment of any
Rents more than thirty (30) days before the due date of such installment, and in
any event no more than thirty (30) days in advance of the then current month.
(d) Trustor at its sole cost and expense will: (i) at all times promptly
and faithfully abide by, discharge and perform in all material respects all of
the covenants, conditions and agreements contained in all Leases, on the part of
the landlord thereunder to be kept and performed; (ii) enforce or secure the
performance of all of the covenants, conditions and agreements of the Leases on
the part of the lessees to be kept and performed; (iii) appear in and defend any
action or proceeding arising under, growing out of or in any manner connected
with the Leases or the obligations, duties or liabilities of landlord or of the
lessees thereunder; (iv) upon written request of Beneficiary, transfer and
assign to Beneficiary, any Lease or Leases heretofore or hereafter entered into,
and make, execute and deliver to Beneficiary upon demand, any and all
instruments required to effectuate said assignment; (v) furnish Beneficiary,
within ten (10) days after a request by Beneficiary so to do,
a written statement containing the names of all
lessees, terms of all Leases, including the spaces occupied and the rentals
payable thereunder; and (vi) exercise within five (5) days of any demand
therefor by Beneficiary any right to request from the lessee under any Lease a
certificate with respect to the status thereof.
(e) Nothing in this Deed of Trust or in any other documents relating to
the loan secured hereby shall be construed to obligate Beneficiary, expressly
or by implication, to perform any of the covenants of Trustor as landlord under
any of the Leases assigned to Beneficiary or to pay any sum of money or damages
therein provided to be paid by the landlord, each and all of which covenants
and payments Trustor agrees to perform and pay.
(f) Trustor will not permit any Lease or any part thereof to become
subordinate to any lien other than the lien hereof.
(g) Beneficiary shall have the option to declare this Deed of Trust in
default because of a default of landlord in any Lease of the Premises unless
such default is cured by Trustor pursuant to the terms of the Lease or unless
such default would not permit the tenant to terminate the Lease.
It is covenanted and agreed that an Event of Default under the
Assignment of Rents shall constitute an
Event of Default hereunder on account of which the whole of the Indebtedness
shall at once, at the option of the Beneficiary, become immediately due and
payable without notice to the Trustor.
(h) Trustor shall not, and shall not permit any tenant to, conduct any on-
site dry cleaning operations on the Premises.
(i) In the event of the enforcement by Beneficiary of the remedies provided
for by law or by this Deed of Trust, the lessee under each Lease of the Premises
shall, at the option of Beneficiary, attorn to any person succeeding to the
interest of Trustor as a result of such enforcement and shall recognize such
successor in interest as landlord under such Lease without change in the terms
or other provisions thereof; provided, however, that said successor in interest
shall not be bound by any payment of rent or additional rent for more than one
month in advance or any amendment or modification
to any Lease made without the consent of Beneficiary
or said successor in interest (unless such consent was not required
under the terms hereof). Each lessee, upon request by
said successor in interest, shall execute and deliver an instrument
or instruments confirming such attornment.
11. Effect of Extension of Time. If the payment of the Indebtedness, or
any part thereof, is extended or varied, or if any part of any security for the
payment of the Indebtedness is released, or if any person or entity liable
for the payment of the Indebtedness is released, or if
Beneficiary takes other or additional security for the
payment of the Indebtedness, or if Beneficiary waives
or fails to exercise any right granted herein, or in the Note secured hereby, or
in any other instrument given to secure the payment hereof, then all persons now
or at any time hereafter liable for the payment of the Indebtedness, or any part
thereof, or interested in the Premises shall be
held to assent to such extension, variation, release,
waiver, failure to exercise or the taking of additional
security, and their liability and the lien and all provisions hereof shall
continue in full force, the right of recourse against all such persons being
expressly reserved by Beneficiary, notwithstanding such extension, variation,
release, waiver, failure to exercise, or the taking of additional security.
12. Effect of Changes in Laws Regarding Taxation. In the event of the
enactment after this date of any law of the state in which the Premises are
located deducting from the value of the Premises for the purpose of taxation any
lien thereon, or imposing upon the Beneficiary the payment of the whole or any
part of the taxes or assessments or charges or liens herein required to be paid
by Trustor, or changing in any way the laws relating to the taxation of
mortgages or debts secured by mortgages or Beneficiary's interest in the
Premises, or the manner of collection of taxes,
so as to affect this Deed of Trust or the debt
secured hereby or the holders thereof, then, and
in any such event, Trustor, upon demand by Beneficiary,
shall pay such taxes or assessments, or reimburse
Beneficiary therefor if Beneficiary pays such taxes and submits proof of payment
to Trustor; provided, however, that if in the opinion of counsel for
Beneficiary:
(a) it might be unlawful to require Trustor to make such payment, or (b) the
making of such payment might result in the imposition of interest beyond the
maximum amount permitted by law; then and in such event, Beneficiary may elect,
by notice in writing given to Trustor, to declare all of the Indebtedness to be
and become due and payable sixty (60) days from the giving of such notice,
without the applicable Prepayment Premium (as defined in the Note).
13. Beneficiary's Performance of Defaulted Acts. Upon the occurrence of
an Event of Default herein, Beneficiary may, but need not, and whether electing
to declare the whole of the Indebtedness due and payable or not, and without
waiver of any other remedy, make any payment or perform any act herein required
of Trustor in any form and manner deemed expedient, and may, but need not, make
full or partial payments of principal or interest on prior encumbrances, if any,
and purchase, discharge, compromise or
settle any tax lien or other prior lien or
title or claim thereof, or redeem from any tax sale or forfeiture affecting the
Premises or contest any tax or assessment or cure any default of Trustor as
landlord in any Lease. All monies paid
for any of the purposes herein authorized
and all expenses paid or incurred in connection therewith, including reasonable
attorneys' fees, and any other monies
advanced by Beneficiary in regard to any tax
referred to in Paragraphs 9 and 12 hereof or to protect the Premises or the lien
hereof, shall be additional Indebtedness and shall become immediately due and
payable without notice and with interest thereon at the Default Rate of interest
set forth in the Note. Inaction of Beneficiary shall never be considered as a
waiver of any right accruing to it on account of any Event of Default on the
part of Trustor.
14. Beneficiary's Reliance on Tax Bills, Etc. Beneficiary in making any
payment hereby authorized: (a) relating to taxes and assessments, may do so
according to any bill, statement or estimate
procured from the appropriate public
office without inquiry into the accuracy of such bill, statement or estimate or
into the validity of any tax, assessment, sale, forfeiture, tax lien or title or
claim thereof; or (b) relating to insurance premiums, may do so according to any
bill or statement procured from the appropriate company without inquiry into the
accuracy of such bill or statement; or (c) for the purchase, discharge,
compromise or settlement of any other prior lien, may do so only with inquiry
as to the validity or amount of any claim for lien which may be asserted.
15. Acceleration of Indebtedness in Event of Default. It is expressly
agreed by Trustor that time is of the essence hereof and that the whole of the
Indebtedness shall become immediately due and payable without notice to Trustor
at the option of the Beneficiary upon the occurrence of one or more of the
following events (hereinbefore and hereinafter
collectively referred to as "Events
of Default" and individually referred to as
an "Event of Default"), together with
a prepayment premium in the amount, if any, required to be paid pursuant to the
terms of the Note in the event of a prepayment:
(a) nonpayment of any monetary sum due hereunder within ten (10) days
after the same shall become due; or
(b) default shall be made in the due observance or performance of the
terms and conditions of Paragraph 6 hereof (Insurance) or Paragraph 29 hereof
(Due on Sale or Further Encumbrance); or
(c) default shall be made in the due observance or performance of any of
the other covenants, agreements or conditions hereinbefore or hereinafter
contained, required to be kept or performed or observed by the Trustor which
does not relate to the nonpayment of any
monetary sum, and such default is not cured
within thirty (30) days following written
notice thereof by Beneficiary to Trustor
or within such longer period of time, not exceeding an additional thirty (30)
days, as may be reasonably necessary to cure such non-compliance if Trustor is
diligently and with continuity of effort pursuing such cure and the failure is
susceptible of cure within an additional period of thirty (30) days, unless
Beneficiary approves a longer period of time; or
(d) the entry of a decree or order for relief by a court having
jurisdiction in respect of Trustor, a general partner of Trustor if
Trustor is a partnership,
the beneficiary or beneficiaries of Trustor if Trustor is a trust, a managing
member of Trustor if Trustor is a limited liability company, or any guarantor of
the Note secured hereby (any of the foregoing parties
being referred to herein as a "Key Party"), in any
involuntary case under the federal bankruptcy laws now or
hereafter constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, or for the appointment of a
receiver, liquidator, assignee, custodian, trustee,
sequestrator (or other similar official) for any Key
Party or any substantial part of the property of any such Key Party, or for the
winding up or liquidation of the affairs of any Key Party and the continuance of
any such decree or order unstayed and in effect for a period of sixty (60)
consecutive days; or
(e) the commencement by any Key Party, of a voluntary case under federal
bankruptcy laws, as now constituted or hereafter amended, or any
other applicable federal or state bankruptcy, insolvency or any other
similar laws or the consent by any such Key Party to the
appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of any Key Party, or of any substantial
part of the property of any such person
or entity, or the making by any such Key Party of an assignment for the benefit
of creditors or the failure of any such Key Party generally to pay the debts of
any such Key Party as such debts become due, or the taking of action by any such
Key Party in furtherance of any of the foregoing, unless such case, receiver,
assignment, or action is dismissed or rescinded within sixty (60) days; or
(f) the death of any guarantor of the Note secured hereby, unless a
substitute guarantor or guarantors having a net worth or an aggregate net worth,
as the case may be, equal to or greater than the net worth of the decedent upon
the date hereof shall become liable by assumption under the guaranty within
thirty (30) days of the death of such guarantor; or
(g) any warranty, representation, certification, financial statement, or
other information furnished or to be furnished to Beneficiary by or on behalf of
Trustor or any guarantor of the Note to induce Beneficiary to loan the money
evidenced by the Note proves to have been inaccurate or false in any material
respect when made; or
(h) any breach, default, event of default or failure of performance
(however denominated) under the Note, any of the other Loan Documents, the Other
Note, or the Other Security Documents, and the expiration of any applicable cure
period without the same having been cured; or
(i) Trustor shall be, in any material respect, in default of, or in
violation of, beyond any applicable grace or cure period, any conditions,
covenants or restrictions which benefit or burden the Premises.
If, while any insurance proceeds or condemnation awards are being held by
Beneficiary to reimburse Trustor for the cost of rebuilding or restoration of
buildings or improvements on the Premises, Beneficiary shall accelerate the
Indebtedness, then and in such event, the Beneficiary shall be entitled to apply
all such insurance proceeds and condemnation awards then held by it in reduction
of the Indebtedness and any excess held by it over the amount of Indebtedness
then due hereunder shall be returned to Trustor or any other party entitled
thereto without interest.
16. Acceleration of Indebtedness; Remedies.
(a) Primary Remedies. If an Event of Default shall occur, Beneficiary may:
declare the Indebtedness to be and the same shall be, immediately due and
payable without presentment, demand, protest
or notice of any kind, all of which are hereby
expressly waived and without regard to the value of the property held as
security for the Indebtedness or the solvency of any person liable for the
payment of such Indebtedness; and/or exercise any other right,
power or remedy available to it at law or in equity,
hereunder or under any other Loan Document without
demand, protest or notice of any kind, all of which are
hereby expressly waived, except such as is expressly
required hereby or by such other Loan Document.
Without limiting the generality of the foregoing, Beneficiary may:
(i) enter and take possession of the Premises or any part
thereof, exclude Trustor and all persons claiming under Trustor wholly
or partly therefrom, and operate, use, manage and control the same, or
cause the same to be operated by a person selected by Beneficiary,
either in the name of Trustor or otherwise, and upon such entry, from
time to time, at the expense of Trustor and of the Premises, make all
such repairs, replacements, alterations, additions or improvements
thereto as Beneficiary may deem proper, and to lease the Premises or
any part thereof at such rental and to such persons as it may deem
proper and collect and receive the rents, revenues, issues, profits,
royalties, income and benefits thereof including, without limitation,
those past due and those thereafter accruing, with the right of
Beneficiary to terminate, cancel or otherwise enforce any Lease or
sublease for any default that would entitle Trustor to terminate,
cancel or enforce same and apply the same to the payment of all
expenses which Beneficiary may be authorized to incur under the
provisions of this Deed of Trust and applicable laws, the remainder to
be applied to the payment, performance and discharge of the
Indebtedness in such order as Beneficiary may determine until the same
have been paid in full;
(ii) institute an action for the foreclosure of this Deed of
Trust and the sale of the Premises pursuant to the judgment or decree
of a court of competent jurisdiction;
(iii) sell the Premises to the highest bidder or bidders at
public auction at a sale or sales held at such place or places and
time or times and upon such notice and otherwise in such manner as may
be required by law, or in the absence of any such requirement, as
Beneficiary may deem appropriate, and from time to time adjourn such
sale by announcement at the time and place specified for such sale or
for such adjourned sale or sales without further notice except such as
may be required by law;
(iv) take all action to protect and enforce the rights of
Beneficiary under this Deed of Trust by suit for specific performance
of any covenant herein contained, or in aid of the execution of any
power herein granted or for the enforcement of any other rights;
(v) exercise any or all of the rights and remedies available to
a secured party under the UCC, including the right to (A) enter the
Premises and take possession of any personal property without demand
or notice and without prior judicial hearing or legal proceedings,
which Trustor hereby expressly waives, (B) require Trustor to assemble
any personal property, or any portion thereof, and make it available
to Beneficiary at a place or places designated by Beneficiary and
reasonably convenient to both parties and (C) sell all or any portion
of the personal property at public or private sale, without prior
notice to Trustor except as otherwise required by law (and if notice
is required by law, after ten days' prior written notice), at such
place or places and at such time or times and in such manner and upon
such terms, whether for cash or on credit, as Beneficiary in its sole
discretion may determine. As to any property subject to Article 9 of
the UCC included in the Premises, Beneficiary may proceed under the
UCC or proceed as to both real and personal property in accordance
with the provisions of this Deed of Trust and the rights and remedies
that Beneficiary may have at law or in equity, in respect of real
property, and treat both the real and personal property included in
the Premises as one parcel or package of security. Trustor shall have
the burden of proving that any such sale pursuant to the UCC was
conducted in a commercially unreasonable manner;
(vi) terminate any management agreements, contracts, or
agents/managers responsible for the property management of the
Premises, if in the sole discretion of Beneficiary such property
management is unsatisfactory in any respect;
(vii) foreclose this Deed of Trust, at Beneficiary's option, by
judicial or non-judicial foreclosure, for the entire unpaid amount of
the Indebtedness, or only as to the sum past due, with interest and
costs without injury to this Deed of Trust or the displacement or
impairment of the remainder of the lien thereof, and at such
foreclosure sale the Premises shall be sold subject to all remaining
items of the Indebtedness and Beneficiary may again foreclose, in the
same manner, as often as there may be any sum past due. In case of
sale in any action or proceeding to foreclose this Deed of Trust, the
Beneficiary shall have the right to sell the Premises covered hereby
in parts or as an entirety. It is intended hereby to give to the
Beneficiary the widest possible discretion permitted by law with
respect to all aspects of any such sale or sales.
(viii) if an Event of Default occurs due to the nonpayment of the
Indebtedness, or any part thereof, as an alternative to the right of
foreclosure for the full Indebtedness after acceleration thereof,
Beneficiary shall have the right to institute proceedings, either
judicial or non-judicial, at Beneficiary's option, for partial
foreclosure with respect to the portion of said Indebtedness so in
default, as if under a full foreclosure, and without declaring the
entire Indebtedness due (such proceedings being hereinafter referred
to as "Partial Foreclosure"), and provided that if a foreclosure sale
is made because of an Event of Default in the payment of a part of the
Indebtedness, such sale may be made subject to the continuing lien of
this Deed of Trust for the unmatured part of the Indebtedness; and it
is agreed that such sale pursuant to a Partial Foreclosure, if so
made, shall not in any manner affect the unmatured part of the
Indebtedness, but as to such unmatured part, this Deed of Trust and
the lien thereof shall remain in full force and effect just as though
no foreclosure sale had been made under the provisions of this
Paragraph. Notwithstanding any Partial Foreclosure, Beneficiary may
elect, at any time prior to sale pursuant to such Partial Foreclosure,
to discontinue such Partial Foreclosure and to accelerate the
Indebtedness by reason of any Event of Default upon which such Partial
Foreclosure was predicated or by reason of any other further Event of
Default, and proceed with full foreclosure proceedings. It is further
agreed that several foreclosures may be made pursuant to Partial
Foreclosure without exhausting the right of full or Partial
Foreclosure sale for any unmatured part of the Indebtedness, it being
the purpose to provide for a Partial Foreclosure sale of the
Indebtedness hereby without exhausting the power to foreclose and to
sell the Mortgaged Property pursuant to any such Partial Foreclosure
for any other part of the Indebtedness, whether matured at the time or
subsequently maturing, and without exhausting any right of
acceleration and full foreclosure.
(b) Receiver. If an Event of Default shall occur, Beneficiary shall be
entitled as a matter of right to the appointment of a receiver of the Premises
and the rents, revenues, issues, profits, royalties, income and benefits
thereof, without notice or demand, and without regard
to the adequacy of the security for
the Indebtedness, the value of the Premises or the solvency of Trustor, either
before or after any sale, and, Beneficiary may be appointed as such receiver.
Such receiver shall have the power: (i) to collect the rents, issues and profits
of the Premises during the pendency of any foreclosure proceedings whether by
judicial or non-judicial foreclosure, and, in case of a sale and a deficiency,
for such time when Trustor, except for the intervention of
such receiver, would be entitled to collect such rents,
issues and profits, to the maximum time and extent
permitted by law; (ii) to extend or modify any then existing Leases and to make
new leases, which extensions, modifications and new leases may provide for terms
to expire, or for options to leases to extend or renew terms to expire, beyond
the maturity date of the Note and beyond the date of the
issuance of a deed or deeds to a purchaser or purchasers
at a foreclosure sale, it being understood and agreed
that any such leases, and the options or other such provisions to be contained
therein, shall be binding upon Trustor and all persons whose interests in the
Premises are subject to the lien hereof and upon the purchaser or purchasers at
any foreclosure sale, notwithstanding any redemption from sale, discharge of the
secured obligations, satisfaction of any foreclosure decree, or issuance of any
certificate of sale or deed to any purchaser; and
(iii) all other powers which may
be necessary or are usual in such case for the protection, possession, control,
management, and operation of the Premises during the whole of said period. The
court from time to time may authorize
the receiver to apply the net income in the
receiver's hands in payment in whole or in part of: (i) the Indebtedness and all
obligations hereunder, or by any decree foreclosing this Deed of Trust, or in
accordance with applicable non-judicial foreclosure provisions, any tax, special
assessment or other lien which may be or
become superior to the lien hereof or of
such decree; and (ii) if this is a leasehold
mortgage, all rents due or which may
become due under the underlying lease.
(c) Sales by Parcels. In any sale made under or by virtue of this Deed of
Trust or pursuant to any judgment or decree of court, the Premises may be sold
in one or more parts or parcels or as an entirety
and in such order as Beneficiary may elect, without
regard to the right of Trustor, or any person claiming under
it, to the marshaling of assets. To the full extent permitted by law, Trustor
waives the marshaling of assets.
(d) Effect of Sale. The purchaser at any sale made under or by virtue of
this Deed of Trust or pursuant to any judgment or decree of court shall take
title to the Premises or the part thereof so sold free and
discharged of the estate of Trustor therein, the purchaser
being hereby discharged from all liability to see to the
application of the purchase money. Any person, including Beneficiary, may
purchase at any such sale. Beneficiary is hereby irrevocably appointed the
attorney-in-fact of Trustor in its name and stead to make all appropriate
transfers and deliveries of the Premises or any portions thereof so sold and,
for this purpose, Beneficiary may execute all appropriate
instruments of transfer, and may substitute one or more
persons with like power, Trustor hereby ratifying and
confirming all that its said attorneys or such substitute or substitutes shall
lawfully do by virtue hereof. Nevertheless, promptly upon Beneficiary's written
request, Trustor shall ratify and confirm, or cause to be ratified and
confirmed, any such sale or sales by executing and
delivering, or by causing to be executed and delivered,
to Beneficiary or to such purchaser or purchasers all such
instruments as may be advisable, in the judgment of Beneficiary, for the
purpose, and as may be designated, in such request.
Any sale or sales made under or by
virtue of this Deed of Trust, to the extent not prohibited by law, shall operate
to divest all the estate, right, title, interest, property, claim and demand
whatsoever, whether at law or in equity, of Trustor in, to and under
the Premises, or any portions thereof so sold, and
shall be a perpetual bar both at law and in
equity against Trustor, its successors and assigns, and against any and all
persons claiming or who may claim the same, or any part thereof, by, through or
under Trustor, or its successors or assigns. The powers and agency herein
granted are coupled with an interest and are irrevocable.
(e) Eviction of Trustor After Sale. If Trustor fails or refuses to
surrender possession of the Premises after any sale thereof, Trustor shall be
deemed a tenant at sufferance, subject to eviction by means of forcible entry
and detainer proceedings, provided, that this remedy is not exclusive or in
derogation of any other right or remedy available to Beneficiary or any
purchaser of the Premises under any provision of this Deed of Trust or pursuant
to any judgment or decree of court.
(f) Insurance Policies. In the event of a foreclosure sale pursuant to
this Deed of Trust or other transfer of title or assignment of the Premises in
extinguishment, in whole or in part, of the Indebtedness, all right, title and
interest of Trustor in and to all policies of insurance required under the
provisions of this Deed of Trust shall inure to the benefit of and pass to the
successor in interest of Trustor or the purchaser or grantee of the Premises or
any part thereof so transferred.
(g) Foreclosure; Expense of Litigation. When the Indebtedness hereby
secured, or any part thereof shall become due, whether by acceleration or
otherwise, Beneficiary shall have the right to foreclose the lien hereof for
such Indebtedness or part thereof. In any suit to foreclose the lien hereof,
there shall be allowed and included as additional Indebtedness in the decree for
sale all expenditures and expenses which may be paid or incurred by or on
behalf of Beneficiary for reasonable attorneys' fees, appraiser's fees, actual
costs of environmental reviews or audits,
outlays for documentary and expert evidence,
stenographers' charges, publication costs, and costs (which may be estimated as
to items to be expended after entry of the
decree) of procuring all such abstracts
of title, title searches and examinations, title insurance policies, and similar
data and assurances with respect to the title as Beneficiary may deem reasonably
necessary either to prosecute such action or to evidence to bidders at any sale
which may be had pursuant to such decree
the true condition of the title to or the
value of the Premises. All expenditures and expenses of the nature in this
Paragraph mentioned and such expenses and fees as may be incurred in the
protection of the Premises and the maintenance
of the lien of this Deed of Trust, including the
reasonable fees of any attorneys employed by Beneficiary in any
litigation or proceeding affecting this Deed of Trust, the Note or the Premises,
including appellate, probate and bankruptcy proceedings, or in preparations for
the commencement or defense of any proceedings or threatened suit or proceeding
shall be immediately due and payable by Trustor, with interest thereon at the
Default Rate of interest as set forth in the Note and shall be secured by this
Deed of Trust.
(h) Other. Upon an Event of Default under this Deed of Trust, Beneficiary
may declare the entire Indebtedness secured by this Deed of Trust
immediately due and payable by delivery to Trustee of written
declaration of default and demand for sale and of written
notice of default and of election to cause to be sold the
Premises, which notice Trustee shall cause to be filed for record. After the
lapse of such time as may then be required by law following the recordation of
the notice of default, the notice of sale having been given as then required
by law, Trustee, without demand on Trustor, shall sell the Premises at the
time and place fixed by it in the notice of sale,
either as a whole or in separate parcels, and
in such order as it may determine, at public auction to the highest bidder for
cash in lawful money of the United States, payable at such time of sale.
Beneficiary may make a credit bid, in lieu of cash, at such sale. Trustee may
postpone sale of all or any portion of
the Premises by public announcement at such
time and place of sale, and from time to time thereafter may postpone such sale
by public announcement at the time fixed by the preceding postponement in
accordance with applicable law. Trustee
shall deliver to such purchaser its deed
conveying the Premises so sold, but without any covenant or warranty, express or
implied. The recitals in such deed of any matters or facts shall be conclusive
proof of the truthfulness thereof. Any person, including Trustor, Trustee or
Beneficiary may purchase at such sale. After deducting all costs, fees and
expenses of Trustee and of this Deed of
Trust, including cost of evidence of title
in connection with sale, Trustee shall apply
the proceeds of sale to payment of:
all sums expended under the terms hereof, not then repaid, with accrued interest
at the Default Rate; all other sums then secured hereby; and the remainder, if
any, to the person or persons legally entitled thereto.
17. Application of Proceeds. Subject to the provisions of the Cross-
Collateralization Rider attached hereto as Exhibit B, the proceeds of any sale
made either under the power of sale hereby given or under a judgment, order or
decree made in any action to foreclose or to enforce this Deed of Trust, shall
be applied:
(a) first to the payment of (i) all costs and expenses of such sale,
including reasonable attorneys' fees, environmental
site assessors fees and costs, appraisers' fees and
costs of procuring title searches, title insurance policies
and similar items and (ii) all charges, expenses and
advances incurred or made by Beneficiary in order to
protect the lien or estate created by this Deed of Trust
or the security afforded hereby including any expenses of entering, taking
possession of and operating the Premises;
(b) then to the payment of any other Indebtedness in such order as
Beneficiary may determine until the same have been paid in full; and
(c) any balance thereof shall be paid to Trustor, or to whosoever shall be
legally entitled thereto, or as a court of competent jurisdiction may direct.
18. Beneficiary's Right of Inspection. Beneficiary shall, upon reasonable
notice to Trustor, have the right to inspect the Premises at all reasonable
times and access thereto shall be permitted for that purpose.
19. Condemnation. The Beneficiary may, at its option, in its own name (a)
appear or proceed in any condemnation proceeding, and (b) make any compromise or
settlement thereof, provided that so long as the Trustor promptly prosecutes any
compromise or settlement thereof, the Trustor shall control any compromise or
settlement proceeding with the result thereof being subject to the Beneficiary's
approval. The Trustor shall give the Beneficiary immediate notice of the
initiation of any condemnation proceeding, and a copy of every pleading, notice
and other items served in any condemnation proceeding. Trustor hereby assigns,
transfers and sets over unto the Beneficiary the entire proceeds of any award or
any claim for damages for any of the Premises taken or damaged under the power
of eminent domain or by condemnation. Beneficiary may elect to apply the
proceeds of the award upon or in reduction of the Indebtedness, whether
due or not, or make said proceeds available
for restoration or rebuilding of the Premises. In the
event that Beneficiary elects, in Beneficiary's sole and absolute discretion, to
make said proceeds available to reimburse Trustor for the cost of the rebuilding
or restoration of the Improvements, such proceeds shall be made available in the
manner and under the conditions that Beneficiary may require. In any event, the
Improvements shall be restored or rebuilt in accordance with plans and
specifications to be submitted to and approved by Beneficiary prior to
commencement of any building or restoration. If the proceeds are made available
by Beneficiary to reimburse Trustor for the cost of said rebuilding or
restoration, any surplus which may remain out of said
award after payment of such cost of rebuilding or
restoration shall at the option of Beneficiary be applied
on account of the Indebtedness or be paid to any party entitled thereto. No
interest shall be allowed to Trustor on the proceeds of any award held by the
Beneficiary.
20. Release Upon Payment and Discharge of Trustor's Obligations.
Beneficiary shall release this Deed of Trust and the lien thereof by proper
instrument upon payment and discharge of all Indebtedness including any
prepayment premium provided for herein or in the Note secured hereby.
21. Giving of Notice. (a) All notices, demands, requests, and other
communications desired or required to be given hereunder ("Notices"), shall be
in writing and shall be given by: (i) hand delivery to the address for Notices;
(ii) delivery by overnight courier service to the address for Notices; or (iii)
sending the same by United States mail, postage prepaid, certified mail, return
receipt requested, addressed to the address for Notices.
(b) All Notices shall be deemed given and effective upon the earlier to
occur of: (i) the hand delivery of such Notice to the address for Notices; (ii)
one business day after the deposit of such Notice with an overnight courier
service by the time deadline for next day delivery addressed to the address for
Notices; or (iii) three business days after depositing the Notice in the United
States mail, postage prepaid, as set forth in (a)(iii) above. All Notices shall
be addressed to the following addresses:
Trustor: Bedford Property Investors, Inc.
270 Lafayette Circle
Lafayette, CA 94549
Attn: Chief Financial Officer
Beneficiary: Security Life of Denver Insurance Company
c/o ING Investment Management LLC
5780 Powers Ferry Road, NW, Suite 300
Atlanta, Georgia, 30327-4349
Attention: Mortgage Loan Servicing Department
and
ING Investment Management LLC
5780 Powers Ferry Road, NW, Suite 300
Atlanta, Georgia, 30327-4349
Attention: Real Estate Law Department
With a copy to: Nyemaster, Goode, Voigts, West,
Hansell & O'Brien, P.C.
700 Walnut, Suite 1600
Des Moines, Iowa 50309
or to such other persons or at such other place as any party hereto may by
Notice designate as a place for service of Notice. Provided,
that the "copy to" Notice to be given as set forth
above is a courtesy copy only; and a Notice given to such
person is not sufficient to effect giving a Notice to the principal party, nor
does a failure to give such a courtesy copy of a Notice constitute a failure to
give Notice to the principal party.
22. Waiver of Defense. No action for the
enforcement of the lien or of any provision hereof
shall be subject to any defense which would not be good and
available to the party interposing same in an action at law or in equity
upon the Note hereby secured.
23. Waiver of Statutory Rights. Trustor shall not, and will not, apply
for or avail itself of any homestead, appraisement, valuation, stay,
extension or exemption laws, or any so-called
"Moratorium Laws", now existing or hereafter
enacted, in order to prevent or hinder the enforcement
or foreclosure of this Deed
of Trust, but to the extent lawfully allowed hereby waives the benefit of such
laws. Trustor, for itself and all who may claim through or under it, waives any
and all right to have the property and estates comprising the Premises marshaled
upon any foreclosure of the lien hereof and agrees that any court having
jurisdiction to foreclose such lien may order the Premises sold as an entirety.
To the extent permitted by law, Trustor does hereby expressly waive any and all
rights of redemption from sale under any order or decree of foreclosure of this
Deed of Trust on behalf of Trustor, the trust estate and all persons
beneficially interested therein and each and every person, acquiring any
interest in or title to the Premises subsequent to the date of this Deed
of Trust.
24. Furnishing of Financial Statements to Beneficiary. (a) Trustor
covenants and agrees that it will keep and maintain books and records of
account, or cause books and records of account to be kept and
maintained in which full, true and correct entries
shall be made of all dealings and transactions relative
to the Premises and Trustor, which books and records of account shall, at
reasonable times during business hours and on reasonable notice, be open to
inspection by Beneficiary and Beneficiary's accountants
and other duly authorized representatives.
Such books of record and account shall be kept and maintained
as follows:
(i) An annual operating statement on each property comprising
the Premises shall be kept and maintained in accordance with a cash
basis of accounting consistently applied; and
(ii) All other financial information, including balance sheets,
income statements and cash flow statements, shall be kept and
maintained in accordance with generally accepted accounting principles
consistently applied.
(b) Trustor covenants and agrees to furnish, or cause to be furnished to
Beneficiary, annually, within ninety (90) days following the end of each fiscal
year of Trustor a copy of a report of the operations of the Premises, including
a balance sheet and supporting schedules and containing a detailed statement of
income and expenses and a current rent roll of the Premises. Trustor shall
simultaneously deliver to Beneficiary a financial statement of Trustor, and each
of its general partners if Trustor is a partnership, prepared in accordance with
the accounting requirements set forth above, certified by Trustor, or an
officer, manager or a general partner of any corporate, limited liability
company or partnership Trustor. Each report or statement shall be certified as
correct by the appropriate party.
(c) If Trustor omits to deliver as required any report or statement
required by this Paragraph 24, and said omission is not cured by Trustor within
thirty (30) days after written notice of such omission has been given by
Beneficiary to Trustor, Beneficiary may elect, in addition to exercising any
remedy for an Event of Default as provided for in this Deed of Trust, to make an
audit of all books and records of Trustor including its bank accounts which in
any way pertain to the Premises and to prepare the statement or statements which
Trustor failed to procure and deliver. Such audit shall be made and such
statement or statements shall be prepared by an independent certified public
accountant to be selected by Beneficiary. Trustor shall pay all reasonable
expenses of the audit and other services, which expenses shall be secured hereby
as additional Indebtedness and shall be immediately due and payable with
interest thereon at the Default Rate of interest as set forth in the Note and
shall be secured by this Deed of Trust.
25. Filing and Recording Fees. Trustor will pay all filing, registration
or recording fees and all reasonable expenses incident to the execution and
acknowledgment of this Deed of Trust and all federal, state, county and
municipal taxes and other taxes, duties,
imposts, assessments and charges arising out of or
in connection with the execution and delivery of
said Note and this Deed of Trust.
26. Business Purpose. Trustor represents, covenants and agrees that all
of the proceeds of the Note secured by this Deed of Trust will be used
solely for business purposes and in furtherance of the regular business
affairs of Trustor.
27. Exculpatory. The liability of the Trustor personally to pay the Note
or any interest that may accrue thereon, or any Indebtedness or obligation
accruing or arising hereunder is limited to the extent set forth in the Note.
28. Security Agreement. Trustor and Beneficiary agree that this Deed of
Trust shall constitute a security agreement within the meaning of the UCC with
respect to all sums on deposit with the Beneficiary with respect to insurance
proceeds or condemnation proceeds ("Deposits") and with respect to any personal
property and fixtures included in the definition herein of the word "Premises",
which property may not be deemed to form a part of the real estate described in
Exhibit "A" or may not constitute a "fixture" within the meaning of the UCC, and
all replacements of such property, substitutions and additions thereto and the
proceeds thereof, all such property being sometimes hereinafter collectively
referred to as the "Collateral", and that a security interest in and to the
Collateral and the Deposits is hereby granted to Beneficiary and the Deposits
and all of Trustor's right, title and interest therein are hereby assigned to
Beneficiary, all to secure payment of the Indebtedness and to secure performance
by Trustor of the terms, covenants and provisions hereof. Upon the occurrence
of an Event of Default under this Deed of Trust, Beneficiary, pursuant to the
appropriate provisions of the UCC, shall have the option of proceeding with
respect to the Collateral in accordance with its rights and remedies with
respect to the real property, in which event the default provisions of the
UCC shall not apply. The parties agree that,
in the event Beneficiary shall elect to proceed
with respect to the Collateral separately from the real property, ten (10) days'
notice of the sale of the Collateral shall be reasonable notice. The reasonable
expenses of retaking, holding, preparing for sale, selling and the like incurred
by Beneficiary shall include, but not be limited to, reasonable attorneys' fees
and legal expenses incurred by Beneficiary. Trustor agrees that, without the
written consent of Beneficiary, Trustor will not remove or permit to be removed
from the Premises any of the Collateral except that so long as the Trustor is
not in default hereunder, Trustor shall be permitted to
sell or otherwise dispose of the Collateral, when
obsolete, worn out, inadequate, unserviceable or unnecessary
for use in or in the ordinary course of business for the operation of the
Premises, upon replacing the same or substituting for the same other Collateral
at least equal in value to the initial value to that disposed of and in such a
manner so that said Collateral shall be subject to the security interest created
hereby, and so that the security interest of Beneficiary shall be first in
priority, it being expressly understood and agreed that all replacements of the
Collateral and any additions to the Collateral shall be and become immediately
subject to the security interest of this Deed of Trust and covered hereby.
Trustor shall, from time to time, on request of Beneficiary, deliver to
Beneficiary an inventory of the Collateral in reasonable detail. Trustor
covenants and represents that all Collateral, and all
replacements thereof, substitutions therefor or
additions thereto, unless Beneficiary otherwise consents, now are and
will be free and clear of liens (other than the lien of taxes not yet due or
payable), encumbrances or security interests of others. Trustor shall, upon
demand 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 anytime, or from time to time, reasonably request
or as may be necessary or appropriate to establish and maintain
a first perfected security interest in the Deposits and
Collateral, subject to no liens (other than
the lien of taxes not yet due or payable), encumbrances, or security interests
of others.
This Deed of Trust also constitutes a financing statement for the purpose
of the UCC and shall constitute a "fixture filing" under such statutes and shall
be filed in the real estate records of the County in which the Land is located.
For such purpose the name and address of the debtor and the secured party are as
set forth below:
Name of Debtor: Bedford Property Investors, Inc.
Debtor's Mailing
Address: 270 Lafayette Circle, Lafayette, California
94549
Debtor's Taxpayer
Identification Number: 68-0306514
Address of Property: (1) 4546 South 35th Street, Phoenix, Maricopa
County, Arizona;
(2) 2601 Broadway, Tempe, Maricopa County,
Arizona;
(3) 3015, 3101, 3111, 3121 and 3131 South Park
Drive, Tempe, Maricopa County, Arizona, 2307 &
2315 West Fairmont Drive, Tempe, Maricopa
County, Arizona, 3010,3110 & 3120 South Potter
Road, Tempe, Maricopa County, Arizona
Name of Secured Party: Security Life of Denver Insurance Company
Address of Secured
Party: c/o ING Investment Management LLC
5780 Powers Ferry Road, NW, Suite 300
Atlanta, Georgia 30327-4349
Attention: Real Estate Law Department
This financing statement covers the Collateral. Some of the items or types of
property comprising the Collateral are or are to become fixtures on the real
property described in this Deed of Trust. Trustor is the record owner of the
real property described herein upon which the foregoing fixtures and other
items and types of property are located.
29. Due on Sale or Further Encumbrance. (a) If, without the Beneficiary's
prior written consent, (i) the Premises or any part thereof or any interest in
the Premises or the Trustor is sold or conveyed; (ii) title to the Premises
or any interest therein is divested; (iii) the
Premises or any ownership interest in the Trustor
is further encumbered or pledged; (iv) any lease which gives the lessee
any option to purchase the Premises or any part thereof is entered into, or, (v)
without limiting the generality of clause (i) above, the ownership of shares of
the Trustor, if a corporation, or of any corporate general partner of Trustor,
if a partnership, or the general partnership interests in any partnership which
is a general partner of Trustor, or any membership
interest in a Trustor which is a limited liability
company, or any beneficial or fiduciary interest in any Trustor
which is a trust or trustee, is sold or conveyed (other than stock in publicly
traded REITs), the Beneficiary shall at its sole discretion be entitled to
accelerate the Indebtedness and declare the then
unpaid principal balance and all
accrued interests and other sums due and payable under the Note due and payable
and exercise all remedies available to Beneficiary under the Loan Documents.
The Trustor understands that the present
ownership of the Premises and Improvements
will be a material inducement to Beneficiary
in the making of the loan secured by
this Deed of Trust. Any consent by Beneficiary to a change in ownership or to a
change in the composition of the Trustor may be conditioned upon payment of a
transfer fee equal to one percent (1%) of the then outstanding Indebtedness for
processing such request for consent, upon an increase in the rate of interest on
the unpaid balance of the Indebtedness to a
then-current market rate, and/or other
terms and conditions as Beneficiary may impose in its sole discretion.
(b) Notwithstanding the foregoing subparagraph (a), Beneficiary will permit
one transfer of the Premises, provided: (i) the transferee has a financial and
credit standing and management expertise
acceptable to Beneficiary as equal to or
greater than that of Trustor at the time Beneficiary approved the loan to the
Trustor; (ii) assumption documents in form and substance satisfactory to
Beneficiary are executed by the transferee; (iii) Beneficiary is paid a transfer
fee equal to one percent (1%) of the then outstanding indebtedness and Trustor
reimburses Beneficiary all fees and expenses associated with the transfer
including legal fees; (iv) Beneficiary receives an endorsement to the
Beneficiary's title policy, in form and substance acceptable to Beneficiary; and
(v) at Beneficiary's option, Beneficiary
receives opinions of counsel, and Trustor
and transferee authorization documents, in form and substance acceptable to
Beneficiary. Further, Beneficiary, in its sole judgement and discretion, may
require individuals specifically named by Beneficiary to deliver to Beneficiary
an Environmental Indemnification Agreement on Beneficiary's standard form. The
rights granted to Trustor in this subparagraph
(b) are personal to Trustor, shall
be extinguished after the exercise thereof,
and shall not inure to the benefit of
any subsequent transferee. Such transfer and assumption will not, however,
release the Trustor or any guarantors from any liability to the Beneficiary
without the prior written consent of Beneficiary, which consent may be given or
withheld in Beneficiary's sole discretion,
but if given, may be conditioned upon,
without limitation, the execution of new guaranties from principals of the
transferee as Beneficiary deems necessary, execution by the principals of the
transferee of Beneficiary's standard Environmental Indemnification Agreement and
such other requirements as Beneficiary may deem appropriate in its discretion.
30. Environmental Matters; Notice; Indemnity. Trustor covenants and agrees
as follows:
(a) For purposes of this Deed of Trust, the following definitions shall
apply:
(i) The term "Environmental Law" means and includes any
federal, state or local law, statute, regulation or ordinance
pertaining to health, industrial hygiene or the environmental or
ecological conditions on, under or about the Premises, including
without limitation each of the following (and their respective
successor provisions): the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. sections
9601 et seq. ("CERCLA"); the Resource Conservation and Recovery Act of
1976, as amended, 42 U.S.C. sections 6901 et seq. ("RCRA"); the
Federal Hazardous Materials Transportation Act, as amended, 49 U.S.C.
sections 1801 et seq.; the Toxic Substance Control Act, as amended, 15
U.S.C. sections 2601 et seq.; the Clean Air Act, as amended, 42 U.S.C.
sections 1857 et seq.; the Federal Water Pollution Control Act, as
amended, 33 U.S.C. sections 1251 et seq.; and the rules, regulations
and ordinances of the U.S. Environmental Protection Agency and of all
other federal, state, county and municipal agencies, boards,
commissions and other governmental bodies and officers having
jurisdiction over the Premises or the use or operation of the
Premises.
(ii) The term "Hazardous Substance" means and includes: (1)
those substances included within the definitions of "hazardous
substances", "hazardous materials", "hazardous waste", "pollutants",
"toxic substances" or "solid waste" in any Environmental Law; (2)
those substances listed in the U.S. Department of Transportation Table
or amendments thereto (49 CFR 172.101) or by the U.S. Environmental
Protection Agency (or any successor agency) as hazardous substances
(40 CFR Part 302 and any amendments thereto); (3) those other
substances, materials and wastes which are or become, regulated under
any applicable federal, state or local law, regulation or ordinance or
by any federal, state or local governmental agency, board, commission
or other governmental body, or which are or become classified as
hazardous or toxic by any such law, regulation or ordinance; and (4)
any material, waste or substance which is any of the following: (A)
asbestos; (B) polychlorinated biphenyl; (C) designated or listed as a
"hazardous substance" pursuant to section 311 or section 307 of the
Clean Water Act (33 U.S.C. sections 1251 et seq.); (D) explosive; (E)
radioactive; (F) a petroleum product; or (G) infectious waste.
Notwithstanding anything to the contrary herein, the term "Hazardous
Substance" shall not include commercially sold products otherwise
within the definition of the term "Hazardous Substance", but (X) which
are used or disposed of by Trustor or used or sold by tenants of the
Premises in the ordinary course of their respective businesses, (Y)
the presence of which product is not prohibited by applicable
Environmental Law, and (Z) the use and disposal of which are in all
respects in accordance with applicable Environmental Law.
(iii) The term "Enforcement or Remedial Action" means and
includes any action taken by any person or entity in an attempt or
asserted attempt to enforce, to achieve compliance with, or to collect
or impose assessments, penalties, fines, or other sanctions provided
by, any Environmental Law.
(iv) The term "Environmental Liability" means and includes any
claim, demand, obligation, cause of action, accusation, allegation,
order, violation, damage (including consequential damage), injury,
judgment, assessment, penalty, fine, cost of Enforcement or Remedial
Action, or any other cost or expense whatsoever, including actual,
reasonable attorneys' fees and disbursements, resulting from or
arising out of the violation or alleged violation of any Environmental
Law, any Enforcement or Remedial Action, or any alleged exposure of
any person or property to any Hazardous Substance.
(b) To the current and actual knowledge of Trustor's officers, Trustor,
after reasonable inquiry, represents, warrants and covenants that,
(i) Except in accordance with applicable law, no Hazardous
Substances have been or shall be discharged, disbursed, released,
stored, treated, generated, disposed of, or allowed to escape or
migrate, or shall threaten to be injected, emptied, poured, leached,
or spilled (collectively a "release") on or from the Premises.
(ii) Except in accordance with applicable law, no asbestos or
asbestos-containing materials have been or will be installed, used,
incorporated into, placed on, or disposed of on the Premises.
(iii) No polychlorinated biphenyls ("PCBs") are or will be
located on or in the Premises, in the form of electrical transformers,
fluorescent light fixtures with ballasts, cooling oils, or any other
device.
(iv) No underground storage tanks are or will be located on the
Premises or were located on the Premises and subsequently removed or
filled.
(v) No investigation, administrative order, consent order and
agreement, litigation, settlement, lien or encumbrance with respect to
Hazardous Substances is proposed, threatened in writing, anticipated
or in existence with respect to the Premises.
(vi) The Premises and Trustor's operations at the Premises are
in compliance in all material respects with all applicable
Environmental Laws including without limitation any, state and local
statutes, laws and regulations. No notice has been received by
Trustor, or any subsidiary of Trustor, from any entity, government
body, or individual claiming any violation of any law, regulation,
ordinance or code, or requiring compliance with any law, regulation,
ordinance or code, or demanding payment or contribution for
environmental damage or injury to natural resources. Copies of any
such notices received subsequent to the date hereof shall be forwarded
to Beneficiary within three (3) days of their receipt.
(vii) Except as set forth on the Phase I environmental studies
for the properties, copies of which have been provided to Beneficiary,
the Trustor has no knowledge of the release or threat of release of
any Hazardous Substances from any property adjoining or within one-
half mile of the Premises.
(viii) No portion of the Premises is a wetland or other water
of the United States subject to jurisdiction under Section 404 of the
Clean Water Act (33 U.S.C. 1344) or any comparable state statute or
local ordinance or regulation defining or protecting wetlands or other
special aquatic areas.
(ix) There are no concentrations of radon or other radioactive
gases or materials in any buildings or structures on the Premises that
exceed background ambient air levels.
(x) To the best of Trustor's knowledge, there have been no
complaints of illness or sickness alleged to result from conditions
inside any buildings or structures on the Premises.
(c) Trustor will give prompt written notice to Beneficiary of:
(i) any proceeding, known investigation or inquiry commenced by
any governmental authority with respect to the presence of any
Hazardous Substance on, under or about the Premises or the migration
thereof to or from adjoining property;
(ii) all claims made or threatened in writing, by any individual
or entity against Trustor or the Premises relating to any loss or
injury allegedly resulting from any Hazardous Substance; and
(iii) the discovery by Trustor of any occurrence or condition on
any real property adjoining or in the vicinity of the Premises which
might cause the Premises or any part thereof to be subject to any
restriction on the ownership, occupancy, transferability or use of the
Premises under any Environmental Law.
(d) Beneficiary shall have the right and privilege to: (i) join in and
participate in, as a party if it so elects, any one or more legal proceedings or
actions involving any Environmental Law and initiated with respect to the
Premises; and to (ii) have all reasonable costs and expenses thereof (including
without limitation Beneficiary's reasonable attorneys' fees and costs) paid by
Trustor.
(e) Trustor agrees to protect, defend, indemnify and hold harmless
Beneficiary, its directors, officers, employees, agents, contractors,
sub-contractors, licensees, invitees, participants, successors and assigns, from
and against any Environmental Liability and any and all claims, demands,
judgments, settlements, damages, actions, causes of action, injuries,
administrative orders, consent agreements and orders, liabilities, losses,
penalties, costs, including but not limited to any cleanup costs, remediation
costs and response costs, and all expenses of any kind whatsoever including
reasonable attorneys' fees and expenses, including but not limited to those
arising out of loss of life, injury to persons,
property or business or damage to natural resources
in connection with the activities of Trustor, its predecessors
in interest, third parties who have trespassed on the Premises, or parties in a
contractual relationship with Trustor, and any of them, the foregoing being
collectively referred to as "Claims", which:
(i) arise out of the actual, alleged or threatened migration,
spill, leaching, pouring, emptying, injection, discharge, dispersal,
release, storage, treatment, generation, disposal or escape of any
Hazardous Substances onto or from the Premises; or
(ii) actually or allegedly arise out of, in connection with the
Premises, the use, specification or inclusion of any product, material
or process containing Hazardous Substances, the failure to detect the
existence or proportion of Hazardous Substances in the soil, air,
surface water or ground water, or the performance of or failure to
perform the abatement of any Hazardous Substances source or the
replacement or removal of any soil, water, surface water or ground
water containing any Hazardous Substances; or
(iii) arise out of the breach of any covenant, warranty or
representation contained in any statement or other information given
by Trustor to Beneficiary relating to environmental matters; or
(iv) arise out of any Enforcement or Remedial Action or any
judicial or administrative action brought pursuant to any
Environmental Law.
Trustor, its successors and assigns, shall bear, pay and discharge when and
as the same become due and payable, any and all such judgments or claims for
damages, penalties or otherwise against Beneficiary
described in this subparagraph
(e), shall hold Beneficiary harmless for those judgments or claims, and shall
assume the burden and expense of defending all
suits, administrative proceedings, and negotiations
of any description with any and all persons, political
subdivisions or government agencies arising out of any of the occurrences set
forth in this subparagraph (e).
Trustor's indemnifications and representations
made herein shall survive any termination or expiration
of the documents evidencing or securing the Loan and/or
the repayment of the indebtedness evidenced by the Note, including, but not
limited to, any foreclosure on this Deed of Trust or
acceptance of a deed in lieu
of foreclosure. Notwithstanding the foregoing, Trustor's indemnifications and
representations shall not extend to Hazardous Substances which first originate
on the Premises subsequent to Beneficiary's succession to title by virtue of a
foreclosure or acceptance of a deed in lieu of foreclosure.
(f) If any investigation, site monitoring, containment, cleanup, removal,
restoration or other remedial work of any kind or nature (the "Remedial Work")
is reasonably desirable (in the case of an operation and maintenance program or
similar monitoring or preventative programs) or necessary, both as determined by
an independent environmental consultant selected by Beneficiary under any
applicable federal, state or local law, regulation or ordinance, or under any
judicial or administrative order or judgment, or by any governmental person,
board, commission or agency, because of or in connection with the current or
future presence, suspected presence, release or suspected release of a Hazardous
Substance into the air, soil, groundwater, or surface water at, on, about, under
or within the Premises or any portion thereof, Trustor shall within thirty (30)
days after written demand by Beneficiary for the performance (or within such
shorter time as may be required under applicable law,
regulation, ordinance, order or agreement), commence
and thereafter diligently prosecute to completion all
such Remedial Work to the extent required by law. All
Remedial Work shall be performed
by contractors approved in advance by Beneficiary (which approval in each case
shall not be unreasonably withheld or delayed) and under the supervision of a
consulting engineer approved in advance by Beneficiary. All costs and expenses
of such Remedial Work (including without limitation the reasonable fees and
expenses of Beneficiary's counsel) incurred in connection with monitoring or
review of the Remedial Work shall be paid by Trustor. If Trustor shall fail or
neglect to timely commence or cause to be commenced, or shall fail to diligently
prosecute to completion, such Remedial Work, Beneficiary may (but shall not be
required to) cause such Remedial Work to
be performed; and all costs and expenses
thereof, or incurred in connection therewith (including, without limitation, the
reasonable fees and expenses of Beneficiary's counsel), shall be paid by Trustor
to Beneficiary forthwith after demand and shall be a part of the Indebtedness.
(g) If recommended by any environmental report, assessment or audit of the
Premises, Grantor shall establish and comply with an operations and maintenance
program with respect to the Premises,
in form and substance reasonably acceptable
to Beneficiary, prepared by an environmental consultant reasonably acceptable to
Beneficiary, which program shall address any
asbestos containing material or lead
based paint that may now or in the future be detected at or on the Premises.
Without limiting the generality of the
preceding sentence, Beneficiary may require
(i) periodic notices or reports to Beneficiary in form, substance and at such
intervals as Beneficiary may specify, (ii) an amendment to such operations and
maintenance program to address changing circumstances, laws or other matters,
(iii) at Beneficiary's sole expense, supplemental examination of the Premises by
consultants specified by Beneficiary, (iv) access to the Premises, at reasonable
times upon reasonable notice to Trustor, by Beneficiary, its agents or servicer,
to review and assess the environmental condition of the Premises and Grantor's
compliance with any operations and maintenance program, and (v) in consultation
with Trustor, variation of the operations and maintenance program in response to
the reports provided by any such consultants.
31. Captions. The captions or headings preceding the text of the
paragraphs or subparagraphs of this Deed of Trust are inserted only for
convenience of reference and shall not constitute a part of this Deed of Trust,
nor shall they in any way affect its meaning, construction or effect.
32. No Waiver; Modifications in Writing. No failure or delay on the part
of Beneficiary in exercising any right, power or remedy hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or
further exercise thereof or the exercise of
any other right, power or remedy. The remedies
provided for herein are cumulative and are not
exclusive of any remedies that may be available to any party at law
or in equity or otherwise. No amendment, modification, supplement, termination
or waiver of or to any provision of this Deed of Trust, nor consent to any
departure therefrom, shall be effective unless the same shall be in writing and
signed by or on behalf of the party to be charged with the enforcement thereof.
Any amendment, modification or supplement of or to any provision of this Deed of
Trust, any waiver of any provision of this Deed of Trust, and any consent to any
departure from the terms of any provision of this Deed of Trust, shall be
effective only in the specific instance and for the specific purpose for which
made or given.
33. Relationship. Beneficiary is only a lender under the Loan Documents,
and nothing contained in this Deed of Trust or the other Loan Documents and no
action taken by the parties pursuant hereto shall be deemed to constitute the
Beneficiary and any other of the parties to any of the Loan Documents a
partnership, an association, a joint venture or other entity, nor constitute
Beneficiary as a fiduciary for any of the parties.
34. Governing Law. This Deed of Trust shall be governed by the laws
(excluding conflicts of laws rules) of Arizona.
35. Time of Essence. Time is of the essence in the performance by the
parties of this Deed of Trust.
36. Construction. Trustor has been represented by its own counsel in this
transaction, and this Deed of Trust shall not be construed more strongly against
any party regardless of who was more responsible for its preparation.
37. Gender; Number; Terms. Words and phrases herein shall be construed as
in the singular or plural number and as masculine, feminine or neuter gender,
according to the context. The use of the words "herein," "hereof," "hereunder"
and other similar compounds of the word "here" shall refer to this entire Deed
of Trust and not to any particular section, paragraph or provision. The term
"person" and words importing persons as used in this Deed of Trust shall include
firms, associations, partnerships (including limited partnerships), joint
ventures, trusts, corporations, limited liability companies, and other legal
entities, including public or governmental bodies, agencies or
instrumentalities, as well as natural persons.
38. Integration. This Deed of Trust, together with the other Loan
Documents and the certain Environmental Indemnification Agreement executed by
Trustor, constitute the entire agreement between the parties hereto pertaining
to the subject matters hereof and thereof and supersede
all negotiations, preliminary agreements and all prior
or contemporaneous discussions and understandings of the
parties hereto in connection with the subject matters hereof and thereof.
39. Substitute Trustee. If, for any reason, Beneficiary prefers to appoint
a substitute Trustee hereunder, Beneficiary may, from time to time, by written
instrument, appoint one or more substitute Trustees, who shall succeed to all
the estate, rights, powers, and duties of the original Trustee named herein.
Such appointment may be executed by anyone
acting in a representative capacity, and
such appointment shall be conclusively presumed to have been executed with
appropriate authority.
40. Indemnification of Trustee. Except for willful misconduct, Trustee
shall not be liable for any act or omission or error of judgment. Trustee may
rely on any document believed by Trustee in good faith to be genuine. All money
received by Trustee shall, until used or applied as herein provided, be held in
trust, but need not be segregated (except to the extent required by law), and
Trustee shall not be liable for interest thereon. Trustor hereby indemnifies
Trustee against all liability and expenses that Trustee may incur in the
performance of Trustee's duties hereunder.
41. General Indemnification. (a) Grantor shall, at its sole cost and
expense, protect, defend, indemnify, release and hold harmless the Indemnified
Parties (defined below) from and against any and all Losses (defined below)
imposed upon or incurred by or asserted against any Indemnified Parties and
directly or indirectly arising out of or in any way relating to any one or more
of the following: (i) any accident, injury to or death of persons or loss of or
damage to property occurring in, on or about the Premises or any part thereof or
on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas,
streets or ways; (ii) any use, nonuse or condition in, on or about the Premises
or any part thereof or on the adjoining sidewalks, curbs, adjacent property or
adjacent parking areas, streets or ways; (iii) performance of any labor or
services or the furnishing of any materials or other property in respect of the
Premises or any part thereof; (iv) any
failure of the Premises to be in compliance
in all material respects with any applicable laws;
(v) any and all claims, demands
or undertakings on its part to perform or discharge any of the terms, covenants,
or agreements contained in any Lease; or (vi) the payment of any commission,
charge or brokerage fee to anyone which may be payable in connection with the
funding of the Loan evidenced by the Note
and secured by this Deed of Trust. Any
amounts payable to Beneficiary by reason of the application of this Paragraph
shall become immediately due and payable and shall bear interest at the Default
Rate (as defined in the Note) from the date loss or damage is sustained by
Beneficiary until paid. The term "Losses" shall mean any and all claims, suits,
liabilities (including, without limitation, strict liabilities), actions,
proceedings, obligations, debts, damages, losses, costs, expenses, fines,
penalties, charges, fees, judgments, awards, amounts paid in settlement of
whatever kind or nature (including but not limited to reasonable attorneys' fees
and other costs of defense). The term "Indemnified Parties" shall mean (i)
Beneficiary, (ii) any prior owner or holder of the Note, (iii) any servicer or
prior servicer of the Loan, (iv) any participant or any prior participant in any
portion of the Loan, (v) any trustees, custodians or other fiduciaries who hold
or who have held a full or partial interest in the Loan for the benefit of any
participant or other third party, (vi) any receiver or other fiduciary appointed
in a foreclosure or other collection proceeding, (vii) any officers, directors,
shareholders, partners, members, employees, agents, servants, representatives,
contractors, subcontractors, affiliates or subsidiaries of any and all of the
foregoing, and (viii) the heirs, legal
representatives, successors and assigns of
any and all of the foregoing (including, without limitation, any successors by
merger, consolidation or acquisition of all or a substantial portion of the
Indemnified Parties' assets and business), in all cases whether during the term
of the Loan or as part of or following a foreclosure of the Loan.
(b) Upon written request by any Indemnified Party, Grantor shall defend such
Indemnified Party (if requested by any Indemnified Party, in the name of the
Indemnified Party) by attorneys and other
professionals reasonably approved by the
Indemnified Parties. Notwithstanding the foregoing,
any Indemnified Parties may,
in their sole discretion, engage their own attorneys and other professionals to
defend or assist them, and, at the option of the Indemnified Parties, their
attorneys shall control the resolution of any claim or proceeding. Upon demand,
Grantor shall pay or, in the sole discretion of the Indemnified Parties,
reimburse, the Indemnified Parties for the payment of reasonable fees and
disbursements of attorneys, engineers,
environmental consultants, laboratories and
other professionals in connection therewith.
(c) Grantor shall, at its sole cost and expense, protect, defend, indemnify,
release and hold harmless the Indemnified Parties from and against any and all
Losses imposed upon or incurred by or
asserted against any Indemnified Parties and
directly or indirectly arising out of or in any way relating to any tax on the
making and/or recording of this Deed of Trust, the Note or any of the other Loan
Documents.
42. Miscellaneous.
(a) This Deed of Trust and all provisions hereof shall extend to and be
binding upon Trustor and its heirs, successors, grantees and assigns, any
subsequent owner or owners of the Premises and all persons claiming under or
through Trustor (but this clause shall not be construed as constituting the
consent by Beneficiary to the transfer of any interest in the Premises), and the
word "Trustor" when used herein shall include any such person and all persons
liable for the payment of the Indebtedness or any part thereof, whether or not
such persons shall have executed said Note or this Deed of Trust. The word
"Beneficiary", when used herein, shall include the successors and assigns of
Beneficiary, and the holder or holders, from time to time, of the Note secured
hereby. In addition, in the event Trustor is a privately held land trust or
similar entity, the term "Trustor" as used herein shall include the beneficiary
or beneficiaries of such land trust or similar entity.
(b) In the event one or more of the provisions contained in this Deed of
Trust or the Note secured hereby, or in any other security documents given to
secure the payment of the Note secured
hereby, shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall, at the option of Beneficiary, not affect any other
provision of this Deed of Trust, and this Deed of Trust shall be construed as if
such invalid, illegal or unenforceable provision had never been contained herein
or therein.
(c) The Trustor will, from time to time, upon ten (10) business days' prior
written request from Beneficiary, make, execute, acknowledge and deliver to
Beneficiary such supplemental mortgages, certificates and other documents,
including without limitation UCC financing statements, as may be necessary for
better assuring and confirming unto Beneficiary any of the Premises, or for more
particularly identifying and describing the Premises, or to preserve or protect
the priority of this Deed of Trust lien, and generally do and perform such other
acts and things and execute and deliver such other instruments and documents as
may reasonably be deemed necessary or advisable by Beneficiary to carry out the
intentions of this Deed of Trust.
(d) Trustor shall not by act or omission permit any building or other
improvement on any premises not subject
to the lien of this Deed of Trust to rely
on the Premises or any part thereof or any interest therein to fulfill any
municipal or governmental requirement, and Trustor hereby assigns to Beneficiary
any and all rights to give consent for all or any portion of the Premises or any
interest therein to be so used. Similarly,
no building or other Improvement on the
Premises shall rely on any premises not
subject to the lien of this Deed of Trust
or any interest therein to fulfill any governmental or municipal requirement.
Trustor shall not by act or omission impair the integrity of the Premises as a
single zoning lot separate and apart from all other premises.
Any act or omission by Trustor which
would result in a violation of any of the provisions of this
paragraph shall be void.
(e) Trustor will, from time to time, upon ten (10) business days' prior
written request by Beneficiary, execute, acknowledge and deliver to Beneficiary,
a certificate stating that this Deed of Trust
is unmodified and in full force and
effect (or, if there have been modifications, that this Deed of Trust is in full
force and effect as modified and setting
forth such modifications) and stating the
principal amount secured hereby and the
interest accrued to date on such principal
amount. The estoppel certificate from
Trustor shall also state to the current and
actual knowledge of Trustor whether any offsets or defenses to the Indebtedness
exist and if so shall identify them.
(f) The Note secured hereby includes provisions for the assessment of a
Late Charge, as defined therein. Said Late Charge shall be secured hereby as
Indebtedness, as that term is used herein.
(g) Beneficiary shall have the right and option to exercise power of sale
or to commence a civil action to foreclose this Deed of Trust and to obtain a
decree of foreclosure. The failure to join any tenant or tenants as party
defendant or defendants in any such civil action or the failure of any decree of
foreclosure and sale to foreclose their rights shall not be asserted by Trustor
as a defense in any civil action instituted to collect the Indebtedness , or any
part thereof, or any deficiency remaining
unpaid after foreclosure and sale of the
Premises, any statute or rule of law at any time existing to the contrary
notwithstanding.
(h) At the option of Beneficiary, this Deed of Trust shall become, subject
and subordinate, in whole or in part (but not with respect to priority of
entitlement to insurance proceeds or any award in condemnation) to any one or
more, or to all, Leases upon the execution by Beneficiary and recording or
registration thereof, at any time hereafter,
in the Office of the Recorder in and
for the county wherein the Premises are situated, or such other office as
determined by Beneficiary, of a unilateral declaration to that effect.
(i) In the event that maturity of the Indebtedness is accelerated by
Beneficiary because of the occurrence of an Event of Default hereunder and a
tender of payment is made by or on behalf of Trustor in the amount necessary to
satisfy the Indebtedness at any time prior to judicial confirmation or other
conclusion if confirmation is not required, of a foreclosure sale or sale under
a power of sale, then such tender shall
constitute a prepayment under the Note and
shall, to the extent specified in the Note, require payment of the prepayment
premium provided for in the Note.
(j) All agreements between Trustor and Beneficiary (including, without
limitation, those contained in this Deed of Trust and the Note) are expressly
limited so that in no event whatsoever
shall the amount paid or agreed to be paid
to the Beneficiary exceed the highest lawful rate of interest permissible under
the laws of Arizona. If, from any circumstances whatsoever, fulfillment of any
provision hereof or the Note or any other documents securing the Indebtedness at
the time performance of such provision
shall be due, shall involve the payment of
interest exceeding the highest rate of
interest permitted by law which a court of
competent jurisdiction may deem applicable hereto, then, ipso facto, the
obligation to be fulfilled shall be reduced
to the highest lawful rate of interest
permissible under the laws of Arizona; and if for any reason whatsoever
Beneficiary shall ever receive as interest an amount which would be deemed
unlawful, such interest shall be applied to the payment of the last maturing
installment or installments of the principal
Indebtedness (whether or not then due
and payable) and not to the payment of interest.
(k) Trustor covenants and agrees that it shall constitute an Event of
Default hereunder if any of the proceeds of the loan for which the Note is given
will be used, or were used, as the case may be, for the purpose (whether
immediate, incidental or ultimate) of
purchasing or "carrying" any "margin stock"
as such terms are defined in Regulation U
of the Board of Governors of the Federal
Reserve System (12 CFR Part 221) or for the purpose of reducing or retiring any
indebtedness which was originally incurred for any such purpose.
(l) Trustor shall exert its best efforts to include a "no lien" provision
in any property management agreement hereafter entered into by Trustor or its
beneficiary with a property manager for
the Premises, whereby the property manager
waives and releases any and all mechanics'
lien rights that he, or anyone claiming
through or under such manager, may have. Such property management agreement
containing such "no lien" provision or a short form thereof shall, at
Beneficiary's request, be recorded in the office of the in and for the County
wherein the Premises is situated, or such
other office as reasonably requested by
Beneficiary.
43. Attorney's Fees. Trustor shall pay on demand all reasonable costs and
expenses incurred by Beneficiary or Trustee in enforcing or protecting their
rights and remedies hereunder, including, but not limited to, reasonable
attorneys' fees and legal expenses.
44. State Law Provisions, Waivers and Agreements. (a) For purposes of
A.R.S. 33--801 through 821 (the "Deed of
Trust Act"), "Debtor" herein shall be
the "Trustor." Beneficiary and Trustee shall have all rights, benefits and
remedies conferred or contemplated by the
Deed of Trust Act. Notwithstanding the
foregoing, Beneficiary may, at its option in its sole discretion, elect to
foreclose this Deed of Trust judicially as authorized by A.R.S. 33-807.
(b) In addition to, and not in limitation of, any other remedy provided in
or available under this Deed of Trust, Beneficiary shall have all the rights set
forth in A.R.S. 33-702B (as amended, supplemented or supplanted) regarding
enforcement of the assignment of rents contained herein.
(c) It is Debtor's intention that the obligations of Debtor to pay and
perform each and all of the obligations secured by this Deed of Trust (for
purposes of this subsection, the "Secured Obligations") be governed according to
the express, bargained-for terms hereof and of the other Loan Documents. The
interest rate and terms applicable to the Note and the other Loan Documents have
been negotiated and agreed to by Beneficiary upon that basis. Therefore, to the
full extent allowable under Arizona law, Debtor hereby expressly waives all
provisions of Arizona law (including without limitation those specifically
referenced below) which might otherwise be
construed, contrary to the terms of the
Loan Documents, to limit the liability of Debtor with respect to the Secured
Obligations, and hereby expressly agrees that no such provision of law shall be
applicable to such obligations. To that end, Debtor expressly:
(i) agrees that the amount of any unpaid or unperformed Secured
Obligations remaining following any sale of collateral (herein
referred to as the "Deficiency") shall be determined solely by the
purchase price (whether cash, credit bid, or otherwise, and net of all
costs and expenses of and relating to the sale) actually received for
such collateral, and waives all provisions of A.R.S. 12-1566, 33-
725, 33-727 and 33-814 which might otherwise determine the Deficiency
by the "fair market value" of the collateral sold or by any other
valuation in excess of such actual net purchase price;
(ii) waives all provisions of A.R.S. 33-814 which purport to
limit the time within which an action upon a Deficiency may be
commenced, or to eliminate any Deficiency if such an action is not
commenced within such time limited, and agrees that such provisions
shall not apply to any Deficiency following a trustee's sale under
this Deed of Trust;
(iii) agrees that if, notwithstanding the foregoing express
intention and agreement of Debtor to the contrary, the provisions of
A.R.S. 33-814 are held by a court to be applicable, then:
(A) for purposes of A.R.S. 33-814(B), the ninety-day
period within which an action for a deficiency judgment may be
brought shall not begin until the date of the last trustee's sale
or other nonjudicial or judicial foreclosure sale of any real or
personal property collateral under any of the Deeds of Trust
which secure the Note, whether such collateral is located within
or outside of Arizona;
(B) the phrase "full satisfaction of the obligation" in
A.R.S. 33-814(D) shall be construed to refer solely to the
obligation of Debtor to repay the site-specific monetary
indebtedness evidenced by the Note, and not to any separate and
independent obligations (1) of Debtor which are created by this
Deed of Trust (including, without limitation, any covenants,
agreements or indemnities which are expressly stated to survive
any foreclosure hereof) or which are created under or evidenced
or secured by any other Loan Document executed in connection
herewith, regardless of whether such separate and independent
obligations are secured hereby by virtue of any cross-
collateralization or cross-default provisions or otherwise, or
(2) of any other Person which is directly, indirectly or
contingently liable with respect to the Secured Obligations (all
such separate and independent obligations being referred to
herein as the "Separate Obligations"); and
(C) notwithstanding any application of A.R.S. 33-814(D)
to limit or bar any action against Debtor with respect to the
monetary indebtedness evidenced by the Note following a trustee's
sale or sales of the entire the Trust Estate such Section shall
not be applicable to, or in any way limit or impede any action
with respect to, such Separate Obligations or any collateral
which might now or hereafter be given by Debtor as security
therefor;
(iv) waives all rights of reinstatement following acceleration
of the obligations secured by this Deed of Trust, including any which
might otherwise be available under A.R.S. 33-813, it being agreed
that Debtor has bargained for the notice and cure rights given to
Debtor, pursuant to Paragraph 15 hereof and under the other Loan
Documents; that such rights provide Debtor with sufficient opportunity
to prevent acceleration following a breach or default which could
become an Event of Default; and that Debtor has agreed in return to
waive any further right of reinstatement following acceleration should
no cure be timely made;
(v) waives all rights of redemption Debtor might otherwise have
under Arizona law with respect to the Premises or any other
collateral, whether by statute, by subrogation, or otherwise,
including without limitation any rights under A.R.S. 12-1281
through 12-1283;
(vi) waives and agrees not to assert any and all rights,
benefits and defenses which might otherwise be available under the
provision of A.R.S. 12-1641, 12-1642, 44-141, 44-142 or 47-3605, or
Arizona Rules of Civil Procedure Rule 17(f); and
(vii) agrees to be and remain liable for the Secured
Obligations, and agrees (including as contemplated by A.R.S. 12-
1566(E) and 33-814(C) with respect to a guaranty) that this Deed of
Trust may be enforced (and sale had hereunder or judgment given
hereon) at any time and independent of any other action or judgment,
all regardless of whether, or when, a trustee's or foreclosure sale of
any collateral given by Debtor or any other Person is held or any
other nonjudicial or judicial action to realize upon collateral, or
against Debtor or any other person obligated with respect to the
Secured Obligations, is commenced, maintained, concluded, continued or
discontinued.
(d) The statutes referred to the above in this Paragraph shall include any
further statutes amending, supplementing or supplanting same. The waivers and
agreements contained in this Paragraph and elsewhere in this Deed of Trust are
given by Debtor knowingly, intelligently and
voluntarily, upon advice of counsel,
to induce Beneficiary to accept a lower
interest rate on the Notes and other Loan
Document terms more favorable to Debtor than would be acceptable to Beneficiary
in the absence thereof, and accordingly are intended to be broadly and liberally
construed in favor of Beneficiary.
45. Cross-Collateralization Rider. The terms and conditions of the Cross-
Collateralization Rider, attached hereto as Exhibit B, are incorporated herein
by this reference.
46. Multisite Real Estate Transaction. Trustor acknowledges and agrees
that the lien of this Deed of Trust shall be absolute and unconditional and
shall not in any manner be affected or impaired by any acts or omissions
whatsoever of Beneficiary and without limiting the generality of the foregoing,
the lien hereof shall not be impaired by any acceptance by the Beneficiary of
any security for or guarantees of any of the Indebtedness hereby secured, or by
any failure, neglect or omission on the part of Beneficiary to realize upon or
protect any Indebtedness hereby secured or any collateral security therefor
including the Other Security Documents. The lien hereof shall not in any
manner be impaired or affected by any release (except as to the property
released), sale, pledge, surrender, compromise, settlement, renewal,
extension, indulgence, alteration, changing, modification or disposition of
any of the Indebtedness secured or of any of the collateral security
therefore, including the Other Security Documents, and Beneficiary may at
its discretion foreclose, exercise any power of sale, or exercise any other
remedy available to it under the Other Security Documents without first
exercising or enforcing any of its rights and remedies hereunder. Such
exercise of Beneficiary's rights and remedies under the Other Security Documents
shall not in any manner impair the Indebtedness hereby secured or the lien of
this Deed of Trust and any exercise of the rights or remedies of the Beneficiary
hereunder shall not impair the lien of the Other Security Documents or any of
Beneficiary's rights and remedies thereunder. The Trustor specifically consents
and agrees that Beneficiary may exercise its rights and remedies hereunder and
under the Other Security Documents separately or concurrently and in any order
that it may deem appropriate and waives any rights of subrogation.
47. Substitution of Collateral. Notwithstanding anything to the contrary
set forth in this Deed of Trust, the Trustor may substitute a parcel of improved
real estate (a "Substitute Parcel") for any one of the Parcels comprising the
Premises, but only upon and subject to the following terms and conditions:
(a) General Requirements and Preliminary Review.
(i) There shall be no more than two substitutions of property effected in
any calendar year (collectively with respect to the Premises and the property
located in California and described as the "Premises" in the Other Security
Documents, referred to herein as the "California Property"); and there shall be
no more than three substitutions of property during the term of the Note
(collectively with respect to the Premises and the California Property).
(ii) The Substitute Parcel shall be located within the continental United
States.
(iii) In the event that at any time Trustor desires to arrange for a
substitution, Trustor shall submit to Beneficiary in writing a request (the
"Request") to substitute property, which shall identify with particularity the
Parcel of the Premises to which the Request relates (the "Exchange Parcel") and
the property proposed as the Substitute Parcel. Within ten (10) business days
after Beneficiary's actual receipt of the Request, Beneficiary shall determine,
in its sole and absolute discretion, whether the proposed Substitute Parcel
appears to be acceptable to replace the Exchange Parcel, and Beneficiary shall
notify Trustor of such initial determination (the "Preliminary Response"). Items
such as location, occupancy, lease term, rollover, tenant exposure and tenant's
credit, each will be reviewed by Lender. In the event the Preliminary Response
is not given within such ten-business-day period, it shall be deemed a
determination that the proposed Substitute Parcel is not acceptable. If in the
Beneficiary's sole and absolute discretion it is determined that the proposed
Substitute Parcel appears to be acceptable, then Beneficiary, through Newmark
Realty Capital, Inc. or other servicing agent, will further process the
Trustor's Request as described herein. If the Request is finally approved as
provided for herein, the Substitute Parcel shall be exchanged for the Exchange
Parcel as provided below; and the effective date of such substitution is
referred to herein as the "Substitution Date".
(b) Conditions to Final Approval.
(i) Prior to Beneficiary's final approval of any Substitute Parcel ("Final
Approval"), the Beneficiary shall have received from the Trustor, at Trustor's
sole cost and expense, such agreements,
instruments, documents and other materials
as Beneficiary reasonably deems appropriate, including without limitation,
modifications of the Deed of Trust and other Loan Documents and of the Other
Security Documents, proof of adequate insurance, tax and insurance escrows, an
assignment of leases and rents, environmental indemnities, title insurance
policies and endorsements, proof of compliance with governmental regulations,
Subordination, Non-Disturbance and Attornment Agreements and/or estoppel
agreements, and confirmation of recourse provisions and exculpation of Trustor,
all of which shall be in form and substance satisfactory to Beneficiary in its
sole discretion.
(ii) Prior to Final Approval and at the
Trustor's sole cost and expense, the
Beneficiary shall have received and approved,
in its sole and absolute discretion,
all additional due diligence materials in any way relating to the Substitute
Parcel, including but not limited to,
an appraisal, a hazardous substance report,
a survey, and an engineer's report, all as may be required by Beneficiary in its
sole discretion.
(iii) The appraised fair market "As Is"
value of the Substitute Parcel shall
be equal to or greater than both the appraised fair market value, or gross sales
proceeds, as the case may be, of the Exchange
Parcel as of that same time, and the
original appraised value of the Exchange Parcel as set forth in the appraisal
delivered to Beneficiary in connection with the closing of the loan evidenced by
the Note. The fair market "As Is" value of the Substitute Parcel and Exchange
Parcel shall be determined by a firm of appraisers selected by Newmark Realty
Capital, Inc. or other designee of Beneficiary and approved by the Beneficiary,
and based on an appraisal, dated not more than ninety (90) days prior to the
Substitution Date, satisfactory to the Beneficiary. All costs of such appraisals
shall be paid by the Trustor on or prior to the Substitution Date.
(iv) Prior to the Substitution Date, Beneficiary shall have received (aa)
a confirmation of all Loan Documents and
Other Security Documents executed by the
Trustor and a consent to such substitution by any guarantors of any recourse
obligations of Trustor, and (bb) such other instruments and agreements and such
certificates and opinions of counsel in connection with such substitution as
Beneficiary may reasonably request, in form and substance satisfactory to the
Beneficiary.
(v) At the time of Final Approval and as of the Substitution Date, the
actual net operating income relating to the Substitute Parcel (based upon
financial results for the trailing twelve-month
period, or such shorter period as
Beneficiary reasonably deems appropriate, for any Substitute Parcel the business
operated on which has been open for less
than one year) shall equal or exceed the
actual net operating income relating to
the Exchange Parcel (based upon financial
results for the trailing twelve-month period, or such shorter period as
Beneficiary reasonably deems appropriate, for any Exchange Parcel operated for
less than one year).
(c) Closing Requirements and Conditions.
(i) As of the Substitution Date, all agreements, documents and instruments
requested by Beneficiary to perfect the liens and security interests in the
Substitute Parcel shall have been recorded, registered and filed (as applicable)
in such manner as may be required by law to create a valid, perfected liens and
security interest with respect to the Substitute Parcel and the personal
property related thereto.
(ii) As of the Substitution Date, the Substitute Parcel shall have been
completed in a good and workmanlike manner, shall be lien-free and paid for in
full, and, shall be in compliance, in all material respects, with all applicable
governmental requirements.
(iii) As of the Substitution Date, the Trustor shall have good and
marketable title to the Substitute Parcel and good and valid title to any
personal property located thereon or used in connection therewith, in each case
satisfactory to the Beneficiary.
(iv) As of the Substitution Date, the liens created in respect of the
Substitute Parcel and personal property related thereto shall be first liens on
the Substitute Parcel and first priority security interests in the personal
property related thereto, subject only to such exceptions as Beneficiary shall
approve in its sole and absolute discretion.
(v) As of the Substitution Date, no default or Event of Default shall have
occurred and be continuing hereunder or under any of the other Loan Documents or
under any of the Other Security Documents.
(vi) As of the Substitution Date, Beneficiary shall be satisfied that no
material adverse change in the financial condition, operations or prospects of
Trustor has occurred after the date hereof.
(vii) As of the Substitution Date, the Trustor shall have paid or
reimbursed Beneficiary for all reasonable out-of-pocket costs and expenses
incurred in connection with any such substitution and the reasonable
out-of-pocket fees and expenses incurred by Beneficiary and its servicer in
connection therewith. Without limiting the generality of the foregoing, the
Trustor shall, in connection with, and as a condition to, each substitution,
pay the reasonable fees and expenses of Beneficiary's counsel, the reasonable
fees and expenses of Beneficiary's engineers, appraisers, construction
consultants, insurance consultants and other due diligence consultants and
contractors, recording charges, title insurance charges, and stamp and/or
mortgage or similar taxes, transfer taxes.
(viii) On or before the Substitution Date, Trustor shall pay a fee to
Beneficiary equal to the greater of $50,000 or one percent (1.0%) of the
Exchange Parcel's original Principal Allocation as set forth in Paragraph 48
hereof.
(d) Substitution.
(i) Upon compliance with all of the foregoing, including without
limitation due issuance of a title insurance policy and endorsements
satisfactory to Beneficiary, the Exchange Parcel shall be released from this
Deed of Trust and the other Loan Documents, and the Substitute Parcel shall
be substituted therefor and shall be thereafter included as a portion
of the Premises.
(ii) Upon substitution of the Substitute Parcel, Beneficiary shall
reallocate and redetermine the Principal Allocations, Allocation Percentages and
Release Factors for purposes of Paragraph 48 hereof, and shall notify Trustor of
such reallocations and redeterminations.
48. Partial Release. (a) The parcels of property comprising the Premises
("Parcels") are separately described in Exhibit "A" attached hereto as Parcels I
through III, and any of such Parcels may be individually released from this Deed
of Trust upon satisfaction of the conditions
set forth herein (adjusted to reflect
partial prepayment as permitted by this Paragraph), including without limitation
payment to Beneficiary of an amount determined in accordance with this Paragraph
(the "Release Amount") together with the applicable Prepayment Premium, and the
costs and expenses associated with such release. For purposes of making a
determination of the manner in which Parcels I through III may be released, the
original principal amount of the Note has been allocated among Parcels I through
III as follows:
Principal Allocation Release
Parcels Allocation Percentage Factor
I* $ 2,190,000 7.1% 1.00
II* $ 1,950,000 6.3% 1.15
III* $ 3,335,000 10.8% 1.15
Total $ 7,475,000
[* Addresses of the Parcels are as follows: (I) 4546 South 35th Street,
Phoenix, Maricopa County, Arizona; (II) 2601 Broadway, Tempe, Maricopa County,
Arizona; (III) 3015, 3101, 3111, 3121 and 3131 South Park Drive, Tempe, Maricopa
County, Arizona, 2307 & 2315 West Fairmont Drive, Tempe, Maricopa County,
Arizona, 3010, 3110 & 3120 South Potter Road, Tempe, Maricopa County, Arizona.]
For purposes of the release of any Parcel, the Principal Allocation for such
Parcel is also set forth in the above table as a percentage of the aggregate of
the original principal balance of the Note and of the Other Note (such aggregate
being $30,890,000), which percentage is set forth above as the "Allocation
Percentage". Further, the "Release Factor" in the above table is the multiplier
to determine the Release Amount for the specific Parcel.
(b) The Release Amount for any particular Parcel shall be the amount which
is equal to the value obtained by multiplying
(i) the Allocation Percentage of the
Parcel to be released, (ii) times the aggregate outstanding principal balance of
the Note and the Other Note as of the date such Parcel is to be released (the
"Release Date"), (iii) times the applicable Release Factor. For example, assume
that Parcel I were requested to be released after the first Loan Year (twelve
months of principal and interest payments).
After the first Loan Year, assume the
outstanding aggregate principal would be
$30,479,191 (assuming a LIBOR of 6.5%).
The amount necessary, then, to have Parcel I released would be the Allocation
Percentage for Parcel I as set forth in subparagraph (a) above applied to the
total aggregate outstanding principal balance of the Note and the Other Note,
times the Release Factor of 1.00. In the example, therefore, the Release Amount
would be equal to the product of 7.1% (the Allocation Percentage of Parcel I)
and $30,479,191, times 1.00; the Release Amount being $2,164,023.
(c) At such time as Trustor desires to have any of Parcels I through III
released from this Deed of Trust, Trustor shall deliver to Beneficiary a request
therefor in writing (the "Release Request") which shall designate the specific
Parcel requested to be released and the anticipated date of such release, which
shall be on a regularly scheduled installment payment due under the Note and
which shall be not less than thirty days after the date such Release Request is
given. Within ten business days after receipt of such Release Request,
Beneficiary shall inform Trustor of the Release Amount which will be necessary
to obtain such release, determined in accordance with the foregoing
subparagraphs (a) and (b).
(d) Without limiting requirements set forth elsewhere herein, in no event
will any Parcel be released except upon compliance with the following
requirements, and a Release Request shall be deemed not to have been made if
compliance has not been attained:
(i) As of the date of the Release Request and as of the date of the
release, no Event of Default shall have occurred and be continuing under any
of the Loan Documents or the Other Security Documents (as defined in Exhibit
B hereto), and no event shall have occurred which with the passage of time or
the giving of notice, or both, shall be or become an Event of Default;
(ii) As of the date of the Release Request and as of the date of the
release, all of the principal and interest installment payments due under the
Note and the Other Note shall have been paid when due or, if not, otherwise
accepted by Beneficiary as having been duly made.
(e) In addition to the Release Amount for the Parcel to be released, Trustor
shall make a payment to Beneficiary equal to the Prepayment Premium, calculated
as set forth in the Note, with respect to the amount of the Release Amount.
(f) The release of any of Parcels I through III hereunder shall be subject
to satisfaction of the following conditions:
(i) Beneficiary shall receive an endorsement to its loan title policy
insuring that the remaining Parcels have access to the same publicly
dedicated streets as prior to the release and amending the legal description
to include only the remaining Parcels;
(ii) Trustor shall have created easements for utilities, signage,
drainage, parking, ingress and egress and other appropriate purposes in, on
and over the released Parcel for the benefit of the remaining Parcels to the
extent required by Beneficiary, and such easements shall be insured, as
appurtenances in Beneficiary's loan policy via the endorsement required in
clause (i) above. The required easements shall include, without limitation,
parking sufficient to meet all tenant lease requirements for tenants of the
remaining Parcels.
(g) Upon receipt of the Release Amount for the Parcel to be released, receipt
by Beneficiary of the applicable Prepayment Premium, payment by Trustor of all
associated costs and expenses, and full compliance with the terms of this
Paragraph, Beneficiary shall release the Parcel to which the Release Request
related, and Beneficiary shall apply the Release Amount so received toward the
outstanding principal of the Indebtedness, allocated to the Note or the Other
Note as shall be determined in Beneficiary's sole and absolute discretion. All
payments shall be by wire transfer.
(h) Trustor concurrently with the release of any Parcel or Parcels and as a
condition thereof, shall pay to Beneficiary the reasonable processing fee
therefore as determined by Beneficiary, and all reasonable costs, fees and
expenses incurred or to be incurred by Beneficiary and associated with or
arising out of the release including, without limitation, reasonable attorney
fees and expenses. Trustor shall pay all other reasonable costs and expenses
associated with or made necessary in respect of the release of any or all of
the Parcels, and Beneficiary shall bear no expense with respect thereto.
(i) Upon such application to the principal balance of the Note or the Other
Note (or both), and also in the event the principal portion of the Note or the
Other Note is otherwise reduced except by application of the regularly scheduled
installment payments under the Note or the Other Note, Beneficiary shall
thereupon revise the Principal Allocation amounts with respect to the remaining
Parcels, and with respect to the Parcels of the Premises as those terms are
defined in the Other Security Documents, and shall reassign Allocation
Percentages and Release Factors in accordance with such reallocation of the
principal. Such reallocation of amounts, percentages, and factors shall be
established by Beneficiary in its sole and absolute discretion, provided only
that the reallocated amount of the Principal Allocation for any Parcel shall
not exceed the initial Principal Allocation for any Parcel established as set
forth in subparagraph (a) above. Beneficiary shall inform Trustor of such
reallocation within thirty (30) days after such determination.
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ
CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. TRUSTOR
ACKNOWLEDGES AND AGREES THAT THERE ARE NO OTHER TERMS OR ORAL PROMISES NOT
CONTAINED IN THIS WRITTEN CONTRACT AND NO SUCH OTHER TERMS AND PROVISIONS MAY BE
LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER
WRITTEN AGREEMENT.
Trustor acknowledges receipt of a copy of this instrument at the time of
execution hereof.
IN WITNESS WHEREOF, the Trustor has executed this instrument the day and year
first above written.
BEDFORD PROPERTY INVESTORS, INC., a Maryland
corporation
By: _/s/Hanh Kihara__
Hanh Kihara
Senior Vice President and Chief
Financial Officer
<PAGE>
STATE OF _________________)
) SS:
COUNTY OF ________________)
On this ____ day of ______________________, 2000, before me, a notary public,
personally appeared Hanh Kihara , to me personally known, who being by me duly
sworn did say that she is the Senior Vice President and Chief Financial Officer,
of Bedford Property Investors, Inc., a corporation; that (no seal has been
procured by) (the seal affixed thereto is the seal of) said corporation; the
foregoing instrument was signed (and sealed) on behalf of said corporation by
authority of its Board of Directors; and that the said Hanh Kihara, as such
officer, acknowledged the execution of the foregoing instrument to be the
voluntary act and deed of said corporation, by it and by her voluntarily
executed.
_____________________________________
Notary Public
Seal
<PAGE>
EXHIBIT A
LEGAL DESCRIPTION
Parcel I - 4546 South 35th Street, Phoenix, Maricopa County, Arizona;
Parcel II - 2601 Broadway, Tempe, Maricopa County, Arizona;
Parcel III - 3015, 3101, 3111, 3121 and 3131 South Park Drive, Tempe, Maricopa
County, Arizona, 2307 & 2315 West Fairmont Drive, Tempe, Maricopa County,
Arizona, 3010, 3110 & 3120 South Potter Road, Tempe, Maricopa County, Arizona
<PAGE>
EXHIBIT B
CROSS-COLLATERALIZATION RIDER
Trustor and Beneficiary are Maker and Payee, respectively, under the following
instruments, each of which is dated as of this same date (together, the
"Instruments"):
1. Promissory Note in the amount of $7,475,000 (the "Note");
2. Promissory Note in the amount of $23,415,000 (the "Other Note");
The Note is secured by (i) this Deed of Trust; (ii) an Assignment of Rents and
Leases, and (iii) a Security Agreement (collectively, the "Security Documents").
The Other Note is secured by, among other things, the following documents,
each dated as of this same date and relating to certain property located at
(1) 410 Allerton, South San Francisco, San Mateo County, California;
(2) 301, 311 and 325 Grand Avenue, South San Francisco, San Mateo County,
California; (3) 901 Kaiser Road, Napa, Napa County, California;
(4) 840-940 Auburn Court, Fremont, Alameda County, California;
(5) 6500 Kaiser Drive, Fremont, Alameda County, California;
and (6) 45713 and 47533 Westinghouse Drive, Fremont, Alameda County, California:
(i) a Deed of Trust, Security Agreement, Financing Statement and Fixture Filing,
(ii) an Assignment of Rents and Leases, and (iii) a Security Agreement
(collectively, the "Other Security Documents").
In addition to securing the obligations described in the Note, this Deed of
Trust shall also secure the Other Note and the obligations secured by the Other
Security Documents.
An Event of Default under the Note or under any of the Security Documents
shall constitute an Event of Default under the Other Note and the Other Security
Documents. An Event of Default under the Other Note or the Other Security
Documents shall constitute an Event of Default under the Note and the Security
Documents.
Trustor waives all rights to have all or part of the Premises or the property
described in the Other Security Documents marshalled upon any foreclosure of the
Security Documents or the Other Security Documents. Beneficiary shall have the
right to sell, and any court in which foreclosure proceedings may be brought
shall have the right to order a sale of the Premises or the property described
in the Other Security Documents as a whole or in separate parcels, in any order
that Beneficiary may designate. Trustor makes this waiver for itself, for all
persons and entities claiming through or under Trustor and for all persons and
entities who may acquire a lien on all or any part of the Premises or the
property described in the Other Security Documents, or on any interest therein.
EXHIBIT C
INTEREST RATE TERMS
The Promissory Note includes the following among its terms, but the terms of
the Note control any inconsistency (capitalized terms are defined in the Note):
The Note Rate shall be determined as follows, unless the Fixed Rate Option
(defined below) is exercised. The initial Note Rate shall be ______%.
Commencing September 1, 2000, and on the first day of every calendar month
thereafter during the term of this Note, upon a change in the LIBOR, as
hereinafter defined (hereinafter an "Interest Adjustment Date"), the Note Rate
to be paid by Maker hereunder shall be adjusted to a rate of interest (the
"Adjusted Rate") equal to one hundred forty (140) basis points plus the
applicable LIBOR on such Interest Adjustment Date, and the principal balance of
the Indebtedness evidenced hereby outstanding on the Interest Adjustment Date
shall be reamortized by Payee over the remaining term of the Amortization
Period at the Adjusted Rate to determine the Monthly Payment of principal and
interest necessary to pay the remaining principal Indebtedness in full on the
Maturity Date in substantially equal installments (the "Adjusted Monthly
Payment"). Commencing on the first day of each calendar month following each
Interest Adjustment Date and continuing on the first day of each month through
and including the next Interest Adjustment Date, Maker's Monthly Payments due
hereunder shall be in the amount of the then applicable Adjusted Monthly
Payment. The "LIBOR," as referred to herein, shall mean the 30-day London
Interbank Offered Rate, as reported in The Wall Street Journal, or if not
available or no longer published, as provided by the Federal Reserve Bank of
New York. In the event the LIBOR ceases to be published or is otherwise
unascertainable, Payee shall select a comparable reference rate as the next
index for purposes of calculating the Adjusted Rate hereunder. Notwithstanding
anything else contained herein, the determination of the adjustment in the Note
Rate hereunder shall occur five (5) London banking days prior to each Interest
Adjustment Date.
Maker shall have the right, exercisable during the period commencing on the
date hereof and ending August 31, 2003, to fix the Note Rate in accordance with
the following (the "Fixed Rate Option"): Provided that no Event of Default,
(as hereinafter defined) exists, the Maker may, upon written notice (the
"Election Notice") to Payee stating Maker's election to change to a fixed rate
and electing a term of years not fewer than three nor more than ten years (the
"Fixed Term"), and payment of a conversion fee equal to one-quarter of one
percent (0.25%) of the outstanding principal balance as of the Fixed Rate
Adjustment Date (as defined below), elect to fix the Note Rate at the highest
of (i) one hundred ninety (190) basis points plus the rate applicable to U.S.
Treasury obligations for a term corresponding to the Fixed Term, as of the
Determination Date (defined below), (ii) the Merrill Lynch index, U.S.
Corporates, BBB-A rated, 5-10 years with an inception date of December 31,
1972, as reported by Bloomberg whose ticker on Bloomberg is C6C0, as of the
Determination Date, and (iii) 6.75%. The Note Rate shall be adjusted to a
fixed rate determined in accordance with the foregoing ("Fixed Rate") to be
effective as of the first day of the second full calendar month following
Payee's receipt of Maker's Election Notice ("Fixed Rate Adjustment Date"). The
Fixed Rate shall be established by Payee within three (3) business days of
Payee's receipt of Maker's Election Notice ("Determination Date"), and Payee
shall notify Maker of the Fixed Rate so determined (the "Rate Notice"). Unless
Maker gives a written notice of objection to Payee within three (3) business
days after Payee has given Maker such Rate Notice, setting forth the basis of
the objection and the calculation as determined by Maker, the Fixed Rate set
forth in the Rate Notice shall be deemed to have been concurred in by Maker.
If Maker objects to the Fixed Rate so determined, the Variable Rate (and the
Call Dates and Prepayment Premium provisions applicable to the Variable Rate)
shall continue until Maker and Payee have agreed upon the Fixed Rate and the
Fixed Rate Adjustment Date shall be the first day of the second full calendar
month following the date of such agreement as to the Fixed Rate. The
outstanding principal balance shall be reamortized as of the Fixed Rate
Adjustment Date over the then-remaining Amortization Period and the Monthly
Payments shall be adjusted, effective as of the first day of the first calendar
month immediately following the Fixed Rate Adjustment Date, so that the
outstanding principal balance as of the Fixed Rate Adjustment Date shall bear
interest at the Fixed Rate and be repaid in full by equal monthly installments
of principal and interest by the Maturity Date ("Fixed Rate Installments").
The 0.25% conversion fee shall be due and payable no later than the Fixed Rate
Adjustment Date. Maker shall also pay all third party costs and expenses
incurred by Payee to document the conversion to the Fixed Rate, including legal
fees. Failure to pay such conversion fee and costs and expenses shall
constitute an Event of Default hereunder, and in no event shall the Fixed Rate
be applicable unless the same have been fully paid. If Payee does not exercise
a Fixed Call Option, the Fixed Rate shall remain in effect through the Maturity
Date.
Instrument Prepared By And
When Recorded Return To:
Nyemaster, Goode, Voigts, West,
Hansell & O'Brien, P.C.
700 Walnut, Suite 1600
Des Moines, Iowa 50309
Attention: Bradford L. Austin
Bedford (AZ)
19806.311
ASSIGNMENT OF RENTS AND LEASES
THIS ASSIGNMENT OF RENTS AND LEASES ("Assignment") is made and entered into
as of July 27, 2000, by BEDFORD PROPERTY INVESTORS, INC., a Maryland
corporation ("Assignor"), with the address of 270 Lafayette Circle, Lafayette,
California 94549, for the benefit of SECURITY LIFE OF DENVER INSURANCE COMPANY,
a Colorado corporation ("Assignee"), with the address of c/o ING Investment
Management LLC, 5780 Powers Ferry Road, NW, Suite 300, Atlanta, Georgia 30327-
4349.
W I T N E S S E T H:
WHEREAS, Assignor has executed and delivered to Assignee Assignor's
Promissory Note dated on or about this same date in the original principal
amount of SEVEN MILLION FOUR HUNDRED SEVENTY-FIVE THOUSAND AND NO/100 DOLLARS
($7,475,000) (the "Note"), performance of which is secured, among other things,
by a Deed of Trust, Security Agreement, Financing Statement and Fixture Filing
(the "Deed of Trust"), which Deed of Trust encumbers certain real estate
described in Exhibit "A", attached hereto and hereby made a part hereof, and
improvements thereon (together, the "Premises"); and
WHEREAS, Assignor has executed and delivered to Assignee the Other Note (as
defined in Exhibit "B" hereto) and the Other Security Documents (as defined in
Exhibit "B" hereto); and
WHEREAS, as a condition to Assignee's obligation to make the loan evidenced
by the Note and secured by the Deed of Trust (and any extensions and/or
modifications thereof) and made pursuant to or in connection with and secured
by other documents, including, but not limited to, a Security Agreement and
financing statements naming Assignor as debtor and Assignee as secured party
(this Assignment, the Note, the Deed of Trust, the Security Agreement and such
other documents are sometimes hereinafter collectively referred to as the "Loan
Documents"), Assignor has agreed to absolutely and unconditionally assign to
Assignee all of Assignor's rights under and title to various leases affecting
the Premises, including Assignor's rights in and title to the rents therefrom,
subject only to the terms and conditions herein set forth.
NOW THEREFORE, in consideration of the foregoing recitals and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and intending to be legally bound, Assignor hereby agrees as
follows:
1. Assignment of Leases. Assignor hereby presently assigns, transfers,
grants and conveys unto Assignee, its successors and assigns, all leasehold
estates of Assignor, as lessor, and all right, title and interest of Assignor
in, to and under all existing and future leases, subleases, license agreements,
concessions, tenancies and other use or occupancy agreements, whether oral or
written, covering or affecting any or all of the Premises and all agreements
for any use of, all or any part of the Premises, the buildings, fixtures and
other improvements located thereon ("Improvements"), and all extensions,
renewals and guaranties thereof and all amendments, and supplements thereto
(collectively, the "Leases"), including without limitation the following:
(a) any and all rents, revenues, issues, income, royalties, receipts,
profits, contract rights, accounts receivable, general intangibles, and other
amounts now or hereafter becoming due to Assignor in connection with or under
the Leases (whether due for the letting of space, for services, materials or
installations supplied by Assignor or for any other reason whatsoever),
including without limitation all insurance, tax and other contributions,
insurance proceeds, condemnation awards, damages following defaults by tenants
under the Leases ("Tenants"), cash or securities deposited by Tenants to secure
performance of their obligations under the Leases, and all other extraordinary
receipts, and all proceeds thereof, both cash and non-cash (all of the
foregoing being hereinafter collectively called the "Rents") and all rights to
direct the payment of, make claim for, collect, receive and receipt for the
Rents;
(b) all claims, rights, privileges and remedies on the part of Assignor,
whether arising under the Leases or by statute or at law or in equity or
otherwise, arising out of or in connection with any failure by any Tenant to
pay the Rents or to perform any of its other obligations under its Lease;
(c) all rights, powers and privileges of Assignor to exercise any election
or option or to give or receive any notice, consent, waiver or approval under
or with respect to the Leases; and
(d) all other claims, rights, powers, privileges and remedies of Assignor
under or with respect to the Leases, including without limitation the right,
power and privilege (but not the obligation) to do any and all acts, matters
and other things that Assignor is entitled to do thereunder or with respect
thereto.
2. Purpose of Assignment; Security. This Assignment is made
for the purpose of securing Assignor's full and faithful (a) payment of the
indebtedness (including any extensions or renewals thereof) evidenced by the
Note and the Other Note, (b) payment of all other sums with interest thereon
becoming due and payable to Assignee under the provisions of the Deed of Trust
or any other Loan Documents, and the Other Security Documents, and (c)
performance and discharge of each and every term, covenant and condition
contained in the Note, Deed of Trust, Security Agreement or any of the other
Loan Documents, and the Other Security Documents. In addition to, and not in
limitation of, any other remedy provided in or available under this Assignment,
Assignor expressly agrees that Assignee shall have all the rights set forth in
A.R.S. Section 33-702B (as amended, supplemented or supplanted) regarding
enforcement of the assignment of rents and leases contained herein.
3. Assignor's Representations, Warranties and Covenants.
Assignor represents, warrants, covenants and agrees with Assignee as follows:
(a) That the sole ownership of the entire lessor's interest in
the Leases and the Rents is, and as to future Leases shall be, vested in
Assignor, and that Assignor has not, and shall not, perform any acts or execute
any other instruments which might prevent Assignee from exercising its rights
in any material respect under any of the terms, covenants and conditions of
this Assignment.
(b) That the Leases are and shall be valid and enforceable
against the respective lessees thereunder in accordance with their terms and,
except as otherwise disclosed in writing to Assignee, have not been altered,
modified, amended, terminated, cancelled, renewed or surrendered nor have any
Rents thereunder been collected more than one month in advance nor have any of
the terms and conditions thereof been waived in any manner whatsoever except as
approved in writing by Assignee or as permitted in the Deed of Trust.
(c) That none of the Leases entered into prior to the date
hereof, unless such Lease is by its express terms subordinated to the Deed of
Trust, shall be altered, modified, amended, terminated, cancelled, extended,
renewed or surrendered, nor any term or condition thereof waived, nor shall
Assignor consent to any assignment or subletting by any lessee thereunder
without the prior written approval of Assignee, which shall not be unreasonably
withheld. Notwithstanding the above, in no event shall any Lease for which
Assignee has executed a subordination, non-disturbance and attornment agreement
be altered, modified, amended, terminated, cancelled, extended, renewed or
surrendered, nor any term or condition thereof waived, nor shall Assignor
consent to any assignment or subletting by any lessee thereunder, without the
prior written approval of Assignee, which shall not be unreasonably withheld.
Under no Lease will any Rents be abated or collected more than one month in
advance.
(d) That, to Assignor's current and actual knowledge there are
no defaults now existing under any of the Leases and there exists no state of
facts which, with the giving of notice or lapse of time or both, would
constitute a default under any of the Leases.
(e) That Assignor shall give prompt notice to Assignee of any
written notice received by Assignor claiming that a default has occurred under
any of the Leases on the part of the Assignor, together with a complete copy of
any such notice.
(f) That Assignor will not permit any Lease to become
subordinate to any lien other than the lien of the Deed of Trust.
(g) That there shall be no merger of the Leases, or any of them,
by reason of the fact that the same person may acquire or hold directly or
indirectly the Leases, or any of them, as well as the fee estate in the
Premises or any interest in such fee estate.
4. Absolute Assignment/License to Collect Rents. This
Assignment is entered into for the purpose of absolutely assigning the Leases
and the Rents to Assignee as additional collateral for the loan evidenced by
the Note and such Assignment is choate on the date hereof. Notwithstanding the
foregoing, so long as no Event of Default, as hereinafter defined, shall have
occurred, Assignor shall have a license, terminable by the Assignee upon any
Event of Default, to collect the Rents accruing from the Premises on or after,
but in no event more than one (1) month in advance of, the respective dates set
forth in the Leases on which the Rents become due (provided that in no event
shall Assignor be permitted to enter into any Lease which makes rent due
earlier than one (1) calendar month in advance of the current month (except for
the last month's rent or security deposit)), and to hold the Rents as a trust
fund for the uses and purposes more particularly described in the Deed of
Trust. Upon the occurrence of an Event of Default, the license granted to the
Assignor shall be automatically and immediately revoked without notice to the
Assignor. Upon the revocation of such license the Assignee may at its option
give Tenants a written notice (a "Tenant Notice"), with a copy to Assignor,
requesting the Tenants to pay all Rents and other amounts due under the Leases
directly to Assignee and to perform any of the Tenants' respective obligations
under the Leases for the benefit of Assignee.
5. Assignee's Powers and Rights. At any time during the term
of the Note or the Deed of Trust, Assignee may, at its option upon or after an
Event of Default and after giving a Tenant Notice, receive and collect all of
the Rents as they become due. Assignee shall thereafter continue to receive
and collect all of the Rents, until the Event of Default has been cured and all
sums due Assignee have been paid in full.
Assignor hereby irrevocably appoints Assignee its true and lawful
attorney, coupled with an interest, with full power of substitution and with
full power for Assignee in its own name and capacity or in the name and
capacity of Assignor, from and after the occurrence of an Event of Default and
after the giving of a Tenant Notice, to demand, collect, receive and give
complete acquittance for any and all Rents and at Assignee's discretion to file
any claim or take any other action or proceeding and make any settlement of any
claims, either in its own name or in the name of Assignor or otherwise, which
Assignee may deem necessary or desirable in order to collect and enforce the
payment of the Rents. Tenants are hereby expressly authorized and directed to
pay all Rents and any other amounts due Assignor pursuant to the Leases or
otherwise, to Assignee, or such nominee as Assignee may designate in a Tenant
Notice delivered to such Tenants, and the Tenants are expressly relieved of any
and all duty, liability or obligation to Assignor with respect to all payments
so made.
From and after the occurrence of an Event of Default and after
the giving of a Tenant Notice, Assignee is hereby vested with full power to use
all measures, legal and equitable, deemed by Assignee necessary or proper to
enforce this Assignment and to collect the Rents assigned hereunder, including
the right of Assignee or its designee to enter upon the Premises, or any part
thereof, with or without force and with or without process of law and take
possession of all or any part of the Premises together with all personal
property, fixtures, documents, books, records, papers and accounts of Assignor
relating thereto, and may exclude the Assignor, its agents and servants, wholly
therefrom. Assignor herein grants full power and authority to Assignee to
exercise all rights, privileges and powers herein granted at any and all times
after the occurrence of an Event of Default and after the giving of a Tenant
Notice, without further notice to Assignor, with full power to use and apply
all of the Rents and other income herein assigned to the payment of the costs
of managing and operating the Premises and of any indebtedness or liability of
Assignor to Assignee, including but not limited to the payment of taxes,
special assessments, insurance premiums, damage claims, the costs of
maintaining, repairing, rebuilding and restoring the improvements on the
Premises or of making the same rentable, reasonable attorneys' fees incurred in
connection with the enforcement of this Assignment, and of principal and
interest payments due (and all other amounts due under the Deed of Trust) from
Assignor to Assignee on the Note and the Deed of Trust, all in such order as
Assignee may determine. Assignee shall be under no obligation to exercise or
prosecute any of the rights or claims assigned to it hereunder or to perform or
carry out any of the obligations of the lessor under any of the Leases and does
not assume any of the liabilities in connection with or arising or growing out
of the covenants and agreements of Assignor in the Leases. It is further
understood that this Assignment shall not operate to place responsibility for
the control, care, management or repair of the Premises, or parts thereof, upon
Assignee, nor shall it operate to make Assignee liable for the performance of
any of the terms and conditions of any of the Leases, or for any waste of the
Premises by any Tenant or any other person, or for any dangerous or defective
condition of the Premises or for any negligence in the management, upkeep,
repair or control of the Premises resulting in loss or injury or death to any
Tenant, licensee, employee or stranger. If Assignor shall fail to pay, perform
or observe any of its covenants or agreements hereunder, Assignee may pay,
perform or observe the same and collect the cost thereof from Assignor all as
more fully provided in the Deed of Trust.
6. Assignee Not Liable; Indemnification. Anything contained
herein or in any of the Leases to the contrary notwithstanding: (a) Assignor
shall at all times remain solely liable under the Leases to perform all of the
obligations of Assignor thereunder to the same extent as if this Assignment had
not been executed; (b) neither this Assignment nor any action or inaction on
the part of Assignor or Assignee shall release Assignor from any of its
obligations under the Leases or constitute an assumption of any such
obligations by Assignee; and (c) Assignee shall not have any obligation or
liability under the Leases or otherwise by reason of or arising out of this
Assignment, nor shall Assignee be required or obligated in any manner to make
any payment or perform any other obligation of Assignor under or pursuant to
the Leases, or to make any inquiry as to the nature or sufficiency of any
payment received by Assignee, or to present or file any claim, or to take any
action to collect or enforce the payment of any amounts which have been
assigned to Assignee or to which it may be entitled at any time or times.
Assignor shall and does hereby agree to indemnify Assignee and hold Assignee
harmless from and against any and all liability, loss or damage which Assignee
may or might incur, and from and against any and all claims and demands
whatsoever which may be asserted against Assignee, in connection with or with
respect to the Leases or this Assignment, whether by reason of any alleged
obligation or undertaking on Assignee's part to perform or discharge any of the
covenants or agreements contained in the Leases or otherwise. Should Assignee
incur any such liability, loss or damage in connection with or with respect to
the Leases or this Assignment, or in the defense of any such claims or demands,
the amount thereof, including costs, expenses and reasonable attorneys' fees,
shall be paid by Assignor to Assignee immediately upon demand, together with
interest thereon from the date of advancement at the Default Rate (as defined
in the Note) until paid.
7. Deed of Trust Foreclosure. Upon foreclosure of the lien of
the Deed of Trust and sale of the Premises pursuant thereto, or delivery and
acceptance of a deed in lieu of foreclosure, all right, title and interest of
Assignor in, to and under the Leases shall thereupon vest in and become the
absolute property of the purchaser of the Premises in such foreclosure
proceeding, or the grantee in such deed, without any further act or assignment
by Assignor. Nevertheless, Assignor shall execute, acknowledge and deliver
from time to time such further instruments and assurances as Assignee may
require in connection therewith and hereby irrevocably appoints Assignee the
attorney-in-fact of Assignor in its name and stead to execute all appropriate
instruments of transfer or assignment, or any instrument of further assurance,
as Assignee may deem necessary or desirable, and Assignee may substitute one or
more persons with like power, Assignor hereby ratifying and confirming all that
its said attorney or such substitute or substitutes shall lawfully do by virtue
hereof.
8. Non-Waiver. Waiver or acquiescence by either party of any
default by the other party, or failure of either party to insist upon strict
performance by the other party of any covenants, conditions or agreements in
this Assignment, shall not constitute a waiver of any subsequent or other
default or failure, whether similar or dissimilar.
9. Rights and Remedies Cumulative. The rights and remedies of
Assignee and Assignor under this Assignment are cumulative and are not in lieu
of, but are in addition to any other rights or remedies which Assignee and
Assignor shall have under the Note, Deed of Trust, the Security Agreement or
any other Loan Document, or at law or in equity.
10. Severability. If any term of this Assignment, or the
application thereof to any person or circumstances, shall, to any extent, be
invalid or unenforceable, the remainder of this Assignment, or the application
of such term to persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected thereby, and each term of this
Assignment shall be valid and enforceable to the full extent permitted by law.
11. Notices. (a) All notices, demands, requests, and other
communications desired or required to be given hereunder ("Notices"), shall be
in writing and shall be given by: (i) hand delivery to the address for Notices;
(ii) delivery by overnight courier service to the address for Notices; or (iii)
sending the same by United States mail, postage prepaid, certified mail, return
receipt requested, addressed to the address for Notices.
(b) All Notices shall be deemed given and effective upon the
earlier to occur of: (x) the hand delivery of such Notice to the address for
Notices; (y) one business day after the deposit of such Notice with an
overnight courier service by the time deadline for next day delivery addressed
to the address for Notices; or (z) three business days after depositing the
Notice in the United States mail, postage prepaid, as set forth in (a)(iii)
above. All Notices shall be addressed to the following addresses:
Assignor: Bedford Property Investors, Inc.
270 Lafayette Circle
Lafayette, CA 94549
Attn: Chief Financial Officer
Assignee: Security Life of Denver Insurance Company
c/o ING Investment Management LLC
5780 Powers Ferry Road, NW, Suite 300
Atlanta, Georgia 30327-4349
Attention: Mortgage Loan Servicing Department
and to: ING Investment Management LLC
5780 Powers Ferry Road, NW, Suite 300
Atlanta, Georgia 30327-4349
Attention: Real Estate Law Department
With a copy to: Nyemaster, Goode, Voigts, West,
Hansell & O'Brien, P.C.
700 Walnut, Suite 1600
Des Moines, Iowa 50309
or to such other persons or at such other place as any party hereto may by
Notice designate as a place for service of Notice. Provided, that the "copy
to" Notice to be given as set forth above is a courtesy copy only; and a Notice
given to such person is not sufficient to effect giving a Notice to the
principal party, nor does a failure to give such a courtesy copy of a Notice
constitute a failure to give Notice to the principal party.
12. Heirs, Successors and Assigns. The terms "Assignor" and
"Assignee" shall be construed to include the respective heirs, personal
representatives, successors and assigns of Assignor and Assignee. The gender
and number used in this Assignment are used as a reference term only and shall
apply with the same effect whether the parties are of the masculine or feminine
gender, corporate or other form, and the singular shall likewise include the
plural.
13. Amendment. This Assignment may not be amended, modified or
changed nor shall any waiver of any provisions hereof be effective, except only
by an instrument in writing and signed by the party against whom enforcement of
any waiver, amendment, change, modification or discharge is sought.
14. Captions. The captions or headings preceding the text of
the Paragraphs of this Assignment are inserted only for convenience of
reference and shall not constitute a part of this Assignment, nor shall they in
any way affect its meaning, construction or effect.
15. Termination of Assignment. Upon payment in full of the
indebtedness described in Paragraph 2, this Assignment shall terminate and be
void and of no force or effect, and Assignee shall release its lien on the
Rents and Leases (and upon request shall record a termination of this
Assignment) without costs or expenses to Assignee, Assignor hereby agreeing to
reimburse Assignee for such costs and expenses.
16. Choice of Law. The validity and interpretation of this
Assignment shall be construed in accordance with the laws (excluding conflicts
of laws rules) of Arizona.
17. Event of Default. The occurrence of any one or more of the
following events shall constitute an event of default hereunder ("Event of
Default"): (i) the failure of Assignor to make any payment due hereunder within
ten (10) days after the same shall fall due, (ii) default shall be made in the
due observance or performance of any of the other covenants, agreements or
conditions hereinbefore or hereinafter contained, required to be kept or
performed or observed by the Assignor which does not relate to the nonpayment
of any monetary sum, and such default is not cured within thirty (30) days
following written notice thereof by Assignee to Assignor or such longer period
as is reasonably necessary to cure such default as long as Assignor is
diligently pursuing such cure and such default is curable by Assignor within a
reasonable time provided that such additional time shall not exceed thirty (30)
days (for an aggregate sixty (60) day period) or such longer time period as
approved by Assignee, or (iii) the occurrence of any breach, default, event of
default, or failure of performance (however denominated) under the Note, the
Deed of Trust or any of the other Loan Documents, and the expiration of any
applicable cure period without the same having been cured. Any Event of
Default hereunder shall constitute a default under each and all of the other
Loan Documents.
18. Exculpatory. The liability of Assignor personally to pay
the Note or any interest that may accrue thereon, or any indebtedness or
obligation accruing or arising hereunder is limited to the extent set forth in
the Note.
19. Integration. This Assignment, together with the other Loan
Documents, constitutes the entire agreement between the parties hereto
pertaining to the subject matters hereof and supersedes all negotiations,
preliminary agreements and all prior or contemporaneous discussions and
understandings of the parties hereto in connection with the subject matters
hereof.
20. Time of Essence. Time is of the essence in the performance
of this Assignment.
21. WAIVER OF JURY TRIAL. THE PARTIES HERETO, AFTER CONSULTING
OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY,
AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN ANY
LITIGATION BASED ON OR ARISING OUT OF THIS AGREEMENT OR INSTRUMENT, OR ANY
RELATED INSTRUMENT OR AGREEMENT, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY
OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS, WHETHER ORAL OR WRITTEN, OR
ACTION OF ANY PARTY HERETO. NO PARTY SHALL SEEK TO CONSOLIDATE BY COUNTERCLAIM
OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY
OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE
PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR
RELINQUISHED BY ANY PARTY HERETO EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY ALL
PARTIES.
22. Attorney's fees. Assignor shall pay on demand all costs and
expenses incurred by Assignee in enforcing or protecting its rights and
remedies hereunder, including, but not limited to, reasonable attorney's fees
and legal expenses.
23. Cross-Collateralization Rider. The terms and conditions of
the Cross-Collateralization Rider, attached hereto as Exhibit B, are
incorporated herein by this reference.
24. Partial Release. Portions of the Premises shall be released
herefrom upon release from the Deed of Trust as provided for therein.
IN WITNESS WHEREOF, Assignor has caused this instrument to be
executed as of the date first above written, and acknowledges receipt of a copy
hereof at the time of execution.
BEDFORD PROPERTY INVESTORS, INC., a
Maryland corporation
By: /s/Hanh Kihara
Hanh Kihara
Senior Vice President and Chief
Financial Officer
STATE OF _________________)
) SS:
COUNTY OF ________________)
On this ____ day of ______________________, 2000, before me, a
notary public, personally appeared Hanh Kihara , to me personally known, who
being by me duly sworn did say that she is the Senior Vice President and Chief
Financial Officer, of Bedford Property Investors, Inc., a corporation; that (no
seal has been procured by) (the seal affixed thereto is the seal of) said
corporation; the foregoing instrument was signed (and sealed) on behalf of said
corporation by authority of its Board of Directors; and that the said Hanh
Kihara, as such officer, acknowledged the execution of the foregoing instrument
to be the voluntary act and deed of said corporation, by it and by her
voluntarily executed.
_____________________________________
Notary Public
Seal
EXHIBIT A
LEGAL DESCRIPTION
Parcel I - 4546 South 35th Street, Phoenix, Maricopa County, Arizona;
Parcel II - 2601 Broadway, Tempe, Maricopa County, Arizona;
Parcel III - 3015, 3101, 3111, 3121 and 3131 South Park Drive, Tempe, Maricopa
County, Arizona, 2307 & 2315 West Fairmont Drive, Tempe, Maricopa County,
Arizona, 3010,3110 & 3120 South Potter Road, Tempe, Maricopa County, Arizona
EXHIBIT B
CROSS-COLLATERALIZATION RIDER
Assignor and Assignee are Maker and Payee, respectively, under
the following instruments, each of which is dated as of this same date
(together, the "Instruments"):
1. Promissory Note in the amount of $7,475,000 (the "Note");
2. Promissory Note in the amount of $23,415,000 (the "Other
Note");
The Note is secured by (i) a Deed of Trust, Security Agreement,
Financing Statement and Fixture Filing; (ii) this Assignment of Rents and
Leases, and (iii) a Security Agreement (collectively, the "Security
Documents").
The Other Note is secured by, among other things, the following
documents, each dated as of this same date and relating to certain property
located at (1) 410 Allerton, South San Francisco, San Mateo County, California;
(2) 301, 311 and 325 Grand Avenue, South San Francisco, San Mateo County,
California; (3) 901 Kaiser Road, Napa, Napa County, California; (4) 850-940
Auburn Court, Fremont, Alameda County, California; (5) 6500 Kaiser Drive,
Fremont, Alameda County, California; and (6) 45713 and 47533 Westinghouse
Drive, Fremont, Alameda County, California: (i) a Deed of Trust, Security
Agreement, Financing Statement and Fixture Filing, (ii) an Assignment of Rents
and Leases, and (iii) a Security Agreement (collectively, the "Other Security
Documents").
In addition to securing the obligations described in the Note,
this Assignment shall also secure the Other Note and the obligations secured by
the Other Security Documents.
An Event of Default under the Note or under any of the Security
Documents shall constitute an Event of Default under the Other Note and the
Other Security Documents. An Event of Default under the Other Note or the
Other Security Documents shall constitute an Event of Default under the Note
and the Security Documents.
Assignor waives all rights to have all or part of the Premises or
the property described in the Other Security Documents marshalled upon any
foreclosure of the Security Documents or the Other Security Documents.
Assignee shall have the right to sell, and any court in which foreclosure
proceedings may be brought shall have the right to order a sale of the Premises
or the property described in the Other Security Documents as a whole or in
separate parcels, in any order that Assignee may designate. Assignor makes
this waiver for itself, for all persons and entities claiming through or under
Assignor and for all persons and entities who may acquire a lien on all or any
part of the Premises or the property described in the Other Security Documents,
or on any interest therein.
Bedford (AZ)
19806.311
SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Agreement") is made and entered into as
of July 27, 2000, by BEDFORD PROPERTY INVESTORS, INC., a Maryland corporation
("Debtor"), in favor of SECURITY LIFE OF DENVER INSURANCE COMPANY, a Colorado
corporation ("Secured Party"), and is made with reference to the following
facts:
RECITALS:
A. Secured Party is loaning to Debtor the sum of SEVEN MILLION
FOUR HUNDRED SEVENTY-FIVE THOUSAND AND NO/100 DOLLARS ($7,475,000), to be
evidenced by a Promissory Note dated on or about this same date, executed by
Debtor in favor of Secured Party (such Promissory Note together with any
extensions, renewals, substitutions and amendments thereof are referred to as
the "Note"). Payment of the Note is secured by, among other things, a Deed of
Trust, Security Agreement, Financing Statement and Fixture Filing (the "Deed of
Trust") executed by Debtor as Trustor in favor of Secured Party, encumbering
the real property described in Exhibit "A" attached hereto and made a part
hereof including improvements and personal property thereon (collectively, the
"Premises") and an Assignment of Rents and Leases (the "Assignment of Rents")
assigning all rents, issues and profits of and from the Premises. This
Agreement, the Note, the Deed of Trust, and the Assignment of Rents and the
other documents referred to therein or executed in connection therewith are
collectively called the "Loan Documents."
B. Debtor has executed and delivered to Secured Party the Other
Note (as defined in Exhibit "B" hereto) and the Other Security Documents (as
defined in Exhibit "B" hereto).
C. Debtor desires to grant to Secured Party a security interest
in certain personal property as described in this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and
other valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and intending to be legally bound, the Debtor agrees as follows:
1. Grant of Security Interest. Debtor hereby grants to Secured
Party a security interest in the Debtor's right, title and interest in and to
the following items and types of property, now owned and hereafter acquired,
which property is collectively referred to herein as the "Collateral":
(a) Personal Property. All machinery, apparatus, equipment,
goods, systems, building materials, carpeting, furnishings, fixtures and
property of every kind and nature whatsoever, now or hereafter located in or
upon or affixed to the Premises, or any part thereof, or used or usable in
connection with any construction on or any present or future operation of the
Premises, now owned or hereafter acquired by Debtor, including, but without
limitation of the generality of the foregoing: all heating, lighting,
refrigerating, ventilating, air-conditioning, air-cooling, fire extinguishing,
plumbing, cleaning, telephone, communications and power equipment, systems and
apparatus; and all elevators, switchboards, motors, pumps, screens, awnings,
floor coverings, cabinets, partitions, conduits, ducts and compressors; and all
cranes and craneways, oil storage, sprinkler/fire protection and water service
equipment; and also including any of such property stored on the Premises or in
warehouses and intended to be used in connection with or incorporated into the
Premises or for the pursuit of any other activity in which Debtor may be
engaged on the Premises, and including without limitation all tools, musical
instruments and systems, audio or video equipment, cabinets, awnings, window
shades, venetian blinds, drapes and drapery rods and brackets, screens,
carpeting and other window and floor coverings, decorative fixtures, plants,
cleaning apparatus, and cleaning equipment, refrigeration equipment, cables,
computers, and computer equipment, software, books, supplies, kitchen
equipment, appliances, tractors, lawn mowers, ground sweepers and tools,
swimming pools, whirlpools, recreational or play equipment together with all
substitutions, accessions, repairs, additions and replacements to any of the
foregoing; it being understood and agreed that all such machinery, equipment,
apparatus, goods, systems, fixtures, and property are a part of the Premises
and are declared to be a portion of the security for the Obligations (as
hereinafter defined) (whether in single units or centrally controlled, and
whether physically attached to said real estate or not), excluding, however,
personal property owned by tenants of the Premises. All of such property is
collectively referred to as the "Personal Property".
(b) Accounts. All accounts receivable and any right of Debtor
to payment for goods sold or leased or for services rendered, whether or not
yet earned by performance, and whether or not evidenced by an instrument or
chattel paper, arising from the operation of the Premises, now existing or
hereafter created, substitutions therefor, proceeds thereof (whether cash or
noncash, movable or immovable, tangible or intangible) received upon the sale,
exchange, transfer, collection or other disposition or substitution thereof and
any or all of the foregoing and proceeds therefrom (collectively, the
"Accounts").
(c) Permits. All authorizations, licenses, permits, contracts,
management agreements, franchise agreements, and occupancy and other
certificates concerning the ownership, use and operation of the Premises
(collectively, the "Permits").
(d) Rents and Deposits. All monies on deposit for the payment
of real estate taxes or special assessments against the Premises or for the
payment of premiums on policies of fire and other hazard insurance covering the
Collateral or the Premises except as provided in the Deed of Trust; all
proceeds paid for damage done to the Collateral or the Premises except as
provided in the Deed of Trust; all proceeds of any award or claim for damages
for any of the Collateral or the Premises taken or damaged under the power of
eminent domain or by condemnation; all rents, issues and leases of the
Premises; and all tenants' or security deposits held by Debtor in respect of
the Premises.
(e) Trade Names and Rights. All names under or by which the
Premises or any improvements thereon may at any time be operated or known, and
all rights to carry on business under any such names or any variant thereof,
and all trademarks, trade names, patents, patents pending and goodwill with
respect to the Premises.
(f) Memberships. All shares of stock or partnership interest or
other evidence of ownership of any part of the Premises that is owned by Debtor
in common with others, including all water stock relating to the Premises, if
any, and all documents of membership in any owners' or members' association or
similar group having responsibility for managing or operating any part of the
Premises and any management agreements.
(g) Plans. All plans and specifications (except those owned by
third parties) prepared for construction of improvements on the Premises and
all studies, data and drawings related thereto; and all contracts and
agreements of Debtor relating to the aforesaid plans and specifications or to
the aforesaid studies, data and drawings, or to the construction of
improvements on the Premises.
(h) Reserve Accounts. All of Debtor's right, title and interest
in, to and under any and all reserve, deposit or escrow accounts made pursuant
to any loan document made between Debtor and Secured Party with respect to the
Premises, together with all income, profits, benefits and advantages arising
therefrom.
(i) Other Collateral. All goods, accounts, general intangibles,
chattel paper, instruments, documents, consumer goods, equipment and inventory
(as defined in the Arizona Uniform Commercial Code ("UCC")) located on and used
in the operation of the Premises.
(j) Substitutions. All substitutions, accessions, additions and
replacements to any of the foregoing.
(k) Products and Proceeds. All products and proceeds of any of
the foregoing, or with respect to the Premises, including without limitation,
insurance proceeds, proceeds of any voluntary or involuntary disposition or
diminution in value of any of the foregoing or of the Premises, and any claim
respecting any thereof (pursuant to judgment, condemnation award or otherwise)
and all goods, accounts, general intangibles, chattel paper, instruments,
documents, consumer goods, equipment and inventory, wherever located, acquired
with the proceeds of any of the foregoing or proceeds thereof.
For purposes of this Agreement, the term "proceeds" means whatever is received
when any of the foregoing or the proceeds thereof (including, without
limitation, cash proceeds) is sold, exchanged or otherwise disposed of
(including involuntary dispositions or destruction and claims for damages
thereto), including without limitation cash proceeds, insurance proceeds,
condemnation proceeds, and any other rights or property arising under or
receivable upon any such disposition. The security interest is granted in the
Collateral for the purpose of securing the following obligations
("Obligations"): (a) payment of the indebtedness evidenced by the Note; (b) the
strict performance and observance of all agreements, warranties, covenants and
conditions of Debtor contained in the Note, Deed of Trust, Assignment of Rents,
this Agreement, the other Loan Documents, and every other instrument securing
payment of the Note; and (c) the repayment of all monies expended by Secured
Party under the provisions hereof, the Deed of Trust, the Assignment of Rents,
the other Loan Documents, or any other instrument securing payment of the Note,
with interest thereon from the date of expenditure at the Default Rate (as
defined in the Note); upon the terms and conditions set forth herein.
2. Representations. Debtor hereby represents and warrants to
Secured Party that:
(a) Debtor owns, or with respect to property hereafter acquired
will own, all of the Collateral free and clear of all liens, charges,
encumbrances, financing statements and adverse claims of any kind or nature
whatsoever in favor of any entity other than Secured Party.
(b) Debtor owns, or with respect to property hereafter acquired
will own, and is, or will be, entitled to collect, without right of
counterclaim or set-off, all of the Accounts presently held and those arising
in the future, free and clear of all liens, charges, encumbrances, financing
statements and adverse claims of any nature whatsoever.
(c) Debtor is the holder of the Permits, which allow Debtor to
operate the Premises for its intended use.
(d) The Collateral is not used or bought primarily for personal,
family or household purposes of Debtor.
3. Covenants. Debtor hereby covenants and agrees that:
(a) Debtor will pay any indebtedness owed to Secured Party
evidenced by the Note promptly when due (giving effect to applicable grace
periods, if any) and will repay immediately upon demand all expenses, including
reasonable attorneys' fees, legal expenses and costs, together with interest at
the Default Rate (as defined in the Note) from the date of such expenditure,
incurred by Secured Party in enforcing the Obligations and this Agreement.
Payment of such expenses and interest shall be secured by this Agreement and
the other Loan Documents.
(b) Debtor will maintain complete and accurate financial
information concerning the Collateral. Debtor will permit Secured Party's
representatives to enter on Debtor's property at any reasonable time and upon
reasonable prior notice to inspect the Collateral and Debtor's books and
records relating thereto and to make extracts from such books and records.
(c) Debtor shall promptly notify Secured Party of all claims and
demands made against the Collateral and any information received that may
affect the value of the Collateral or the rights and remedies of Secured Party
relating thereto (including any liens, encumbrances or security interests
purporting to affect the title to the Collateral). In the event of any such
claim or demand, Debtor shall promptly take such action as may be reasonably
necessary to protect the value of the Collateral.
(d) Debtor will pay when due all taxes, assessments or similar
obligations affecting the Collateral. Debtor shall have the right to contest
the amount or validity of any such taxes, assessments or obligations by
appropriate proceedings conducted in good faith and with due diligence and
otherwise in accordance with the provisions of the Deed of Trust.
(e) The Personal Property shall be kept on the Premises except
for the sales of inventory in the ordinary course of business. Debtor shall
not remove Collateral without the written consent of Secured Party, unless the
Collateral is removed in the ordinary course of business and Debtor promptly
replaces the removed Collateral with substitute Collateral of substantially
similar quality and utility and of equal or greater value.
(f) Debtor will keep the Collateral free from any lien, charge,
encumbrance, financing statement or adverse claim in favor of any entity other
than Secured Party. Debtor will protect and defend the Collateral against all
claims thereto and hereby indemnifies and agrees to defend and save Secured
Party harmless against and with respect to any liability or claim in connection
therewith. Debtor will not sell, dispose of, or grant a security interest or
other encumbrance in any portion of the Collateral or execute any financing
statement covering any portion of the Collateral in favor of any person other
than Secured Party.
(g) Debtor will do all acts necessary to maintain, preserve,
protect and keep the Collateral in good condition and repair, ordinary wear and
tear excepted, will not permit any waste or unusual or unreasonable
depreciation of Collateral to occur and will not commit any act for which any
portion of the Collateral might be confiscated by any governmental or private
entity.
(h) Debtor will maintain and deliver to Secured Party policies of
insurance relating to the Collateral as required by the Deed of Trust.
4. Secured Party's Actions. Upon the occurrence of an Event of
Default (as hereinafter defined), Secured Party shall have the right, but shall
not be obligated, to discharge taxes, liens, security interests or other
encumbrances at any time levied or placed on the Collateral or on the Premises,
pay for insurance on the Collateral, pay for the maintenance and preservation
of the Collateral, sign and endorse any checks, notes, drafts, money orders,
acceptances or other forms of remittance payable to Debtor and any invoice,
freight or express bill, bill of lading, or other documents relating to the
Collateral, demand, bring suit, collect or give acquittance for any monies due
on the Accounts or compromise, prosecute or defend any action, claim or
proceeding arising from the Collateral. Secured Party shall have the right to
do any or all of the foregoing in the name of Debtor or otherwise. Should
Debtor fail or refuse to make any payment, perform any covenant or obligation,
observe any condition or take any action which Debtor is obligated hereunder to
make, perform, observe, take or do, at the time or in the manner herein
provided, then Secured Party shall have the right to, at Secured Party's sole
discretion, without notice to or demand upon Debtor with respect to any Event
of Default and without releasing Debtor from any obligation, covenant or
condition hereof, make, perform, observe, take or do the same in such manner
and to such extent as Secured Party may, during any period of time that Debtor
is in default hereunder, deem necessary to protect the Collateral and the
security provided by this Agreement. Debtor agrees to reimburse Secured Party
on demand for any reasonable payment made, or any reasonable expense incurred,
including reasonable attorneys' fees, by Secured Party in connection with the
foregoing, together with interest thereon at the Default Rate.
5. Default. The occurrence of any one or more of the following
events shall constitute an event of default hereunder ("Event of Default"): (i)
the failure of Debtor to make any payment due hereunder within ten (10) days
after the same shall fall due, (ii) default shall be made in the due observance
or performance of any of the other covenants, agreements or conditions
hereinbefore or hereinafter contained, required to be kept or performed or
observed by the Debtor which does not relate to the nonpayment of any monetary
sum, and such default is not cured within thirty (30) days following written
notice thereof by Secured Party to Debtor or such longer period as is
reasonably necessary to cure such default as long as Debtor is diligently
pursuing such cure and such default is curable by Debtor within a reasonable
time provided that such additional time shall not exceed thirty (30) days (for
an aggregate sixty (60) day period) unless a longer time is approved by Secured
Party, or (iii) the occurrence of any breach, default, event of default, or
failure of performance (however denominated) under the Note, the Deed of Trust
or any of the other Loan Documents, and the expiration of any applicable cure
period without the same having been cured. Any Event of Default hereunder
shall constitute a default under each and all of the other Loan Documents.
Upon the occurrence of any one or more Events of Default hereunder, Secured
Party shall have the right at its option and without notice or demand, to
declare all Obligations and indebtedness secured hereby immediately due and
payable, and to do one or more of the following:
(a) Foreclose or otherwise enforce Secured Party's security
interest in any manner permitted by the UCC or other applicable laws, or
provided for in the Note, the Deed of Trust, the Assignment of Rents, this
Agreement or other Loan Documents or applicable agreement.
(b) Enter upon the Premises, exclude Debtor therefrom and take
immediate possession of the Collateral, either personally or by means of a
receiver appointed by a court, and may, at Secured Party's option, use,
operate, manage and control the Collateral in any lawful manner or business and
collect and receive all rents, income, revenue, earnings, issues and profits of
the Collateral, remove all or part of the Collateral as Secured Party may
determine in Secured Party's discretion, and any monies so collected or
received by Secured Party shall be applied to the payment of all costs and
expenses of Secured Party's taking and fees for such operation thereof, all
costs and expenses of such repairs, renovations and alterations of the
Collateral and attorneys' fees in a reasonable sum, with the remainder, if any,
to be applied upon any indebtedness secured hereby, or toward the satisfaction
of any of the Obligations, in such order as is specified in the Note and at
such times as Secured Party may determine.
(c) With respect to the Accounts, at any time give notice of
assignment to any and all obligors or account debtors under the Accounts and
may collect the Accounts. Debtor hereby covenants and agrees that Debtor will
cooperate fully with Secured Party, and its employees and agents, and will
provide any and all documents deemed by Secured Party to be necessary or
desirable to collect the Accounts.
(d) Sell, lease or otherwise dispose of any Collateral at one or
more public or private sales, whether or not such Collateral is present at the
place of sale, for cash or credit or future delivery, on such terms and in such
manner as Secured Party may determine. In the event of a sale, lease or other
disposition of the Collateral or of collection of the Accounts:
(1) Any person, including Debtor and Secured Party, may
purchase at the sale.
(2) (A) In connection with any sale or other dispositions
of the Collateral, the parties agree that without limiting any
other commercially reasonable conduct as may be followed by
Secured Party, the following procedures shall be deemed to
comprise and constitute a commercially reasonable sale (the
"sale"):
(i) Secured Party shall mail to Debtor written
notice of the sale not less than ten (10) days prior to such
sale.
(ii) In the event of a public sale, as often as (but
no more than) required under the UCC immediately preceding
the sale, Secured Party will publish notice of the sale in
an appropriate publication that Secured Party selects. The
notice will advise prospective purchasers as to where they
may obtain information with respect to the Collateral.
(iii) Upon receipt of any written request to do so,
Secured Party will make available to any bona fide
prospective purchaser for inspection, within five (5)
business days following receipt of such request and during
reasonable business hours, such information (including
records and documents with respect to the Accounts) as shall
be necessary to enable a prospective purchaser to prepare a
bid.
(B) Notwithstanding paragraph (A) hereof, in the
event Secured Party offers to sell all or any part of the Colla-
teral, Secured Party will be under no obligation to consummate a
sale if, in its reasonable business judgment, none of the offers
received by it reasonably approximates the fair value of such
Collateral.
(3) Secured Party shall apply the proceeds of any sale,
collection, or disposition hereunder to payment of the following:
(A) the expenses of such sale or disposition, including but not
limited to the costs of publishing, recording, mailing and
posting notice; (B) the cost of any search and other evidence of
title procured in connection therewith and any transfer tax on
any deed or conveyance or bill of sale; (C) all sums expended
under the terms hereof, not then repaid, with accrued interest in
the amount provided herein; (D) all sums evidenced by the Note
and secured hereby and evidenced or owed pursuant to the Deed of
Trust; and (E) the remainder, if any, to the person or persons
legally entitled thereto.
(4) Secured Party may require Debtor to make the
Collateral available to Secured Party at a reasonable place
designated by Secured Party.
(5) If the holder of the Note is a purchaser at such sale,
such holder shall be entitled to apply any portion of the
indebtedness then secured hereby for or in settlement or payment
of any portion of the purchase price of the property purchased at
such sale.
(e) Recover from Debtor all reasonable costs and expenses,
including, without limitation, reasonable attorneys' fees, incurred or paid by
Secured Party in exercising any right, power or remedy provided by this
Agreement or by law.
6. Exercise of Remedies; No Waiver. All remedies conferred
upon Secured Party shall be deemed cumulative with, and not exclusive of, any
other remedy conferred by this Agreement, the Note, the Deed of Trust, the
Assignment of Rents, any of the other Loan Documents, or by law or equity. The
exercise of any one remedy shall not preclude the exercise of any other.
Failure of Secured Party to exercise any rights it may have upon Debtor's
default hereunder shall not be deemed to be a waiver of Secured Party's rights
thereupon or to be a release of Debtor from its Obligations. The acceptance by
Secured Party of any sum after the same is due shall not constitute a waiver of
the right either to require prompt payment, when due, of all other sums hereby
secured or to declare a default as herein provided. The acceptance by Secured
Party of any sum in an amount less than the sum then due shall not constitute a
waiver of the obligation of Debtor to pay the entire sum then due. The waiver
by Secured Party of any default hereunder shall not be deemed to constitute a
waiver of any succeeding default. Debtor waives any right to require Secured
Party to proceed against any person or to exhaust any Collateral or to pursue
any remedy in Secured Party's power.
7. Successors. All agreements, covenants, conditions and
provisions of this Agreement shall inure to the benefit of Secured Party and
its successors and assigns, and shall bind the heirs, executors,
administrators, successors in interest of Debtor in the Collateral. In the
event that there is more than one Debtor or successor in interest of Debtor in
the Collateral, they shall be jointly and severally liable hereunder. The
obligations of Debtor hereunder shall be binding on any community of which
Debtor is a part and on any separate or quasi-community property of any Debtor.
8. Term. This Agreement shall remain in full force and effect
until the Obligations and the indebtedness secured hereby, including reasonable
charges, expenses, fees, costs, and interest, shall have been paid in full or
until its release and termination is given in writing by Secured Party. No
party to this Agreement or otherwise liable for the Obligations shall be
discharged by any extension of time, additional advances, renewals and
extensions of the Note, the Deed of Trust, or the Assignment of Rents, the
taking of further security, releases of a part or all of the Collateral, or any
other acts except as provided in this section.
9. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws (excluding conflicts of laws rules) of
Arizona.
10. No Modification. This Agreement may not be modified or
amended except by a written instrument executed by the party sought to be
charged or bound thereby. If any provision hereof should be held unenforceable
or void, then such provision shall be deemed separable from the remaining
provisions hereof and shall in no way affect the validity of this Agreement
except that if such provision relates to the payment of any monetary sum, then
Secured Party may at its option declare the indebtedness evidenced by the Note
and all other sums secured hereby immediately due and payable.
11. Notices. All notices, demands, requests, and other
communications desired or required to be given hereunder by the Debtor or
Secured Party ("Notices"), shall be in writing and shall be given by: (i) hand
delivery to the address for Notices; (ii) delivery by overnight courier service
to the address for Notices; or (iii) sending the same by United States mail,
postage prepaid, certified mail, return receipt requested, addressed to the
address for Notices.
All Notices shall be deemed given and effective upon the earlier
to occur of: (x) the hand delivery of such Notice to the address for Notices;
(y) one business day after the deposit of such Notice with an overnight courier
service by the time deadline for next day delivery addressed to the address for
Notices; or (z) three business days after depositing the Notice in the United
States mail, postage prepaid, as set forth in (iii) above. All Notices shall
be addressed to the following addresses:
Debtor: Bedford Property Investors, Inc.
270 Lafayette Circle
Lafayette, CA 94549
Attn: Chief Financial Officer
Secured Party: Security Life of Denver Insurance Company
c/o ING Investment Management LLC
5780 Powers Ferry Road, NW, Suite 300
Atlanta, Georgia 30327-4349
Attention: Mortgage Loan Servicing Department
and
ING Investment Management LLC
5780 Powers Ferry Road, NW, Suite 300
Atlanta, Georgia 30327-4349
Attention: Real Estate Law Department
With a copy to: Nyemaster, Goode, Voigts, West,
Hansell & O'Brien, P.C.
700 Walnut, Suite 1600
Des Moines, Iowa 50309
or to such other persons or at such other place as any party hereto may by
Notice designate as a place for service of Notice. Provided, that the "copy
to" Notice to be given as set forth above is a courtesy copy only; and a Notice
given to such person is not sufficient to effect giving a Notice to the
principal party, nor does a failure to give such a courtesy copy of a Notice
constitute a failure to give Notice to the principal party.
12. Time is of the Essence. Time is of the essence in the
performance of Debtor's obligations under this Agreement.
13. Exculpation. The liability of Debtor personally to pay the
Note or any interest that may accrue thereon, or any indebtedness or obligation
accruing or arising hereunder is limited to the extent set forth in the Note.
14. Integration. This Agreement, the other Loan Documents and
the certain Environmental Indemnification Agreement together constitute the
entire agreement between the parties hereto pertaining to the subject matters
hereof and thereof and supersede all negotiations, preliminary agreements and
all prior or contemporaneous discussions and understandings of the parties
hereto in connection with the subject matters hereof and thereof.
15. WAIVER OF JURY TRIAL. THE PARTIES HERETO, AFTER CONSULTING
OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY,
AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN ANY
LITIGATION BASED ON OR ARISING OUT OF THIS AGREEMENT OR INSTRUMENT, OR ANY
RELATED INSTRUMENT OR AGREEMENT, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY
OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS, WHETHER ORAL OR WRITTEN, OR
ACTION OF ANY PARTY HERETO. NO PARTY SHALL SEEK TO CONSOLIDATE BY COUNTERCLAIM
OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY
OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE
PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR
RELINQUISHED BY ANY PARTY HERETO EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY ALL
PARTIES.
16. Attorney's Fees. Debtor shall pay on demand all costs and
expenses incurred by Secured Party in enforcing or protecting its rights and
remedies hereunder, including, but not limited to, reasonable attorney's fees
and legal expenses.
17. Cross-Collateralization Rider. The terms and conditions of
the Cross-Collateralization Rider, attached hereto as Exhibit B, are
incorporated herein by this reference.
18. Partial Release. Portions of the Premises shall be released
herefrom upon release from the Deed of Trust as provided for therein.
IN WITNESS WHEREOF, Debtor has caused this Agreement to be
executed as of the date first set forth above and acknowledges receipt of a
copy hereof at the time of execution.
DEBTOR:
BEDFORD PROPERTY INVESTORS, INC., a
Maryland corporation
By: /s/Hanh Kihara
Hanh Kihara
Senior Vice President and Chief
Financial Officer
STATE OF _________________)
) SS:
COUNTY OF ________________)
On this ____ day of ______________________, 2000, before me, a
notary public, personally appeared Hanh Kihara , to me personally known, who
being by me duly sworn did say that she is the Senior Vice President and Chief
Financial Officer, of Bedford Property Investors, Inc., a corporation; that (no
seal has been procured by) (the seal affixed thereto is the seal of) said
corporation; the foregoing instrument was signed (and sealed) on behalf of said
corporation by authority of its Board of Directors; and that the said Hanh
Kihara, as such officer, acknowledged the execution of the foregoing instrument
to be the voluntary act and deed of said corporation, by it and by her
voluntarily executed.
_____________________________________
Notary Public
Seal
EXHIBIT A
LEGAL DESCRIPTION
Parcel I - 4546 South 35th Street, Phoenix, Maricopa County, Arizona;
Parcel II - 2601 Broadway, Tempe, Maricopa County, Arizona;
Parcel III - 3015, 3101, 3111, 3121 and 3131 South Park Drive, Tempe, Maricopa
County, Arizona, 2307 & 2315 West Fairmont Drive, Tempe, Maricopa County,
Arizona, 3010,3110 & 3120 South Potter Road, Tempe, Maricopa County, Arizona
<PAGE>
EXHIBIT B
CROSS-COLLATERALIZATION RIDER
Debtor and Secured Party are Maker and Payee, respectively, under
the following instruments, each of which is dated as of this same date
(together, the "Instruments"):
1. Promissory Note in the amount of $7,475,000 (the "Note");
2. Promissory Note in the amount of $23,415,000 (the "Other
Note");
The Note is secured by (i) a Deed of Trust, Security Agreement,
Financing Statement and Fixture Filing; (ii) an Assignment of Rents and Leases,
and (iii) a Security Agreement (collectively, the "Security Documents").
The Other Note is secured by, among other things, the following
documents, each dated as of this same date and relating to certain property
located at (1) 410 Allerton, South San Francisco, San Mateo County, California;
(2) 301, 311 and 325 Grand Avenue, South San Francisco, San Mateo County,
California; (3) 901 Kaiser Road, Napa, Napa County, California; (4) 850-940
Auburn Court, Fremont, Alameda County, California; (5) 6500 Kaiser Drive,
Fremont, Alameda County, California; and (6) 45713 and 47533 Westinghouse
Drive, Fremont, Alameda County, California: (i) a Deed of Trust, Security
Agreement, Financing Statement and Fixture Filing, (ii) an Assignment of Rents
and Leases, and (iii) a Security Agreement (collectively, the "Other Security
Documents").
In addition to securing the obligations described in the Note,
this Agreement shall also secure the Other Note and the obligations secured by
the Other Security Documents.
An Event of Default under the Note or under any of the Security
Documents shall constitute an Event of Default under the Other Note and the
Other Security Documents. An Event of Default under the Other Note or the
Other Security Documents shall constitute an Event of Default under the Note
and the Security Documents.
Debtor waives all rights to have all or part of the Premises or
the property described in the Other Security Documents marshalled upon any
foreclosure of the Security Documents or the Other Security Documents. Secured
Party shall have the right to sell, and any court in which foreclosure
proceedings may be brought shall have the right to order a sale of the Premises
or the property described in the Other Security Documents as a whole or in
separate parcels, in any order that Secured Party may designate. Debtor makes
this waiver for itself, for all persons and entities claiming through or under
Debtor and for all persons and entities who may acquire a lien on all or any
part of the Premises or the property described in the Other Security Documents,
or on any interest therein.
Bedford (AZ)
19806.311
ENVIRONMENTAL INDEMNIFICATION AGREEMENT
THIS ENVIRONMENTAL INDEMNIFICATION AGREEMENT ("Agreement"), made and
entered into as of July 27, 2000 by BEDFORD PROPERTY INVESTORS, INC., a Maryland
corporation (the "Borrower" or "Indemnitors"), to and for the benefit of
SECURITY LIFE OF DENVER INSURANCE COMPANY, a Colorado corporation
(the "Lender").
W I T N E S S E T H:
WHEREAS, Borrower is the owner of certain real property situated in
Maricopa County, State of Arizona, as more particularly described on Exhibit "A"
attached hereto and made a part hereof (such real property, together with any
additional real property hereafter encumbered by the lien of the Deed of Trust
(as defined below), and all improvements now or hereafter located thereon and
all rights and interests of Borrower therein, are hereinafter referred to as the
"Premises"); and
WHEREAS, Lender is about to make a loan to Borrower in the original
principal amount of SEVEN MILLION FOUR HUNDRED SEVENTY-FIVE THOUSAND AND NO/100
DOLLARS ($7,475,000) (the "Loan") to be evidenced by a Promissory Note dated on
or about this same date (as the same may be amended, modified, supplemented or
extended from time to time, the "Note"); and
WHEREAS, the Note will be secured by a certain Deed of Trust,
Security Agreement, Financing Statement and Fixture Filing of even date
herewith, from Borrower to Lender (as the same may be amended, modified,
supplemented or extended from time to time, the "Deed of Trust"); and
WHEREAS, as a condition to making the Loan, Lender requires that
Indemnitors provide certain indemnities; and
WHEREAS, to induce Lender to make the Loan, Indemnitors have agreed
to provide such indemnities.
NOW THEREFORE, in consideration of the foregoing recitals and other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and intending to be legally bound hereby, Indemnitors hereby
covenant and agree as follows:
1. Definitions. For purposes of this Agreement, the following
definitions shall apply:
(a) The term "Environmental Law" means and includes any federal,
state or local law, statute, regulation or ordinance pertaining to health,
industrial hygiene or the environmental or ecological conditions on, under or
about the Premises, including without limitation each of the following
(and their respective successor provisions): the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. section
9601 et seq. ("CERCLA"); the Resource Conservation and Recovery Act of 1976, as
amended, 42 U.S.C. sections 6901 et seq. ("RCRA"); the Federal Hazardous
Materials Transportation Act, as amended, 49 U.S.C. sections 1801 et seq.; the
Toxic Substance Control Act, as amended, 15 U.S.C. sections 2601 et seq.; the
Clean Air Act, as amended, 42 U.S.C. sections 1857 et seq.; the Federal Water
Pollution Control Act, as amended, 33 U.S.C. sections 1251 et seq.; and the
rules, regulations and ordinances of the U.S. Environmental Protection Agency
and of all other federal, state, county and municipal agencies, boards,
commissions and other governmental bodies and officers having jurisdiction over
the Premises or the use or operation of the Premises.
(b) The term "Hazardous Substance" means and includes: (i) those
substances included within the definitions of "hazardous substances", "hazardous
materials", "hazardous waste", "pollutants", "toxic substances" or "solid waste"
in any Environmental Law; (ii) those substances listed in the U.S. Department of
Transportation Table or amendments thereto (49 CFR 172.101) or by the U.S.
Environmental Protection Agency (or any successor agency) as hazardous
substances (40 CFR Part 302 and any amendments thereto); (iii) those other
substances, materials and wastes which are or become, regulated under any
applicable federal, state or local law, regulation or ordinance or by any
federal, state or local governmental agency, board, commission or other
governmental body, or which are or become classified as hazardous or toxic by
any such law, regulation or ordinance; and (iv) any material, waste or substance
which is any of the following: (1) asbestos; (2) polychlorinated biphenyl;
(3) designated or listed as a "hazardous substance" pursuant to section 311 or
section 307 of the Clean Water Act (33 U.S.C. sections 1251 et seq.);
(4) explosive; (5) radioactive; (6) a petroleum product; or (7) infectious
waste. Notwithstanding anything to the contrary herein, the term "Hazardous
Substance" shall not include commercially sold products otherwise within the
definition of the term "Hazardous Substance", but (A) which are used or
disposed of by Borrower or used or sold by tenants of
the Premises in the ordinary course of their respective businesses, (B) the
presence of which product is not prohibited by applicable Environmental Law, and
(C) the use and disposal of which are in all respects in accordance with
applicable Environmental Law.
(c) The term "Enforcement or Remedial Action" means and includes
any action taken by any person or entity in an attempt or asserted attempt to
enforce, to achieve compliance with, or to collect or impose assessments,
penalties, fines, or other sanctions provided by, any Environmental Law.
(d) The term "Environmental Liability" means and includes any
claim, demand, obligation, cause of action, accusation, allegation, order,
violation, damage (including consequential damage), injury, judgment,
assessment, penalty, fine, cost of Enforcement or Remedial Action, or any other
cost or expense whatsoever, including reasonable attorneys' fees and
disbursements, resulting from or arising out of the violation or alleged
violation of any Environmental Law, any Enforcement or Remedial Action, or any
alleged exposure of any person or property to any Hazardous Substance.
2. Indemnity. Indemnitors agree to defend, indemnify and hold
harmless Lender, its directors, officers, employees, agents, contractors,
sub-contractors, licensees, invitees, participants, successors and assigns, from
and against any Environmental Liability and any and all claims, demands,
judgments, settlements, damages, actions, causes of action, injuries,
administrative orders, consent agreements and orders, liabilities, penalties,
costs, including but not limited to any cleanup costs, remediation costs and
response costs, and all expenses of any kind whatsoever including reasonable
attorneys' fees and expenses, including but not limited to those arising out of
loss of life, injury to persons, property or business or damage to natural
resources in connection with the activities of Borrower, its predecessors in
interest, third parties who have trespassed on the Premises or parties in a
contractual relationship with Borrower, and any of them, the foregoing being
collectively referred to as "Claims", which:
(a) arise out of the actual, alleged or threatened migration,
spill, leaching, pouring, emptying, injection, discharge, dispersal, release,
storage, treatment, generation, disposal or escape of any Hazardous Substances
onto or from the Premises; or
(b) actually or allegedly arise out of, in connection with the
Premises, the use, specification or inclusion of any product, material or
process containing Hazardous Substances, in the soil, air, surface water or
ground water, or the performance of or failure to perform the abatement of any
Hazardous Substances source or the replacement or removal of any soil, water,
surface water or ground water containing any Hazardous Substances; or
(c) arise out of the breach of any covenant, warranty or
representation set forth in Exhibit B attached hereto and
incorporated herein; or
(d) arise out of any Enforcement or Remedial Action or any judicial
or administrative action brought pursuant to any Environmental Law.
Indemnitors, their successors and assigns, shall bear, pay and discharge when
and as the same become due and payable, any and all such judgments or claims for
damages, penalties or otherwise against Lender described in this Section 2,
shall hold Lender harmless for those judgments or claims, and shall assume the
burden and expense of defending all suits, administrative proceedings, and
negotiations of any description with any and all persons, political subdivisions
or government agencies arising out of any of the occurrences set
forth in this Section 2.
3. Incorporation of Covenants, Warranties, Representations and
Agreements. The covenants, warranties, representations and agreements of
Indemnitors set forth in any certificate, report, exhibit or document furnished
by Indemnitors to Lender pursuant to or in connection with the Loan are hereby
incorporated herein and made a part hereof, with the same force and effect as if
set forth fully in this Agreement.
4. Survival. Indemnitors' indemnifications and representations
made herein shall survive any termination or expiration of the documents
evidencing or securing the Loan and/or the repayment of the indebtedness
evidenced by the Note, including, but not limited to, any foreclosure on the
Deed of Trust, trustee's sale, or acceptance of a deed in lieu thereof; it being
understood and agreed that the indemnity given herein is independent of the
secured indebtedness and the documents evidencing or securing the Loan.
Notwithstanding the foregoing, Indemnitors' indemnifications and representations
shall not extend to Hazardous Substances which first originate on the Premises
subsequent to Lender's succession to title by virtue of a foreclosure,
trustee's deed, or acceptance of a deed in lieu of foreclosure.
5. Notices To Lender. Each Indemnitor shall provide Lender with
prompt oral and written notice upon (a) such Indemnitor becoming aware of any
release or threat of release of any Hazardous Substances upon, under or from the
Premises or any land immediately adjacent to the Premises, (b) such Indemnitor's
receipt of any complaint, order, citation or notice from any federal, state,
municipal or other governmental agency or authority in connection with any
Hazardous Substances located upon or under or emanating from the Premises, and
(c) such Indemnitor obtaining knowledge of the incurring of any expense by any
governmental agency or authority in connection with the assessment, containment
or removal of any Hazardous Substances located upon or under or emanating from
the Premises or any land immediately adjacent to the Premises; and Indemnitors
shall timely and diligently comply with all their obligations under any
Environmental Law with regard to such release, complaint or expense.
6. Remedial Work. If any investigation, site monitoring,
containment, cleanup, removal, restoration or other remedial work of any kind or
nature (the "Remedial Work") is necessary, both as determined by an independent
environmental consultant selected by Lender under any applicable federal, state
or local law, regulation or ordinance, or under any judicial or administrative
order or judgment, or by any governmental person, board, commission or agency,
because of or in connection with the current or future presence, suspected
presence, release or suspected release of a Hazardous Substance into the air,
soil, groundwater, or surface water at, on, about, under or within the Premises
or any portion thereof, Indemnitors shall within thirty (30) days after written
demand by Lender for the performance (or within such shorter time as may be
required under applicable law, regulation, ordinance, order or agreement),
commence and thereafter diligently prosecute to completion all such Remedial
Work to the extent required by law. All Remedial Work shall be performed by
contractors approved in advance by Lender (which approval in each case shall not
be unreasonably withheld or delayed) and under the supervision of a consulting
engineer approved in advance by Lender. All costs and expenses of such Remedial
Work (including without limitation the reasonable fees and expenses of Lender's
counsel) incurred in connection with monitoring or review of the Remedial Work
shall be paid by Indemnitors. If Indemnitors shall fail or neglect to timely
commence or cause to be commenced, or shall fail to diligently prosecute to
completion, such Remedial Work, Lender may (but shall not be required to) cause
such Remedial Work to be performed; and all costs and expenses thereof, or
incurred in connection therewith (including, without limitation, the reasonable
fees and expenses of Lender's counsel), shall be paid by Indemnitors to Lender
forthwith after demand and shall be paid to Lender by Indemnitors upon demand.
7. Operations and Maintenance Programs. If recommended by any
environmental report, assessment or audit of the Premises, Indemnitors shall
establish and comply with an operations and maintenance program with respect to
the Premises, in form and substance reasonably acceptable to Lender, prepared by
an environmental consultant reasonably acceptable to Lender, which program shall
address any asbestos containing material or lead based paint that may now or in
the future be detected at or on the Premises. Without limiting the generality
of the preceding sentence, Lender may require (a) periodic notices or reports to
Lender in form, substance and at such intervals as Lender may specify, (b) an
amendment to such operations and maintenance program to address changing
circumstances, laws or other matters, (c) at Lender's sole expense, supplemental
examination of the Premises by consultants specified by Lender, (d) access to
the Premises by Lender, its agents or servicer, to review and assess the
environmental condition of the Premises and Indemnitor's compliance with any
operations and maintenance program, and (e) variation of the operations and
maintenance program in response to the reports provided by any such consultants.
8. Joint and Several Obligations. The obligations of Indemnitors
hereunder shall be the joint and several obligations of Indemnitors, and the
representations, warranties, covenants and agreements of Indemnitors shall be
the joint representations, warranties, covenants and agreements of Indemnitors.
9. Notices. (a) All notices, demands, requests, and other
communications desired or required to be given hereunder ("Notices"), shall be
in writing and shall be given by: (i) hand delivery to the address for Notices;
(ii) delivery by overnight courier service to the address for Notices; or (iii)
sending the same by United States mail, postage prepaid, certified mail, return
receipt requested, addressed to the address for Notices.
(b) All Notices shall be deemed given and effective upon the
earlier to occur of: (i) the hand delivery of such Notice to the address for
Notices; (ii) one business day after the deposit of such Notice with an
overnight courier service by the time deadline for next day delivery addressed
to the address for Notices; or (iii) three business days after depositing the
Notice in the United States mail, postage prepaid, as set forth in (a)(iii)
above. All Notices shall be addressed to the following addresses:
Indemnitors: Bedford Property Investors, Inc.
270 Lafayette Circle
Lafayette, CA 94549
Attn: Chief Financial Officer
Lender: Security Life of Denver Insurance Company
c/o ING Investment Management LLC
5780 Powers Ferry Road, NW, Suite 300
Atlanta, Georgia 30327-4349
Attention: Mortgage Loan Servicing Department
and
ING Investment Management LLC
5780 Powers Ferry Road, NW, Suite 300
Atlanta, Georgia 30327-4349
Attention: Real Estate Law Department
With a copy to: Nyemaster, Goode, Voigts, West,
Hansell & O'Brien, P.C.
700 Walnut, Suite 1600
Des Moines, Iowa 50309
or to such other persons or at such other place as any party hereto may by
Notice designate as a place for service of Notice. Provided, that the "copy to"
Notice to be given as set forth above is a courtesy copy only; and a Notice
given to such person is not sufficient to effect giving a Notice to the
principal party, nor does a failure to give such a courtesy copy of a Notice
constitute a failure to give Notice to the principal party.
10. General.
(a) Effect. This Agreement (i) shall become effective on the date
hereof and (ii) shall, together with the Loan Documents (as defined in the Deed
of Trust), represent the complete understanding between or among the parties
hereto as to the subject matter hereof, and supersede all prior written, and all
oral, negotiations, representations, guaranties, warranties, promises,
statements or agreements between or among the parties hereto as to the same. No
determination by any court, governmental body or otherwise that any provision
hereof is invalid or unenforceable in any instance shall affect the validity or
enforceability of (i) any other provision hereof, or (ii) such provision in any
circumstance not controlled by such determination. Each such provision shall be
valid and enforceable to the full extent allowed by, and be construed wherever
possible as being consistent with, applicable law.
(b) Amendment. This Agreement may be amended by and only by an
instrument executed and delivered by each party hereto.
(c) Applicable Law. This Agreement shall be given effect and
construed by application of the law (without regard to the principles thereof
governing conflicts of law) of Arizona, and any action or proceeding arising
hereunder shall be brought in the courts of Arizona, except that if any such
action or proceeding arises under the constitution, laws or treaties of the
United States of America, or if there is a
diversity of citizenship between the parties
thereto, so that it is to be brought in a United States District Court, it shall
be brought in the United States District Court for the federal judicial district
in which the Premises is located.
(d) Construction. As used herein, (i) the term "person" means a
natural person, a trustee, a corporation, a partnership, a limited liability
company and any other form of legal entity; and (ii) all references made (1) in
the neuter, masculine or feminine gender shall be deemed to have been made in
all such genders, (2) in the singular or plural number shall be deemed to have
been made, respectively, in the plural or singular number as well, (3) to the
"Indemnitors" shall be deemed to refer to each person who is a signatory hereto
and its respective heirs, personal representatives, successors and assigns, and
(4) to any section, subsection, paragraph or subparagraph shall, unless therein
expressly indicated to the contrary, be
deemed to have been made to such section,
subsection, paragraph or subparagraph of this Agreement. The headings of the
sections, subsections, paragraphs and
subparagraphs hereof are provided herein for
and only for convenience of reference, and shall not be considered in construing
their contents. Each, if any, writing
referred to herein as being attached hereto
as an exhibit or otherwise designated herein as an exhibit hereto is hereby made
a part hereof.
(e) Assignment. This Agreement shall be binding on and shall inure
to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns hereunder.
(f) Time of Essence. Time shall be of the essence in the
performance of this Agreement.
(g) Liability. The Indemnitors shall be jointly and severally
liable for adhering to the terms and satisfying the conditions hereof.
Notwithstanding the terms of any other
agreement evidencing or securing the Loan,
the liability of the Indemnitors hereunder is not limited to the Premises and is
not secured thereby, and Lender shall have full recourse to any and all assets
of the Indemnitors with respect to any claim hereunder. Indemnitors waive, if
applicable, the provisions of Section 12-1641, et seq., of the Arizona Revised
Statutes and waive the provisions of Arizona Revised Statutes, Rule of Civil
Procedure, Rule 17(f).
(h) Attorneys' Fees. Indemnitors shall pay on demand all costs and
expenses incurred by Lender or Trustee in enforcing or protecting its rights and
remedies hereunder, including, but not limited to, reasonable attorneys' fees
and legal expenses.
(i) Waiver of Jury Trial. THE PARTIES HERETO, AFTER CONSULTING OR
HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THEY
MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED ON OR ARISING OUT OF THIS
AGREEMENT OR INSTRUMENT, OR ANY RELATED INSTRUMENT OR AGREEMENT, OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS,
WHETHER ORAL OR WRITTEN, OR ACTION OF ANY PARTY HERETO. NO PARTY SHALL SEEK TO
CONSOLIDATE BY COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL
HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY
RESPECT OR RELINQUISHED BY ANY PARTY HERETO EXCEPT BY A WRITTEN INSTRUMENT
EXECUTED BY ALL PARTIES.
(i) Independent Agreement. THIS ENVIRONMENTAL INDEMNIFICATION
AGREEMENT IS SEPARATE FROM AND INDEPENDENT OF THE OBLIGATIONS OF INDEMNITORS
UNDER THE LOAN DOCUMENTS AND MAY BE ENFORCED BY LENDER WITHOUT REGARD TO WHETHER
A DEFAULT EXISTS UNDER ANY OF THE LOAN DOCUMENTS AND WITHOUT REGARD TO ANY OTHER
RIGHTS AND REMEDIES LENDER MAY HAVE AGAINST INDEMNITORS UNDER ANY OF THE LOAN
DOCUMENTS. IN ADDITION, THIS ENVIRONMENTAL INDEMNIFICATION AGREEMENT MAY BE
ENFORCED BY LENDER WITHOUT REGARD TO ANY
LIMITATIONS ON LENDER'S RECOURSE AGAINST
INDEMNITORS OR ANY OTHER PERSONS UNDER
THE LOAN DOCUMENTS, AND ENFORCEMENT OF THIS
ENVIRONMENTAL INDEMNIFICATION AGREEMENT SHALL NOT BE CONSIDERED TO CONSTITUTE AN
ACTION FOR RECOVERY OF ALL OR ANY PART OF THE LOAN INDEBTEDNESS OR FOR RECOVERY
OF A DEFICIENCY JUDGMENT.
WITNESS the due execution of this Agreement as of the day and year
first above written.
BEDFORD PROPERTY INVESTORS, INC., a
Maryland corporation
By: /s/Hanh Kihara
Hanh Kihara
Senior Vice President and Chief
Financial Officer
STATE OF _________________)
) SS:
COUNTY OF ________________)
On this ____ day of ______________________, 2000, before me, a
notary public, personally appeared Hanh Kihara , to me personally known, who
being by me duly sworn did say that she is the Senior Vice President and Chief
Financial Officer, of Bedford Property Investors, Inc.,
a corporation; that (no seal has been procured by)
(the seal affixed thereto is the seal of) said corporation; the
foregoing instrument was signed (and sealed) on behalf of said corporation by
authority of its Board of Directors; and that the said Hanh Kihara, as such
officer, acknowledged the execution of the foregoing instrument to be the
voluntary act and deed of said corporation, by it and by her voluntarily
executed.
_____________________________________
Notary Public
Seal
<PAGE>
EXHIBIT A
LEGAL DESCRIPTION
Parcel I - 4546 South 35th Street, Phoenix, Maricopa County, Arizona;
Parcel II - 2601 Broadway, Tempe, Maricopa County, Arizona;
Parcel III - 3015, 3101, 3111, 3121 and 3131 South Park Drive, Tempe, Maricopa
County, Arizona, 2307 & 2315 West Fairmont Drive, Tempe, Maricopa County,
Arizona, 3010,3110 & 3120 South Potter Road, Tempe, Maricopa County, Arizona
<PAGE>
EXHIBIT "B"
Indemnitors' Hazardous Substances Covenants,
Warranties and Representations
1. To the current and actual knowledge of Indemnitors' officers,
Indemnitors, after reasonable inquiry, represent, warrant and
covenant that,
A. Except in accordance with applicable law, no Hazardous
Substances have been, or shall be discharged, disbursed,
released, stored, treated, generated, disposed of or allowed
to escape or migrate, or shall threaten to be injected,
emptied, poured, leached or spilled (collectively referred to
as a "release") on or from the Premises.
B. Except in accordance with applicable law,no asbestos or
asbestos-containing materials have been or will be installed,
used, incorporated into, placed on or disposed of on the
Premises.
C. No polychlorinated biphenyls ("PCBs") are or will be located
on or in the Premises, in the form of electrical transformers,
fluorescent light fixtures with ballasts, cooling oils or any
other device.
D. No underground storage tanks are or will be located on the
Premises or were located on the Premises and subsequently
removed or filled.
E. No investigation, administrative order, consent order and
agreement, litigation, settlement, lien or encumbrance with
respect to Hazardous Substances is proposed, threatened in
writing, anticipated or in existence with respect to the
Premises.
F. The Premises and Indemnitors' operations at the Premises are
in compliance in all material respects with all applicable
Environmental Laws including without limitation any federal,
state and local statutes, laws and regulations. No notice has
been received by any Indemnitor, or any affiliate or
subsidiary of any Indemnitor, from any entity, government body
or individual claiming any violation of any law, regulation
ordinance or code, or requiring compliance with any law,
regulation, ordinance or code, or demanding payment or
contribution for environmental damage or injury to natural
resources. Copies of any such notices received after the date
hereof shall be forwarded to Lender within three (3) days of
their receipt.
G. Except as set forth on the Phase I environmental studies for
the properties, copies of which have been provided to Lender,
Indemnitors have no knowledge of any release or threat of
release of any Hazardous Substances from any land adjoining or
within one-half mile of the Premises.
H. No portion of the Premises is a wetland or other water of the
United States subject to jurisdiction under Section 404 of the
Clean Water Act (33 U.S.C. 1344) or any comparable state or
local ordinance or regulation defining or protecting wetlands
or other special aquatic areas.
I. There are no concentrations of radon or other radioactive
gases or materials in any buildings or structures on the
Premises that exceed background ambient air levels.
J. To the best of Indemnitors' knowledge, there have been no
complaints of illness or sickness alleged to have resulted
from conditions inside any buildings or structures on the
Premises.
2. To the extent any provision in Section 1 is a covenant, failure to
comply with any such provision in Section 1 of this Exhibit "B",
shall be deemed to be an Event of Default under the Deed of Trust
described in the Environmental Indemnification Agreement to which
this Exhibit "B" is attached.
Bedford (AZ)
19806.311
CERTIFICATE OF BORROWER
THIS CERTIFICATE is made as of July 27, 2000, by BEDFORD PROPERTY
INVESTORS, INC., a Maryland corporation("Borrower"), in order to induce SECURITY
LIFE OF DENVER INSURANCE COMPANY, a Colorado corporation (the "Lender"), to fund
a loan (the "Loan") evidenced by a Promissory Note in the principal amount of
SEVEN MILLION FOUR HUNDRED SEVENTY-FIVE THOUSAND AND NO/100 DOLLARS ($7,475,000)
dated on or about this same date (the "Note") and secured by a Deed of Trust,
Security Agreement, Financing Statement and Fixture Filing among Borrower as
Trustor, and Lender as Beneficiary (the "Deed of Trust"), encumbering property
located in Maricopa County, Arizona, more particularly described in Exhibit "A"
attached thereto (the "Premises").
The undersigned hereby represents and warrants as of the date of
this Certificate as follows:
1. General Representations and Warranties.
1.1 The undersigned holds the position with Borrower set
forth below, and is duly authorized to make this Affidavit for and on behalf of
Borrower.
1.2 The principal office and the chief executive office of
the Borrower is located at 270 Lafayette Circle, Lafayette, California 94549.
1.3 On prior occasion Borrower delivered to Lender true,
correct and complete copies of the organizational documents of the Borrower,
together with all restatements, amendments and modifications thereto, which are
true, correct and complete as of the date hereof.
1.4 The consent of all of the equity owners of or holders of
any beneficial interest in Borrower, that are required to consent, has been
obtained to authorize the Borrower to borrow and/or establish with the Lender a
loan in the principal amount of SEVEN MILLION FOUR HUNDRED SEVENTY-FIVE THOUSAND
AND NO/100 DOLLARS ($7,475,000), upon such terms as the Borrower may deem
advisable and all equity owners of or holders of beneficial interest in the
Borrower that are required to do so have authorized the execution and delivery,
for and on behalf of the Borrower, in
connection with the Loan, of the Promissory
Note in the amount of the Loan, the Deed of Trust (the "Deed of Trust"), an
Environmental Indemnification Agreement, Financing Statements, an Assignment of
Rents and Leases, a Security Agreement and such other documents and certificates
relating to the Loan as may be required by the Lender (collectively, the "Loan
Documents"), by the person or persons executing the same.
1.5 Each of the Loan Documents previously made or effected
by the Borrower and delivered to the Lender in connection with the Loan, if any,
have been ratified and confirmed by all equity owners of or holders of
beneficial interest in the Borrower that are required to so ratify and confirm.
1.6 The Borrower is a real estate investment trust duly
organized, validly existing and in good standing under the laws of Maryland and
is licensed or qualified to do business and is in good standing in each
jurisdiction in which the character of the properties owned by it therein or in
which the transaction of its business makes such qualification necessary.
1.7 The Borrower (a) is in compliance in all material
respects with all laws and legal requirements applicable to it, and (b) has all
requisite power and authority and all necessary licenses and permits to own and
operate the Premises and to carry on its business as now being conducted and has
the necessary power and authority to execute and deliver the Loan Documents and
to incur and perform the obligations provided for herein and therein (including
the borrowing of the Loan), all of which have been duly authorized by all proper
and necessary action. No consent or approval of any other person or public
authority or regulatory body is required as a condition to the validity or
enforceability of the Deed of Trust or any of the other Loan Documents, or if
required the same has been duly obtained.
1.8 There is no litigation or proceeding pending, or to the
knowledge of the undersigned threatened, against or affecting the Borrower or
the Premises in any court or administrative agency or before any governmental
authority or arbitration board or tribunal (whether federal, state, local or
municipal) having jurisdiction over the Premises which, if adversely determined
would materially and adversely affect the Premises, business, prospects, profits
or condition (financial or otherwise) of the Borrower or the authority of the
Borrower to enter into, or the ability
of the Borrower to perform its obligations
under, the Loan Documents, or which, in any way, could adversely affect the
validity or enforceability of the Loan Documents.
1.9 (a) The execution and delivery by the Borrower of the
Loan Documents and compliance by the
Borrower with all of the provisions thereof
(i) are within the power of the Borrower, and (ii) will not conflict in any
material respect with or result in any violation of, breach of any of the
provisions of, or constitute a default under, or result in the creation of any
lien, charge or encumbrance other than
upon the Premises, under the provision of,
any agreement, partnership agreement, operating agreement or other instrument to
which Borrower is a party or by which the Borrower or the Premises may be bound,
or any applicable license, judgment, decree, or other Laws applicable to the
Borrower or the Premises; and (b) the Loan Documents are valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
their respective terms, subject to bankruptcy laws, laws affecting creditors
rights generally and general principles of equity.
1.10 Neither the Borrower nor any of its respective businesses
or the Premises, nor any relationship between the Borrower or any other person,
nor any circumstances in connection with the execution, delivery and performance
by the Borrower of the Loan Documents,
is such as to require the consent, approval
or authorization of, or the filing, registration or qualification with, any
governmental authority on the part of the Borrower, other than those already
obtained, made or done.
1.11 The Borrower (a) is the owner of good and marketable fee
simple legal title to and is lawfully seized and possessed of the Premises, free
and clear of all liens, encumbrances or restrictions, except for permitted
encumbrances previously approved by Lender
and (b) subject only to such permitted
encumbrances, has the unconditional right
to encumber the Premises by the Deed of
Trust. The Borrower does hereby warrant generally and agree to defend the
Premises and the title thereto, whether now owned or hereafter acquired, and the
lien, operation and effect of the Deed of Trust thereon against all claims and
demands by any person. The Borrower
represents and warrants that it has complied
in all material respects, and shall comply in all material respects at all times
until the Indebtedness is paid in full, with each of the covenants, restrictions
and conditions imposed by each instrument or matter to which the Premises is
subject, including but not limited to, each instrument and matter contained
within such permitted encumbrances.
1.12 At the time of the execution and delivery of the Deed of
Trust, no event has occurred and no
condition exists with respect to the Borrower,
or the Premises that constitutes an Event of Default under the Deed of Trust or
the other Loan Documents or which, with the lapse of time or with the giving of
notice or both, would become an Event of Default under the Deed of Trust or any
of the other Loan Documents. The Borrower is not in default with respect to any
order of any court, or other governmental authority or in violation in any
material respect of any agreement, partnership or operating agreement or other
instrument to which it is a party or by which it may be bound.
1.13 Neither the Deed of Trust nor any other Loan Document
furnished by the Borrower in connection with the Loan contains any untrue or
misleading statement of a material fact or omits to state any material fact
necessary in order to make the statements
contained therein not misleading. There
is no fact which the Borrower has not disclosed to the Lender in writing which
materially and adversely affects, nor, so far as the Borrower can now reasonably
foresee, is reasonably likely to affect, materially and adversely the business,
or the operation and use of the Premises, or the performance by the Borrower
under the Loan Documents.
1.14 There are on the Premises at least a sufficient number
of parking spaces to meet the minimum parking ratio of any applicable laws and
each Lease.
1.15 Borrower is not a "foreign person" within the meaning of
the Internal Revenue Code of 1986, as amended, Sections 1445 and 7701 (that is,
Borrower is not a non-resident alien, foreign corporation, foreign partnership,
foreign trust or foreign estate as those terms are defined therein and in any
regulations promulgated thereunder).
1.16 Borrower's Taxpayer Identification Number is 68-0306514.
2. Leases
2.1 The rent roll ("Rent Roll") previously submitted by the
Borrower to the Lender is true, accurate and complete in all material respects.
2.2 The liability of the Borrower for the return of tenants'
security deposits and interest thereon is accurately set forth on the Rent Roll.
2.3 Each of the Leases for the Premises submitted by the
Borrower to the Lender is true, accurate and complete, there are no amendments
or modifications thereto except as indicated on the Rent Roll or as otherwise
provided to Lender, and such Leases constitute all of the Leases which cover any
portion of the Premises.
2.4 Each of the Leases for the Premises is in full force and
effect, no default with respect to any Lease has been declared by any party
thereto and the undersigned has no knowledge of any facts or circumstances which
shemight reasonably believe would give rise to a default by any party thereto.
2.5 Except as expressly set forth on the Rent Roll, each
tenant under the Leases is in occupancy
as of the date hereof, and is paying rent
on a current basis with no right to any
rental offsets or claims, and no rent has
been prepaid other than as permitted under the terms of the lease.
3. Contracts
3.1 There are no material contracts, management agreements,
or other agreements affecting the Premises except as previously described by
Borrower to Lender in writing.
4. Bankruptcy
4.1 Borrower has not received notice that any of its
creditors has filed a petition with respect to the Borrower pursuant to the
Federal Bankruptcy Code or any similar federal, state or other law.
4.2 Borrower has not (a) applied for or consented in writing
to the appointment of a receiver, trustee
or liquidator of the Borrower or of any
or all of the Premises, or of all or
substantially all of the other assets of the
Borrower or (b) filed a voluntary petition in bankruptcy or admitted in writing
its inability to pay its debts as they become due, or (c) made a general
assignment for the benefit of creditors, or (d) filed a petition or an answer
seeking a reorganization or an arrangement
with creditors or to take advantage of
any insolvency law, or (e) filed an answer admitting the material allegations of
a petition filed against the Borrower, in any bankruptcy, reorganization or
insolvency proceeding, or (f) transferred by merger, sale, consolidation,
assignment, operation of law, or otherwise all or substantially all of the
assets of the Borrower.
4.3 No (a) execution or attachment has been levied against
any or all of the Premises, or (b) order, judgment or decree has been entered by
any court of competent jurisdiction on
the application of a creditor adjudicating
the Borrower a bankrupt or insolvent or appointing a receiver, trustee or
liquidator of substantially all of the assets of the Borrower.
5. Financial Condition
5.1 All balance sheets, statements of profit and loss, and
other financial data that have been given to the Lender with respect to the
Borrower: (a) are complete and correct in all material respects; (b) accurately
present the financial condition of the
Borrower and the results of its operations
as of the dates and for the periods for which the same have been furnished; (c)
have been prepared in accordance with generally accepted accounting principles
consistently applied, or on a cash basis
or other recognized comprehensive basis,
throughout the periods covered thereby; and (d) disclose all known liabilities,
direct or contingent, as of their respective dates.
5.2 There has been no adverse change in the business,
properties, condition (financial or otherwise) of Borrower and there has been no
change in the structure or ownership of said parties. The financial statements
submitted to Lender in connection with the Loan were true and correct in all
material respects as of the date of submission and remain true and correct in
all material respects as of the date hereof.
5.3 All information, reports, papers, and data given to the
Lender with respect to the Borrower and representations and warranties of the
Borrower contained in the Loan Documents
are true, complete, accurate and correct
in all material respects and true and complete in all material respects as of
the date hereof.
6. Subdivision; Separate Assessment; Zoning; Parking
6.1 The Premises is covered by tax identification numbers
which do not include any other property and may be leased, transferred or
mortgaged without the approval of any governmental authority having jurisdiction
to regulate or control subdivision or land development. The Land is assessed
separately from all other lands for purposes of ad valorem taxation. All
requirements of every governmental authority pertaining to the Land and the
Improvements, including without limitation zoning, have been complied with in
all material respects. The present zoning classification affecting the Premises
permits the present and intended use of the Land. No variances, reliance on
adjacent property or special exception is required for the Improvements. If all
or any part of the Improvements are damaged or destroyed, the Improvements can,
under presently applicable laws, be legally
reconstructed to their condition prior
to such damage or destruction, and thereafter exist without violating any zoning
or other ordinances presently applicable thereto and without the necessity of
obtaining any variances or other relief from local Laws. Neither the zoning
classification or any other right to construct, use or operate any Improvements
or the Land is in any way dependent upon
or related to any real estate other than
the Land. The Land contains such parking spaces as are required by applicable
law and by all Leases or subleases of the Land.
7. Utility Services
All utility services necessary for the ownership of the Improvements
and the operation thereof for their intended purpose are available at the
boundaries of the Land, including water supply and sanitary and storm sewer
facilities and gas, electric, telephone, and cable facilities.
8. Flood Area: Filled Land
8.1 The Premises is not in an "area of special flood hazard",
as that term is defined in the National Flood Insurance Act of 1968 (as amended
and supplemented by the Flood Disaster Protection Act of 1973). No portion
of the Premises consists of and no portion of the Improvements will be located
on filled in land.
The Borrower (a) acknowledges that the Lender is acting in reliance
upon the representations and undertakings set forth herein, and that such
representations and undertakings are of a material nature, and (b) agrees to
indemnify and hold harmless the Lender against and from any loss or expense
(including, by way of example rather than of limitation, that of reasonable
attorneys' fees) which it may suffer as a result of any inaccuracy contained in
any of such representations and warranties. The indemnity herein is limited to
the extent set forth in the Note.
Any capitalized terms used herein not otherwise defined herein,
shall have the meaning given to those terms in the Deed of Trust.
BEDFORD PROPERTY INVESTORS, INC., a
Maryland corporation
By: /s/Hanh Kihara
Hanh Kihara
Senior Viced President and Chief
Financial Officer
STATE OF _________________)
) SS:
COUNTY OF ________________)
On this ____ day of ______________________, 2000, before me, a
notary public, personally appeared Hanh Kihara,
to me personally known, who being
by me duly sworn did say that she is the
Senior Vice President and Chief Financial
Officer, of Bedford Property Investors, Inc., a corporation; that (no seal has
been procured by) (the seal affixed
thereto is the seal of) said corporation; the
foregoing instrument was signed (and sealed) on behalf of said corporation by
authority of its Board of Directors; and that the said Hanh Kihara, as such
officer, acknowledged the execution of the foregoing instrument to be the
voluntary act and deed of said corporation, by it and by her voluntarily
executed.
_____________________________________
Notary Public
Seal
