Exhibit 10.6

 

WHEN RECORDED RETURN TO:

 

Janet Wagner, Esq.

LATIMER LEVAY FYOCK LLC

55 W. Monroe Street, Suite 1100

Chicago, IL 60603

(LLF File No. 72001-241)

 

Property Address:

300 Cormorant Place

Frederick, MD 21701

(Frederick County)

 

Tax Map No(s):

 

 

PURCHASE MONEY DEED OF TRUST, SECURITY AGREEMENT,
ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING

(MARYLAND)

 

THIS PURCHASE MONEY DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND
RENTS AND FIXTURE FILING (as the same may from time to time hereafter be
modified, supplemented or amended, this “Deed of Trust”) is made as of September
30, 2015, by IRESI FREDERICK MARKET SQUARE, L.L.C., a Delaware limited liability
company (“Borrower”), having its principal place of business and mailing address
at 2901 Butterfield Road, Oak Brook, Illinois 60523, LAWYERS TITLE REALTY
SERVICES, INC., a Virginia corporation, as “Trustee”, for the benefit of PARKWAY
BANK AND TRUST COMPANY, an Illinois banking corporation, having a principal
place of business and mailing address at 4800 N. Harlem Avenue, Harwood Heights,
IL 60706, as “Lender”.

 

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WITNESSETH:

 

A.              Borrower is justly indebted to Lender for money borrowed (the
“Loan”) in the original principal sum of Forty-Five Million Seven Hundred Fifty
Thousand and no/100 Dollars ($45,750,000.00) (the “Loan Amount”) made pursuant
to the Loan Agreement of even date herewith (as amended, restated or otherwise
modified from time to time, the “Loan Agreement”) and evidenced by a Secured
Promissory Note of even date herewith executed by Borrower, made payable and
delivered to Lender in the principal amount of the Loan Amount (as may be
modified, amended, supplemented, extended or consolidated in writing and any
note(s) issued in exchange therefor or replacement thereof, the “Note”),
pursuant to which Note the Borrower promises to pay to Lender the Loan Amount,
together with all accrued and unpaid interest thereon, interest accrued at the
Default Rate (if any), Late Charges (if any) and all other obligations and
liabilities due or to become due to Lender pursuant to the Loan Documents and
all other amounts, sums and expenses paid by or payable to Lender pursuant to
the Loan Documents (as defined in the Loan Agreement) (collectively the
“Indebtedness”) until the Indebtedness has been paid in accordance with the Note
and other Loan Documents. Capitalized terms used herein and not otherwise
defined shall have those meanings given to them in the other Loan Documents.

 

The Note is in the original principal amount of $45,750,000.00 and matures on
September 30, 2016, subject to extension as set forth in Section 2(b) of the
Note.

 

B.              NOW, THEREFORE, to secure the payment of the Indebtedness in
accordance with the terms and conditions of the Loan Documents, and all
extensions, modifications, and renewals thereof and the performance of the
covenants and agreements contained therein, and also to secure the payment of
any and all other Indebtedness, direct or contingent, that may now or hereafter
become owing from Borrower to Lender in connection with the Loan Documents, and
in consideration of the Loan Amount in hand paid, receipt of which is hereby
acknowledged, Borrower does by these presents hereby bargain, sell, convey and
confirm unto Trustee, its successors and assigns forever, IN TRUST, WITH POWER
OF SALE, that certain real estate and all of Borrower’s estate, right, title and
interest therein, located in the County of Frederick, State of Maryland, more
particularly described in Exhibit ”A” attached hereto and made a part hereof
(the “Land”), which Land, together with the following described property, rights
and interests, is collectively referred to herein as the “Premises,” together
with:

 

C.              Borrower’s interest as lessor in and to all leases of the
Premises and all rents, which are pledged primarily and on a parity with the
Land and not secondarily; and

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D.              All and singular the tenements, hereditaments, easements,
appurtenances, passages, waters, water courses, riparian rights, direct flow,
ditch, reservoir, well and other water rights, whether or not adjudicated,
whether tributary or nontributary and whether evidenced by deed, water stock,
permit or otherwise, sewer rights, rights in trade names (excluding however, the
“Inland” name and logo), licenses, permits and contracts, and all other rights,
liberties and privileges of any kind or character in any way now or hereafter
appertaining to the Land, including but not limited to, homestead and any other
claim at law or in equity as well as any after-acquired title, franchise or
license and the reversion and reversions and remainder and remainders thereof;
and the right in the case of foreclosure hereunder of the encumbered property
for Lender to take and use the name by which the buildings and all other
improvements situated on the Premises are commonly known and the right to manage
and operate the said buildings under any such name and variants thereof; and

 

E.              All right, title and interest of Borrower in any and all
buildings and improvements of every kind and description now or hereafter
erected or placed on the said Land and all materials intended for construction,
reconstruction, alteration and repairs of such buildings and improvements now or
hereafter erected thereon, all of which materials shall be deemed to be included
within the Premises immediately upon the delivery thereof to the Premises, and a
security interest in all fixtures now or hereafter owned by Borrower and
attached to or contained in and used in connection with the Premises including,
but not limited to, all machinery, motors, elevators, fittings, radiators,
awnings, shades, screens, and all plumbing, heating, lighting, ventilating,
refrigerating, incinerating, air-conditioning and sprinkler equipment and
fixtures and appurtenances thereto; all items of furniture, furnishings,
equipment and personal property owned by Borrower used or useful in the
operation of the Premises; and all renewals or replacements of all of the
aforesaid property owned by Borrower or articles in substitution therefor,
whether or not the same are or shall be attached to said buildings or
improvements in any manner (collectively, the “Improvements”). Borrower and
Lender mutually agree, intend and declare that all the Improvements owned by
Borrower and placed by it on the Land or used in connection with the operation
or maintenance of the Premises shall, so far as permitted by law, be deemed to
form a part and parcel of the Land and, for the purpose of this Deed of Trust,
to be Land and covered by this Deed of Trust, and as to any of the Improvements
which do not form a part and parcel of the Land or do not constitute a “fixture”
(as such term is defined in the Uniform Commercial Code in effect in the state
where the Premises is located (“UCC”)), this Deed of Trust and the other Loan
Documents (the terms of which grant a security interest in personal property or
real property, the proceeds of which may become personal property) are each
hereby deemed to be, as well, a security

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agreement under the UCC for the purpose of creating a security interest in all
items, including, but not limited to all property and rights which Borrower may
grant, assign, bargain, sell, transfer, set over, deliver, or otherwise convey
to Lender, as secured party, under the terms of this Deed of Trust or any of the
other Loan Documents, including any and all proceeds thereof (as used herein,
Borrower shall mean “Debtor” under the UCC and Lender shall mean “Secured Party”
under the UCC). Borrower hereby appoints Lender as its attorney-in-fact,
effective upon the occurrence of any Event of Default, to execute such documents
necessary to perfect Lender’s security interest and authorizes Lender at any
time until the Indebtedness is paid in full, to prepare and file, at Borrower’s
expense, any and all UCC financing statements, amendments, assignments,
terminations and the like, reasonably necessary to create and/or maintain a
prior security interest in such property all without Borrower’s execution of the
same. Furthermore, upon the occurrence of any Event of Default under the Loan
Documents, Lender will, in addition to all other remedies provided for in the
Loan Documents, have the remedies provided for under the UCC. Borrower warrants
that, to its knowledge, the location of such property is upon the real estate.
Borrower covenants and agrees that Borrower will furnish Lender with notice of
any change in Borrower’s name, identity, entity, structure, organization
identification number and residence or principal place of business within thirty
(30) days of the effective date of any such change. Borrower, as debtor, hereby
grants to Lender, as secured party, a security interest in all Improvements (to
the extent Improvements include any personal property pursuant to the UCC) as
security for the Loan and Indebtedness, and Borrower hereby authorizes Lender to
file any financing statements as Lender may reasonably require in order to
perfect such grant of security interest; Borrower’s organization identification
number is 5831640. This Deed of Trust is being recorded with the Clerk of the
Land Records of Frederick County, Maryland, as a Fixture Filing (as defined in
the UCC); and

 

F.              All right, title and interest of Borrower, now or hereafter
acquired, in and to any and all strips and gores of land adjacent to and used in
connection with the Premises and all right, title and interest of Borrower, now
owned or hereafter acquired, in, to, over and under the ways, streets, sidewalks
and alleys adjoining the Premises; and

 

G.             All funds now or hereafter held by Lender under any property
reserves agreement (including any proceeds derived from any letter of credit) or
escrow security agreement or under any of the terms hereof or of the Loan
Documents, including but not limited to funds held under the provisions of the
Loan Agreement; and

 

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H.              All of Borrower’s payment intangibles, letter of credit rights,
interest rate cap agreements, tenant in common agreement rights, and any other
contract rights of Borrower related in any manner to the ownership, operation,
or management of the Premises, as well as any and all supporting obligations,
and all proceeds, renewals, replacements and substitutions thereof; and

 

I.                All funds, accounts and proceeds thereof relating to the
Premises whether or not such funds, accounts or proceeds thereof are held by
Lender under the terms of any of the Loan Documents, including, but not limited
to bankruptcy claims of Borrower against any tenant at the Premises, and any
proceeds thereof; proceeds of any rents, insurance proceeds from all insurance
policies required to be maintained by Borrower under the Loan Documents (subject
to the balance of the terms of this Deed of Trust); and all awards, decrees,
proceeds, settlements or claims for damage now or hereafter made to or for the
benefit of Borrower by reason of any damage to, destruction of or taking of the
Premises or any part thereof, whether the same shall be made by reason of the
exercise of the right of eminent domain or by condemnation or otherwise (a
“Taking”).

 

TO HAVE AND TO HOLD the same unto Trustee and its successors and assigns, upon
the trusts, covenants and agreements herein expressed; PROVIDED, HOWEVER, that
should the Indebtedness be paid according to the tenor and effect thereof when
the same shall become due and payable as provided for in the Loan Documents, and
should Borrower perform all covenants contained in the Loan Documents in a
timely manner, then this Deed of Trust shall be cancelled and released.

 

J.               Borrower represents that it shall forever warrant and defend
the title to the Premises against all claims and demands of all persons
whomsoever and will on demand execute any additional instrument which may be
required to give Trustee a valid first lien on all of the Premises, subject to
the Permitted Encumbrances.

 

K.              Borrower further represents that (i) the Premises is not subject
to any casualty damage; (ii) Borrower has not received any written notice of any
eminent domain or condemnation proceeding affecting the Premises; (iii) all
leasing broker fees and commissions payable by Borrower with respect to the
lease(s) have been paid in full, in cash or other form of immediately available
funds; and (iv) to the best of Borrower’s knowledge, following due and diligent
inquiry, there are no actions, suits or proceedings pending, completed or
threatened against or affecting Borrower or any Person owning an interest
(directly or indirectly) in Borrower (“Interest Owner(s)”) or any property of
Borrower or any Interest Owner in any court or before any arbitrator of any kind
or before or by any governmental authority (whether local, state, federal or
foreign) that, individually or in the aggregate, could reasonably be expected by
Lender to be material to the transaction contemplated hereby. Notwithstanding
the foregoing, no representation is made concerning holders of interests in
Borrower who are Interest Owners solely by virtue of their ownership interest in
the Borrower.

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L.               Borrower further represents, warrants and covenants that as of
the date hereof and until the Indebtedness is paid in full:

 

(a)Borrower and each Person owning an interest in Borrower and/or any guarantor
is not (i) identified on the Specially Designated Nationals and Blocked Persons
List maintained by the Office of Foreign Assets Control, Department of the
Treasury (“OFAC”) and/or on any other similar list maintained by OFAC pursuant
to any authorizing statute, executive order or regulation (collectively, the
“List”), (ii) a Person with whom a citizen of the United States is prohibited to
engage in transactions by any trade embargo, economic sanction, or other
prohibition of the laws and regulations of the United States of America or any
Executive Order of the President of the United States of America;

 

(b)none of the funds or other assets of Borrower constitute property of, or are
beneficially owned, directly or indirectly, by any Embargoed Person (as
hereinafter defined);

 

(c)no Embargoed Person has any interest of any nature whatsoever in Borrower
(whether directly or indirectly);

 

(d)none of the funds of Borrower have been derived from any unlawful activity
with the result that the investment in Borrower is prohibited by law or that the
Loan Documents are in or will be in violation of law,

 

(e)Borrower has and will continue to implement procedures, and has consistently
and will continue to consistently apply those procedures, to ensure the
foregoing representations and warranties remain true and correct at all times.
The term “Embargoed Person” means any person, entity or government subject to
trade restrictions under the laws of the United States of America, including but
not limited to, the International Emergency Economic Powers Act, 50 U.S.C. §1701
et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any
Executive Orders or regulations promulgated thereunder with the result that the
investment in Borrower is prohibited by law or Borrower is in violation of law;

 

(f)Borrower has complied and will continue to comply with all requirements of
law relating to money laundering, anti-terrorism, trade embargos and economic
sanctions, now or hereafter in effect; and

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(g)Borrower has not and will not use funds from any “Prohibited Person” (as such
term is defined in the September 24, 2001, Executive Order Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism) to make any payment due to Lender under the Loan Documents.

 

Borrower will immediately notify Lender in writing if any of the
representations, warranties or covenants in this Deed of Trust are no longer
true or have been breached or if Borrower has a reasonable basis to believe that
they may no longer be true or have been breached. In addition, Borrower will, at
the request of Lender, provide such information as may be requested by Lender to
determine Borrower’s compliance with the terms hereof.

 

Borrower COVENANTS AND AGREES AS FOLLOWS:

 

1. Borrower shall:

 

(a)pay each item of Indebtedness secured by this Deed of Trust when due
according to the terms of the Loan Documents;

 

(b)pay, to the extent permitted by law, a Late Charge on any payment of
principal, interest or Indebtedness which is not paid on or before the due date
as required under the Note;

 

(c)pay, on or before the due date thereof any indebtedness permitted to be
incurred by Borrower pursuant to the Loan Documents and any other claims which
could become a lien on the Premises (unless otherwise specifically addressed in
Paragraph 1(e) hereof), and upon request of Lender exhibit satisfactory evidence
of the discharge thereof;

 

(d)complete within a reasonable time, the construction of any Improvements now
or at any time in process of construction upon the Land which are required to be
performed by Borrower;

 

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(e)manage, operate and maintain the Premises and keep the Premises, including,
but not limited to, the Improvements, in good condition and repair and free from
mechanics liens or other liens or claims for liens, provided, however, that
Borrower may in good faith, with reasonable diligence and upon written Notice to
Lender within thirty (30) days after Borrower has knowledge of such lien or
claim, contest the validity or amount of any such lien or claim and defer
payment and discharge thereof during the pendency of such contest in the manner
provided by law, provided that (i) such contest may be made without the payment
thereof; (ii) such contest shall prevent the sale or forfeiture of the Premises
or any part thereof, or any interest therein, to satisfy such lien or claim;
(iii) Borrower shall have obtained a bond over such lien or claim from a bonding
company acceptable to Lender, or have had it insured over by the Title Company,
which has the effect of removing such lien or collection of the claim or lien so
contested; (iv) Borrower shall pay all costs and expenses incidental to such
contest; and (v) in the event of a final, non-appealable ruling or adjudication
adverse to Borrower and provided the court of jurisdiction has not granted a
stay of the enforcement of the ruling or judgment, Borrower shall promptly pay
such claim or lien, shall indemnify and hold Lender and the Premises harmless
from any loss or damage arising from such contest and shall take whatever action
necessary to prevent sale, forfeiture or any other loss or damage to the
Premises or to Lender.

 

(f)comply, and cause each lessee or other user of the Premises to comply, with
all requirements of law and ordinance, and all rules and regulations, now or
hereafter enacted, by authorities having jurisdiction of the Premises and the
use thereof, including but not limited to all covenants, conditions and
restrictions of record pertaining to the Premises, the Improvements, and the use
thereof (collectively, “Legal Requirements”);

 

(g)subject to the provisions of Paragraph 5 hereof, promptly repair, restore or
rebuild any Improvements now or hereafter a part of the Premises which may
become damaged or be destroyed by any cause whatsoever, so that upon completion
of the repair, restoration and rebuilding of such Improvements, there will be no
liens of any nature arising out of the construction and the Premises will be of
substantially the same character and quality as it was prior to the damage or
destruction;

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(h)if other than a natural person, do all things necessary to preserve and keep
in full force and effect its existence, franchises, rights and privileges under
the laws of the state of its formation and, if other than its state of
formation, the state where the Premises is located. Borrower shall notify Lender
at least thirty (30) days prior to (i) any relocation of Borrower’s principal
place of business to a different state or any change in Borrower’s state of
formation, and/or (ii) if Borrower is an individual, any relocation of
Borrower's principal residence to a different state;

 

(i)do all things necessary to preserve and keep in full force and effect
Lender’s title insurance coverage insuring the lien of this Deed of Trust as a
first and prior lien, subject only to the Permitted Encumbrances and any other
exceptions after the date of this Deed of Trust approved in writing by Lender,
including without limitation, delivering to Lender not less than 30 days prior
to the effective date of any rate adjustment, modification or extension of the
Note or any other Loan Document, any new policy or endorsement which may be
reasonably required to assure Lender of such continuing coverage;

 

(j)execute any and all documents which may be required to perfect the security
interest granted by this Deed of Trust; and

 

(k)remain a Limited-Asset Entity.

 

2. Borrower shall not:

 

(a)construct any building or structure nor make any alteration or addition
(other than normal repair and maintenance) to (i) the roof or any structural
component of any Improvements on the Premises or (ii) the building operating
systems, including, but not limited to, the mechanical, electrical, heating,
cooling, or ventilation systems (other than replacement with equal or better
quality and capacity).

 

(b)remove or demolish any material Improvements, or any portion thereof, which
at any time constitute a part of the Premises.

 

(c)cause or permit any change to be made in the general use of the Premises
without Lender’s prior written consent;

 

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(d)initiate any or acquiesce to a zoning reclassification or material change in
zoning of the Premises without Lender’s prior written consent. Borrower shall
use all reasonable efforts to contest any such zoning reclassification or
change;

 

(e)make or permit any use of the Premises that could with the passage of time
result in the creation of any right of use, or any claim of adverse possession
or easement on, to or against any part of the Premises in favor of any Person or
the public;

 

(f)except for the Permitted Transfers described in Section 6.17 of the Loan
Agreement, or except to the extent permitted elsewhere in the Loan Documents,
permit, acquiesce to or allow any of the following to occur: (i) a sale,
conveyance, assignment, transfer, encumbrance (other than the lien hereof, the
lease(s), the Permitted Encumbrances and those liens which Borrower is
contesting in accordance with this Deed of Trust), alienation, pledge or other
disposition (whether directly or indirectly, voluntary or involuntary, or by
operation of law) of all or any portion of the Premises or an interest in the
Premises or direct or indirect ownership interests in the Borrower; (ii) the
reconstitution or conversion of Borrower and/or any Interest Owner from one
entity to another type of entity except in connection with a Permitted Transfer;
(iii) the issuance or other creation of ownership interests in the Borrower
and/or any Interest Owner, except as otherwise expressly permitted by the Loan
Agreement; (iv) a merger, consolidation, reorganization or any other business
combination with respect to Borrower and/or any Interest Owner that is not an
Interest Owner solely by virtue of its ownership interest in the Borrower; (v) a
conversion to or operation of all or any portion of the Premises as a
cooperative or condominium form of ownership; or (vi) if Borrower is a trust,
the addition, deletion or substitution of a trustee of such trust. For the
purposes of this provision, any of the events described above shall be defined
as a “Transfer”. If any such Transfer occurs without the prior written consent
of Lender, it shall be null and void and shall constitute an immediate Event of
Default under the Loan Documents. Lender may, in its commercially reasonable
discretion, consent to a Transfer (not otherwise expressly permitted by the
terms hereof), and any such consent shall not constitute a consent as to any
other Transfer;

 

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(g)cause, permit or allow:

 

(i)any Person to own an interest in Borrower who is (A) identified on the
Specially Designated Nationals and Blocked Persons List maintained by OFAC
and/or on any other similar list maintained by OFAC, or (B) a party with whom a
citizen of the United States is prohibited to engage in transactions by any
trade embargo, economic sanction, or other prohibition of United States law,
regulation, or Executive Order of the President of the United States;

 

(ii)any of the funds or other assets of Borrower to constitute property of, or
be beneficially owned, directly or indirectly, by any Embargoed Person;

 

(iii)an Embargoed Person to have any interest of any nature whatsoever in
Borrower (whether directly or indirectly); or

 

(iv)any of its funds to be derived from any unlawful activity with the result
that the investment in Borrower is prohibited by law or that the Loan Documents
are in or will be in violation of law.

 

3.   (a)   Borrower shall pay, or cause to be paid when due, and before any
penalty attaches or interest accrues, all general taxes, special taxes,
assessments (including assessments for benefits from public works or
improvements whenever begun or completed), utility charges, water charges, sewer
service charges, common area maintenance charges, if any, vault or space charges
and all other like charges against or affecting the Premises or against any
property or equipment located on the Premises, or which might become a lien on
the Premises, and shall, within ten (10) days following Lender’s request,
furnish to Lender a duplicate receipt of such payment. If any such tax,
assessment or charge may legally be paid in installments, Borrower may, at its
option, pay such tax, assessment or charge in installments.

 

(b)If Borrower desires to contest any tax, assessment or charge relating to the
Premises, Borrower may do so by paying the same in full, under protest, in the
manner provided by law; provided, however, that

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(i)if contest of any tax, assessment or charge may be made without the payment
thereof, and

 

(ii)such contest shall have the effect of preventing the collection of the tax,
assessment or charge so contested and the sale or forfeiture of the Premises or
any part thereof or any interest therein to satisfy the same,

 

then Borrower may, in its discretion and upon the giving of Notice to Lender of
its intended action and upon the furnishing to Lender of such security or bond
as Lender may require, contest any such tax, assessment or charge in good faith
and in the manner provided by law. All costs and expenses incidental to such
contest shall be paid by Borrower. In the event of a ruling or adjudication
adverse to Borrower, Borrower shall promptly pay such tax, assessment or charge.
Borrower shall indemnify and save harmless the Lender and the Premises from any
loss or damage arising from any such contest and shall, if necessary to prevent
sale, forfeiture or any other loss or damage to the Premises or to Lender, pay
such tax, assessment or charge or take whatever action is necessary to prevent
any sale, forfeiture or loss.

 

4.   (a)     Borrower shall at all times keep or cause to be kept in force (i)
property insurance insuring all Improvements which now are or hereafter become a
part of the Premises for perils covered by a Standard “All Risk” insurance
policy (to include Basic and Broad Form causes of loss), including coverage
against terrorism containing both replacement cost and agreed amount
endorsements or equivalent coverage; (ii) commercial general liability insurance
naming Lender as an additional insured protecting Borrower and Lender against
liability for bodily injury or property damage occurring in, on or adjacent to
the Premises in commercially reasonable amounts; (iii) boiler and machinery
insurance if the property has a boiler or is an office building; (iv) rental
value insurance for the perils specified herein for one hundred percent (100%)
of the rents (including operating expenses, real estate taxes, assessments and
insurance costs which are lessee’s liability) for a period of twelve (12)
months;

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(v) builders risk insurance during all periods of construction; and
(vi) insurance against all other hazards as may be reasonably required by
Lender, including, without limitation, insurance against loss or damage by
flood, hurricane and windstorm. Notwithstanding anything herein above to the
contrary, if neither: (i) property insurance without an exclusion for terrorism,
terrorist acts or similar perils (“Terrorism”) nor (ii) a separate policy
insuring specifically against Terrorism is available at a cost which is in
Lender’s opinion commercially reasonable, taking into consideration, among other
things, (a) how properties similar in type, size, quality and location are
insured with respect to Terrorism and (b) the amount of coverage, premium and
deductible applicable to such insurance, then Lender agrees to waive the
requirement to provide insurance covering Terrorism until such coverage again
becomes available at a cost that is commercially reasonable in Lender’s opinion.

 

(b)All insurance (including deductibles and exclusions) shall be in form,
content and amounts approved by Lender and written by an insurance company or
companies approved by Lender and rated A-, class size VIII or better in the most
current issue of Best’s Insurance Reports and which is licensed to do business
in the state in which the Premises are located or a governmental agency or
instrumentality approved by Lender. The policies for such insurance shall have
attached thereto standard mortgagee clauses in favor of and permitting Lender to
collect any and all proceeds payable thereunder and shall include a thirty (30)
day (except for nonpayment of premium, in which case, a ten (10) day) notice of
cancellation clause in favor of Lender. All certificates of insurance (or
policies if requested by Lender) shall be delivered to and held by Lender as
further security for the payment of the Note and any other obligations arising
under the Loan Documents, with evidence of renewal coverage delivered to Lender
at least thirty (30) days before the expiration date of any policy. Borrower
shall not carry or permit to be carried separate insurance, concurrent in kind
or form and contributing in the event of loss, with any insurance required in
the Loan Documents.

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5.In the event of any damage to or destruction of the Premises, or any part
thereof (and subject to the provisions of Paragraph 5(e) below):

 

(a)Borrower shall immediately give Lender Notice thereof. Lender shall have the
right (which may be waived by Lender in writing) to settle and adjust any claim
in excess of $100,000 under such insurance policies required to be maintained by
Borrower (and which are not being maintained by the Tenant). In all
circumstances, the proceeds thereof shall be paid to Lender and Lender is
authorized to collect and to give receipts therefor; provided that proceeds of
claims not exceeding $100,000 shall be paid to Borrower so long as there is no
then existing Event of Default. Borrower agrees and acknowledges that such
proceeds shall be held by Lender without any allowance of interest and that in
any bankruptcy proceeding of Borrower, all such proceeds shall be deemed to be
“Cash Collateral” as that term is defined in Section 363 of the Bankruptcy Code.
Provided that no Event of Default exists, Borrower shall have the right to
participate in any settlement or adjustment; provided, however, that any
settlement or adjustment shall be subject to the written approval of Lender, not
to be unreasonably withheld, conditioned or delayed.

 

(b)Such proceeds, after deducting therefrom any reasonable expenses incurred by
Lender in the collection thereof (including but not limited to reasonable
attorneys’ fees and costs), shall be applied by Lender to pay the Indebtedness
secured hereby, whether or not then due and payable, without prepayment penalty.

 

Notwithstanding anything hereinabove to the contrary (but subject to the
provisions of Paragraph 5(e) below),

 

(i)in the event the casualty occurs more than six (6) months prior to the
maturity date of the Note and no Event of Default exists, Lender shall apply
such proceeds as follows:

 

(A)If the aggregate amount of such proceeds is less than $100,000, Lender shall
pay such proceeds directly to Borrower, to be held in trust for Lender and
applied to the cost of rebuilding and restoring the Premises. If there is an
existing Event of Default, such proceeds shall be paid to Lender.

14 

 

 

(B)If the aggregate amount of such proceeds equals or exceeds $100,000, such
proceeds shall be paid to Lender, and Lender shall disburse such amounts of the
proceeds as Lender reasonably deems necessary for the repair or replacement of
the Premises, subject to the conditions set forth in Paragraph 5(c) below.

 

(ii)in the event (x) an Event of Default exists, or (y) the casualty occurs
during the last six (6) months prior to the maturity date of the Note and Lender
determines that the repair and restoration of such casualty cannot be completed
prior to the maturity date of the Note, or (z) the conditions set forth in
Paragraph 5(c) are not met, then Lender, in its sole and absolute discretion may
either:

 

(A)declare the entire Indebtedness to be immediately due and payable without
prepayment penalty. Subject to the terms of the leases then in effect, all
proceeds shall be applied toward payment of the Indebtedness in such priority as
Lender elects; or

 

(B)disburse such proceeds as Lender reasonably deems necessary for the repair or
replacement of the Premises subject to those conditions set forth in Paragraph
5(c) which Lender in its sole and absolute discretion may require.

15 

 

 

(c) (i) In the event that Borrower is to be reimbursed out of the insurance
proceeds or out of any award or payment received with respect to a Taking,
Lender shall from time to time make available such proceeds, subject to the
following conditions: (a) there continues to exist no Event of Default; (b) the
delivery to Lender of satisfactory evidence of the estimated cost of completion
of such repair and restoration work and any architect’s certificates, waivers of
lien, contractor’s sworn statements, and other evidence of cost and of payment
and of the continued priority of the lien hereof over any potential liens of
mechanics and materialmen (including, without limitation, title policy
endorsements) as Lender may reasonably require and approve; (c) the time
required to complete the repair and restoration work and for the income from the
Premises to return to the level it was prior to the loss will not exceed the
coverage period of the rental value insurance required hereunder; (d) Lender
approves the plans and specifications of such work before such work is commenced
if the estimated cost of rebuilding and restoration exceeds 25% of the
Indebtedness or involves any structural changes or modifications (if said plans
and specifications substantially comply with those previously approved by
Lender, Lender’s approval shall not be unreasonably withheld); (e) if the amount
of any insurance proceeds, award or other payment is insufficient to cover the
cost of restoring and rebuilding the Premises, Borrower shall pay such cost in
excess of such proceeds, award or other payment before being entitled to
reimbursement out of such funds; (f) Borrower pays to Lender a non-refundable
processing fee equal to the lesser of $5,000.00 or .25% of the amount of such
proceeds within sixty (60) days of the occurrence of any such damage or
destruction and before Lender disburses any proceeds; and (g) such other
conditions to such disbursements that, in Lender’s reasonable discretion, would
be customarily required by a construction lender doing business in the area
where the Premises is located or which are otherwise required by any rating
agency rating a Securitization Transaction.

16 

 

 

(ii)No payment made by Lender prior to the final completion of the repair or
restoration work shall, together with all payments theretofore made, exceed 90%
of the cost of such work performed to the time of payment, and at all times the
undisbursed balance of said proceeds shall be at least sufficient to pay for the
cost of completion of such work free and clear of all liens. Any proceeds
remaining after payment of the cost of rebuilding and restoration shall, at the
option of Lender, either be (a) applied in reduction of the Indebtedness secured
hereby, or (b) paid to Borrower.

 

(iii)Repair and restoration of the Premises shall be commenced promptly after
the occurrence of the loss and shall be prosecuted to completion diligently, and
the Premises shall be restored and rebuilt to substantially the same character
and quality as prior to such damage and destruction and shall comply with all
Legal Requirements.

 

(d)Should such damage or destruction occur after foreclosure or sale proceedings
have been instituted, the proceeds of any such insurance policy or policies, if
not applied in rebuilding or restoration of the Improvements, shall be used to
pay (i) the Indebtedness then due and owing in the event of a non-judicial sale
in such priority as Lender elects, or (ii) the amount due in accordance with any
decree of foreclosure or deficiency judgment that may be entered in connection
with such proceedings, and the balance, if any, shall be paid to the owner of
the equity of redemption if it shall then be entitled to the same, or otherwise
as any court having jurisdiction may direct.

 

 

6.In the event of the commencement of a Taking affecting the Premises:

 

(a)Borrower shall give Lender Notice thereof. Lender may participate in such
proceeding, and Borrower shall deliver to Lender all documents requested by it
to permit such participation.

17 

 

 

(b)Borrower shall cause the proceeds of any award or other payment made relating
to a Taking, to be paid directly to Lender. Lender, in its sole and absolute
discretion: (i) may apply all such proceeds to pay the Indebtedness in such
priority as Lender elects without prepayment penalty; or (ii) subject to and in
accordance with the provisions set forth in Paragraph 5(c) above, may disburse
such amounts of the proceeds as Lender reasonably deems necessary for the repair
or replacement of the Premises.

 

(c)Notwithstanding anything herein above to the contrary, provided no Event of
Default exists, Lender agrees to disburse the proceeds received from any
Inconsequential Taking, as hereinafter defined, to Borrower for the repair
and/or replacement of the Premises. An Inconsequential Taking shall be a Taking
which (i) results in less than $100,000 in proceeds; and (ii) does not, in
Lender’s determination, materially or adversely affect the Improvements,
parking, access, ingress, egress or use of the Premises.

 

7.If by the laws of the United States of America or of any state or governmental
subdivision having jurisdiction over Borrower or of the Premises or of the Loan
evidenced by the Loan Documents or any amendments or modifications thereof, any
tax or fee is due or becomes due or is imposed upon Lender or Borrower in
respect of the issuance or the making, executing, delivering, recording and/or
registration of this Deed of Trust or the Note or otherwise in connection with
the Loan Documents or the Loan, except for Lender’s income or franchise tax,
Borrower covenants and agrees to pay such tax or fee in the manner required by
such law and to hold harmless and indemnify Trustee and Lender, their successors
and assigns, against any liability incurred by reason of the imposition of any
such tax or fee, and any and all penalties, interest, attorneys’ fees or other
costs due in connection therewith. In the event of a failure by Borrower to pay
any such tax or fee, or applicable penalties, interest, attorneys’ fees or other
costs, as set forth herein, the same shall, without limitation of any other
remedies herein, constitute an Event of Default under this Deed of Trust, and,
should Lender elect to pay the same, all such taxes, fees, penalties, interest,
attorneys’ fees or other charges, in addition to being due and owing to Lender
upon demand, shall be secured by the lien of this Deed of Trust and shall bear
interest at the Default Rate as hereinafter provided from the date of advance by
Lender until paid by Borrower. Notwithstanding anything to the contrary in this
Deed of Trust, the Note or any of the Loan Documents, this Paragraph 7 shall
survive repayment of the Note and satisfaction of this Deed of Trust.

18 

 

 

8.   (a)     Upon the occurrence of any Event of Default, Lender may, but need
not, make any payment or perform any act herein required of Borrower, 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 said
Premises, or contest any tax or assessment. All moneys paid for any of the
purposes herein authorized and all reasonable expenses paid or incurred in
connection therewith, including but not limited to, reasonable attorneys’ fees
and costs and reasonable attorneys’ fees and costs on appeal, and any other
money advanced by Lender to protect the Premises and the lien hereof, shall be
so much additional Indebtedness secured hereby and shall become immediately due
and payable without notice and with interest thereon at the Default Rate from
the date of expenditure or advance until paid.

 

(b)In making any payment hereby authorized relating to taxes or assessments or
for the purchase, discharge, compromise or settlement of any prior lien, Lender
may make such payment according to any bill, statement or estimate secured from
the appropriate public office without inquiry into the accuracy thereof or into
the validity of any tax, assessment, sale, forfeiture, tax lien or title or
claim thereof or without inquiry as to the validity or amount of any claim for
lien which may be asserted.

 

9.If one or more of the following events (herein called an “Event of Default” or
“Events of Default” as the context so requires) shall have occurred:

 

(a)failure to pay when due any principal of or interest on the Note or any other
Indebtedness, utilities, taxes or assessments or insurance premiums required
pursuant to the Loan Documents and continuance of such failure for five (5) days
after payment of any such amount is due; or

 

(b)the failure of Borrower to duly observe or perform any of the covenants,
conditions and agreements of the Borrower contained in Paragraph 2(f) of this
Deed of Trust; or    

19 

 

 

(c)with respect to matters not described in the other subsections of this
Section 9, failure to duly observe or perform any covenant, condition or
agreement of the Borrower contained in this Deed of Trust, and such failure
shall have continued for thirty (30) days after Notice specifying such failure
is given by Lender to Borrower; provided that if any such failure to observe or
perform shall be of such nature that it can be cured, but cannot be cured or
remedied within thirty (30) days, Borrower shall be entitled to a reasonable
period of time to cure or remedy such failure (not to exceed ninety (90) days
following the giving of Notice), provided Borrower commences the cure or remedy
thereof within the thirty (30) day period following the giving of Notice and
thereafter proceeds with diligence, as determined by Lender, to complete such
cure or remedy; or

 

(d)with respect to matters not described in the other subsections of this
Section 9, failure to duly observe or perform any covenant, condition or
agreement of the Borrower contained in any of the Loan Documents which continues
beyond any applicable grace of cure period;

 

then, in each and every such case, the whole of said principal sum hereby
secured shall, at the option of the Lender and without further notice to
Borrower, become immediately due and payable together with accrued interest
thereon and all other Indebtedness, and whether or not Lender has exercised said
option, interest shall accrue on the entire principal balance and any interest
or other Indebtedness then due, at the Default Rate until fully paid or, if
Lender has not exercised said option, for the duration of any Event of Default.

20 

 

 

10.If one or more of the Events of Default shall happen, the Trustee may, and
upon the written request of the Lender shall, by such agents as they may
appoint, with or without entry, sell all the Property as an entirety or in
parcels as the Lender shall request in writing, or, in the absence of such
request, as the Trustee may determine, subject to applicable law, at public
auction at some convenient place in the county where the Land is located or
other location permitted or required by law, at such time, in such manner and
upon such terms as the Trustee may fix and briefly specify in the notice of
sale, which notice of sale shall state the time when, and the place where, the
same is to be made, shall contain a brief description of the property to be
sold, and shall be sufficiently given if published once a week for three (3)
successive weeks prior to such sale in at least one newspaper, if any, printed
in the English language and customarily published at least once a week in the
place or places where such sale is to take place, and in such other manner as
may be required by law, and any such sale may be adjourned by the Trustee by
announcement at the time and place appointed for such sale or for such adjourned
sale or sales, and, without further notice or publication, such sale may be made
at the time and place to which the same shall be so adjourned. In addition, if
Lender so elects, Trustee or Lender may sell the personal property covered by
this Deed of Trust at one or more separate sales in any manner permitted by the
UCC, and one or more exercises of the powers herein granted shall not extinguish
or exhaust such powers, until the entire Premises is sold or the Indebtedness is
paid in full.

 

11.Upon such sale, Trustee shall make, execute, and after due payment is made,
deliver to the purchaser or purchasers a deed or deeds for the Premises or part
thereof sold and shall apply the proceeds of the sale, at the election of Lender
first, to all of the expenses of such sale including the reasonable expenses of
this trust or the Trustee and the fees and costs of any attorneys for this
trust, environmental audits, the Trustee or Lender, all of which shall accrue
and become due from and after any Event of Default, together with any sums which
Trustee or Lender shall have paid for procuring any abstract, certificate or
report of title to the Premises and, second, to principal, interest and any
other Indebtedness and all other sums or amounts due under the Note or agreed or
provided to be paid by Borrower herein or in any other Loan Documents, all in
such order as Lender may determine. The remainder of such proceeds, if any,
shall be paid to the party or parties lawfully entitled thereto.

21 

 

 

12.In the event of such a sale of the Premises or any part thereof and the
execution of a deed or deeds therefor under these trusts, any recital therein of
the occurrence of an Event of Default or of the giving or recording of any
notice or demand by Trustee or Lender regarding such sale shall be conclusive
proof thereof, and the receipt of the purchase money recited therein shall fully
discharge the purchaser from any obligation for the proper application of the
proceeds of sale in accordance with these trusts.

 

13.Following the occurrence of an Event of Default, unless the same has been
specifically waived in writing, subject to the rights of tenants under any
leases then in effect, Borrower shall forthwith upon demand of Trustee or Lender
surrender to Lender possession of the Premises, and Lender shall be entitled to
take actual possession of the Premises or any part thereof personally or by its
agents or attorneys, and Lender in its discretion may, with or without force and
with or without process of law, enter upon and take and maintain possession of
all or any part of the Premises together with all documents, books, records,
papers and accounts of the Borrower or the then owner of the Premises relating
thereto, and may exclude Borrower, its agents or assigns wholly therefrom, and
may as attorney-in-fact or agent of the Borrower, or in its own name as Lender
and under the powers herein granted:

 

(a)hold, operate, maintain, repair, rebuild, replace, alter, improve, manage or
control the Premises as it deems judicious, insure and reinsure the same and any
risks related to Lender’s possession, operation and management thereof and
receive all rents, either personally or by its agents, and with full power to
use such measures, legal or equitable, as in its discretion it deems proper or
necessary to enforce the payment or security of the rents, including actions for
the recovery of Rent, actions in forcible detainer and actions in distress for
rents, hereby granting full power and authority to exercise each and every of
the rights, privileges and powers herein granted at any and all times hereafter,
without notice to Borrower; and

 

(b)conduct leasing activity pursuant to the provisions of the agreements between
Lender and Borrower.

22 

 

 

Neither Trustee nor Lender shall be obligated to perform or discharge, nor does
it hereby undertake to perform or discharge, any obligation, duty or liability
under any lease. Except to the extent that the same is caused solely by Lender’s
gross negligence or willful misconduct, should Trustee or Lender incur any
liability, loss or damage under any leases, or under or by reason of any other
documents or agreements related to the leases, or in the defense of any claims
or demands whatsoever which may be asserted against Lender or Trustee by reason
of any alleged obligations or undertakings on its part to perform or discharge
any of the terms, covenants or agreements in any lease, the amount thereof,
including costs, expenses and reasonable attorneys’ fees and costs, including
reasonable attorneys’ fees and costs on appeal, shall be added to the
Indebtedness and secured hereby.

 

14.Upon the occurrence of an Event of Default, Trustee and Lender, in the
exercise of the rights and powers conferred upon them, shall have the full power
to use and apply the rents, less costs and expenses of collection to the payment
of or on account of the items listed in (a) - (c) below, at the election of
Lender and in such order as Lender may determine as follows:

 

(a)to the payment of (i) the expenses of operating and maintaining the Premises,
including, but not limited to, the cost of management, leasing (which shall
include reasonable compensation to Trustee, Lender and their respective agent or
agents if management and/or leasing is delegated to an agent or agents),
repairing, rebuilding, replacing, altering and improving the Premises, (ii)
premiums on insurance as hereinabove authorized, (iii) taxes and special
assessments now due or which may hereafter become due on the Premises, and (iv)
expenses of placing the Premises in such condition as will, in the sole judgment
of Lender, make it readily rentable;

 

(b)to the payment of any principal, interest or any other Indebtedness secured
hereby or any deficiency which may result from any foreclosure sale;

 

(c)to the payment of established claims for damages, if any, reasonable
attorneys’ fees and costs and reasonable attorneys’ fees and costs on appeal.

23 

 

 

The manner of the application of rents, the reasonableness of the costs and
charges to which such rents are applied and the item or items which shall be
credited thereby shall be within the sole and unlimited discretion of Lender. To
the extent that the costs and expenses in (a) and (c) above exceed the amounts
collected, the excess shall be added to the Indebtedness and secured hereby.

 

15.Upon the occurrence of any Event of Default, unless the same has been
specifically waived in writing, Lender may apply to any court having
jurisdiction for the appointment of a receiver of the Premises. Such appointment
may be made either before or after sale, without notice, without regard to the
solvency or insolvency of Borrower at the time of application for such receiver
and without regard to the then value of the Premises or the adequacy of Lender’s
security. Lender may be appointed as such receiver. The receiver shall have
power to collect the rents during the pendency of any foreclosure proceedings
and, in case of a sale, during the full statutory period of redemption, if any,
as well as during any further times when Borrower, except for the intervention
of such receiver, would be entitled to collect such rents. In addition, the
receiver shall have all other powers which shall be necessary or are usual in
such cases 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 its possession at Lender’s
election and in such order as Lender may determine in payment in full or in part
of those items listed in Paragraph 15.

 

16.Borrower agrees that all reasonable costs, charges and expenses, including
but not limited to reasonable attorneys’ fees and costs incurred or expended by
Trustee or Lender arising out of or in connection with any action, proceeding or
hearing, legal, equitable or quasi-legal, including the preparation therefor and
any appeal therefrom, in any way affecting or pertaining to the Loan Documents
or the Premises, shall be promptly paid by Borrower. All such sums not promptly
paid by Borrower shall be added to the Indebtedness secured hereby and shall
bear interest at the Default Rate from the date of such advance and shall be due
and payable on demand.

24 

 

 

17.In accordance with and subject to the terms and conditions of the other Loan
Documents, Borrower hereby assigns to Lender directly and absolutely, and not
merely collaterally, the interest of Borrower as lessor under the leases
currently in effect at the Premises and the rents payable under any lease and/or
with respect to the use of the Premises, or portion thereof, including any oil,
gas or mineral lease, or any installments of money payable pursuant to any
agreement or any sale of the Premises or any part thereof, subject only to a
license, if any, granted by Lender to Borrower with respect thereto prior to the
occurrence of an Event of Default. Borrower has executed and delivered the other
Loan Documents which grants to Lender specific rights and remedies in respect of
said Leases and governs the collection of rents thereunder and from the use of
the Premises, and such rights and remedies so granted shall be cumulative of
those granted herein.

 

The collection of such rents and the application thereof as aforesaid shall not
cure or waive any Event of Default or notice of default hereunder or invalidate
any act done pursuant to such notice, except to the extent any such Event of
Default is fully cured. Failure or discontinuance of Lender at any time, or from
time to time, to collect any such moneys shall not impair in any manner the
subsequent enforcement by Lender of the right, power and authority herein
conferred on Lender. Nothing contained herein, including the exercise of any
right, power or authority herein granted to Lender, shall be, or be construed to
be, an affirmation by Lender of any tenancy, Lease or option, or an assumption
of liability under, or the subordination of the lien or charge of this Deed of
Trust to any such tenancy, lease or option. Borrower hereby agrees that, in the
event Lender exercises its rights as provided for in this paragraph or in any
other Loan Documents, Borrower waives any right to compensation for the use of
Borrower’s furniture, furnishings or equipment in the Premises for the period
such assignment of rents or receivership is in effect, it being understood that
the rents derived from the use of any such items shall be applied to Borrower’s
obligations hereunder as above provided.

25 

 

 

18.All rights and remedies granted to Trustee or Lender in the Loan Documents
shall be in addition to and not in limitation of any rights and remedies to
which it is entitled in equity, at law or by statute, and the invalidity of any
right or remedy herein provided by reason of its conflict with applicable law or
statute shall not affect any other valid right or remedy afforded to Trustee or
Lender. No waiver of any default or Event of Default under any of the Loan
Documents shall at any time thereafter be held to be a waiver of any rights of
Trustee or Lender hereunder, nor shall any waiver of a prior Event of Default or
default operate to waive any subsequent Event of Default or default. All
remedies provided for in the Loan Documents are cumulative and may, at the
election of Lender, be exercised alternatively, successively or concurrently. No
act of Trustee or Lender shall be construed as an election to proceed under any
one provision herein to the exclusion of any other provision or to proceed
against one portion of the Premises to the exclusion of any other portion. Time
is of the essence under this Deed of Trust and the Loan Documents.

 

19.By accepting payment of any sum secured hereby after its due date, Lender
does not waive its right either to require prompt payment when due of all other
sums or installments so secured or to declare a default for failure to pay such
other sums or installments.

 

20.The usury provisions of Paragraph 7 of the Note are fully incorporated herein
by reference as if the same were specifically stated here.

 

21.In the event one or more provisions of the Loan Documents shall be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, and the Loan
Documents shall be construed as if any such provision had never been contained
herein.

 

22.If the payment of the Indebtedness secured hereby or of any part thereof
shall be extended or varied, or if any part of the security be released, all
persons now or at any time hereafter liable therefor, or interested in said
Premises, shall be held to assent to such extension, variation or release, 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 Lender notwithstanding such variation or release.

26 

 

 

23.Upon payment in full of the principal sum, interest and other Indebtedness
secured by the Loan Documents, these presents shall be null and void, and
Trustee shall release this Deed of Trust and the lien hereof by proper
instrument executed in recordable form.

 

24.    (a)    Borrower hereby grants to Lender and its respective agents,
attorneys, employees, consultants, contractors and assigns an irrevocable
license and authorization to enter upon and inspect the Premises and all
facilities located thereon at reasonable times, subject to the inspection rights
provisions afforded to Borrower under the leases. Lender shall make reasonable
efforts to ensure that the operations of tenants are not disturbed.

 

(b)In connection with any sale or conveyance of this Deed of Trust, Borrower
grants to Lender and its respective agents, attorneys, employees, consultants,
contractors and assigns an irrevocable license and authorization to conduct, at
Lender’s expense, a Phase I environmental audit of the Premises, subject to the
inspection rights provisions afforded to Borrower under the leases.

 

(c)In the event there has been an Event of Default or in the event Lender has
formed a reasonable belief, based on its inspection of the Premises or other
factors known to it, that Hazardous Materials may be present on the Premises,
then, subject to the rights of the Tenant under any existing lease, Borrower
grants to Lender and its respective agents, attorneys, employees, consultants,
contractors and assigns an irrevocable license and authorization to conduct, at
Borrower’s expense using the firm of Borrower’s choice, subject to Lender’s
reasonable approval, environmental tests of the Premises, including, without
limitation, a Phase I environmental audit, subsurface testing, soil and ground
water testing, and other tests which may physically invade the Premises or
facilities (the “Tests”). The scope of the Tests shall be such as Lender, in its
sole discretion, determines is necessary to (i) investigate the condition of the
Premises, (ii) protect the security interests created under this Deed of Trust,
or (iii) determine compliance with Environmental Laws, the provisions of the
Loan Documents and other matters relating thereto. Lender shall make reasonable
efforts to ensure that the operations of tenants are not disturbed.

27 

 

 

(d)Provided no Event of Default has occurred, Lender will provide Borrower with
reasonable notice of Lender’s intent to enter, inspect and conduct the Tests
provided for in this Paragraph. In addition, Lender shall conduct such
inspections and Tests during normal business hours and use reasonable efforts to
minimize disruption of the lessee’s business operations.

 

The foregoing licenses and authorizations are intended to be a means of
protection of Lender’s security interest in the Premises and not as
participation in the management of the Premises.

 

25.Within fifteen (15) days after any written request by any party to this Deed
of Trust, the requested party shall certify, by a written statement duly
acknowledged, the amount of principal, interest and other Indebtedness then
owing on the Note, the terms of payment, maturity date and the date to which
interest has been paid. Borrower shall further certify whether any defaults,
offsets or defenses exist against the Indebtedness secured hereby.

 

26.Each notice, consent, request, report or other communication under this Deed
of Trust shall be given in accordance with the provisions of Section 6.18 of the
Loan Agreement.

 

27.Borrower has had the opportunity to fully negotiate the terms hereof and
modify the draftsmanship of the Loan Documents. Therefore, the terms of the Loan
Documents shall be construed and interpreted without any presumption, inference,
or rule requiring construction or interpretation of any provision of the Loan
Documents against the interest of the party causing the Loan Documents or any
portion of it to be drafted. Borrower is entering into the Loan Documents freely
and voluntarily without any duress, economic or otherwise.

 

28.This Deed of Trust and all provisions hereof shall inure to the benefit of
the successors and assigns of Lender and shall bind the heirs and permitted
successors and assigns of Borrower.

28 

 

 

29.THE LOAN DOCUMENTS AND THE PARTIES’ RIGHTS AND OBLIGATIONS THEREUNDER SHALL
IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF ILLINOIS (WITHOUT GIVING EFFECT TO ILLINOIS’ PRINCIPLES
OF CONFLICTS OF LAW), EXCEPT TO THE EXTENT (A) OF PROCEDURAL AND SUBSTANTIVE
MATTERS RELATING ONLY TO THE CREATION AND PERFECTION OF SECURITY INTERESTS AND
THE ENFORCEMENT OF LENDER’S REMEDIES WITH RESPECT THERETO, WHICH MATTERS SHALL
BE GOVERNED BY THE LAWS OF THE STATE OF MARYLAND, AND (B) THAT THE LAWS OF THE
UNITED STATES OF AMERICA AND ANY RULES, REGULATIONS, OR ORDERS ISSUED OR
PROMULGATED THEREUNDER, APPLICABLE TO THE AFFAIRS AND TRANSACTIONS ENTERED INTO
BY LENDER, OTHERWISE PREEMPT THE LAWS OF THE STATE OF MARYLAND OR ILLINOIS LAW;
IN WHICH EVENT SUCH FEDERAL LAW SHALL CONTROL.

 

30.As used herein, the term “Default Rate” means a rate equal to the lesser of
(i) three percent (3%) per annum above the then applicable interest rate payable
under the Note or (ii) the maximum rate allowed by applicable law at the time of
the occurrence of an Event of Default.

 

31.AFTER CONSULTING WITH COUNSEL AND CAREFUL CONSIDERATION, Borrower AND LENDER
(BY ITS ACCEPTANCE HEREOF) KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE THE
RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION
ARISING OUT OF THIS DEED OF TRUST OR ANY OTHER INSTRUMENT OR AGREEMENT BY WHICH
THIS DEED OF TRUST IS, OR MAY HEREAFTER BE, SECURED, OR OUT OF ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (ORAL OR WRITTEN), OR ACTIONS OF Borrower
OR LENDER. THIS WAIVER IS A MATERIAL INDUCEMENT TO THE LENDER’S ACCEPTANCE OF
THIS DEED OF TRUST.

29 

 

 

32.This Deed of Trust and the Indebtedness secured hereby is for the sole
purpose of conducting or acquiring a lawful business, professional or commercial
activity or for the acquisition or management of real or personal property as a
commercial investment, and all proceeds of such Indebtedness shall be used for
said business or commercial investment purpose. Such proceeds will not be used
for the purchase of any security within the meaning of the Securities Exchange
Act of 1934, as amended, or any regulation issued pursuant thereto, including
without limitation, Regulations U, T and X of the Board of Governors of the
Federal Reserve System. The Premises secured hereby is not a residence or
homestead or used for mining, grazing, agricultural, timber or farming purposes.

 

33.Unless Lender shall otherwise direct in writing, Borrower shall appear in and
defend all actions or proceedings purporting to affect the security hereunder,
or any right or power of the Lender, excluding any federal regulatory
proceedings against Lender that are not instituted because of any act or
omission by Borrower, any Interest Owner or which result from the Premises. The
Lender shall have the right to appear in such actions or proceedings. Borrower
shall save Lender harmless from all reasonable costs and expenses, including but
not limited to, reasonable attorneys’ fees and costs and costs of a title
search, continuation of abstract and preparation of survey incurred by reason of
any action, suit, proceeding, hearing, motion or application before any court or
administrative body in and to which Lender may be or become a party by reason
hereof, excluding any federal regulatory proceedings against Lender that are not
instituted because of any act or omission by Borrower, any Interest Owner or
which result from the Premises. Such proceedings shall include but not be
limited to condemnation, bankruptcy, probate and administration proceedings, as
well as any other action, suit, proceeding, right, motion or application wherein
proof of claim is by law required to be filed or in which it becomes necessary
to defend or uphold the terms of this Deed of Trust or the Loan Documents or
otherwise purporting to affect the security hereof or the rights or powers of
Lender. All money paid or expended by Lender in that regard, together with
interest thereon from date of such payment at the Default Rate shall be
additional Indebtedness secured hereby and shall be immediately due and payable
by Borrower without notice.

30 

 

 

34.Upon the occurrence of an Event of Default, unless the same has been
specifically waived in writing, all rents collected or received by Borrower
shall be accepted and held for Lender in trust and shall not be commingled with
the funds and property of Borrower, but shall be promptly paid over to Lender.

 

35.If this Deed of Trust is executed by more than one Person as Borrower, all
obligations and agreements of Borrower are joint and several.

 

36.This Deed of Trust may be executed in counterparts, each of which shall be
deemed original; and such counterparts when taken together shall constitute but
one agreement.

 

37.Borrower shall have the right, after giving thirty (30) days’ prior written
notice to Lender, to prepay (without penalty or premium) in whole or in part,
principal owed under the Note together with interest thereon to the date on
which payment is made, along with all sums, amounts, advances, or charges then
due under any instrument or agreement by which the Note is secured.

 

38.Upon request of Borrower, Lender, at Lender's option so long as this Deed of
Trust secures indebtedness held by Lender, may make future advances to Borrower.
Such future advances, with interest thereon, shall be secured hereby if made
under the terms of this Deed of Trust, the Note or any other Loan Document, or
if made pursuant to any other promissory note, instrument or agreement stating
that sums advanced thereunder are secured hereby, provided, however, that any
such future advances that cause the principal balance of the Loan to exceed
$45,750,000.00 must first be memorialized in an amendment to this Deed of Trust
and recorded with the applicable recorder’s office, with all taxes and fees paid
thereon.

31 

 

 

39.To the greatest extent permitted by law: (a) Borrower hereby waives the
benefit of, and agrees that it will not apply for or avail itself of, any
appraisement, valuation, redemption, reinstatement, 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;
and (b) Borrower, for itself, any and all persons or entities who may claim
through or under it and each and every person or entity acquiring any interest
in the Premises or title to the Premises subsequent to the date of this Deed of
Trust, hereby also waives (i) any and all rights to have the Premises 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 in its entirety; (ii) any and all rights of (A)
redemption in the event of foreclosure of the lien hereof pursuant to the rights
herein granted; and (B) homestead in the Premises which Borrower may now or
hereafter have under applicable law; and (iii) all rights to void liens under
Section 506 of the United States Bankruptcy Code (11 U.S.C. §506), or any
amendment or successor thereto.

 

40.Lender, from time to time, may substitute another Trustee in place of the
Trustee named herein, to execute the trusts hereby created; and upon such
appointment, and without conveyance to the successor trustee, the successor
trustee shall be vested with all the title, interest, powers, duties and trusts
in the Premises hereby vested in or conferred upon Trustee herein named. Each
such appointment and substitution shall be made by written instrument executed
by the Lender containing reference to this Deed of Trust sufficient to identify
it, which instrument, when recorded in the office of the Register of Deeds of
the county or counties in which the Premises is situated, shall be conclusive
proof of proper appointment of the successor trustee. The recital or statement,
in any instrument executed by Trustee in pursuance of any of said trusts, of the
due authorization of any agent of the Trustee executing the same shall for all
purposes be conclusive proof of such authorization.

32 

 

 

41.Trustee at any time, at Trustee’s option, may commence and maintain suit in
any court of competent jurisdiction and obtain the aid and direction of said
court in the execution by it of the trusts or any of them, herein expressed or
contained, and, in such suit, may obtain the orders or decrees, interlocutory or
final of said court directing the execution of said trusts, and confirming and
approving Trustee’s acts, or any of them, or any sales or conveyances made by
Trustee, and adjudging the validity thereof, and directing that the purchasers
of the property sold and conveyed be let into immediate possession thereof, and
providing for orders of court or other process requiring the Sheriff of the
county in which said property is situated to place and maintain said purchasers
in quiet and peaceable possession of the property so purchased by them, and the
whole thereof.

 

42.Borrower, forthwith upon request, at any and all times hereafter, at the
expense of Borrower, will cause to be made, executed, acknowledged and delivered
to Trustee, any and every deed or assurance in law which Trustee or counsel of
Trustee shall reasonably advise or require for the more sure, effectual and
satisfactory granting and confirming of said Premises unto Trustee.

 

43.Trustee shall not be liable or responsible for its acts or omissions
hereunder, except for Trustee’s own gross negligence or willful default, or be
liable or responsible for any acts or omissions of any agent, attorneys or
employee by him employed hereunder, if selected with reasonable care.

 

44.Trustee accepts this trust when this Deed of Trust executed and acknowledged
is made a public record as provided by law. Trustee is not obligated to notify
any party hereto of pending sale under any other deed of trust or of any action
or proceeding in which Borrower, Lender, or Trustee shall be a party unless
brought by Trustee.

(Signature on following page.)

33 

 

 

IN WITNESS WHEREOF, Borrower has caused this Deed of Trust, Security Agreement,
Assignment of Rents and Fixture Filing to be duly executed and delivered as of
the date first hereinabove written.

 

   

IRESI FREDERICK MARKET SQUARE, L.L.C.,

a Delaware limited liability company

                By: Inland Residential Operating Partnership, L.P., a Delaware
limited partnership, its sole member                   By:

Inland Residential Properties Trust, Inc.

a Maryland corporation,

its general partner

            Attest:     By: /s/ David Z. Lichterman       Name: David Z.
Lichterman /s/ David Neboysky     Its: Vice President, Treasurer & CAO
Name:  David Neboysky                      

 

State of Illinois       )

County of DuPage )

 

ON THIS DAY before me, a Notary Public duly commissioned, qualified and acting
within and for the County and State aforesaid, personally appeared the within
named David Z. Lichterman, to me personally well known, who stated that he/she
is the Vice President, Treasurer & CAO of Inland Residential Properties Trust,
Inc., a Delaware corporation, being the general partner of Inland Residential
Operating Partnership, L.P., a Delaware limited partnership, as the sole member
of IRESI Frederick Market Square, L.L.C., a Delaware limited liability company,
who has signed to the foregoing conveyance and who is known to me, acknowledged
before me on this day that, being informed of the contents of the conveyance,
he/she, as such officer and with full authority, executed the same voluntarily
for and as the act of said limited liability company, and further stated and
acknowledged that he/she, being informed of the contents thereof, had
voluntarily so signed, executed and delivered said instrument as such officer
and in such capacity for the consideration, uses and purposes therein set forth.

 

Given under my hand this 28th day of September 2015.

 

    /s/ Susan Metzler     Notary Public My Commission Expires:          

 34

 

 

MARYLAND ATTORNEY CERTIFICATE

 

In accordance with Section 3-104(f) of the Real Property Article, Annotated Code
of Maryland, as amended, I hereby certify I am an attorney admitted to practice
before the Court of Appeals of Maryland, and that the attached Instrument was
prepared by me or under my supervision.

 

/s/ Richard J. Melnick                 

 

Printed Name: Richard J. Melnick

 

 

EXHIBIT A

 

LEGAL DESCRIPTION

 

All that certain lot or parcel of land together with all improvements thereon
located and being in the County of Frederick, Maryland and being more
particularly described as follows:

 

Fee simple parcel:

 

Lot MF-1 and Lot MF-2, as shown on plat entitled " 'Market Square at Frederick'
—Lots MF-1, MF-2 and Neighborhood Pool and Community Amenity Lot" recorded in
Plat Book 92 at Pages 46 and 47, among the Land Records of Frederick County,
Maryland.

 

Leasehold parcel:

 

Neighborhood Pool and Community Amenity Lot, as shown on plat entitled " 'Market
Square at Frederick' — Lots MF-1, MF-2 and Neighborhood Pool and Community
Amenity Lot" recorded in Plat Book 92 at Pages 46 and 47, among the Land Records
of Frederick County, Maryland.

 

 

 

Property Address: 300 Cormorant Place, Frederick, Maryland 21701

 

Tax Map No(s):