Exhibit
10.3


 


WHEN RECORDED, HOLD FOR

PICK-UP BY:


 


Fennemore
Craig

Suite 2600

3003 North Central Avenue

Phoenix, Arizona 85012

Attention: William L. Kurtz


LOAN
NO. 122503


DEED OF
TRUST, ASSIGNMENT OF LEASES,

RENTS AND CONTRACTS, SECURITY AGREEMENT

AND

FIXTURE FILING


 


BETWEEN




AMERIVEST CAMELBACK INC., AN ARIZONA CORPORATION, AS TRUSTOR,


CHICAGO
TITLE INSURANCE COMPANY, A MISSOURI CORPORATION,

AS TRUSTEE


 


AND


 


ALLSTATE
LIFE INSURANCE COMPANY, AN ILLINOIS CORPORATION, AND

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK,

A NEW YORK CORPORATION,


AS
BENEFICIARY




DATED: AUGUST 19, 2004




LOAN AMOUNT: $21,000,000


 


PROPERTY
ADDRESS:

2710-2850 EAST CAMELBACK ROAD

PHOENIX, ARIZONA


 


 





















TABLE
OF CONTENTS


 


	
  ARTICLE/SECTION

  	
  PAGE

  
	
  ARTICLE I COVENANTS OF
  TRUSTOR

  	
   

  
	
  1.1

  	
  Performance of
  Obligations Secured

  	
   

  
	
  1.2

  	
  Insurance

  	
   

  
	
  1.3 

  	
  Condemnation

  	
   

  
	
  1.4 

  	
  Damage to Property

  	
   

  
	
  1.5
  

  	
  Escrow
  Fund for Condemnation and Insurance Proceeds

  	
   

  
	
  1.6

  	
  Taxes, Liens and Other
  Items

  	
   

  
	
  1.7

  	
  Assignment
  of Leases, Contracts, Rents and Profits

  	
   

  
	
  1.8 

  	
  Due on Sale or Encumbrance

  	
   

  
	
  1.9

  	
  Preservation
  and Maintenance of Property

  	
   

  
	
  1.10 

  	
  Use
  of Property

  	
   

  
	
  1.11 

  	
  Alterations and Additions

  	
   

  
	
  1.12 

  	
  Offset Certificates

  	
   

  
	
  1.13 

  	
  Trustee’s Costs and
  Expenses

  	
   

  
	
  1.14 

  	
  Protection
  of Security; Costs and Expenses

  	
   

  
	
  1.15 

  	
  Trustor’s
  Covenants Respecting Collateral

  	
   

  
	
  1.16 

  	
  Covenants
  Regarding Financial Statements

  	
   

  
	
  1.17 

  	
  Environmental
  Covenants and Indemnities

  	
   

  
	
  1.18 

  	
  Further Assurances

  	
   

  
	
  1.19 

  	
  Trustor’s Continued
  Existence

  	
   

  
	
  ARTICLE II EVENTS OF
  DEFAULT

  	
   

  
	
  2.1 

  	
  Monetary and
  Performance Defaults

  	
   

  
	
  2.2

  	
  Bankruptcy,
  Insolvency, Dissolution

  	
   

  
	
  2.3

  	
  Misrepresentation

  	
   

  
	
  2.4

  	
  Default under
  Subordinate Loans

  	
   

  
	
  2.5 

  	
  Breach
  of Due on Sale or Encumbrance Provision

  	
   

  
	
  ARTICLE III REMEDIES

  	
   

  
	
  3.1

  	
  Acceleration

  	
   

  
	
  3.2 

  	
  Entry

  	
   

  
	
  3.3

  	
  Judicial
  Action

  	
   

  
	
  3.4 

  	
  Power
  of Sale

  	
   

  
	
  3.5

  	
  Rescission of Notice of
  Default

  	
   

  
	
  3.6

  	
  Beneficiary’s
  Remedies Respecting Collateral

  	
   

  
	
  3.7

  	
  Proceeds of Sales

  	
   

  
	
  3.8 

  	
  Condemnation and
  Insurance Proceeds

  	
   

  
	
  3.9 

  	
  Waiver of Marshaling, Rights of
  Redemption, Homestead and Valuation.

  	
   

  
	
  3.10 

  	
  Remedies Cumulative

  	
   

  
	
  3.11 

  	
  Nonrecourse

  	
   

  
	
  ARTICLE IV MISCELLANEOUS

  	
   

  
	
  4.1

  	
  Severability

  	
   

  
	
  4.2 

  	
  Certain Charges and
  Brokerage Fees

  	
   

  
						



 


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  4.3

  	
  Notices

  	
   

  
	
  4.4

  	
  Trustor Not
  Released; Certain Trustee Acts

  	
   

  
	
  4.5

  	
  Inspection

  	
   

  
	
  4.6

  	
  Release or
  Reconveyance or Cancellation

  	
   

  
	
  4.7

  	
  Statute of Limitations

  	
   

  
	
  4.8

  	
  Interpretation

  	
   

  
	
  4.9

  	
  Captions

  	
   

  
	
  4.10
  

  	
  Consent

  	
   

  
	
  4.11 

  	
  Delegation to Subagents

  	
   

  
	
  4.12 

  	
  Successors and Assigns

  	
   

  
	
  4.13 

  	
  Governing
  Law

  	
   

  
	
  4.14 

  	
  Substitution of Trustee

  	
   

  
	
  4.15 

  	
  Changes in Taxation

  	
   

  
	
  4.16 

  	
  Maximum Interest Rate

  	
   

  
	
  4.17 

  	
  Time
  of Essence

  	
   

  
	
  4.18 

  	
  Reproduction of Documents

  	
   

  
	
  4.19 

  	
  No Oral Modifications

  	
   

  
	
  4.20 

  	
  Trustee Provisions

  	
   

  



 


 


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DEED OF
TRUST, ASSIGNMENT OF LEASES, RENTS AND CONTRACTS,

SECURITY AGREEMENT AND FIXTURE FILING


 


 


THIS DEED OF TRUST,
ASSIGNMENT OF LEASES, RENTS AND CONTRACTS, SECURITY AGREEMENT AND FIXTURE
FILING (“Deed of Trust”) is made as of August 19, 2004, from AMERIVEST
CAMELBACK INC., an Arizona corporation, whose mailing address is 1780 South
Bellaire Street, Suite 100, Denver, Colorado 80222 (herein “Trustor”), to
CHICAGO TITLE INSURANCE COMPANY, a Missouri corporation, whose mailing address
is 2415 East Camelback Road, Suite 300, Phoenix, Arizona 85016 (herein “Trustee”),
in favor of ALLSTATE LIFE INSURANCE COMPANY, an Illinois corporation (“ALIC”),
and ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK, a New York corporation (“ALNY”),
whose mailing address is Allstate Plaza South, 3075 Sanders Road, Suite G5C,
Northbrook, Illinois 60062 (ALIC and ALNY are sometimes hereinafter referred to
collectively as “Beneficiary”).


 


TRUSTOR, in consideration of
the indebtedness herein recited and the trust herein created, hereby
irrevocably grants, bargains, sells, mortgages, conveys, transfers and assigns
to Trustee, its successors and assigns, in trust, with power of sale and right
of entry and possession, all of Trustor’s estate, right, title and interest in,
to and under that certain real property located in Maricopa County, Arizona,
more particularly described in Exhibit A attached hereto and
incorporated herein by this reference (the “Land”);


 


TOGETHER with all of Trustor’s
now or hereafter acquired estate, right, title and interest in, to and under
all buildings, structures, improvements and fixtures now existing or hereafter
erected on the Land and all right, title and interest, if any, of Trustor in
and to the streets and roads, opened or proposed, abutting the Land to the
center lines thereof, and strips within or adjoining the Land, the air space
and right to use said air space above the Land, all rights of ingress and
egress on or within the Land, all easements, rights and appurtenances thereto
or used in connection with the Land, including, without limitation, all lateral
support, alley and drainage rights, all revenues, income, rents, cash or
security deposits, advance rental deposits, and other benefits thereof or
arising from the use or enjoyment of all or any portion thereof (subject
however to the rights and authorities given herein to Trustor to collect and
apply such revenues, and other benefits), all interests in and rights,
royalties and profits in connection with all minerals, oil and gas and other
hydrocarbon substances thereon or therein, and water stock, all options to
purchase or lease, all development or other rights relating to the Land or the
operation thereof, or used in connection therewith, including all Trustor’s
right, title and interest in all fixtures, attachments, partitions, machinery,
equipment, building materials, appliances and goods of every nature whatever
now or hereafter located on, or attached to, the Land, all of which, including
replacements and additions thereto, shall, to the fullest extent permitted by
law and for the purposes of this Deed of Trust, be deemed to be real property
and, whether affixed or annexed thereto or not, be deemed conclusively to be
real property; and Trustor agrees to execute and deliver, from time to time,
such further instruments and


 





















 


 


documents as may be required by Beneficiary
to confirm the legal operation and effect of this Deed of Trust on any of the
foregoing. All of the foregoing property described in this section (the “Improvements”)
together with the Land, shall be hereinafter referred to as the “Property”.


 


TRUSTOR further hereby
grants to Beneficiary a security interest in, and assigns, all of Trustor’s now
existing or hereafter acquired right, title and interest in the following:


 


(A)          All equipment, fixtures, inventory, goods, instruments,
appliances, furnishings, machinery, tools, raw materials, component parts, work
in progress and materials, and all other tangible personal property of
whatsoever kind, used or consumed in the improvement, use or enjoyment of the
Property now or any time hereafter owned or acquired by Trustor, wherever
located and all products thereof whether in possession of Trustor or whether
located on the Property or elsewhere;


 


(B)           To the extent such general intangibles are assignable, all
general intangibles relating to design, development, operation, management and
use of the Property, including, but not limited to, (i) all names under which
or by which the Property may at any time be owned and operated or any variant
thereof, and all goodwill in any way relating to the Property and all service
marks and logotypes used in connection therewith, (ii) all permits, licenses,
authorizations, variances, land use entitlements, approvals, consents,
clearances, and rights obtained from governmental agencies issued or obtained
in connection with the Property, (iii) all permits, licenses, approvals,
consents, authorizations, franchises and agreements issued or obtained in
connection with the construction, use, occupation or operation of the Property,
(iv) all materials prepared for filing or filed with any governmental agency,
and (v) the books and records of Trustor relating to construction or operation
of the Property;


 


(C)            All shares of stock or partnership interest or other
evidence of ownership of any part of the Property that is owned by Trustor in
common with others, including all water stock relating to the Property, if any,
and all documents or rights of membership in any owners’ or members’
association or similar group having responsibility for managing or operating
any part of the Property provided, however, that the foregoing shall not include
any ownership interests in Trustor;


 


(D)            All accounts, deposit accounts, supporting obligations,
letter-of-credit rights, tax and insurance escrows held pursuant to this Deed
of Trust, accounts receivable, instruments, documents, documents of title, general
intangibles, payment intangibles, rights to payment of every kind, all of
Trustor’s rights, direct or indirect, under or pursuant to any and all
construction, development, financing, guaranty, indemnity, maintenance,
management, service, supply and warranty agreements, commitments, contracts,
subcontracts, insurance policies, licenses and bonds now or anytime hereafter
arising from construction on the Land or the use or enjoyment of the Property
to the extent such are assignable;


 


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(E)           All condemnation proceeds (including
payments in lieu thereof) and insurance proceeds related to the Property;


 


TOGETHER with all additions
to, substitutions for and the products of all of the above, and all proceeds
therefrom, whether cash proceeds or noncash proceeds, received when any such
property (or the proceeds thereof) is sold, exchanged, leased, licensed, or
otherwise disposed of, whether voluntarily or involuntarily. Such proceeds
shall include any of the foregoing specifically described property of Trustor
acquired with cash proceeds. Together with, and without limiting the above
items, all Goods, Accounts, Documents, Instruments, Money, Chattel Paper,
Deposit Accounts, Letter-of-Credit Rights, Investment Property, Equipment and
General Intangibles arising from or used in connection with the Property, as
those terms are defined in the Uniform Commercial Code from time to time in
effect in the state in which the Property is located. (All of the foregoing
including such products and proceeds thereof, are collectively referred to as “Collateral”.)


 


The personal property in
which Beneficiary has a security interest includes goods which are or shall
become fixtures on the Property. This Deed of Trust is intended to serve as a
fixture filing pursuant to the terms of the applicable provisions of the
Uniform Commercial Code of the state in which the Property is located and the
provisions of Exhibit B are, for that purpose, incorporated herein. This filing
is to be recorded in the real estate records of the appropriate city, town or
county in which the Property is located. In that regard, the following
information is provided:


 


 


	
  Name of Debtor:

  	
   

  	
  AmeriVest Camelback Inc.,
  an Arizona corporation

  
	
   

  	
   

  	
   

  
	
  Address of Debtor:

  	
   

  	
  See Section 4.3 hereof

  
	
   

  	
   

  	
   

  
	
  Taxpayer Identification

  	
   

  	
   

  
	
  Number of Debtor:

  	
   

  	
  84-1240264

  
	
   

  	
   

  	
   

  
	
  Organizational

  	
   

  	
   

  
	
  Identification Number

  	
   

  	
   

  
	
  of Debtor:

  	
   

  	
  1113001-9

  
	
   

  	
   

  	
   

  
	
  Name of Secured Party: 

  	
   

  	
  Allstate Life Insurance
  Company,

  
	
   

  	
   

  	
  an Illinois corporation,
  and

  
	
   

  	
   

  	
  Allstate Life Insurance
  Company of New York, a New York corporation

  
	
   

  	
   

  	
   

  
	
  Address of Secured Party: 

  	
   

  	
  See Section 4.3 hereof.

  



 


Trustor warrants and agrees
that, to its knowledge, there is no financing statement covering the foregoing
Collateral, the Property, or any part thereof, on file in any public office.


 


3





















 


HOWEVER, THIS IS A DEED OF
TRUST, AND THIS CONVEYANCE IS MADE IN TRUST FOR THE FOLLOWING USES AND TRUST,
AND FOR NO OTHER PURPOSES, AND FOR THE PURPOSE OF SECURING, IN SUCH ORDER OF
PRIORITY AS BENEFICIARY MAY ELECT:


 


(A)            The repayment of the indebtedness evidenced by (i) that
certain Mortgage Note (the “ALIC Note”) of even date herewith with a maturity
date of September 5, 2014, executed by Trustor and payable to the order of
ALIC, in the principal sum of SIXTEEN MILLION DOLLARS ($16,000,000), with
interest thereon, as provided therein and all late charges, loan fees,
commitment fees, Prepayment Premiums (as described in the ALIC Note), and all
extensions, renewals, modifications, amendments and replacements thereof; and
(ii) that certain Mortgage Note (the “ALNY Note”) of even date herewith with a
maturity date of September 5, 2014, executed by Trustor and payable to the
order of ALNY, in the principal sum of FIVE MILLION DOLLARS ($5,000,000), with
interest thereon, as provided therein and all late charges, loan fees,
commitment fees, Prepayment Premiums (as described in the ALNY Note), and all
extensions, renewals, modifications, amendments and replacements thereof (the
ALIC Note and the ALNY Note are sometimes hereinafter referred to individually
as a “Note” and collectively as the “Notes”);


 


(B)            The payment of all other sums which may be advanced by or
otherwise be due to Trustee or Beneficiary under any provision of this Deed of
Trust or under any other instrument or document referred to in Clause (C)
below, with interest thereon at the rate provided herein or therein;


 


(C)            The performance of each and every covenant and agreement
of Trustor contained (i) herein, in the Notes, or in any note evidencing a
Future Advance (as hereinafter defined), and (ii) in the obligations of Trustor
upon any and all pledge or other security agreements, loan agreements,
disbursement agreements, supplemental agreements (the foregoing shall not
include the Commitment Letter between Trustor and Beneficiary or that certain
Environmental Indemnity Agreement of even date herewith, among Trustor,
AMERIVEST PROPERTIES INC., a Maryland corporation, and Beneficiary),
assignments (both present and collateral) and all instruments of indebtedness
or security now or hereafter executed by Trustor in connection with any
indebtedness referred to in clauses (A), (B) or (D) of this section or for the
purpose of supplementing or amending this Deed of Trust or any instrument
secured hereby (all of the foregoing in this Clause (C), as the same may be
amended, modified or supplemented from time to time, being referred to
hereinafter as “Related Agreements”) and all costs and expenses, including
reasonable attorneys’ fees with respect to all such documents, including,
without limitation, the negotiation and drafting of any loan settlement or
workout agreement; and,


 


(D)            The repayment of any other loans or advances, with
interest thereon, hereafter made to Trustor (or any successor in interest to
Trustor as the owner of the Property or any part thereof) by Beneficiary when
the promissory note evidencing the


 


4





















 


loan or advance specifically states that said
note is secured by this Deed of Trust, together with all extensions, renewals,
modifications, amendments and replacements thereof (herein and in the Related
Agreements “Future Advance”).


 


Trustor makes the foregoing
grant to Trustee to hold the Property and the Collateral in trust for the
benefit of Beneficiary and for the purposes and upon the terms and conditions
hereinafter set forth, subject to those exceptions (the “Permitted Exceptions”)
shown in the title policy (the “Title Policy”) issued to Beneficiary and
insuring the first lien position of this Deed of Trust.


 


TO HAVE AND TO HOLD THE
SAME, together with the possession and right of possession of the Property and
the Collateral, unto Beneficiary, its successors and assigns, forever.


 


ARTICLE I

COVENANTS OF TRUSTOR


 


To protect the security of
this Deed of Trust, Trustor covenants and agrees as follows:


 


1.1
Performance of Obligations
Secured.  Trustor
shall promptly pay when due the principal of and interest on the indebtedness
evidenced by the Notes, the principal of and interest on any Future Advance,
any Prepayment Premium and late charges provided for in the Notes or in any
note evidencing a Future Advance, and shall further perform fully and in a
timely manner all other obligations of Trustor contained herein or in the Notes
or in any note evidencing a Future Advance or in any of the Related Agreements.


 


1.2  Insurance.  For
all times during the period there remains any indebtedness under the Notes, or
any and all other indebtedness (including without limitation Future Advances)
secured by this Deed of Trust, Trustor shall keep the Property insured against
all risks or hazards as Beneficiary may require. Such insurance shall be in
policy form, amount and coverage satisfactory to Beneficiary, including, but
not limited to:


 


(A)            Fire and extended coverage on an “all risk” replacement
cost basis, in an amount equal to the insurable value of the Improvements,
without coinsurance or deducting for depreciation, containing a waiver of
subrogation clause and a deductible amount acceptable to Beneficiary;


 


(B)            General public liability insurance, in such form, amount
and deductible reasonably satisfactory to Beneficiary, and naming Beneficiary
c/o Beneficiary’s servicing agent, if any, as additional insured covering
Beneficiary’s interest in the Property;


 


5





















 


(C)            Business interruption or rent loss insurance endorsement
in an amount at least equal to 100% of the sum of: annual debt service on the
Notes, the annual debt service on any other financing permitted by Beneficiary,
ground rents, if any, and operating expenses (without contribution from Trustor
for a period of twelve (12) months), including, without limitation, real estate
taxes and assessments and insurance, for the Property;


 


(D)            Flood insurance (whether or not available through the
National Flood Insurance Program) sufficient to cover any damage which may be
anticipated in the event of flood unless Trustor has provided Beneficiary
evidence satisfactory to Beneficiary that no portion of the Property is located
within the boundaries of the 100 year flood plain (Flood Zone A);


 


(E)           “Dram shop” insurance if alcoholic
beverages are sold on the Property;


 


(F)           Boiler and machinery insurance when
risks covered thereby are present and Beneficiary requires such insurance; and


 


(G)           Earthquake insurance if Beneficiary
requires such insurance.


 


The insurance coverages described in
subsections (A), (C), (D), (F) and (G) above shall name Beneficiary c/o
Beneficiary’s servicing agent, if any, under a standard noncontributory
mortgagee loss payable clause (and naming Beneficiary as loss payee for rent
loss coverage) or otherwise directly insure Beneficiary’s interest in the
Property. All losses under said insurance shall be payable to Beneficiary in
the manner provided in Sections 1.4 and 1.5 hereof. All policies of insurance
required under this Section 1.2 shall be with a company or companies with a
policy rating of A- and financial rating of at least Class X in the most
current edition of Best’s Key Rating Guide and authorized to do business in the
state in which the Property is located. All policies of insurance shall provide
that they will not be canceled or modified without thirty (30) days’ prior
written notice to Beneficiary. True copies of the above mentioned insurance
policies or evidence of such insurance (in the form of Acord Form 28)
satisfactory to Beneficiary shall be delivered to and held by Beneficiary. True
copies of all renewal and replacement policies or evidences of such insurance
forms (Acord Form 28) thereof shall be delivered to Beneficiary at least thirty
(30) days before the expiration of the expiring policies. If any renewal or
replacement policy is not obtained as required herein, Beneficiary is
authorized to obtain the same in Trustor’s name and at Trustor’s expense.
Beneficiary shall not by the fact of failing to obtain any insurance, incur any
liability for or with respect to the amount of insurance carried, the form or
legal sufficiency of insurance contracts, solvency of insurance companies, or
payment or defense of lawsuits, and Trustor hereby expressly assumes full
responsibility therefor and all liability, if any, with respect thereto.


 


 


6










 


 













 


1.3          Condemnation.


 


(A)          Immediately upon obtaining knowledge of the commencement or
threat of any action in connection with (i) any condemnation, (ii) any other
taking of the Property or any part thereof by any public authority or private
entity having the power of eminent domain, or (iii) any conveyance in lieu of
such condemnation or taking of the Property or any part thereof
(“Condemnation”), Trustor shall notify Beneficiary in writing but in no event
later than twenty (20) days after Trustor obtains knowledge of the commencement
of or threat of a Condemnation. Beneficiary shall have the right, but not the
obligation, to participate in any proceedings relating to any Condemnation and
may, in its sole discretion, consent or withhold its consent to any settlement,
adjustment, or compromise of any claims arising from the Condemnation and no
such settlement, adjustment or compromise shall be final or binding upon
Beneficiary without Beneficiary’s prior consent.


 


(B)            If all or part of the Property is taken by Condemnation
and Beneficiary in its reasonable judgment determines that the remainder of the
Property, if any, cannot be operated as an economically viable entity at
substantially the same level of operations as immediately prior to such
Condemnation, then all proceeds of the Condemnation (“Condemnation Proceeds”)
shall be paid over to Beneficiary and shall be applied first toward
reimbursement of the costs and expenses (including reasonable attorneys’ fees)
of Beneficiary, if any, in connection with the recovery of such Condemnation
Proceeds, and then, in the sole and absolute discretion of Beneficiary and
without regard to the adequacy of its security under this Deed of Trust, shall
be applied against all amounts due herein or under the Notes and any remaining
Condemnation Proceeds shall be released to Trustor. Provided there is no Event
of Default (as defined below) hereunder, full or partial prepayment of the
Notes under this Section 1.3(B) shall not be subject to the Prepayment Premium;
however, such partial prepayment shall not entitle Trustor to prepay the
portion of the Notes remaining unpaid after application of the Condemnation
Proceeds. Prepayment of the balance shall continue to be subject to the terms
and conditions of the Notes, including the No-Prepayment Period and the
Prepayment Premium described therein.


 


(C)            If less than all of the Property is taken by Condemnation
and Beneficiary in its reasonable judgment determines that the remainder of the
Property can be operated as an economically viable entity at substantially the
same level of operations as immediately prior to such Condemnation, then
Trustor shall diligently restore the Property to a condition and use as close
as possible to its condition immediately prior to the Condemnation and all Condemnation
Proceeds shall be made available to Trustor for such restoration. If the
estimated cost of restoration, as reasonably determined by Beneficiary, is
equal to or less than $500,000.00, all Condemnation Proceeds shall be released
directly to Trustor for restoration of the Property. If the estimated cost of
restoration exceeds $500,000.00, all Condemnation Proceeds shall be deposited
into an escrow fund in accordance with Section 1.5 below. Beneficiary shall
have the right to obtain an opinion of an independent contractor or engineer
satisfactory to Beneficiary, at Trustor’s expense, to estimate the cost to
restore


 


 


7





















 


the remaining portion of the
Property. If the amount of the Condemnation Proceeds is not sufficient to
restore the Property based on the opinion of an independent contractor or
engineer, subject to revision as restorations are made, Trustor shall be
obligated to pay the difference toward the restoration of the Property, prior
to the disbursement of any Condemnation Proceeds to, or for the account of
Trustor.


 


(D)      If an Event of Default exists at any time
from the time of a Condemnation through the completion of restoration and
payment of any Condemnation Proceeds, the use of the Condemnation Proceeds
shall be governed by the remedies set forth in Article III below. If an event
has occurred which with notice, the passage of time, or both, could become an
Event of Default, then, the Condemnation Proceeds shall be held by Beneficiary
or in the Escrow Fund (as defined below), as applicable, pending cure of such
event prior to the expiration of any applicable cure or grace period. The
application of any Condemnation Proceeds to the indebtedness secured hereby
shall not cure or waive any Event of Default hereunder, or invalidate any act
done pursuant to any notice thereof.


 


1.4     Damage to Property.


 


(A)     Promptly upon obtaining knowledge of any
damage to the Property or any part thereof with an estimated cost of
restoration in excess of $25,000.00, but in no event later than five (5) days
after Trustor obtains such knowledge, Trustor shall notify Beneficiary of such
damage in writing. Trustor shall diligently restore the Property to the same
condition that existed immediately prior to the damage whether or not insurance
proceeds are sufficient for such restoration. All proceeds of any insurance on
the Property (“Insurance Proceeds”) received by Trustor shall be applied to
such restoration. Beneficiary shall have the right to obtain an opinion of an independent
contractor or engineer satisfactory to Beneficiary, at Trustor’s expense, to
estimate the cost to restore the Property to its original condition, which
opinion may be revised as restorations are made. If the amount of the insurance
proceeds is not sufficient to restore the Property based on an independent
contractor’s or engineer’s opinion, subject to revision as restorations are
made, Trustor shall be obligated to pay the difference toward the restoration
of the Property, prior to the application of any Insurance Proceeds to such
restoration as provided herein.


 


(B)      If the estimated cost of restoration is
equal to or less than $500,000.00, Trustor shall promptly settle and adjust any
claims under the insurance policies which insure against such risks and, upon
receipt of the Insurance Proceeds, Trustee and Beneficiary shall deliver such
to Trustor for use in restoration of the Property.


 


(C)       If the estimated cost of restoration is
greater than $500,000.00, Beneficiary shall have the right, but not the
obligation, to participate in the settlement of the insurance claims and may,
in its commercially reasonable discretion, consent or withhold its consent to
any settlement, adjustment, or compromise of such insurance claims and no such
settlement, adjustment, or compromise shall be final or binding


 


8





















 


upon Beneficiary without its prior consent.
Upon settlement of insurance claims, and if Trustor can demonstrate to the
reasonable satisfaction of Beneficiary that the projected ratio of Net
Operating Income, as defined below, to annual debt service due under the Notes
and any other notes secured by the Property (“Debt Coverage Ratio”) will be at
least 105% for the twelve months immediately following reconstruction of the
Property, the insurance proceeds shall be deposited into an escrow fund in
accordance with Section 1.5 below, prior to the disbursement of any
Condemnation Proceeds to, or for the account of Trustor.


 


As used in this Deed of
Trust, “Net Operating Income” shall mean: (i) all gross operating revenues
anticipated to be received during the following twelve-month period based on
leases in effect as of the date of calculation and only for such time as those
leases are contracted to remain in effect without expiration by their terms or
optional termination by the tenant (unless the tenant has waived its
termination rights in writing or the term of the lease has been extended in
writing), including without limitation all amounts to be received from tenants
as payment of operating expenses but not including refundable deposits, lease
termination payments, excess tenant improvement and leasing commission payments
included as additional rent, principal or interest payments received by Trustor
on loans to tenants, and fees and reimbursements for work performed for tenants
by Trustor, less: (ii) all amounts, calculated on a pro forma basis, for
the operation or maintenance of the Property for the following twelve-month
period, including ground rents, the cost of property management (which shall be
no less than 4% of gross revenues), maintenance, cleaning, security,
landscaping, parking maintenance and utilities, and other costs and expenses
approved in writing by Beneficiary and amounts reasonably estimated by
Beneficiary for the payment of real estate taxes and assessments and other
taxes related to the operation of the Property, insurance premiums, necessary
repairs and future replacements of equipment; payments under the Notes shall
not be included in Net Operating Income. Notwithstanding the foregoing, if any
of the Related Agreements require a historical calculation of Net Operating
Income, it shall be calculated on a cash basis for the previous twelve-month
period as of the date of such calculation.


 


(D)            If in the reasonable judgment of Beneficiary the
conditions of Paragraph 1.4(C) cannot be satisfied, then at any time from and
after the occurrence of the damage, upon written notice to Trustor, Beneficiary
may declare the entire balance of the Notes and/or any Future Advances then
outstanding and accrued and unpaid interest thereon, and all other sums or
payments required thereunder or under this Deed of Trust, without any
Prepayment Premium (provided no Event of Default then exists hereunder), to be
immediately due and payable, and all insurance proceeds shall be applied by
Beneficiary first to the reimbursement of any costs or expenses incurred by
Beneficiary in connection with the damage or the determination to be made
hereunder, and then to the payment of the indebtedness secured by this Deed of
Trust in such order as Beneficiary may determine in its sole discretion.


 


(E)           Notwithstanding any provision herein
to the contrary, if an Event of Default exists at any time from the time of
damage through the completion of restoration


 


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and the final release of any Insurance
Proceeds to Trustor, the use of the insurance proceeds shall be governed by the
remedies set forth in Article III below. If an event has occurred which with
notice, the passage of time, or both, could become an Event of Default, then
the Insurance Proceeds shall be held by Beneficiary or in the Escrow Fund, as
applicable, pending cure of such event prior to the expiration of any
applicable cure or grace period. The application of any Insurance Proceeds to
the indebtedness secured hereby shall not cure or waive any Event of Default
hereunder or invalidate any act done pursuant to any notice thereof.


 


1.5           Escrow Fund for Condemnation and Insurance Proceeds.


 


(A)            In the circumstances indicated above in Subsections
1.3(C) and 1.4(C), all Condemnation Proceeds and Insurance Proceeds
(“Proceeds”) shall be deposited in an interest bearing escrow fund (“Escrow
Fund”). The escrow agent and the form of the escrow agreement shall be
satisfactory to Beneficiary and Trustor. The costs and fees of such escrow
agent shall be paid by Trustor. If the amount of the Proceeds is not sufficient
to restore the Property based on an independent contractor’s or engineer’s
opinion obtained by Beneficiary at Trustor’s expense, subject to revision as
restorations are made, Trustor shall be obligated to deposit in the Escrow Fund
the difference between the contractor’s or engineer’s estimate and the amount
of the Proceeds or deliver to the escrow agent an irrevocable, unconditional
letter of credit issued in the amount of such difference in a form and by a
financial institution acceptable to Beneficiary or other cash equivalent
acceptable to Beneficiary. Trustor’s funds, if necessary, and the Proceeds
shall be deposited into the Escrow Fund and shall not be released by the escrow
agent unless used to restore the Property to its original condition and unless
a disbursement agent satisfactory to Beneficiary and Trustor approves such
disbursements from time to time. The escrow agreement shall provide that the
escrow agent shall only disburse funds to Trustor so long as the restoration
work is being diligently performed by Trustor and only after: (i) Trustor has
delivered to Beneficiary and Beneficiary has approved the plans and
specifications for the restoration of the Property; (ii) Trustor has executed a
contract acceptable to Beneficiary with a general contractor reasonably
acceptable to Beneficiary for the restoration of the Property; (iii) the
general contractor has submitted lien waivers and/or releases, executed by the
general contractor and all subcontractors which may be partial to the extent of
partial payments and which, in the case of releases, may be contingent upon payment
if the escrow agent makes payment directly to such contractor or subcontractor;
(iv) Trustor has furnished Beneficiary with an endorsement to the Title Policy
showing no additional exceptions; and (v) Trustor has deposited its funds in
the Escrow Fund as provided in this paragraph and has submitted such other
documents and information as may be requested by Beneficiary to determine that
the work to be paid for has been performed in accordance with the plans and
specifications approved by Beneficiary. If any requisition for payment of work
performed is for an amount which would result in the remaining balance of the
Escrow Fund to be insufficient to complete the remainder of the restoration,
Trustor shall advance the requisite amount in cash to the Escrow Fund
immediately upon written request from the disbursement agent or Beneficiary.
Any failure by Trustor to satisfy any of the


 


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conditions to the disbursement of Proceeds
set forth in this Paragraph upon demand by Beneficiary shall constitute a
Performance Default, as hereinafter defined.


 


(B)            Any Proceeds and any interest thereon remaining in the
Escrow Fund after payment of the costs to complete the restoration of the
Property pursuant to the approved plans and specifications and the costs of the
escrow agent shall be paid first, to Trustor to the extent of any funds of
Trustor’s contributed to the restoration pursuant to Paragraph 1.5, provided
there is no Event of Default or an event which with notice, the passage of
time, or both, could become an Event of Default, and thereafter at
Beneficiary’s option, any remaining Proceeds may be applied to the prepayment
of the Notes without payment of any Prepayment Premium. Full or partial
prepayment of the Notes under the preceding sentences of this Section 1.5B
shall not be subject to the Prepayment Premium; however, any such partial
prepayment shall not entitle Trustor to prepay the portion of the Notes
remaining unpaid after application of the Proceeds. Prepayment of the balance
shall continue to be subject to the terms and conditions of the Notes,
including the No-Prepayment Period and the Prepayment Premium described
therein. If an Event of Default exists, the use of the Proceeds shall be
governed by Article III below. If, however, an event exists which with notice,
the passage of time, or both, could become an Event of Default, the remaining
balance in the Escrow Fund shall be held by the escrow agent pending cure of
the event prior to the expiration of any applicable cure or grace period.


 


1.6            Taxes, Liens and Other Items.


 


(A)            Trustor shall pay any and all taxes, bonds, assessments,
fees, liens, charges, fines, impositions and any accrued interest or penalty
thereon, and any and all other items which are attributable to or affect the
Property (collectively, “Impositions”) by making payment prior to delinquency
directly to the payee thereof and promptly furnish copies of paid receipts for
these to Beneficiary. Trustor shall promptly discharge or bond any lien or
encumbrance on the Property whether or not said lien or encumbrance has or may
attain priority over this Deed of Trust. This Deed of Trust shall be the sole
encumbrance on the Property (other than the Permitted Exceptions and the lien
for taxes not yet due and payable) and, if with the consent of Beneficiary it
is not the sole encumbrance, then it shall be prior to any and all other liens
or encumbrances on the Property. Trustor may in good faith and with due
diligence protest the payment of any Imposition which it believes unwarranted
or excessive and may defer payment of such Imposition pending conclusion of
such contest if legally permitted to do so, provided that the priority of this
Deed of Trust and Beneficiary’s security is not adversely affected and that
Trustor shall have furnished Beneficiary or the taxing authority such security
as may be required.


 


(B)            As further security for the payment of the Notes and the
payment of real estate taxes, regular or special assessments and insurance
premiums, Trustor shall deposit 1/12th of the annual amounts of such items as
estimated by Beneficiary, with each monthly payment on the Notes, so that
Beneficiary will hold a sufficient amount to pay all such charges not less than
thirty (30) days prior to the date on which such items


 


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become due and payable. Beneficiary shall be
furnished evidence to allow it to estimate such amounts, including paid
receipts or annual insurance premium statements, assessment notices and tax
receipts. All funds so deposited shall, until applied to the payment of the
aforesaid items, as hereinafter provided, be held by Beneficiary without
interest (except to the extent required under applicable law) and may be
commingled with other funds of Beneficiary. All funds so deposited shall be
applied to the payment of the aforesaid items only upon the satisfaction of the
following conditions: (i) no Event of Default or event, which with notice or
the passage of time or both could become an Event of Default, shall have
occurred; (ii) Beneficiary shall have sufficient funds to pay the full amounts
of such items (which funds may include amounts paid solely for such purpose by
Trustor in addition to the escrowed funds); and (iii) Trustor shall have furnished
Beneficiary with prior written notification that such items are due and with
the bills and invoices therefor in sufficient time to pay the same before any
penalty or interest attaches and before policies of insurance lapse, as the
case may be, and shall have deposited any additional funds as Beneficiary may
determine as necessary to pay such items.


 


(C)            Beneficiary expressly disclaims any obligation to pay the
aforesaid items unless and until Trustor complies with all of the provisions
set forth in Subsections 1.6(A) and (B). Trustor hereby pledges and grants a
security interest in any and all monies now or hereafter deposited pursuant to
Subsection 1.6(B) as additional security for the Notes and Related Agreements.
If any Event of Default shall have occurred, or if the Notes shall be
accelerated as herein provided, all funds so deposited may, at Beneficiary’s
option, be applied as determined solely by Beneficiary or to cure said Event of
Default or as provided in this Section 1.6. In no event shall Trustor claim any
credit against the principal and interest due hereunder for any payment or
deposit for any of the aforesaid items.


 


1.7           Assiqnment of Leases, Contracts, Rents and Profits.


 


(A)            Trustor hereby absolutely, presently and unconditionally
grants, assigns, transfers, conveys and sets over to Beneficiary, subject to
all of the terms, covenants and conditions set forth herein, all of Trustor’s
right, title and interest in and to the following whether arising under the
“Leases” (as hereinafter defined), by statute, at law, in equity, or in any
other way:


 


(1)             All of the leases of the Property
which are in effect on the date hereof and all leases entered into or in effect
from time to time after the date hereof, including, without limitation, all amendments,
extensions, replacements, modifications and renewals thereof and all subleases,
concession agreements, and all other agreements affecting the same (the
“Leases”) and all guaranties thereunder;


 


(2)             All of the rents, income, profits,
revenue, security deposits, judgments, Condemnation Proceeds, Insurance
Proceeds, unearned insurance premiums, all termination and/or cancellation
payments received by Trustor in connection with any Lease, proceeds from the
surrender, sale or other disposition of


 


12





















 


any Lease, any other fees or sums payable to
Trustor or any other person as landlord and any award or payment in connection
with any enforcement action of any Lease, including, without limitation, any
award to Trustor made hereafter in any court involving any of the tenants under
the Leases in any bankruptcy, insolvency, or reorganization proceeding in any
state or federal court, and Trustor’s right to appear in any action and/or to
collect any such award or payment, and all payments by any tenant in lieu of
rent (collectively, “Rents and Profits”); and


 


(3)             All contracts, agreements,
management, operating and maintenance agreements, warranties, licenses,
permits, guaranties and sales contracts relating to the Property and the
Collateral entered into by, or inuring to the benefit of, Trustor (the
“Contracts”).


 


(B)            Notwithstanding the provisions of Subsection 1.7(A), so
long as no Event of Default is continuing, and, subject to Subsection 1.7(F)
and Article III, Trustor shall have a license to manage the Property; to
collect, receive and use all Rents and Profits in accordance with the terms of
the Leases; to let the Property subject to the terms hereof and to take all
actions which a reasonable and prudent landlord would take in enforcing the
provisions of the Leases and Contracts; provided, however, that all amounts so
collected shall be applied toward operating expenses, real estate taxes and
insurance relating to the Property, capital repair items necessary to the
operation of the Property, and the payment of sums due and owing under the
Notes and this Deed of Trust prior to any other expenditure or distribution by
Trustor. During the continuation of an Event of Default (whether or not
Beneficiary shall have exercised Beneficiary’s option to declare the Notes
immediately due and payable), such license shall be automatically revoked
without any action required by Beneficiary. Any amounts received by Trustor or
its agents in the performance of any acts prohibited by the terms of this Deed
of Trust, including but not limited to any amounts received in connection with
any cancellation, modification or amendment of any of the Leases prohibited by
the terms of this Deed of Trust and any amounts received by Trustor as rents,
income, issues or profits from the Property from and after the occurrence of an
Event of Default under this Deed of Trust, the Notes, or any of the other
Related Agreements, shall be held by Trustor as trustee for Beneficiary and all
such amounts shall be accounted for to Beneficiary and shall not be commingled
with other funds of Trustor. Any person acquiring or receiving all or any
portion of such trust funds shall acquire or receive the same in trust for
Beneficiary as if such person had actual or constructive notice that such funds
were impressed with a trust in accordance herewith.


 


(C)            During the continuation of an Event of Default,
Beneficiary shall have the right but not the obligation to perform as landlord
under the Leases and as a party under the Contracts. The assignment of Rents
and Profits set forth herein constitutes an irrevocable direction and
authorization to all tenants under the Leases to pay all Rents and Profits to
Beneficiary upon demand and without further consent or other action by Trustor.
Trustor irrevocably appoints Beneficiary its true and lawful attorney, at the
option of Beneficiary at any time, to demand, receive and enforce payment, to
give receipts, releases and satisfactions, and to sue, either in the name of


 


13





















 


Trustor or in the name of Beneficiary, for
all such Rents and Profits and apply the same to the indebtedness secured by
this Deed of Trust.


 


(D)            Neither the foregoing assignment of Rents and Profits,
Leases and Contracts to Beneficiary nor the exercise by Beneficiary of any of
its rights or remedies under Article III shall be deemed to make Beneficiary a
“mortgagee-in-possession” or otherwise liable in any manner with respect to the
Property, unless Beneficiary, in person or by agent, assumes actual possession
thereof. Nor shall appointment of a receiver for the Property by any court at
the request of Beneficiary or by agreement with Trustor, or the entering into
possession of the Property by such receiver, be deemed to make Beneficiary a
“mortgagee-in-possession” or otherwise liable in any manner with respect to the
Property.


 


(E) In the event Beneficiary
collects and receives any Rents and Profits under this Section 1.7 pursuant to
any Monetary or Performance Default as defined in Section 2.1 hereof, such
collection or receipt shall in no way constitute a curing of the Monetary or
Performance Default.


 


(F) Trustor shall not,
without the prior written consent of Beneficiary, (i) enter into any lease,
extend or renew any Lease (other than extensions or renewals in accordance with
the terms of a lease approved by Beneficiary), or consent to or permit the
assignment or subletting of any Leases (other than assignments or subleases in
accordance with the terms of a lease approved by Beneficiary), or amend or
terminate any Lease; (ii) alter, modify, change or terminate the terms of any
guaranties of any Leases; (iii) create or permit any lien or encumbrance which,
upon foreclosure, would be superior to any such Leases or in any other manner
impair Beneficiary’s rights and interest with respect to the Rents and Profits;
(iv) pledge, transfer, mortgage or otherwise encumber or assign the Leases, the
Contracts or the Rents and Profits; or (v) collect rents more than 30 days prior
to their due date. Notwithstanding the foregoing, so long as no Event of
Default has occurred hereunder, Trustor may enter into Leases, extend or renew
Leases, and permit the assignment or sublease of Leases which demise 20,000
rentable square feet or less for a term of five (5) years or less (“Non-material
Leases”), provided they are on rental rates, including rental concessions, at
least equal to that charged for comparable properties within the Property’s
submarket area, have been negotiated at arm’s length, and do not contain
material modifications to the form of lease previously approved by Beneficiary.
Trustor may also amend Non-material Leases without Beneficiary’s prior written
consent if, in Trustor’s prudent business judgment, such amendments are necessary
and do not impair the value of the Property. Beneficiary will not unreasonably
withhold or delay its consent to any lease submitted to it for approval. Any
lease submitted for Beneficiary’s consent shall, at Beneficiary’s option, be
accompanied by a Subordination, Non-Disturbance and Attornment Agreement in
Beneficiary’s then current form. Trustor may also terminate leases of less than
6,500 rentable square feet without Beneficiary’s prior written consent if, in
Trustor’s prudent business judgment, such termination is necessary and will not
impair the value of the Property.


 


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(G)            Trustor shall promptly give notice to Beneficiary of any
and all monetary defaults or material non-monetary defaults of any of the
tenants under any of the Leases meeting the criteria of a lease for which
Beneficiary’s consent would have been required pursuant to Paragraph 1.7(F)
regardless of whether such leases were executed before or after the date of
this Deed of Trust, together with a complete copy of any notices delivered to
or by the tenant as a result of such default. Beneficiary shall have the right,
but not the obligation, to cure any default of Trustor under any of the Leases
and all amounts disbursed in connection with said cure shall be deemed to be
indebtedness secured hereby.


 


(H)            Beneficiary shall have the right to approve any lease
forms used by Trustor for lease of space in the Property, which approval shall
not be unreasonably withheld, conditioned or delayed.


 


(I)           Trustor hereby represents, warrants
and agrees that:


 


(1)               Trustor has the right, power and capacity to make this
assignment and that no person, firm or corporation or other entity other than
Trustor has or will have any right, title or interest in or to the Leases or
the Rents and Profits.


 


(2)               Trustor shall, at its sole cost and expense, perform
and discharge all of the obligations and undertakings of the landlord under the
Leases. Trustor shall enforce the performance of each obligation of the tenants
under the Leases and will appear in and prosecute or defend any action
connected with the Leases or the obligations of the tenants thereunder.


 


(J)             Beneficiary shall not be obligated to perform or
discharge, nor does it hereby undertake to perform or discharge, any
obligation, duty or liability under the Leases or under or by reason of this
assignment. Trustor shall and does hereby agree to indemnify Beneficiary for
and to defend and hold Beneficiary harmless from any and all liability, loss or
damage which Beneficiary may or might incur under the Leases or under or by
reason of this assignment, and from any and all claims whatsoever which may be
asserted against Beneficiary by reason of any alleged obligations or
undertakings on Beneficiary’s part to perform or discharge any of the terms,
covenants or agreements contained in the Leases. Should Beneficiary incur any
liability, loss or damage under the Leases or under or by reason of this
assignment, or in the defense of any of such claims or demands, the amount
thereof, including costs, expenses and reasonable attorneys’ fees, shall be
secured by this Deed of Trust; and Trustor shall reimburse Beneficiary therefor
immediately upon demand, and upon failure of Trustor to do so, Beneficiary may
declare all sums so secured to be immediately due and payable.


 


(K)            Beneficiary may take or release other security, may
release any party primarily or secondarily liable for any indebtedness secured
hereby, may grant extensions, renewals or indulgences with respect to such
indebtedness, and may apply any other security therefor held by it to the
satisfaction of such indebtedness, without prejudice to any of its rights
hereunder.


 


 


15





















 


 


(L)             Nothing herein contained and no act done or omitted by
Beneficiary pursuant to the powers and rights granted it herein shall be deemed
to be a waiver by Beneficiary of its other rights and remedies under the Notes
and this Deed of Trust, and this assignment is made and accepted without
prejudice to any of the other rights and remedies possessed by Beneficiary
under the terms thereof. The right of Beneficiary to collect said indebtedness
and to enforce any other security therefor held by it may be exercised by
Beneficiary either prior to, simultaneously with, or subsequent to any action
taken by it hereunder. It is the intent of both Trustor and Beneficiary that this
assignment be supplementary to, and not in substitution or derogation of, any
other provision contained in this Deed of Trust giving Beneficiary any interest
in or rights with respect to the Leases or Rents and Profits.


 


(M)           Neither this assignment nor pursuit of any remedy
hereunder by Beneficiary shall cause or constitute a merger of the interests of
the tenant and Trustor under any of the Leases such that any of the Leases
hereby assigned are no longer valid and binding legal obligations of the parties
executing the same.


 


(N)            Trustor agrees, from time to time, to execute and
deliver, upon demand, all assignments and any and all other writings as
Beneficiary may reasonably deem necessary or desirable to carry out the purpose
and intent hereof, or to enable Beneficiary to enforce any right or rights
hereunder.


 


1.8
Due on Sale or Encumbrance.  Neither Trustor nor any principal
of Trustor shall, without the prior written consent of Beneficiary: (i) create,
effect, consent to, suffer to exist, assume, incur, permit (voluntarily or
involuntarily, by operation of law or otherwise) any direct or indirect
conveyance, sale, assignment, transfer, grant, lien, pledge, mortgage, security
interest or other encumbrance or disposition (each of the foregoing defined as
“Transfer”) of the Property or an interest therein; (ii) be divested of its
title to the Property or any interest therein; (iii) enter into a contract to
sell or grant an option to purchase all or any portion of the Property or any
interest therein that results in a transfer of possession or of equitable title
to the Property or any portion thereof prior to the payment of the Loan in
accordance with its terms; (iv) enter into any lease giving the tenant any
option to purchase the Property or any part thereof; (v) permit or suffer any
Transfer of any direct or indirect ownership interest in Trustor or any
indemnitor or guarantor under this Deed of Trust or any Related Agreement; (vi)
permit or suffer any Transfer of any ownership interest in any direct or indirect
owner of a legal or beneficial interest in Trustor (including, without
limitation its general partners, members, trustees, beneficiaries or
shareholders); (vii) permit or suffer the merger, dissolution, liquidation or
consolidation of Trustor or any of the direct or indirect owners of Trustor or
the conversion of one type of legal entity into another type of legal entity.
Except as expressly consented to in writing by Beneficiary, Trustor shall not
incur any additional indebtedness (secured or unsecured, direct or contingent)
other than unsecured debt or trade payables incurred in the ordinary course of
business in connection with the operation of the Property. Upon the occurrence
of any of the prohibited actions specified herein, then Beneficiary shall have
the right, at its option, to declare the


 


16





















 


indebtedness secured by this Deed of Trust
immediately due and payable, irrespective of the maturity date specified in the
Notes.


 


Notwithstanding the foregoing, it is
understood and agreed by Beneficiary that AMERIVEST PROPERTIES INC., a Maryland
corporation (“Properties”), may engage in the issuance and trading of stock in
Properties as long as Properties maintains its status as a real estate
investment trust.


 


1.9
Preservation
and Maintenance  of Property.
Trustor shall hire competent and responsible property managers who shall be
reasonably acceptable to Beneficiary. Trustor, at its sole cost and expense,
shall keep the Property and every part thereof in good condition and repair
(subject to ordinary wear and tear), in such a fashion that the value and
utility of the Property will not be diminished and shall promptly and
faithfully comply with and obey all laws, ordinances, rules, regulations,
requirements and orders of every duly constituted governmental authority or
agent having jurisdiction with respect to the Property. All repairs,
replacements and renewals shall be at least equal in quality to the original
Improvements. Trustor shall not permit or commit any waste, impairment, or
deterioration of the Property, nor commit, suffer or permit any act upon or use
of the Property in violation of law or applicable order of any governmental
authority, whether now existing or hereafter enacted, or in violation of any
covenants, conditions or restrictions affecting the Property or bring or keep
any article in the Property or cause or permit any condition to exist thereon
which would be prohibited by or invalidate the insurance coverage required to
be maintained hereunder. Trustor shall promptly bond or discharge any
mechanics’ liens against the Property.


 


1.10
Use of Property.  Except as may have been
previously agreed in writing by Beneficiary, Trustor shall continue to operate
the Property for the purposes for which it was used on the date hereof and for
no other purpose. Trustor shall not make or suffer any improper or offensive
use of the Property or any part thereof and will not use or permit to be used
any part of the Property for any dangerous, noxious, offensive or unlawful
trade or business or for any purpose which will reduce the value of the
Property in any respect or will cause the Property or any part thereof or
interest therein to be subject to forfeiture. Trustor at its expense will
promptly comply with all rights of way or use, privileges, franchises,
servitudes, licenses, easements, tenements, hereditaments and appurtenances
forming a part of the Property and all instruments relating or evidencing the
same, in each case, to the extent compliance therewith is required of Trustor
under the terms thereof. Trustor will not take any action which results in a
forfeiture or termination of the rights afforded to Trustor under any such
instruments and will not, without the prior written consent of Beneficiary, amend
in any material respect any of such instruments. Trustor shall at all times
comply with all laws affecting the Property and comply with any instruments of
record at the time in force affecting the Property or any part thereof and
shall procure, maintain and comply with all permits, licenses, and other
authorizations required for any use of the Property or any part thereof then
being made, and for the proper erection, installation, operation and
maintenance of the Improvements or any part thereof. Trustor shall not
initiate, join in, acquiesce in, or consent to any change in any private
restrictive covenant, zoning law or


 


17





















 


other
public or private restriction, limiting or defining the uses which may be made
of the Property or any part thereof. In furtherance of the foregoing sentence,
Trustor will not, by act or omission: (i) impair the integrity of the Property
as a single zoning lot separate and apart from all other premises; or (ii)
permit or suffer to permit the Property to be used by the public or any party
in such manner as might make possible a claim of adverse usage or possession or
any implied dedication or easement. If under applicable zoning provisions the
use of all or any portion of the Property is or shall become a nonconforming
use, Trustor will not cause or permit such nonconforming use to be discontinued
or abandoned without the express written consent of Beneficiary.


 


1.11
Alterations and Additions. Trustor shall not cause, suffer or permit:


 


(A)            Any material alterations of the
Property except (i) as required by any law, statute, ordinance, order, rule,
regulation, decree or other requirement of the United States, the applicable
state or county in which the Property is located or any political subdivision
of any of the foregoing, or any agency, department, commission, board, court,
bureau or instrumentality of any of them (“Governmental Authority”) or by any
condition of any approval, consent, registration, franchise, permit, license,
variance, certificate of occupancy or other authorization with regard to
zoning, landmark, ecological, environmental, air quality, subdivision,
planning, building or land use required by any Governmental Authority for the
construction, lawful occupancy and operation of the Property and the actual and
contemplated uses thereof, or (ii) as permitted or required to be made by the
terms of any Leases approved by Beneficiary (with respect to work in any space
demised thereunder);


 


(B)          Any demolition or removal of any portion
of the Property;


 


(C)          Any change which would increase the
risk of fire or other hazard;


 


(D)         Any zoning, reclassification with
respect to the Property; or


 


(E)          Any unlawful use of, or nuisance to
exist upon, the Property.


 


As
used herein, the term “material alteration” shall mean any alteration,
improvement or replacement (i) the cost of which (including any related
alteration, improvement or replacement) shall exceed $420,000 (excluding tenant
improvement work pursuant to Leases), or (ii) which materially and adversely
affects the mechanical, electrical, heating, ventilating, air-conditioning or
other building or operating systems of any of the Improvements, or materially
and adversely affects the cost of operation or maintenance of any such building
or operating systems, affects the structure or structural soundness of any of
the improvements of the Property, or the exterior or appearance of the
Property, or otherwise has a material adverse effect on the Property including
the use and/or value thereof.


 


1.12 Offset
Certificates.  Trustor,
within three (3) days upon request in person or within ten (10) days upon
request by mail, shall furnish a written statement duly


 


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acknowledged and notarized, of all amounts
due on any indebtedness secured hereby or secured by any of the Related
Agreements, whether for principal or interest on the Notes or otherwise, and
stating whether any offsets or defenses exist against the indebtedness secured
hereby and covering such other matters with respect to any such indebtedness as
Beneficiary may reasonably require.


 


1.13
Trustee’s Costs and
Expenses.  Trustor
shall pay all costs, fees and expenses of Trustee, its agents and counsel, in
connection with the performance of its duties hereunder.


 


1.14  Protection of Security;
Costs and Expenses.


 


(A)            In addition to any other rights or remedies of
Beneficiary hereunder, under any of the Related Agreements, or in law or in
equity, upon the occurrence and during the continuation of an Event of Default
(or prior thereto after notice to Trustor, when possible, if Trustor is not
paying or performing the act itself and Beneficiary determines in its sole good
faith judgment that the same is necessary to preserve the Property or the lien
of this Deed of Trust or any other collateral securing the indebtedness
evidenced by the Notes, either before or after acceleration of the
indebtedness) Beneficiary may, but shall not be required to, make any payment
or perform any act required to be performed by Trustor hereunder or under any
of the Related Agreements in any form and manner deemed expedient to
Beneficiary, including, without limitation, if applicable: (i) paying any
Impositions which remain unpaid; (ii) procuring the release, discharge, compromise
or settlement of any lien filed or otherwise asserted against the Property
which has not been discharged by Trustor in accordance with the provisions of
this Deed of Trust or any of the other Related Agreements, and (iii) obtaining
insurance policies where insurance coverage was required to be obtained
hereunder and the required evidence that Trustor had obtained the same has not
been delivered to Beneficiary as required hereunder. Nothing herein shall be
construed to require Beneficiary to advance or expend monies for any purpose
mentioned herein, or for any other purpose.


 


(B)            Trustor and its property manager, if applicable, shall
appear in and defend any action or proceeding purporting to affect the security
of this Deed of Trust or any additional or other security for the obligations
secured hereby, or the rights or powers of Beneficiary or Trustee, and shall
pay all costs and expenses actually incurred, including, without limitation,
cost of evidence of title and actual attorneys’ fees, in any such action or
proceeding in which Beneficiary or Trustee may appear, and in any suit brought
by Beneficiary to foreclose this Deed of Trust or to enforce or establish any
other rights or remedies of Beneficiary hereunder or under any other security
for the obligations secured hereby. If Trustor fails to perform any of the
covenants or agreements contained in this Deed of Trust, or if any action or
proceeding is commenced which affects Beneficiary’s interest in the Property or
any part thereof, including, eminent domain, code enforcement, or proceedings
of any nature whatsoever under any federal or state law, whether now existing
or hereafter enacted or amended, relating to bankruptcy, insolvency,
arrangement, reorganization or other form of debtor


 


19





















 


relief, or to a decedent, then Beneficiary
may, but without obligation to do so and without notice to or demand upon
Trustor, perform such covenant or agreement and compromise any encumbrance,
charge or lien which in the judgment of Beneficiary appears to be prior or
superior hereto. Trustor shall further pay all expenses of Beneficiary actually
incurred (including reasonable and actual fees and disbursements of counsel)
incident to the protection or enforcement of the rights of Beneficiary
hereunder, and enforcement or collection of payment of the Notes or any Future
Advance whether by judicial or nonjudicial proceedings, or in connection with
any bankruptcy, insolvency, arrangement, reorganization or other debtor relief
proceeding of Trustor, or otherwise.


 


(C)           Trustor shall pay to Beneficiary, immediately upon written
notice from Beneficiary: (i) all recordation, transfer, stamp, documentary or
other fees or taxes levied on Beneficiary (exclusive of Beneficiary’s income
taxes) by reason of the making or recording of the Notes, this Deed of Trust or
any Related Agreement, and (ii) all intangible property taxes levied upon any
holder of the Notes or Beneficiary under this Deed of Trust or secured party
under the Related Agreements.


 


Any amounts disbursed by
Beneficiary pursuant to this section or Section 1.13, including, without
limitation, reasonable attorneys’ fees, whether or not the indebtedness as a
result thereof shall exceed the face amount of the Notes, shall be additional
indebtedness of Trustor secured by this Deed of Trust and each of the Related
Agreements as of the date of disbursement shall become immediately due and
payable on demand and shall bear interest at the Default Rate set forth in the
Notes, from demand until paid. All such amounts shall be payable by Trustor
immediately upon demand. Nothing contained in this section shall be construed
to require Beneficiary to incur any expense, make any appearance, or take any
other action.


 


1.15
Trustor’s
Covenants Respecting Collateral.


 


(A)            Trustor authorizes Beneficiary to file financing and
continuation statements covering the Collateral from time to time and in such
form as Beneficiary may require to perfect and continue the perfection of
Beneficiary’s security interest with respect to such property, and Trustor
shall pay all reasonable costs and expenses of any record searches for
financing statements Beneficiary may require. For purpose of such filings,
Trustor agrees to furnish any information requested by Beneficiary promptly
upon request by Beneficiary describing the Collateral. Trustor hereby ratifies
and approves all filings of financing statements, amendments, and continuations
applicable to the Collateral made or filed by Beneficiary prior to the date of
this Deed of Trust.


 


(B)            Without the prior written consent of Beneficiary, Trustor
shall not create or suffer to be created any other security interest in the
Collateral, including replacements and additions thereto.


 


(C)           Without the prior written consent of
Beneficiary or except in the ordinary course of business, Trustor shall not
sell, transfer or encumber any of the


 


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Collateral, or remove any of the Collateral
from the Property unless Trustor shall promptly substitute and replace the
property removed with similar property of at least equivalent value on which
Beneficiary shall have a continuing security interest ranking at least equal in
priority to Beneficiary’s security interest in the property removed.


 


(D)            Trustor shall (i) upon reasonable notice (unless an
emergency or Event of Default exists) permit Beneficiary and its
representatives to enter upon the Property to inspect the Collateral and
Trustor’s books and records relating to the Collateral and make extracts
therefrom and to arrange for verification of the amount of Collateral, under
procedures acceptable to Beneficiary, directly with Trustor’s debtors or
otherwise at Trustor’s expense; (ii) promptly notify Beneficiary of any
attachment or other legal process levied against any of the Collateral and any
information received by Trustor relative to the Collateral, Trustor’s debtors
or other persons obligated in connection therewith, which may in any way affect
the value of the Collateral or the rights and remedies of Beneficiary in
respect thereto; (iii) reimburse Beneficiary upon demand for any and all costs
actually incurred, including, without limitation, reasonable and actual
attorneys’ and accountants’ fees, and other expenses incurred in collecting any
sums payable by Trustor under any obligation secured hereby, or in the
checking, handling and collection of the Collateral and the preparation and
enforcement of any agreement relating thereto; (iv) notify Beneficiary of each
location at which the Collateral is or will be kept, other than for temporary
processing, storage or similar purposes, and of any removal thereof to a new
location, including, without limitation, each office of Trustor at which
records relating to the Collateral are kept; (v) provide, maintain and deliver
to Beneficiary originals or certified copies of the policies of insurance and
certificates of insurance insuring the Collateral against loss or damage by
such risks and in such amounts, form and by such companies as Beneficiary may
require and with loss payable to Beneficiary, and in the event Beneficiary
takes possession of the Collateral, the insurance policy or policies and any
unearned or returned premium thereon shall at the option of Beneficiary become
the sole property of Beneficiary; and (vi) do all acts necessary to maintain,
preserve and protect all Collateral, keep all Collateral in good condition and
repair and prevent any waste or unusual or unreasonable depreciation thereof.


 


(E)             Until Beneficiary exercises its right to collect
proceeds of the Collateral pursuant hereto, Trustor will collect with diligence
any and all proceeds of the Collateral. If an Event of Default exists, any
proceeds received by Trustor shall be held in trust for Beneficiary, and Trustor
shall keep all such collections separate and apart from all other funds and
property so as to be capable of identification as the property of Beneficiary
and shall deliver to Beneficiary such collections at such time as Beneficiary
may request in the identical form received, properly endorsed or assigned when
required to enable Beneficiary to complete collection thereof.


 


(F)             Beneficiary shall have all of the rights and remedies
granted to a secured party under the Uniform Commercial Code of the state in which
the Collateral is located, as well as all other rights and remedies available
at law or in equity. During the continuation of any Event of Default hereunder
or under either of the Notes, Beneficiary


 


21





















 


shall have the right to take possession of
all or any part of the Collateral, to receive directly or through its agent(s)
collections of proceeds of the Collateral (including notification of the
persons obligated to make payments to Trustor in respect of the Collateral), to
release persons liable on the Collateral and compromise disputes in connection
therewith, to exercise all rights, powers and remedies which Trustor would
have, but for the security agreement contained herein, to all of the Collateral
and proceeds thereof, and to do all other acts and things and execute all
documents in the name of Trustor or otherwise, deemed by Beneficiary as
necessary, proper and convenient in connection with the preservation,
perfection or enforcement of its rights hereunder; and


 


(G)            During the continuation of any Event of Default hereunder
or under either of the Notes, Trustor shall, at the request of Beneficiary,
assemble and deliver the Collateral and books and records pertaining to the
Property at a place designated by Beneficiary, and Beneficiary may, with
reasonable notice to Trustor (unless an emergency or Event of Default exists,
in which case no notice shall be required), enter onto the Property and take
possession of the Collateral. It is agreed that public or private sales, for
cash or on credit to a wholesaler or retailer or investor, or user of
collateral of the types subject to the security agreement, or public auction,
are all commercially reasonable since differences in the sales prices generally
realized in the different kinds of sales are ordinarily offset by the
differences in the costs and credit risks of such sales. The proceeds of any
sale of the Collateral shall be applied first to the expenses of Beneficiary
actually incurred in retaking, holding, preparing for sale, or selling the
Collateral or similar matters, including reasonable and actual attorneys’ fees,
and then, as Beneficiary shall solely determine.


 


(H)            Trustor represents and warrants to Beneficiary that (i)
Trustor’s exact legal name is as set forth in the heading to the Deed of Trust;
(ii) if Trustor is an organization, Trustor’s type of organization and
jurisdiction of organization are as set forth in the heading to this Deed of
Trust, and Trustor’s chief executive office is located at the address set forth
for notices to Trustor in this Deed of Trust; (iii) if Trustor is an
individual, Trustor’s principal residence is at Trustor’s address for notices
set forth in the Deed of Trust; (iv) except as specifically disclosed by
Trustor to Beneficiary prior to the execution of this Deed of Trust, during the
five (5) years and six months prior to the date of this Deed of Trust, Trustor
has not been known by any legal name different from the one set forth in the
heading of the Deed of Trust nor has Trustor been the subject of any merger,
consolidation, or other corporate or organizational reorganization.


 


(I)              Trustor agrees that so long as this Deed of Trust
remains in effect, it will notify Beneficiary in writing at least sixty (60)
days in advance of: (i) any change whatsoever in the name of Trustor; (ii) any
change whatsoever in the state or jurisdiction in which Trustor is formed or,
if Trustor is an individual, in which Trustor’s principal residence is located,
or (iii) any change whatsoever in the name(s) under which Trustor conducts
business, any new names under which Trustor intends to do business; or, (iv)
any new addresses at or from which Trustor intends to do business or


 


22





















 


to keep collateral of any kind. Trustor shall
in any event keep all collateral within one or more of the United States of
America.


 


1.16
Covenants
Regarding Financial Statements.


 


(A)            Trustor shall keep true books of record and account in
which full, true and correct entries in accordance with sound accounting
practice and principles applied on a consistent basis from year to year shall
be made of all dealings or transactions with respect to the Property.


 


(B)           (1)           Trustor shall deliver to Beneficiary:


 


(a)               Within sixty (60) days after the last day of each
fiscal year of Trustor during the term of the Notes, unaudited annual financial
reports prepared on an accrual basis, including balance sheets, income
statements and cash flow statements covering the operation of the Property, the
financial condition of Trustor, Trustor’s general partners(s), shareholder(s),
member(s) and such principals of Trustor as Beneficiary may from time to time
designate, for the previous fiscal year, all certified to Beneficiary to be
complete, correct and accurate by the individual, managing general partner,
manager or chief financial officer of the party whom the report concerns; and


 


(b)              if available, within thirty (30) days after receipt by
Trustor, original annual audit reports of an independent certified public
accountant prepared in accordance with generally accepted accounting principles
containing an unqualified opinion, including balance sheets, income statements
and cash flow statements covering the operation of the Property and the financial
condition of Trustor, Trustor’s general partner(s), shareholder(s), member(s)
and such principals of Trustor as Beneficiary may from time to time designate,
for the previous fiscal year;


 


(2)               If, in Beneficiary’s reasonable opinion, the loan to
value ratio is then seventy-five percent (75%) or greater, Trustor shall also
deliver, at Beneficiary’s request from time to time (but no more often than
once in each fiscal quarter of Trustor during the term of the Notes), unaudited
financial reports prepared on an accrual basis, including balance sheets,
income statements and cash flow statements covering the operation of the
Property and the financial condition of Trustor, Trustor’s general partner(s),
shareholder(s), member(s) and such principals of Trustor as Beneficiary may
from time to time request, for the previous fiscal quarter, a portfolio
analysis report covering the operation of all properties of which Trustor or
any of Trustor’s general partners, shareholder(s), member(s) or principals
designated by Beneficiary is the owner or a general partner of the owner,
setting out a cash flow statement (including debt service payments) for each
such property, and a current rent roll of the Property, all certified to
Beneficiary to be complete, correct and accurate by the individual, managing
general partner or chief financial officer of the party whom the report
concerns.


 


23










 













 


(3) All reports shall
include, without limitation, balance sheets and statements of income and of
partner’s equity, if applicable, setting forth in each case in comparative form
the figures for the previous fiscal quarter or year, as the case may be. The interim
quarterly reports shall also include a breakdown of all categories of revenues
and expenses, and any supporting schedules and data requested by Beneficiary.
Each set of annual or quarterly financial reports or quarterly rent rolls
delivered to Beneficiary pursuant to this Section 1.16 shall also be
accompanied by a certificate of the chief financial officer or the managing
general partner of Trustor, stating whether any condition or event exists or
has existed during the period covered by the annual or quarterly reports which
then constituted or now constitutes an Event of Default under either of the
Notes or this Deed of Trust, and if any such condition or event then existed or
now exists, specifying its nature and period of existence and what Trustor did
or proposes to do with respect to such condition or event.


 


(C)            In the event such statements are not in a form reasonably
acceptable to Beneficiary or Trustor fails to furnish such statements and
reports, then Beneficiary shall have the immediate and absolute right to audit
the respective books and records of the Property and Trustor at the expense of
Trustor.


 


1.17
Environmental
Covenants and Indemnities. Trustor
covenants:


 


(A)            That no Hazardous Materials (as defined below) shall be
installed, used, generated, manufactured, treated, handled, refined, produced,
processed, stored or disposed of, in, on or under the Property other than
Hazardous Materials in quantities and of types reasonably and customarily
associated with general office use which have been and are stored, used and
disposed of in compliance with Hazardous Material Laws (as defined below) and
the presence of which do not require compliance with any reporting requirements
under any Hazardous Material Laws;


 


(B)          That no activity shall be undertaken
on the Property which would cause:


 


(1)           the Property to become a hazardous
waste treatment, storage or disposal facility under any Hazardous Material Law,


 


(2)           a release or threatened release of
Hazardous Material from the Property in violation of any Hazardous Material
Law, or


 


(3)           the discharge of Hazardous Material
into any watercourse, body of surface or subsurface water or wetland, or the
discharge into the atmosphere of any Hazardous Material which would require a
permit under any Hazardous Material Law and for which no such permit has been
issued;


 


(C)          That no activity shall be undertaken
or permitted to be undertaken, by Trustor on the Property which would result in
a violation under any Hazardous Material Law;


 


 


24
















 


(D)            To obtain and deliver to Beneficiary, within a reasonable
time following completion of actions required by an appropriate governmental
agency, certifications of engineers or other professionals reasonably
acceptable to Beneficiary, in form and substance satisfactory to Beneficiary,
certifying that all necessary and required actions to clean up, remove,
contain, prevent and eliminate all releases or threats of release of Hazardous
Materials on or about the Property to the levels required by the appropriate
governmental agencies have been taken and, to the knowledge of such
professional, the Property is then in compliance with applicable Hazardous
Material Laws as then in effect and applicable to such actions. For purposes of
this Deed of Trust, “Hazardous Materials” means and includes asbestos or any
substance containing asbestos, polychlorinated biphenyls, any explosives,
radioactive materials, chemicals known or suspected to cause cancer or
reproductive toxicity, pollutants, effluents, contaminants, emissions,
infectious wastes, any petroleum or petroleum-derived waste or product or
related materials and any items defined as hazardous, special or toxic
materials, substances or waste under any Hazardous Material Law, or any material
which shall be removed from the Property pursuant to any administrative order
or enforcement proceeding or in order to place the Property in a condition that
is suitable for ordinary use. “Hazardous Material Laws” means all federal,
state and local laws (whether under common law, statute or otherwise),
ordinances, rules, regulations and guidance documents now in force, as amended
from time to time, in any way relating to or regulating human health or safety,
industrial hygiene or environmental conditions, protection of the environment,
pollution or contamination of the air, soil, surface water or groundwater, and
includes, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. §9601, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. §6901, et seq., the Clean Water Act,
33 U.S.C. §1251, et seq., the Clean Air Act, 42 U.S.C. §7401, et seq., the
Occupational Safety and Health Act, 29 U.S.C. §651, et seq., the Hazardous
Materials Transportation Act, 49 U.S.C. §1801, et seq., the Federal Water
Pollution Control Act, 33 U.S.C. §1321, et seq., and the Toxic Substances
Control Act, 15 U.S.C. §2601, et seq.


 


(E)             Trustor hereby agrees, at its sole cost and expense, to
unconditionally indemnify, defend, and hold Beneficiary, its directors,
officers, employees and agents harmless against any loss, liability, damage
(whether direct or consequential), expenses, claims, penalties, fines,
injunctions, suits, proceedings, disbursements or expenses (including, without
limitation, attorneys’ and experts’ fees and disbursements and court costs)
(collectively, the “Liabilities”) arising under any Hazardous Material Law, or
any other Liabilities which may be incurred by or asserted against Beneficiary
directly or indirectly resulting from the presence of Hazardous Material on the
Property. Trustor shall assume the burden and expense of defending all suits,
administrative proceedings and disputes of any description with all persons,
entities, political subdivisions or government agencies arising out of the
matters to be indemnified under this Deed of Trust. Trustor shall pay, promptly
upon entry, any nonappealable order, judgment or other final resolution of any
claim or dispute arising out of the matters to be indemnified under this Deed
of Trust and shall pay promptly


 


 


25
















 


when due any fines, penalties or agreed
settlements arising out of the matters to be indemnified under this Deed of
Trust. In the event that such payment is not made, Beneficiary, at its sole
discretion, may proceed to file suit against Trustor to compel such payment.
Promptly following completion of any actions imposed upon Trustor under any
Hazardous Material Law, Trustor shall obtain and deliver to Beneficiary, an
environmental report in form and substance reasonably acceptable to Beneficiary
from an environmental consultant acceptable to Beneficiary, stating that all
required action has been taken, and that upon completion of such action, the
Property is, to the knowledge of such professional, then in compliance with the
applicable Hazardous Material Laws. Such indemnification shall survive payment
of the Notes, but shall become null and void and of no further force or effect
in the event Beneficiary or any other party obtains title to the Property
through foreclosure or exercise of power of sale under this Deed of Trust or
deed in lieu of foreclosure or exercise of power of sale.


 


1.18
Further Assurances. Trustor, from time to time, will execute, acknowledge,
subscribe and deliver to or at the direction of Beneficiary such documents and
further assurances as Beneficiary may reasonably require for the purpose of
evidencing, perfecting or confirming the lien and security interest created by
this Deed of Trust or the security to be afforded by the Related Agreements, or
both. Without limiting the foregoing and notwithstanding anything in this Deed
of Trust or the Related Agreements to the contrary, Trustor will defend,
indemnify and hold Beneficiary harmless with respect to any suit or proceeding
in which the validity, enforceability or priority of any such lien or security
interest, or both, is endangered or contested, directly or indirectly. If
Trustor fails to undertake the defense of any such claim in a timely manner,
or, in Beneficiary’s sole determination, fails to prosecute such defense with
due diligence, then Beneficiary is authorized to take, at the sole expense of
Trustor, all necessary and proper action in defense of any such claim,
including, without limitation, the retention of legal counsel, the prosecution
or defense of litigation and the compromise or discharge of claims, including
payment of all costs and attorneys’ and paralegals’ fees. All cost, expenses
and losses, if any, so incurred by Beneficiary, including all attorneys’ and
paralegals’ fees, regardless of whether suit is brought, for all
administrative, trial and appellate proceedings, if any, will constitute
advances by Beneficiary as provided in Section 1.14 hereinabove.


 


1.19
Trustor’s Continued
Existence. Trustor shall
at all times during the term of the Loan maintain its legal existence and
qualification to do or transact business in the state in which the Property or
any of the Collateral is located and shall maintain its legal existence and
good standing in the state in which Trustor was created.


 


ARTICLE II 


EVENTS
OF DEFAULT


 


Each of the following shall
constitute an event of default (“Event of Default”) hereunder:


 


2.1 Monetary and Performance Defaults.


 


 


26
















 


(A)            Failure to make any payment due under either of the Notes
or any note evidencing a Future Advance, other than the final payment and
Prepayment Premium, or to make any payment due under this Deed of Trust to
Beneficiary or any other party, including without limitation, payment of escrow
deposits, real estate taxes, insurance premiums and ground rents, if any, on or
before the fourth day after such payment is due; or,


 


(B)            Failure to make the final payment or the Prepayment
Premium due under either of the Notes or any note evidencing a Future Advance when
such payment is due whether at maturity, by reason of acceleration, as part of
a prepayment or otherwise (the defaults in (A) and (B) hereinafter “Monetary
Default”); or


 


(C)            Breach or default in the performance of any of the
covenants or agreements of Trustor contained herein or in any Related Agreement
(“Performance Default”), if such Performance Default shall continue for fifteen
(15) days or more after written notice to Trustor from Beneficiary specifying
the nature of the Performance Default; provided, however, that if such
Performance Default is of a nature that it cannot be cured within the 15 day
period, then Trustor shall not be in default if it commences good faith efforts
to cure the Performance Default within the 15 day period, demonstrates continuous
diligent efforts to cure the Performance Default in a manner satisfactory to
Beneficiary and, within a reasonable period, not to exceed 180 days after the
date of the original written notice of the Performance Default, completes the
cure of such Performance Default. Notwithstanding the foregoing, if the breach
or default is one which is defined as an Event of Default elsewhere in this
Article II or in the default definition of any Related Agreement, then Trustor
shall not be entitled to any notice or cure period upon the occurrence of such
breach or default except for such notice and cure periods, if any, as may be
expressly granted in such other defined Event of Default.


 


2.2 Bankruptcy, Insolvency, Dissolution.


 


(A)            Any court of competent jurisdiction shall sign an order
(i) adjudicating Trustor, or any person, partnership or corporation holding an
ownership interest in Trustor or in any partnership comprising Trustor, or any
guarantor (which term when used in this Deed of Trust shall mean guarantor of
payment of the indebtedness) bankrupt or insolvent, (ii) appointing a receiver,
trustee or liquidator of the Property or of a substantial part of the property
of Trustor, or any person, partnership or corporation holding an ownership
interest in Trustor, or in any partnership comprising Trustor, or any
guarantor, or (iii) approving a petition for, or effecting an arrangement in
bankruptcy, or any other judicial modification or alteration of the rights of
Beneficiary or of other creditors of Trustor, or any person, partnership or
corporation holding an ownership interest in Trustor, or in any partnership
comprising Trustor or any guarantor; or


 


 


27
















 


(B)            Trustor, any person, partnership or corporation holding
an ownership interest in Trustor or in any partnership comprising Trustor,
shall (i) apply for or consent to the appointment of a receiver, trustee or
liquidator for it or for any of its property, (ii) as debtor, file a voluntary
petition in bankruptcy, or petition or answer seeking reorganization or an
arrangement with creditors or to take advantage of any bankruptcy,
reorganization, insolvency, readjustment of debt, dissolution or liquidation
law or statute, or an answer admitting the material allegations of a petition
filed against it and any proceeding under such law, (iii) admit in writing an
inability to pay its debts as they mature, or (iv) make a general assignment
for the benefit of creditors; or


 


(C)            An involuntary petition in bankruptcy is filed against
Trustor, or any person, partnership or corporation holding an ownership
interest in Trustor or in any partnership comprising Trustor and the same is
not vacated or stayed within 30 days of the filing date.


 


2.3
Misrepresentation.  Trustor makes or furnishes a
representation, warranty, statement, certificate, schedule and/or report to
Beneficiary in or pursuant to this Deed of Trust or any of the Related
Agreements which is false or misleading in any material respect as of the date
made or furnished.


 


2.4
Default under Subordinate
Loans.  An
occurrence of a default under any loan subordinate to this Deed of Trust which
is not an independent default under this Deed of Trust which results in the
commencement of foreclosure proceedings or the taking of any other remedial
action under such subordinate loan.


 


2.5
Breach of Due on Sale or
Encumbrance Provision.  Any
occurrence of a prohibited Transfer under Section 1.8 hereof.


 


ARTICLE III

REMEDIES


 


Notwithstanding any
provision to the contrary in the Notes, this Deed of Trust, or any of the
Related Agreements, upon the occurrence of an Event of Default, such Event of
Default shall be deemed to exist and be continuing unless and until (a)
applicable law requires Beneficiary to accept a cure by Trustor of such Event
of Default or (b) Beneficiary elects, in its sole and absolute discretion, to
accept a cure by Trustor of such Event of Default. During the continuation of
any Event of Default, Trustee and Beneficiary shall have the following rights
and remedies set forth in Sections 3.1 through 3.8:


 


3.1
Acceleration.  Notwithstanding the stated
maturity date in the Notes, or any note evidencing any Future Advance,
Beneficiary may without notice or demand, declare the entire principal amount
of the Notes and/or any Future Advances then outstanding and accrued and unpaid
interest thereon, and all other sums or payments required thereunder including,
but not limited to the Prepayment Premium described in the Notes, to be due and
payable immediately.


 


 


28





















 


 


3.2
Entry.
Irrespective of whether Beneficiary exercises the option provided in
Section 3.1 above, Beneficiary in person or by agent or by court-appointed
receiver may, at its option, without any action on its part being required,
without in any way waiving such Event of Default, with or without the
appointment of a receiver, or an application therefor:


 


(A)            Take possession of the Property and conduct tests of,
manage or hire a manager to manage, lease and operate the Property or any part
thereof, on such terms and for such period of time as Beneficiary may deem
proper, with full power to make, from time to time, all alterations,
renovations, repairs or replacements thereto as may seem proper to Beneficiary;


 


(B)            With or without taking possession of the Property,
collect and receive all Rents and Profits, notify tenants under the Leases or
any other parties in possession of the Property to pay Rents and Profits
directly to Beneficiary, its agent or a court-appointed receiver and apply such
Rents and Profits to the payment of:


 


(1)
all costs and expenses incident to taking and retaining possession of the
Property (including the cost of any receivership), management and operation of
the Property, keeping the Property properly insured and all alterations,
renovations, repairs and replacements to the Property;


 


(2)
all taxes, charges, claims, assessments, and any other liens which may be prior
in lien or payment to this Deed of Trust or the Notes, and premiums for
insurance, with interest on all such items; and


 


(3)
the indebtedness secured hereby together with all costs and attorneys’ fees, in
such order or priority as to any of such items as Beneficiary in its sole
discretion may determine, any statute, law, custom or use to the contrary
notwithstanding;


 


(C)           Exclude Trustor, its agents and
servants, wholly from the Property;


 


(D)           Have joint access with Trustor to the
books, papers and accounts of Trustor relating to the Property, at the expense
of Trustor;


 


(E)             Commence, appear in and/or defend any action or
proceedings purporting to affect the interests, rights, powers and/or duties of
Beneficiary hereunder, whether brought by or against Trustor or Beneficiary;
and


 


(F)             Pay, purchase, contest or compromise any claim, debt, lien,
charge or encumbrance which in the judgment of Beneficiary may affect or appear
to affect the interest of Beneficiary or the rights, powers and/or duties of
Beneficiary hereunder.


 


 


 


29





















 


 


Trustee or Beneficiary, as a
matter of right without notice to Trustor or anyone claiming under it and
without regard to the then value of the Property or the interest of Trustor
therein, shall have the right to apply to any court having jurisdiction to
appoint a receiver or receivers to take charge of the Property or any portion
thereof. Any such receiver or receivers shall have all of the usual and
customary powers and duties of receivers in like or similar cases and all of
the powers and duties of Beneficiary in case of entry as provided hereinabove,
including without limitation, the right to collect and receive Rents and
Profits. All such Rents and Profits paid to Trustee or Beneficiary or collected
by such receiver shall be applied as provided for in subparagraph 3.2(B) above.
Trustor for itself and any subsequent owner of the Property hereby waives any
and all defenses to the application for such receiver and hereby irrevocably
consents to such appointment without notice of any application therefor.


 


The receipt by Beneficiary of any Rents and
Profits pursuant to this Deed of Trust after the institution of foreclosure or
other proceedings under the Deed of Trust shall not cure any such Event of
Default or affect such proceedings or any sale pursuant thereto. After deducting
the expenses and amounts set forth above in this Section 3.2, as well as just
and reasonable compensation for all Beneficiary’s employees and other agents
(including, without limitation, reasonable and actual attorneys’ fees and
management and rental commissions) engaged and employed, the moneys remaining,
at the option of Beneficiary, may be applied to the indebtedness secured
hereby. Whenever all amounts due on the Notes and under this Deed of Trust
shall have been paid and all Events of Default have been cured and any such
cure has been accepted by Beneficiary, Beneficiary shall surrender possession
to Trustor. The same right of entry, however, shall exist if any subsequent
Event of Default shall occur; provided, however, neither Trustee nor Beneficiary
shall be under any obligation to make any of the payments or do any of the acts
referred to in this Section 3.2.


 


3.3
Judicial Action.  Beneficiary may bring an action
in any court of competent jurisdiction to foreclose this instrument or to
enforce any of the covenants and agreements hereof. The Property may be
foreclosed in parts or as an entirety.


 


3.4
Power of Sale.  Beneficiary may elect to cause
the Property or any part thereof to be sold under the power of sale herein
granted in any manner permitted by applicable law. Should Beneficiary elect to
sell the Property, or any part thereof, which is real property as provided
above, Beneficiary or Trustee shall give such notice of default and election to
sell as may then be required by law. Thereafter, upon the expiration of such
time and the giving of such notice of sale as may then be required by law, and
without the necessity of any demand on Trustor, Trustee, at the time and place
specified in the notice of sale, shall sell the Property or any part thereof at
public auction to the highest bidder for cash in lawful money of the United
States payable at time of sale, or as otherwise provided by applicable law.
Trustee may, and upon request of Beneficiary shall, from time to time, postpone
any sale hereunder in the manner required by law. If the Property consists of
several lots, parcels or items of property, Beneficiary may designate the order
in which such lots, parcels or items shall be offered for sale or sold. Any
person, including Trustor, Trustee or Beneficiary, may purchase at


 


 


 


30





















 


 


any sale hereunder, and Beneficiary shall
have the right to purchase at any sale hereunder by crediting upon the bid
price the amount of all or any part of the indebtedness hereby secured plus
interest, late charges, prepayment fees, and reasonable attorneys’ fees and
trustees’ fees, as herein provided. Should Beneficiary desire that more than
one sale or other disposition of the Property be conducted, Beneficiary may, at
its option, cause the same to be conducted simultaneously, or successively, on
the same day, or at such different times and in such order as Beneficiary may
deem to be in its best interests, and no such sale shall terminate or otherwise
affect the lien of this Deed of Trust on any part of the Property not sold
until all indebtedness secured hereby has been fully paid. In the event of
default of any purchaser, Trustee shall have the right to resell the Property
as set forth above. Upon any sale hereunder, Trustee shall execute and deliver
to the purchaser or purchasers a deed or deeds conveying the property so sold,
but without any covenant or warranty whatever, express or implied, whereupon
such purchaser or purchasers shall be let into immediate possession; and the
recitals of facts in any such deed or deeds such as default, the giving of
notice of default and notice of sale, and other facts affecting the regularity
or validity of such sale or disposition, shall be conclusive proof of the truth
of such facts and any such deed or deeds shall be conclusive against all
persons as to such facts recited therein.


 


3.5
Rescission of Notice of
Default.  Beneficiary,
from time to time before Trustee’s sale, public sale or deed in lieu of
foreclosure, may rescind any such notice of breach or default and of election
to cause the Property to be sold by executing and delivering to Trustee a
written notice of such rescission, which notice, when recorded, shall also
constitute a cancellation of any prior declaration of default and demand for
sale or such documents as may be required by the laws of the state in which the
Property is located to effect such rescission. The exercise by Beneficiary of
such right of rescission shall not constitute a waiver of any breach or Event
of Default then existing or subsequently occurring, or impair the right of
Beneficiary to execute and deliver to Trustee, as above provided, other
declarations of default and demand for sale, and notices of breach or default,
and of election to cause the Property to be sold to satisfy the obligations
hereof, nor otherwise affect any provision, agreement, covenant or condition of
the Notes and/or of this Deed of Trust or any of the rights, obligations or
remedies of the parties hereunder.


 


3.6
Beneficiary’s
Remedies Respecting Collateral.
Beneficiary may realize upon the Collateral, enforce and exercise all of
Trustor’s rights, powers, privileges and remedies in respect of the Collateral,
dispose of or otherwise deal with the Collateral in such order as Beneficiary
may in its discretion determine, and exercise any and all other rights, powers,
privileges and remedies afforded to a secured party under the laws of the state
in which the Property is located as well as all other rights and remedies
available at law or in equity.


 


 


31





















 


 


 


3.7
Proceeds of Sales.  The proceeds of any sale made
under or by virtue of this Article III, together with all other sums which then
may be held by Trustee or Beneficiary under this Deed of Trust, whether under
the provisions of this Article III or otherwise, shall be applied as follows:


 


(A)            To the payment of the costs, fees and expenses of sale
and of any judicial proceedings wherein the same may be made, including the
cost of evidence of title in connection with the sale, compensation to Trustee
and Beneficiary, and to the payment of all expenses, liabilities and advances
made or incurred by Trustee under this Deed of Trust, together with interest on
all advances made by Trustee at the interest rate applicable under the Notes,
but limited to any maximum rate permitted by law to be charged by Trustee;


 


(B)            To the payment of any and all sums expended by
Beneficiary under the terms hereof, not then repaid, with accrued interest at
the Default Rate set forth in the Notes, and all other sums (except advances of
principal and interest thereon) required to be paid by Trustor pursuant to any
provisions of this Deed of Trust, or the Notes, or any note evidencing any
Future Advance, or any of the Related Agreements, including, without
limitation, all expenses, liabilities and advances made or incurred by
Beneficiary under this Deed of Trust or in connection with the enforcement
thereof, together with interest thereon as herein provided; and


 


(C)            To the payment of the entire amount then due, owing or
unpaid for principal and interest upon the Notes, any notes evidencing any
Future Advance, and any other obligation secured hereby, with interest on the
unpaid principal at the rate set forth therein from the date of advancement
thereof until the same is paid in full; and then


 


(D)          The remainder, if any, to the person
or persons, including Trustor, legally entitled thereto.


 


3.8
Condemnation and Insurance
Proceeds.  All
Proceeds and any interest earned thereon shall be paid over either by the
condemning authority, insurance company or escrow agent to Beneficiary and
shall be applied first toward reimbursement of the costs and expenses of
Beneficiary (including reasonable attorneys’ fees), if any, in connection with
the recovery of such Proceeds, and then shall be applied in the sole and
absolute discretion of Beneficiary and without regard to the adequacy of its
security under this Deed of Trust:


 


(A)         to the payment or prepayment of all or
any portion of the Notes including the Prepayment Premium described in the
Notes;


 


(B)          to the reimbursement of expenses
incurred by Beneficiary in connection with the restoration of the Property; or


 


 


32





















 


 


(C)            to the performance of any of the covenants contained in
this Deed of Trust as Beneficiary may determine. Any prepayment of the Notes or
portion thereof pursuant to Beneficiary’s election under this section shall be
subject to the Prepayment Premium described in the Notes.


 


3.9 Waiver of Marshaling,  Rights
of Redemption,  Homestead and  Valuation.


 


(A)            Trustor, for itself and for all persons hereafter
claiming through or under it or who may at any time hereafter become holders of
liens junior to the lien of this Deed of Trust, hereby expressly waives and
releases all rights to direct the order in which any of the Property shall be
sold in the event of any sale or sales pursuant hereto and to have any of the
Property and/or any other property now or hereafter constituting security for
any of the indebtedness secured hereby marshalled upon any foreclosure of this
Deed of Trust or of any other security for any of said indebtedness.


 


(B)            To the fullest extent permitted by law, Trustor, for
itself and all who may at any time claim through or under it, hereby expressly
waives, releases and renounces all rights of redemption from any foreclosure
sale, all rights of homestead, exception, monitoring reinstatements,
forbearance, appraisement, valuation, stay and all rights under any other laws
which may be enacted extending the time for or otherwise affecting enforcement
or collection of the Notes, the debt evidenced thereby, or this Deed of Trust.


 


3.10
Remedies Cumulative.  No remedy herein conferred upon
or reserved to Trustee or Beneficiary is intended to be exclusive of any other
remedy herein or by law provided, but each shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute. No delay or omission of Trustee or Beneficiary
to exercise any right or power accruing upon any Event of Default shall impair
any right or power or shall be construed to be a waiver of any Event of Default
or any acquiescence therein. Every power and remedy given by this Deed of Trust
to Trustee or Beneficiary may be exercised separately, successively or
concurrently from time to time as often as may be deemed expedient by Trustee
or Beneficiary. If there exists additional security for the performance of the
obligations secured hereby, Beneficiary, at its sole option, and without
limiting or affecting any of its rights or remedies hereunder, may exercise any
of the rights and remedies to which it may be entitled hereunder either
concurrently with whatever rights and remedies it may have in connection with
such other security or in such order as it may determine. Any application of
any amounts or any portion thereof held by Beneficiary at any time as
additional security or otherwise, to any indebtedness secured hereby shall not
extend or postpone the due dates of any payments due from Trustor to
Beneficiary hereunder or under the Notes, any Future Advance, or under any of
the Related Agreements, or change the amounts of any such payments or otherwise
be construed to cure or waive any default or notice of default hereunder or
invalidate any act done pursuant to any such default or notice.


 


 


33










 













3.11
Nonrecourse.  Beneficiary acknowledges and
agrees that the liability of Trustor under the Notes, this Deed of Trust and
the Related Agreements is limited as provided in the Notes, the provisions of
which are hereby incorporated by this reference.


 


ARTICLE IV


MISCELLANEOUS


 


4.1
Severability.  In the event any one or more of
the provisions contained in this Deed of Trust shall for any reason be held to
be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Deed of Trust, but this Deed of Trust shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein, but only to
the extent that it is invalid, illegal or unenforceable.


 


4.2
Certain Charges and
Brokerage Fees.


 


(A)            Trustor agrees to pay Beneficiary a commercially
reasonable charge for each written statement requested of Beneficiary as to the
obligations secured hereby, furnished at Trustor’s request. Trustor further
agrees to pay the charges of Beneficiary for any other service rendered
Trustor, or on its behalf, connected with this Deed of Trust or the
indebtedness secured hereby, including, without limitation, the delivery to an
escrow holder of a request for full or partial release or reconveyance of this
Deed of Trust, transmittal to an escrow holder of moneys secured hereby,
changing its records pertaining to this Deed of Trust and indebtedness secured
hereby to show a new owner of the Property, and replacing an existing policy of
insurance held hereunder with another such policy.


 


(B)            Trustor agrees to indemnify and hold Beneficiary harmless
from any responsibility and/or liability for the payment of any commission
charge or brokerage fees to anyone which may be payable in connection with the
funding of the loan evidenced by the Notes and this Deed of Trust or
refinancing of any prior indebtedness, if applicable, based upon any action
taken by Trustor. It is understood that any such commission charge or brokerage
fees shall be paid directly by Trustor to the entitled parties.


 


4.3 Notices.


 


(A)            All notices expressly provided hereunder to be given by
Beneficiary to Trustor and all notices, demands and other communications of any
kind or nature whatever which Trustor may be required or may desire to give to
or serve on Beneficiary shall be in writing and shall be (i) hand-delivered,
effective upon receipt, (ii) sent by United States Express Mail or by private
overnight courier, effective upon receipt, or (iii) served by certified mail,
to the appropriate address set forth below, or at such other place as Trustor,
Beneficiary or Trustee, as the case may be, may from time to time designate in
writing by ten (10) days prior written notice thereof. Any such notice or
demand served by certified mail, return receipt requested, shall be deposited


 


34





















 


in the United States mail, with postage
thereon fully prepaid and addressed to the party so to be served at its address
above stated or at such other address of which said party shall have
theretofore notified in writing, as provided above, the party giving such
notice. Service of any such notice or demand so made shall be deemed effective
on the day of actual delivery as shown by the addressee’s return receipt or the
expiration of three (3) business days after the date of mailing, whichever is
the earlier in time. Any notice required to be given by Beneficiary shall be
equally effective if given by Beneficiary’s agent, if any.


 


(B)            Trustor hereby requests that any notice, demand, request
or other communication (including any notice of an Event of Default and notice
of sale as may be required by law) desired to be given or required pursuant to
the terms hereof be addressed to Trustor as follows:


 


AmeriVest Camelback Inc.


1780 South Bellaire Street

Suite 100


Denver, Colorado 80222


 


With a copy to:


 


Stephen R. Voelker, Esq.


Jenkens & Gilchrist


1445 Ross Avenue


Suite 3200


Dallas, Texas 75202


 


All notices and other
communications to Beneficiary shall be addressed as follows:


 


Allstate Investments, LLC


Allstate Plaza South, Suite
G5C


3075 Sanders Road


Northbrook, Illinois 60062


Attention:  Commercial Mortgage Loan Servicing Manager


 


With a copy to:


 


Allstate Investments, LLC


Investment Law Division


Allstate Plaza South, Suite
G5A


3075 Sanders Road


Northbrook, Illinois 60062


 


35





















 


All notices to Trustee shall
be addressed as follows:


 


Chicago Title Insurance
Company


2415 East Camelback Road


Suite 300


Phoenix, Arizona 85012


 


By acceptance of this Deed of Trust,
Beneficiary collectively represent and warrant to Trustor that they have
appointed Allstate Investments, LLC as their agent, investment advisor and
manager of their investment assets. Notwithstanding any contrary term or
provision in this Deed of Trust or in any Related Agreement, and until Trustor
receives written notice signed by Allstate Investments, LLC, (i) Trustor will
communicate only to Allstate Investments, LLC with respect to any and all
notices, consents, approvals, requests, modifications and agreements required
or otherwise relating to this Deed of Trust or the Loan (collectively “Approvals
and Requests”) and Allstate Investments, LLC shall communicate and act on
behalf of Beneficiary with respect to all Approvals and Requests, and (ii)
Trustor shall be entitled to rely on any communications from or actions by
Allstate Investments, LLC with respect to Beneficiary and all Approvals and
Requests made to Allstate Investments, LLC by Trustor or made by Allstate
Investments, LLC to Trustor shall be deemed to be made to or by Beneficiary, as
the case may be, and binding upon Beneficiary. In the event Allstate
Investments, LLC ceases to be the agent, investment advisor and investment
manager for one or more of the companies comprising Beneficiary, Beneficiary
collectively agree that they shall appoint another agent or shall designate one
of the companies comprising Beneficiary to communicate and act on behalf of
Beneficiary. Additionally, Beneficiary collectively represent and warrant that:
(i) there will always be one loan servicer in connection with the Loan; (ii)
Trustor shall be consistently directed to make all payments due under the Notes
to a single loan servicer; and (iii) Trustor shall have no responsibility for
allocating any such payments among the holders of the Notes. The Notes shall be
pari passu and the interests of each company comprising the Beneficiary or the
Lender under this Deed of Trust and the Related Agreements and in and to all
Loan Collateral shall be co-equal without any preference or priority over the
interests of any other company comprising Beneficiary.


 


4.4
Trustor Not Released;
Certain Trustee Acts.


 


(A)            Extension of the time for payment or modification of the
terms of payment of any sums secured by this Deed of Trust granted by
Beneficiary to any successor in interest of Trustor shall not operate to
release, in any manner, the liability of Trustor. Beneficiary shall not be
required to: commence proceedings against such successor or refuse to extend
time for payment or otherwise modify the terms of payment of the sums secured
by this Deed of Trust, by reason of any demand made by Trustor. Without
affecting the liability of any person, including Trustor, but subject to the
terms and provisions of Section 3.11, for the payment of any indebtedness
secured hereby, or the legal operation and effect of this Deed of Trust on the
remainder of the Property for the full amount of any such indebtedness and
liability unpaid, Beneficiary


 


36





















 


and Trustee are respectively empowered as
follows: Beneficiary may from time to time and without notice (i) release any
person liable for the payment of any of the indebtedness; (ii) extend the time
or otherwise alter the terms of payment of any of the indebtedness; (iii)
accept additional real or personal property of any kind as security therefor,
whether evidenced by deeds of trust, mortgages, security agreements or any
other instruments of security; or (iv) alter, substitute or release any
property securing the indebtedness.


 


(B)            Beneficiary may, at any time, and from time to time, (i)
consent to the making of any map or plan of the Property or any part thereof;
(ii) join in granting any easement or creating any restriction thereon; (iii)
join in any subordination or other agreement affecting this Deed of Trust or
the legal operation and effect or charge hereof; or (iv) release or reconvey,
without any warranty, all or part of the Property from the lien of this Deed of
Trust.


 


4.5
Inspection.  Upon reasonable prior notice and
subject to the rights of tenants under the Leases, Beneficiary may at any
reasonable time make or cause to be made entry upon and make inspections,
reappraisals, surveys, construction and environmental testing of the Property
or any part thereof in person or by agent, and if Beneficiary has a reasonable
basis to believe that Trustor is in breach of any covenant of this Deed of
Trust in regard to the Property, the cost of any such inspection shall be borne
by Trustor.


 


4.6
Release
or Reconveyance or Cancellation.
Upon the payment in full of all sums secured by this Deed of Trust,
Beneficiary shall cancel this Deed of Trust or request Trustee to release this
Deed of Trust or reconvey the Property and shall surrender this Deed of Trust
and all notes evidencing indebtedness secured by this Deed of Trust to Trustee.
Upon payment of its fees and any other sums owing to it under this Deed of
Trust, Trustee shall release this Deed of Trust or reconvey the Property
without warranty to the person or persons legally entitled thereto. The duly
recorded release or reconveyance of the Property shall constitute a
reassignment of the Leases by Beneficiary to Trustor. Such person or persons
shall pay all fees of Trustee and costs of recordation, if any. The recitals in
such release or reconveyance of any matters or facts shall be conclusive proof
of the truthfulness thereof.


 


4.7
 Statute of Limitations.  Trustor hereby expressly waives
and releases to the fullest extent permitted by law, the pleading of any
statute of limitations as a defense to any and all obligations secured by this
Deed of Trust.


 


4.8
Interpretation.  Wherever used in this Deed of
Trust, unless the context otherwise indicates a contrary intent, or unless
otherwise specifically provided herein, the word “Trustor” shall mean and
include both Trustor and any subsequent owner or owners of the Property, and
the word “Beneficiary” shall mean and include not only the original Beneficiary
hereunder but also any future owner and holder, including pledgees, of the
Notes or other obligations secured hereby. In this Deed of Trust, the Notes and
the Related Agreements, whenever the context so requires, the masculine gender


 


37





















 


includes the feminine and/or neuter, and the
neuter includes the feminine and/or masculine, and the singular number includes
the plural. In this Deed of Trust, the Notes and the Related Agreements, the
use of the word “including” shall not be deemed to limit the generality of the
term or clause to which it has reference, whether or not non-limiting language
(such as “without limitation,” or “but not limited to,” or words of similar
import) is used with reference thereto.


 


4.9
Captions.  The captions and headings of the
Articles and sections of this Deed of Trust, the Notes and the Related
Agreements, are for convenience only and are not to be used to interpret,
define or limit the provisions hereof.


 


4.10
Consent.  The granting or withholding of
consent by Beneficiary to any transaction as required by the terms hereof shall
not be deemed a waiver of the right to require consent to future or successive
transactions. Trustor covenants and agrees to reimburse Beneficiary promptly on
demand for all legal and other expenses incurred by Beneficiary or its
servicing agent in connection with all requests by Trustor for consent or
approval under this Deed of Trust.


 


4.11
Delegation to Subagents.  Wherever a power of attorney is
conferred upon Beneficiary hereunder, it is understood and agreed that such
power is conferred with full power of substitution, and Beneficiary may elect
in its sole discretion to exercise such power itself or to delegate such power,
or any part thereof, to one or more subagents.


 


4.12
Successors and Assigns.  All of the grants, obligations,
covenants, agreements, terms, provisions and conditions herein shall run with
the land and shall apply to, bind and inure to the benefit of, the heirs,
administrators, executors, legal representatives, successors and assigns of
Trustor (but this shall not permit any assignment prohibited hereby) and the
successors in trust of Trustee and the endorsees, transferees, successors and
assigns of Beneficiary. In the event Trustor is composed of more than one
party, the obligations, covenants, agreements, and warranties contained herein
and in the Related Agreements as well as the obligations arising therefrom are
and shall be joint and several as to each such party.


 


4.13
Governing Law.  THIS DEED OF TRUST AND THE
RELATED AGREEMENTS ARE INTENDED TO BE GOVERNED BY AND CONSTRUED UNDER THE LAWS
OF THE STATE IN WHICH THE PROPERTY IS LOCATED. TRUSTOR HEREBY WAIVES ITS RIGHT
TO A TRIAL BY JURY.


 


4.14
Substitution of Trustee.  Beneficiary may remove Trustee at
any time or from time to time and appoint a successor trustee, and upon such
appointment, all powers, rights, duties and authority of Trustee, as aforesaid,
shall thereupon become vested in such successor. Such substitute trustee shall
be appointed by written instrument duly recorded in the county or counties
where the real property covered hereby is located, which appointment may be
executed by any authorized agent of Beneficiary or in any other manner
permitted by applicable law.


 


38





















 


4.15
Changes in Taxation.  If, after the date of this Deed
of Trust, any law is passed by the state in which the Property is located or by
any other governing entity, imposing upon Beneficiary any tax against the
Property, or changing in any way the laws for the taxation of mortgages or
deeds of trust or debts secured by mortgages or deeds of trust so that an
additional or substitute tax is imposed on Beneficiary or the holders of the
Notes, Trustor shall reimburse Beneficiary for the amount of such taxes
immediately upon receipt of written notice from Beneficiary. Provided, however,
that such requirement of payment shall be ineffective if Trustor is permitted
by law to pay the whole of such tax in addition to all other payments required
hereunder, without any penalty or charge thereby accruing to Beneficiary and if
Trustor in fact pays such tax prior to the date upon which payment is required
by such notice.


 


4.16
Maximum Interest Rate.  Trustor agrees to pay an
effective rate of interest which is the stated rate provided for in the Notes,
plus any additional rate of interest resulting from any charges of interest or
in the nature of interest paid or to be paid in connection with the loans
evidenced by the Notes, including without limitation, any amounts paid pursuant
to the provisions of the Notes, this Deed of Trust and that certain Commitment
Letter dated July 30, 2004, by and between Beneficiary and Trustor. No
provision of this Deed of Trust or of the Notes or of any note evidencing a
Future Advance shall require the payment or permit the collection of interest
in excess of the maximum non-usurious rate permitted by applicable law. In the
event such interest does exceed the maximum legal rate, it shall be canceled
automatically to the extent that such interest exceeds the maximum legal rate
and if theretofore paid, credited on the principal amount of the Notes or, if
the Notes have been prepaid, then such excess shall be rebated to Trustor and
Trustor hereby agrees to accept such rebate.


 


4.17
Time of Essence.  Time is of the essence of the
obligations of Trustor in this Deed of Trust and each and every term, covenant
and condition made herein by or applicable to Trustor.


 


4.18
Reproduction of Documents.  This Deed of Trust and all
documents relating thereto, specifically excluding the Notes but including,
without limitation, consents, waivers and modifications which may hereafter be
executed, financial and operating statements, certificates and other
information previously or hereafter furnished to Beneficiary, may be reproduced
by Beneficiary by any photographic, photostatic, microfilm, micro-card,
miniature photographic or other similar process and Beneficiary may destroy any
original document (“Master”) so reproduced. Trustor agrees and stipulates that
any such reproduction is an original and shall be admissible in evidence as the
Master in any judicial or administrative proceeding (whether or not the Master
is in existence and whether or not such reproduction was made or preserved by
Beneficiary in the regular course of business) and any enlargement, facsimile
or further reproduction of such a reproduction shall be no less admissible.


 


39





















 


4.19
No Oral Modifications. This Deed of Trust may not be amended or modified orally,
but only by an agreement in writing signed by the party against whom
enforcement of any amendment or modification is sought.


 


4.20
Trustee Provisions.  Trustee accepts this Trust when
this Deed of Trust, duly executed and acknowledged is made a public record as
provided by law. The Trust created hereby is irrevocable by Trustor. Trustee,
upon presentation to it of an affidavit signed by or on behalf of Beneficiary,
setting forth any facts showing a default by Trustor under any of the terms or
conditions of this Deed of Trust, is authorized to accept as true and
conclusive all facts and statements in such affidavit and to act hereunder in
complete reliance thereon. Trustee shall be under no obligation to notify any
party hereof of any action or proceeding of any kind in which Trustor,
Beneficiary and/or Trustee shall be a party, unless brought by Trustee, or of
any pending sale under any other deed of trust. The necessity of Trustee’s
making oath, filing inventory or giving bond as security for the execution of
this Deed of Trust, as may now be or hereafter required by the laws of the
state in which the Property is located, is hereby expressly waived.


 


IN WITNESS WHEREOF, the
undersigned has executed this Deed of Trust as of the day and year first
hereinabove written.


 


	
   

  	
  AMERIVEST CAMELBACK INC.,
  an

  
	
   

  	
  Arizona corporation

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ John B. Groonman

  
	
   

  	
   

  	
  John B. Groonman

  
	
   

  	
   

  	
  Its

  	
  Vice President

  



 


40





















 


	
  STATE OF COLORADO

  	
  )

  
	
   

  	
  ) ss.

  
	
  County of Denver

  	
  )

  



 


                The
foregoing instrument was acknowledged before me this 20th day of August, 2004,
by John B. Groonman, the Vice President of AMERIVEST CAMELBACK INC., an Arizona
corporation, on behalf of the corporation.


 


                Witness
my hand and official seal.


 


	
  [SEAL]

  	
  /s/ Loretta J. Zerbe

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
  My Commission Expires:

  	
   

  
	
   

  	
   

  
	
  3/17/2005

  	
   

  	
   

  
			



 


41










 













 


EXHIBIT
“A”

(Property Description)


 


The land referred to in this document is
situated in the State of Arizona, County of Maricopa, and described as follows:


 


PARCEL NO. 1:


 


Parcel 40, ARIZONA BILTMORE ESTATES, a
subdivision recorded in Book 183 of Maps, page 35, records of Maricopa County,
Arizona


 


PARCEL NO. 2:


 


Lot 2, CAMELBACK LAKES CORPORATE CENTER -
PARCEL 38, a subdivision recorded in Book 449 of Maps, page 14, records of
Maricopa County, Arizona


 


PARCEL NO. 3:


 


Non-exclusive easement for vehicular and
pedestrian ingress and egress and parking for the benefit of Parcel 2, as set
forth in EASEMENT AGREEMENT recorded in Docket 13151, page 1055.


 


PARCEL NO. 4:


 


Non-exclusive easement for ingress and egress
for reasonable vehicular and pedestrian traffic and parking for the benefit of
Parcel 1 and 2, as set forth in GRANT OF EASEMENT recorded in Docket 14716,
page 929.


 


PARCEL NO. 5:


 


Non-exclusive easement for ingress and egress
for vehicular traffic and for surface water drainage and for existing stop sign
as set forth in RESTATED DECLARATION OF EASEMENTS AND MAINTENANCE, recorded in
Recording No. 97-639191.


 


PARCEL NO. 6:


 


All easements, rights and benefits set forth
in Parking Easement and Agreement recorded May 18, 1998 in Recording No.
98-0412811.


 


PARCEL NO. 7:


 


All easements, rights and benefits set forth
in Declaration of Covenants, Conditions and Restrictions recorded in Docket
12246, page 1155.


 


 


 





















 


EXHIBIT
“B” 

(Fixture Filing)


 


 


Pursuant to the security
agreement contained in this Deed of Trust (“Security Agreement”) and the
appropriate Uniform Commercial Code (“UCC”) sections in the State in which the
Fixtures are located, as amended and recodified from time to time, this Deed of
Trust shall constitute a Fixture Filing.


 


1.               Description of Fixtures
“Fixtures” shall include all articles of personal property now or hereafter
attached to, placed upon for an indefinite term or used in connection with said
real property, appurtenances and improvements together with all goods and other
property which are or at any time become so related to the Property that an
interest in them arises under real estate law.


 


2.               Description of Collateral
The Collateral, as defined in the Security Agreement, includes, without
limitation, the following items and types of Collateral as well as certain
other items and types of Collateral:


 


All equipment, fixtures, goods, inventory and
all present and future accessions and products thereof and thereto as defined
in the UCC, now or at any time acquired, used, or to be used for or in
connection with the construction, use or enjoyment of the Property by Trustor,
whether in the possession of Trustor, warehousemen, bailees or any other person
and whether located at the Property or elsewhere, including without limitation:


 


(A)            all building, maintenance or service equipment; building,
maintenance or raw materials or supplies; component parts or work in process;
appliances; furnishings; machinery; and tools; and


 


(B)            all goods and property covered by any warehouse receipts,
bills of lading and other documents evidencing any goods or other tangible
personal property of any kind (including any Collateral) in which Trustor now
or at any time hereafter has any interest in connection with any or all of the
Property or Collateral; and


 


(C)          any and all products of any accessions
to any such Collateral which may exist at any time.


 


Part of the above described goods are or are
to become Fixtures on the Property. As used in this Exhibit to qualify the
scope of Beneficiary’s security interest in any of the Collateral, the phrase “in
connection with any or all of the Property or Collateral” shall be used in its
broadest and most comprehensive sense and shall include without limitation
property used or acquired (or to be used or acquired) in connection with the
improvement, development, construction, repair or remodeling of any or all of
the Property, property arising from or in connection with the operation, use,
maintenance, occupancy, sale, lease or disposition of any or all of the
Property or Collateral, property


 


 





















 


used or acquired (or to be used or acquired)
in connection with Trustor’s performance of any of its obligations to
Beneficiary, and property acquired with any loan proceeds. If any property is
used (or to be used) for multiple or different purposes, and one such purpose
relates to any aspect of the Property or collateral, such property shall
constitute Collateral hereunder, unless Beneficiary shall release such property
from this Fixture Filing and Beneficiary’s security interest in a duly executed
written instrument.


 


3.             Relation of Fixture filing
to Deed of Trust:  Some or all of the Collateral described in
Section 2 above may be or become Fixtures in which Beneficiary has a security
interest under the Security Agreement. However, nothing herein shall be deemed
to create any lien or interest in favor of Trustee under this Deed of Trust in
any such Collateral which is not a fixture, and the purpose of this Exhibit B
is to create a fixture filing under the appropriate Uniform Commercial Code
sections in the State in which the Fixtures are located, as amended or
recodified from time to time. The rights, remedies and interests of Beneficiary
under this Deed of Trust are independent and cumulative, and there shall be no
merger of any lien hereunder with any security interest created by the Security
Agreement. Beneficiary may elect to exercise or enforce any of its rights,
remedies, or interests under this Deed of Trust as Beneficiary may from time to
time deem appropriate.


 


4.             Name and Address
of Beneficiary:


 


Allstate
Life Insurance Company

Allstate Life Insurance Company of New York
 c/o Allstate Investments, LLC

Allstate Plaza South, Suite G5C 

3075 Sanders Road

Northbrook, Illinois 60062

Attention: Commercial Mortgage Loan Servicing Manager


 


5.             Other Fixture
Financing and Removal of Fixtures


 


(A)          Beneficiary has not consented to any
other security interest of any other person in any Fixtures and has not
disclaimed any interest in any Fixtures; and


 


(B)            Beneficiary has not agreed or consented to the removal of
any Fixtures from the Property, and any such consent by Trustor shall not be
binding on Beneficiary. Beneficiary reserves the right to prohibit the removal
of any Fixtures by any person with the legal right to remove any Fixtures from the
Property unless and until such person makes arrangements with (and satisfactory
to) Beneficiary for the payment to Beneficiary of all costs of repairing any
physical injury to the Property which may be caused by the removal of such
Fixtures. Any such payment shall be made directly to Beneficiary at its
request, and Beneficiary may hold such payment as additional collateral under
this Deed of Trust. Failure by Trustor to cause the delivery to Beneficiary of
any such payment shall constitute both: (i) waste under (and breach of)


 


 


ii


 





















 


 


this Deed of Trust; and (ii) conversion of
Collateral under (and a breach of) the Security Agreement.


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


iii