Document:

exv10w41

Exhibit 10.41

This instrument was drafted

by and when recorded this

instrument should be

returned to:

Fennemore Craig, P.C.

3003 North Central Avenue

Suite 2600

Phoenix, Arizona 85012-2913

Attn: William L. Kurtz

(602) 916-5372

Loan No. 10-0086070

 

[Above space reserved for recording information.]

For Tax Parcel I.D. Numbers, see Exhibit “A” attached hereto.

ASSUMPTION AND SECOND MODIFICATION AGREEMENT

     THIS ASSUMPTION AND SECOND MODIFICATION AGREEMENT (“Assumption”) is made to be effective as of
July 6, 2010, by and among CRESTLINE INVESTMENTS, L.L.C., an Arizona limited liability company
(“Assignor”), TNP SRT NORTHGATE PLAZA TUCSON, LLC, a Delaware limited liability company
(“Assignee”), and THRIVENT FINANCIAL FOR LUTHERANS, a Wisconsin corporation (“Lender”).

RECITALS

     A. On or about July 10, 2002, Lender made a loan to Assignor, in the original principal sum of
FIVE MILLION THREE HUNDRED THOUSAND DOLLARS ($5,300,000) (the “Loan”). The Loan is evidenced by
that certain Promissory Note made by Assignor to the order of Lender dated July 10, 2002 (the
“Original Note”), in the face amount of FIVE MILLION THREE HUNDRED THOUSAND DOLLARS ($5,300,000),
which Original Note was amended and restated by that certain Amended and Restated Promissory Note
dated June 22, 2004 (the “Restated Note”), in the face amount of FIVE MILLION THREE HUNDRED
THOUSAND DOLLARS ($5,300,000), made by Assignor to the order of Lender and Assignor’s obligations
thereunder were released, in part, by letter dated July 20, 2005, from Lender (the Original Note,
as amended and restated by the Restated Note, and as partially released, is hereinafter referred to
as the “Note”).

     B. The Note is secured by, among other things, (i) that certain Deed of Trust, Assignment of
Rents, Security Agreement and Fixture Filing dated July 10, 2002 (the “Original Deed of Trust”),
made by Assignor, as Trustor, to a trustee for the use and benefit of Lender, as Beneficiary, and
recorded July 10, 2002, in Docket 11838, page

LOAN NO. 10-0086070

 2324563.3/ASSUMPTION AGREEMENT/CRESTLINE 2010 ASSUMPTION

 

 

269, in the office of the Pima County Recorder (all recording information contained herein
refers to recordings in the office of the Pima County Recorder), as modified by that certain
Modification Agreement dated June 22, 2004 (the “Modification”), by and between Lender, as Lender,
and Assignor, as Borrower, and recorded June 25, 2004, in Docket 12331, page 1269, (the Original
Deed of Trust, as modified by the Modification, is hereinafter referred to as the “Deed of Trust”);
and (ii) that certain Assignment of Rents and Leases dated July 10, 2002 (the “Original Lease
Assignment”), from Assignor, as Borrower, to Lender, as Lender, and recorded July 10, 2002, in
Docket 11838, page 302, as modified by the Modification, (the Original Lease Assignment, as
modified by the Modification, is hereinafter referred to as the “Lease Assignment”), which are
liens against the real property described in Exhibit A attached hereto and incorporated herein by
this reference (the “Premises”). The Deed of Trust and the Lease Assignment are sometimes
hereinafter collectively referred to as the “Security Documents”.

     C. In connection with the making of the Loan, (i) Assignor and DANIEL KIVEL, individually and
ALVIN KIVEL, individually (sometimes hereinafter referred to individually as a “Guarantor” and
collectively as “Guarantors”), executed and delivered to Lender that certain Environmental
Indemnity Agreement dated July 10, 2002 (the “Environmental Indemnity”), by Assignor and
Guarantors, as Indemnitors, for the benefit of Lender, as Lender, and (ii) Guarantors executed and
delivered to Lender that certain Guaranty dated July 10, 2002 (the “Original Guaranty”), by
Guarantor, as Guarantor, to Lender, as Lender, which Original Guaranty has been amended and
restated by that certain Amended and Restated Guaranty dated June 22, 2004 (the “Restated
Guaranty”), which was released, in part, by letter dated July 20, 2005, from Lender, (the Original
Guaranty as amended and restated by the Restated Guaranty, and as partially released, is
hereinafter referred to as the “Guaranty”). The Note, the Security Documents and the Environmental
Indemnity are sometimes hereinafter collectively referred to as the “Loan Documents”. The
Environmental Indemnity and the Guaranty are sometimes hereinafter collectively referred to as the
“Guarantor Documents”.

     D. Assignor and Assignee’s predecessor-in-interest, TNP ACQUISITIONS, LLC, a Delaware limited
liability company (“Acquisitions”), have entered into that certain Real Estate Purchase Agreement
and Escrow Instructions dated April 6, 2010, as amended, pursuant to which Assignor has agreed to
sell to Assignee, and Assignee has agreed to purchase from Assignor, the Premises. As a condition
of Assignor transferring its interest in the Premises to Assignee, Assignee has agreed to assume,
perform and otherwise be bound by all of the terms, covenants, conditions and obligations imposed
upon Assignor under the Loan Documents.

     E. Lender is willing to consent to the transfer of the Premises from Assignor to Assignee (the
“Transfer”), and the assumption of the Loan by Assignee (the “Loan Assumption”), on the terms and
conditions contained herein and in that certain consent to transfer letter dated June 3, 2010 (the
“Transfer Consent”), from Lender to Assignor.

     NOW, THEREFORE, in consideration of the foregoing Recitals, which Recitals are incorporated
herein by this reference, the covenants and agreements contained

2

 

herein, and for other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:

     1. Recitals. The Recitals are hereby restated and made a material part of this Assumption.

     2. Assignment of Interest. Assignor hereby grants, transfers and assigns to Assignee,
effective as of the date hereof, all of its right, title and interest under the Loan Documents.

     3. Acceptance and Assumption of Obligations. Assignee hereby accepts such grant, transfer and
assignment of Assignor’s rights under the Loan Documents, and hereby agrees, from and after the
date hereof, to pay the Note and the Deed of Trust according to the terms thereof, and hereby
assumes and agrees to perform and be bound by all of the terms, covenants, conditions,
undertakings, liabilities, and obligations of Assignor under the Loan Documents with the same
effect as if Assignee had originally executed and been a party to the Loan Documents, with the
understanding that Assignee’s personal liability under the Note is limited in accordance with the
terms and conditions thereof. Thus, without limiting the generality of any of the liabilities and
obligations assumed by Assignee hereby, the parties hereto agree (a) that, from and after the date
of this Assumption, whenever the term “Maker” appear in the Note, such references shall mean, in
lieu of Assignor, Assignee, and (b) that whenever the term “Trustor” appears in the Deed of Trust,
such reference shall mean, in lieu of Assignor, Assignee. It is expressly understood by Lender and
Assignee that Assignee’s liability for any covenants, conditions, undertakings, liabilities, and
obligations under the Loan Documents exists only with respect to such obligations from and after
the date hereof, and that all representations and warranties contained in the Loan Documents,
except as otherwise modified by this Assumption, are as of the date hereof and no representations
or warranties are made with respect to the Premises for any period of time prior to the effective
date hereof.

     4. Release of Assignor and Guarantor/Indemnitor. Assignor is hereby released from any
liability of Assignor to Lender under the Loan Documents solely with respect to matters which occur
subsequent to the Transfer. Lender may proceed directly against Assignee for any obligations
relating to the Loan Documents. Guarantors are hereby released from any liability as Indemnitor
and/or Guarantor under the Guarantor Documents solely with respect to matters which occur
subsequent to the Transfer. Concurrently with the execution and delivery hereof, Lender shall
cause to be terminated and released of record those certain UCC-1 Financing Statements filed with
the Arizona Secretary of State on July 12, 2002 as file No. 200212238187, and recorded in the
office of the Pima County Recorder on July 10, 2002 in Docket 11838 at page 269.

     5. Grant of Security Interest. Assignee hereby grants to Lender a security interest, within
the meaning of Uniform Commercial Code as adopted in the State in which the Premises is located, in
favor of Lender in the “Trust Property” (as that term is defined in the Deed of Trust), leases,
rents, issues, income, profits, instruments, general

3

 

intangibles, accounts, contract rights and claims included within or related to the Premises
and in all deposits made under the Deed of Trust, and all insurance policies and unearned premiums
prepaid thereon, insurance proceeds, and awards, payments or consideration for the taking of the
Premises, or any portion thereof, by condemnation or exercise of the power of eminent domain, or
from any sale in lieu or in anticipation thereof, assigned to Lender under the Deed of Trust, to
the extent that a security interest may be granted therein under the terms of the Uniform
Commercial Code in place under the laws of the State in which the Premises is located. Assignee’s
organizational number is DE-4830961. Assignee hereby authorizes Lender to file any Uniform
Commercial Code financing statements deemed appropriate by Lender to perfect the security interest
hereby granted by Assignee to Lender, together with any renewal or continuations of such financing
statements.

     6. Assignor’s Indemnification. Assignor hereby agrees to indemnify, defend and hold Assignee
harmless from all claims, liabilities, damages, losses, demands, judgments, costs or expenses
(including all actual and reasonable attorneys’ fees and costs) made against or suffered by
Assignee, which relate to any obligations of Assignor accruing, to be performed or arising out of
events occurring prior to the date hereof in respect of the Loan Documents or the Premises for
which Assignor has liability to Lender under the Loan Documents and for which no release has been
given hereunder. Assignor hereby agrees to indemnify, defend and hold Lender harmless from all
claims, liabilities, damages, losses, demands, judgments, costs or expenses (including all actual
and reasonable attorneys’ fees and costs) made against or suffered by Lender, in accordance with
the terms and conditions of the Loan Documents arising out of events occurring prior to the date
hereof in respect of the Loan Documents or the Premises to the extent Assignor has liability to
Lender therefor under the Loan Documents and for which no release has been given hereunder.

     7. Assignee’s Indemnification. Assignee hereby agrees to indemnify, defend and hold each of
Assignor and the Guarantors harmless from all claims, liabilities, damages, losses, demands,
judgments, costs or expenses (including all actual and reasonable attorneys’ fees and costs) made
against or suffered by Assignor and/or the Guarantors which relate to any obligations of Assignee
accruing, to be performed or arising out of events occurring on or after the date hereof in respect
of the Loan Documents or the Premises. Assignee hereby agrees to indemnify, defend and hold Lender
harmless from all claims, liabilities, damages, losses, demands, judgments, costs or expenses
(including all actual and reasonable attorneys’ fees and costs) made against or suffered by Lender,
in accordance with the terms and conditions of the Loan Documents arising out of events occurring
on or after the date hereof in respect of the Loan Documents or the Premises.

     8. Assignor’s Representations. Assignor represents and warrants to and for the benefit of
Lender that as of the date hereof:

     (a) Assignor is a limited liability company duly organized, existing and in good
standing under the laws of the State of Arizona. Assignor is manager

4

 

managed. Alvin Kivel and Daniel Kivel are each a manager of Assignor, each having the
authority to act alone for and on behalf of the Company.

     (b) The execution, delivery and performance of this Assumption have been duly
authorized by the governing authorities of Assignor and no other action of Assignor or any
other party related to Assignor is a requisite to the execution, delivery and performance of
this Assumption.

     (c) The Loan Documents are in full force and effect.

     (d) The Loan Documents have not been amended, modified, supplemented or assigned except
as indicated in the Recitals.

     (e) To the best of Assignor’s actual knowledge, there is no “Event of Default” (as
defined in the Deed of Trust) nor any event, which with the passage of time or notice or
both, shall constitute an Event of Default under the Loan Documents.

     (f) Assignor has no defense as to any of its obligations under the Loan Documents.

     9. Assignee’s Representations. Assignee represents and warrants to and for the benefit of
Lender that:

     (a) Assignee is a limited liability company duly organized, validly existing and in
good standing under the laws of the State of Delaware, duly qualified to transact business
in, and in good standing under the laws of, the State of Arizona. Assignee is member
managed. The sole member of Assignee is TNP SRT NORTHGATE PLAZA TUCSON HOLDINGS, LLC, a
Delaware limited liability company (“NPT Holdings”).

     (b) NPT Holdings is a limited liability company duly organized, validly existing and in
good standing under the laws of the State of Delaware, with the requisite limited liability
company power and authority to be the sole member of Assignee.

     (c) TNP STRATEGIC RETAIL OPERATING PARTNERSHIP, L.P., a Delaware limited partnership,
is the sole member of NPT Holdings (“Sole Member”).

     (d) Sole Member is a limited partnership duly organized, validly existing and in good
standing under the laws of the State of Delaware, with the requisite partnership power and
authority to be the sole member of NPT Holdings. The sole general partner of Sole Member is
TNP STRATEGIC RETAIL TRUST, INC., a Maryland corporation (“General Partner”).

     (e) General Partner is a corporation duly organized, validly existing and in good
standing under the laws of the State of Maryland.

5

 

     (f) Assignee has delivered to Lender true, correct and complete copies of its
Certificate of Formation and Operating Agreement, and any amendments thereto, and such
documents have not been further modified, amended or otherwise changed since the date
thereof and all documents required to be filed in connection with the conduct of Assignee’s
business have been filed in all appropriate offices.

     (g) NPT Holdings has delivered to Lender true, correct and complete copies of its
Certificate of Formation and Operating Agreement, and any amendments thereto, and such
documents have not been further modified, amended or otherwise changed since the date
thereof and all documents required to be filed in connection with the conduct of NPT
Holdings’ business have been filed in all appropriate offices.

     (h) Sole Member has delivered to Lender true, correct and complete copies of its
Certificate of Limited Partnership and Form of Limited Partnership Agreement, and such
documents have not been further modified, amended or otherwise changed since the date
thereof and all documents required to be filed in connection with the conduct of Sole
Member’s business have been filed in all appropriate offices.

     (i) General Partner has delivered to Lender true, correct and complete copies of its
Articles of Incorporation and Bylaws, and any amendments thereto, and such documents have
not been further modified, amended or otherwise changed since the date thereof and all
documents required to be filed in connection with the conduct of General Partner’s business
have been filed in all appropriate offices.

     (j) All statements, representations, and warranties contained in any writing previously
delivered by Assignee to Lender in connection with the Loan Assumption are true and correct
in all material respects, and all obligations of Assignee and all conditions to the making
of the Loan Assumption have been performed and satisfied in all material respects.

     (k) There has been no material adverse change, financial or otherwise, in the condition
of Assignee from that submitted to Lender by Assignee or in any supporting data submitted
therewith, and all of the information contained therein is materially true and correct.

     (l) There is no claim, investigation, litigation or condemnation proceeding pending or
threatened against Assignee except as may have been heretofore disclosed in writing to
Lender.

     (m) There is no judgment, decree, or order of any court or governmental or
administrative agency or instrumentality which has been issued against Assignee and which
has or may have any material effect on the business of Assignee, except as have been
heretofore disclosed to Lender in writing.

6

 

     (n) This Assumption and all other documents required to be executed by Assignee
pursuant to the terms hereof and to the terms of the Transfer Consent have been duly
authorized, executed and delivered, and this Assumption and the Loan Documents constitute
valid and binding obligations of Assignee enforceable in accordance with their respective
terms. No approval, consent, order or authorization of any governmental authority and no
designation, registration, declaration or filing with any governmental entity is required in
connection with the execution and delivery by Assignee of this Assumption.

     (o) The Loan Assumption will not violate or contravene any agreement, indenture, or
instrument to which Assignee is a party or by which it may be bound, or be in conflict with,
result in a breach of, or constitute a default under any such agreement, indenture, or other
instrument, or result in the creation or imposition of any lien, charge, or encumbrance of
any nature whatsoever upon any of the property or assets of Assignee except as contemplated
by the provisions of the Loan Documents, and no action or approval with respect thereto by
any third person is required.

     10. Modification of Deed of Trust. In connection with the Transfer and the Premises to
Assignee and this Assumption, the parties agree to modify the Deed of Trust as follows:

     (a) References. Without limiting the generality of any of the liabilities and
obligations assumed by Assignee hereby, Lender and Assignee agree that, to the extent
applicable: wherever the term “Trustor” appears in the Deed of Trust, such reference shall
mean Assignee.

     (b) Address. The address of the Trustor shown in the first paragraph of the Deed of
Trust is hereby deleted and replaced with the following address:

c/o
Thompson National Properties, LLC, 1900 Main Street, Suite 700,

Irvine, California
92614, Attention: Mr. Steve Corea

     11. Permitted Transfer and Encumbrances. Upon completion of the Transfer, Assignee will be
the owner of the Premises. NPT Holdings (which term shall include any successors in interest as
provided herein) will control Assignee and own, directly or indirectly, at least 51% of the
membership interests in Assignee. Notwithstanding anything to the contrary contained herein or in
the Loan Documents, no consent of or notice to Lender shall be required in connection with, and
Lender agrees that it expressly consents to, the following transfers: (i) the transfer of
membership interests in Assignee as long as NPT Holdings or an affiliate of General Partner
continues to control and to own, directly or indirectly, at least 51% of the membership interests
in Assignee; (ii) the transfer of membership interests in NPT Holdings as long as Sole Member or an
affiliate of General Partner continues to control and to own, directly or indirectly, at least 51%
of the membership interests in NPT Holdings; (iii) the transfer or issuance of securities or
transfer of shares of General Partner; provided,

7

 

however, that any transfer involving more than 49% of the shares of General Partner in a
single transaction or coordinated series of transactions shall be subject to the “Post-Merger
Requirements” (as hereinafter defined); (iv) the transfer of limited partnership interests in Sole
Member, provided that General Partner remains the sole general partner of and controls Sole Member;
(v) so long as the Post-Merger Requirements are satisfied, conduct any merger of General Partner
(regardless of which entity is the surviving entity); and/or (vi) so long as the Post-Merger
Requirements are satisfied, conduct any corporate reorganization (which term excludes any of the
transactions permitted under subsections (i) through (v) of this paragraph) of General Partner,
Sole Member or NPT Holdings.

          For the purposes of this Assumption and the Loan Documents, “Post-Merger Requirements” shall
mean the following: (A) General Partner is the sole general partner of Sole Member; (B) General
Partner shall continue to own, directly or indirectly, at least three (3) retail properties of
similar class to the Property containing in the aggregate at least 300,000 square feet of gross
leasable area; and (C) General Partner shall have a net worth of at least $8,000,000; provided,
however, that the Post-Merger Requirements shall be deemed to be satisfied in connection with any
dissolution or winding up of General Partner.

          Notwithstanding the foregoing or anything in the Loan Documents to the contrary, (i) Lender
expressly permits and consents to the pledge of not more than 49% of the membership interests in
Assignor and NPT Holdings pursuant to that certain Pledge and Security Agreement by and among
KeyBank National Association, a national banking association and Sole Member dated November 12,
2009; and (ii) there shall be no restriction on the ability of Sole Member or NPT Holdings to
pledge non-voting, non-controlling economic interests in NPT Holdings or Assignee.

     12. Modification Only. This Assumption, to the extent it modifies the Loan Documents, is a
modification only, and shall relate back to the original date of execution and delivery of the Loan
Documents, and except as herein provided, all of the terms and conditions of the Loan Documents
shall remain in full force and effect and the parties hereby ratify and confirm the security and
enforceability of the Loan Documents, as expressly modified by this Assumption.

     13. Further Assurances. Assignor and Assignee shall execute, acknowledge, and deliver all
such instruments, and take all such action as may be necessary to further assure Lender the rights
and obligations assigned and reserved hereby and the full benefits hereof and to preserve and
protect this Assumption and all of the rights, powers, and remedies of Lender provided for herein.

     14. Remedies Cumulative, etc. Except as otherwise provided in Section 4 above, each right,
power and remedy of Lender provided for in the Loan Documents and the Guarantor Documents now or
hereafter existing at law or in equity or by statute or otherwise shall be in addition to every
other right, power or remedy provided for in the Loan Documents and the Guarantor Documents or now
or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning
of the exercise by

8

 

Lender of any one or more of such rights, powers or remedies shall not preclude the
simultaneous or later exercise by Lender of any or all such other rights, powers or remedies.

     15. Assignee’s Review of Documents. Assignee acknowledges that it has received, reviewed and
approved the Loan Documents.

     16. Consents. On the terms and conditions set forth herein, Lender hereby consents to (a) the
Transfer, and (b) the Loan Assumption.

     17. Future Transfers or Assignments. Assignor and Assignee acknowledge that Lender’s consent
to the Transfer and the Loan Assumption does not constitute a consent by Lender to any future
transfer, conveyance, or assignment of any right, title, or interest under the Loan Documents and
such transfers, conveyances and assignments are subject to the provisions of the Loan Documents.

     18. Notices. Notices shall be delivered in the manner prescribed in the Deed of Trust to the
parties addressed as follows:

	 	 	 	 	 

	 

	 	If to Assignor:
	 	Crestline Investments, L.L.C.
	 

	 	 	 	Post Office Box 42677
	 

	 	 	 	Tucson, Arizona 85733
	 

	 	 	 	Attention: Alvin Kivel

Lender shall endeavor to give a courtesy copy of any notice given by it to Assignor hereunder to:

	 	 	 	 	 

	 

	 	 	 	Deborah Oseran
	 

	 	 	 	Mendelsohn & Oseran, PLC
	 

	 	 	 	3915 E. Broadway Blvd. #301
	 

	 	 	 	Tucson, Arizona 85711

     provided, however, that Assignor expressly agrees that the failure to give such courtesy copy
shall not affect the validity of the notice given to Assignor.

	 	 	 	 	 

	 

	 	If to Assignee:
	 	TNP SRT Northgate Plaza Tucson, LLC
	 

	 	 	 	c/o Thompson National Properties, LLC
	 

	 	 	 	1900 Main Street
	 

	 	 	 	Suite 700
	 

	 	 	 	Irvine, California 92614
	 

	 	 	 	Attention: Mr. Steve Corea
	 
	 	 	 	 
	 

	 	If to Lender:
	 	Thrivent Financial for Lutherans
	 

	 	 	 	625 Fourth Avenue South
	 

	 	 	 	Minneapolis, Minnesota 55415
	 

	 	 	 	Attn: Loan Administration
	 

	 	 	 	Mortgage and Real Estate Investments

9

 

     19. Balances. The parties agree that, as of the date hereof, (a) the unpaid principal balance
of the Note (which balance reflects the making of the June 15, 2010 monthly installment payment) is
FOUR MILLION THREE HUNDRED NINETY-EIGHT THOUSAND FOUR HUNDRED NINETY-NINE AND 20/100 DOLLARS
($4,398,499.20); and (b) Lender is not holding any impounds for taxes and assessments or any
impounds for insurance premiums.

     20. Validity of Assignment. Assignor and Assignee acknowledge that this Assumption shall have
no force, effect or validity unless Assignor and Assignee consummate the Transfer.

     21. Escrow Waiver Letter. Lender hereby agrees that the escrow waiver letter dated July 10,
2002, from Lender to Assignor shall, notwithstanding anything to the contrary contained therein,
remain in full force and effect with Assignee being substituted for Assignor therein.

     22. Successor and Assigns. This Assumption shall be binding upon and inure to the benefit of
the successors and assigns of the respective parties hereto.

     23. Governing Law. This Assumption shall be governed by and construed in accordance with the
laws of the State of Arizona.

     24. Attorneys’ Fees. In the event of the bringing of any action or suit by a party hereto
against another party hereto by reason of any breach of any of the covenants, conditions,
agreements, or provisions on the part of the other party arising out of this Assumption, the
prevailing party shall be entitled to have and recover of and from the other party all costs and
expenses of the action or suit, including actual and reasonable attorneys’ fees and court costs.

     25. Counterparts. This Assumption, including without limitation that certain Consent by
Guarantors and Indemnitors, which are attached hereto and by this reference incorporated herein,
may be executed in several counterparts, each of which shall be an original, but all of which taken
together shall constitute one and the same instrument.

     26. Captions, Gender, and Number. Any section, paragraph, title or caption contained in this
Assumption is for convenience only and shall not be deemed a part of this Assumption. As used in
this Assumption, the masculine, feminine, or neuter gender, and the singular or plural number shall
each be deemed to include the others whenever the context so indicates.

     27. Effectiveness of Assumption. This Assumption shall not be effective unless and until it
is recorded in the office of the Pima County Recorder. Assignor and Assignee acknowledge and agree
that this Assumption shall not be recorded unless and until all conditions imposed by Lender to
such recordation have been complied with to the satisfaction of Lender. Such conditions include
the conditions set forth in the

10

 

Transfer Consent, which have been satisfied other than with respect to those to be satisfied
upon closing of the Transfer through escrow.

     28. Dating of this Assumption. The parties hereto authorize and instruct LANDMARK TITLE
ASSURANCE AGENCY OF ARIZONA, LLC, an Arizona limited liability company, to date this Assumption
with the date on which this Assumption is offered for recordation in the office of the Pima County
Recorder.

[The remainder of this page is intentionally left blank.]

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     IN WITNESS WHEREOF, the parties have executed this Assumption and Second Modification
Agreement to be effective (although not necessarily signed) as of the date first above written.

ASSIGNOR:

CRESTLINE INVESTMENTS, L.L.C., an
Arizona
limited liability company

	 	 	 	 	 

	By

	 	/s/ Alvin Kivel
 

Alvin Kivel
	 	 
	 

	 	Its Manager	 	 

	 	 	 	 	 	 	 

	STATE OF ARIZONA

	 	 	)	 	 	 
	 

	 	 	)	 	 	ss.
	County of Pima

	 	 	)	 	 	 

     The foregoing instrument was acknowledged before me this 2nd day of July, 2010, by ALVIN
KIVEL, the Manager of CRESTLINE INVESTMENTS, L.L.C., an Arizona limited liability company, on
behalf of the limited liability company.

	 	 	 	 	 
	 	 	 
	 	     /s/ Lee Ann Edmond
 	 
	 	Notary Public 	 
	 	 	 
	 

My Commission Expires:

11/20/2013

12

 

     IN WITNESS WHEREOF, the parties have executed this Assumption and Second Modification
Agreement to be effective (although not necessarily signed) as of the date first above written.

ASSIGNEE:

	 	 	 	 	 	 	 	 	 	 	 

	TNP SRT NORTHGATE PLAZA TUCSON, LLC,
 a

Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:	 	TNP SRT NORTHGATE PLAZA TUCSON HOLDINGS,
LLC, 

a Delaware limited liability company

Its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	TNP STRATEGIC RETAIL OPERATING
PARTNERSHIP, LP, 

a Delaware limited
partnership

Its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	TNP STRATEGIC RETAIL
TRUST, INC., 

a Maryland
corporation 

General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By
	 	/s/ Christopher S. Cameron
 

	 	 
	 

	 	 	 	 	 	

Name Christopher S. Cameron
	 	 
	 

	 	 	 	 	 	Title CFO, Secretary	 	 

13

 

	 	 	 	 	 	 	 

	STATE OF CALIFORNIA

	 	 	)	 	 	 
	 

	 	 	)	 	 	ss.
	County of Orange

	 	 	)	 	 	 

     On July 1, 2010, before me, Bhrizra Comacho, a Notary Public, personally appeared Christopher
S. Cameron, who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed
the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the
instrument.

     I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.

     WITNESS my hand and official seal.

	 	 	 	 	 	 	 

	 

	 	Signature:
	 	/s/ Bhrizra Comacho
 

	 	 

(Seal)

14

 

     IN WITNESS WHEREOF, the parties have executed this Assumption and Second Modification
Agreement to be effective (although not necessarily signed) as of the date first above written.

LENDER:

	 	 	 	 	 

	THRIVENT FINANCIAL FOR LUTHERANS, 

a Wisconsin corporation	 	 
	 
	 	 	 	 
	By

	 	/s/ Paul R. Binder
 

	 	 
	Name Paul R. Binder	 	 
	Title Asst. Vice President	 	 

	 	 	 	 	 	 	 

	STATE OF MINNESOTA

	 	 	)	 	 	 
	 

	 	 	)	 	 	ss.
	COUNTY OF HENNEPIN

	 	 	)	 	 	 

     On July 1, 2010, before me, the undersigned, a Notary Public in and for said State, personally
appeared Paul R. Binder, personally known to me or proved to me on the basis of satisfactory
evidence to be the person who executed the within instrument as a Ass’t Vice President of THRIVENT
FINANCIAL FOR LUTHERANS, a Wisconsin corporation, the corporation that executed the within
instrument.

WITNESS my hand and official seal.

	 	 	 	 	 

	
         
         
(SEAL)

 

	 	/s/ Debra Ruth Schwandt
 

Notary Public
	 	 
	 
	 	 	 	 
	My Commission Expires:
	 	 	 	 
	 
	 	 	 	 
	January 31, 2015
	 	 	 	 

15

 

CONSENT BY GUARANTORS AND INDEMNITORS

     The undersigned, being (a) Guarantors under the “Guaranty” [as defined in that certain
Assumption and Second Modification Agreement of even date herewith (the “Assumption”), by and
between Assignor, Assignee and Lender, of which this Consent by Guarantors and Indemnitors is a
part; all defined terms used in this Consent by Guarantors and Indemnitors, as indicated by initial
capitalization, shall have the meaning given to such terms in the Assumption], and (b) Indemnitors
under the Environmental Indemnity, do hereby (i) consent and agree to (A) the Transfer, and (B) the
provisions of the Assumption; and (ii) acknowledge and agree that, except as provided in the
Assumption, (A) the Guarantor Documents remain in full force and effect in accordance with their
respective terms with respect to events which occurred prior to the Transfer, notwithstanding (y)
the Transfer, and (z) the execution and delivery of the Assumption, and (B) the provisions of the
Assumption shall not, in any way, modify, limit or impair the obligations of the undersigned under
the Guarantor Documents in connection with events which occurred prior to the Transfer.

          IN WITNESS WHEREOF, this Consent by Guarantors and Indemnitors has been executed to be
effective (although not necessarily executed) as of the date of the Assumption.

	 	 	 	 	 
	 	/s/ Daniel Kivel
 	 
	 	Daniel Kivel 	 
	 	 	 
	 	                                                     /s/ Alvin Kivel
 	 
	 	Alvin Kivel 	 
	 	 	 

The undersigned MARIA KIVEL, the wife of Daniel Kivel, hereby acknowledges that she has read and
understands the foregoing Consent, and hereby joins this Consent to the extent necessary to bind
her interest in any property owned by her marital community; and, further expressly covenants and
agrees that recourse may be had under this Agreement to any property owned jointly (as tenants by
entireties, tenants in common, community property or any other form of joint ownership) of the
undersigned and Daniel Kivel, if and to the extent such jointly owned property is included in
assets referred to in any financial statement heretofore or hereafter submitted by Daniel Kivel to
Lender.

	 	 	 	 	 
	 	     /s/ Maria Kivel
 	 
	 	Maria Kivel 	 
	 	 	 

16

 

The undersigned JANICE KIVEL, the wife of Alvin Kivel, hereby acknowledges that she has read and
understands the foregoing Consent, and hereby joins this Consent to the extent necessary to bind
her interest in any property owned by her marital community; and, further expressly covenants and
agrees that recourse may be had under this Agreement to any property owned jointly (as tenants by
entireties, tenants in common, community property or any other form of joint ownership) of the
undersigned and Alvin Kivel, if and to the extent such jointly owned property is included in assets
referred to in any financial statement heretofore or hereafter submitted by Alvin Kivel to Lender.

	 	 	 	 	 
	 	     /s/ Janice Kivel
 	 
	 	Janice Kivel 	 

	 	 	 	 	 	 	 

	STATE OF ARIZONA

	 	 	)	 	 	 
	 

	 	 	)	 	 	ss.
	County of Pima

	 	 	)	 	 	 

     The foregoing instrument was acknowledged before me this 2nd day of July, 2010, by DANIEL
KIVEL, individually.

	 	 	 	 	 
	 	     /s/ Lee Ann Edmond
 	 
	 	Notary Public 	 
	 	 	 

My Commission Expires:

11-20-13

	 	 	 	 	 	 	 

	STATE OF ARIZONA

	 	 	)	 	 	 
	 

	 	 	)	 	 	ss.
	County of Pima

	 	 	)	 	 	 

     The foregoing instrument was acknowledged before me this 2nd day of July, 2010, by ALVIN
KIVEL, individually.

	 	 	 	 	 
	 	     /s/ Lee Ann Edmond
 	 
	 	Notary Public 	 
	 	 	 

My Commission Expires:

11-20-13

17

 

	 	 	 	 	 	 	 

	STATE OF ARIZONA

	 	 	)	 	 	 
	 

	 	 	)	 	 	ss.
	County of Pima

	 	 	)	 	 	 

     The foregoing instrument was acknowledged before me this 2nd day of July, 2010, by MARIA
KIVEL, individually.

	 	 	 	 	 
	 	     /s/ Lee Ann Edmond
 	 
	 	Notary Public 	 
	 	 	 

My Commission Expires:

11-20-13

	 	 	 	 	 

	STATE OF ARIZONA
	 	)	 	 
	 
	 	)	 	ss.
	County of Pima
	 	)	 	 

     The foregoing instrument was acknowledged before me this 2nd day of July, 2010, by JANICE
KIVEL, individually.

	 	 	 	 	 
	 	     /s/ Lee Ann Edmond
 	 
	 	Notary Public 	 
	 	 	 

My Commission Expires:

11-20-13

18

 

LEGAL DESCRIPTION

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

A portion of the Southwest quarter of the Southwest quarter of the Southwest quarter of Section 34,
Township 13 South, Range 14 East, Gila and Salt River Base and Meridian, Pima County, Arizona, more
particularly described as follows:

COMMENCING at the Southwest corner of said Section 34 being monumented by a brass cap in casting;

THENCE North 00 degrees 28 minutes 39 seconds West, along the West line of said Section 34, a
distance of 60.00 feet;

THENCE North 89 degrees 53 minutes 28 seconds East, parallel to the South line of said Section 34,
a distance of 60.00 feet to the POINT OF BEGINNING, monumented by a 1/2 inch rebar tagged “LS 4399”;

THENCE North 00 degrees 28 minutes 39 seconds West, parallel to the West line of said Section 34, a
distance of 15.00 feet to a point, monumented by a 1/2 inch rebar tagged “LS 4399”;

THENCE North 04 degrees 05 minutes 42 seconds East, a distance of 125.43 feet to a chiseled “X”;

THENCE North 00 degrees 28 minutes 39 seconds West, parallel to the West line of said Section 34, a
distance of 124.78 feet;

THENCE North 45 degrees 28 minutes 39 seconds West, a distance of 14.14 feet to a 1/2 inch rebar
tagged “LS 4399”;

THENCE North 00 degrees 28 minutes 39 seconds West, parallel to and distant 60.00 feet Easterly of
the West line of said Section 34, a distance of 305.16 feet to a concrete nail tagged “LS 19324”,
being 20.00 feet Southerly of the North line of the Southwest quarter of the Southwest quarter of
the Southwest quarter, of said Section 34;

THENCE North 89 degrees 52 minutes 03 seconds East, parallel to the North line of the Southwest
quarter of the Southwest quarter of the Southwest quarter of said Section 34, a distance of 555.33
feet to the beginning of a horizontal curve concave Southwesterly and a 1/2 inch rebar tagged “LS
4399”;

THENCE Southerly along said curve, an arc distance of 39.11 feet, said curve having a central angle
of 89 degrees 37 minutes 25 seconds, and a radius of 25.00 feet, to a 1/2 inch rebar tagged “LS
4399”;

 

THENCE South 00 degrees 30 minutes 32 seconds East, a distance of 385.23 feet to a 1/2 inch rebar
tagged “LS 4399”;

THENCE South 89 degrees 43 minutes 18 seconds East, a distance of 19.91 feet to a 1/2 inch rebar
tagged “LS 4399”;

THENCE South 00 degrees 28 minutes 56 seconds East, a distance of 180.00 feet to a 1/2 inch rebar
tagged “CE 1322” on the North right-of-way line of Grant Road;

THENCE South 89 degrees 53 minutes 28 seconds West, parallel to and distant 50.00 feet Northerly of
the South line of said Section 34, a distance of 200.06 feet to a 1/2 inch rebar tagged “CE 1322”;

THENCE North 00 degrees 16 minutes 48 seconds West, a distance of 10.00 feet;

THENCE South 89 degrees 53 minutes 28 seconds West, parallel to and distant 60.00 feet Northerly of
the South line of said Section 34, a distance of 400.30 feet to the POINT OF BEGINNING.

EXCEPT the certain above-ground improvements, buildings and/or structures conveyed in Deed recorded
June 25, 2004 in Docket 12331 at page 1264

			
	Tax Parcel Nos.	 	110-07-414C9

110-07-414D0

110-07-414E1

110-07-414F2

iiexv10w42

EXHIBIT 10.42

PROMISSORY NOTE

	 	 	 

	$5,300,000

	 	Tucson, Arizona
	 

	 	July 10, 2002

FOR VALUE RECEIVED, the undersigned, CRESTLINE INVESTMENTS, L.L.C., an Arizona limited liability
company (hereinafter called “Maker”), promises to pay to the order of THRIVENT FINANCIAL FOR
LUTHERANS, a Wisconsin corporation (hereinafter called “Holder”), by preauthorized Automated
Clearinghouse transaction (“ACH”) or such other reasonable method as Holder directs, to its
account at Bank One, Milwaukee, Wisconsin, Attention: Thrivent Financial for Lutherans, Account
No. 510100001 (Thrivent Loan No. 86070), or at such other place as Holder may from time to time
designate in writing, the principal sum of FIVE MILLION THREE HUNDRED THOUSAND AND NO/100 DOLLARS
($5,300,000.00) plus interest calculated on a daily basis (based on a 360-day year) from the date
that Holder disburses the principal sum on the principal balance from time to time outstanding as
hereinafter provided, principal, interest and all other sums payable hereunder to be paid in
lawful money of the United States of America as follows:

	A.	 	Initially, interest shall accrue at the rate of 6.25% per annum.
	 
	B.	 	All interest accruing during the period commencing on the date of this Promissory Note
(this “Note”) through and including the fourteenth (14th) day of July, 2002,
shall be due
and payable on the date of this Note; such interest payment shall be deducted by Holder
from the commitment fee delivered to Holder by Maker. Thereafter, interest and
principal shall be due and payable in consecutive, equal monthly installments of Thirty-
Four Thousand Nine Hundred Sixty-Three and No/100 Dollars ($34,963.00) each,
commencing on the fifteenth (15th) day of August, 2002 (hereinafter the
“Commencement Date”) and continuing on the fifteenth (15th) day of each and every
month thereafter until this Note shall be paid in full or until the interest rate is reset
pursuant to Paragraph C.
	 
	C.	 	Holder has the option, upon ninety (90) days prior written notice, to increase or
decrease the interest rate at the end of the third loan year, at the end of the sixth loan
year and at the end of the ninth loan year (each a “Reset Date”). Holder may, on any Reset
Date, reset the interest rate to Holder’s then-current interest rate for similar loans. In
the event Holder elects to exercise its option to reset the interest rate on any Reset Date,
the principal and interest payment shall be recalculated by Holder based on the principal
balance outstanding on the Reset Date and an amortization period calculated by subtracting
the number of months elapsed under this Note from 300. Payments will be due in the amount
calculated by Holder commencing on the next regularly scheduled payment date and on the
fifteenth (15th) day of each and every month thereafter until this Note shall be
paid in full or until the interest rate is reset on a subsequent Reset Date pursuant to this
paragraph.

05-115863.03

Promissory Note

Crestline Investments, L.L.C.

Tucson, Arizona

Thrivent Loan No. 86070

 

 

	D.	 	If not sooner paid, the entire unpaid principal balance, all accrued and unpaid
interest, and all other amounts payable hereunder shall be due and payable in full on the
fifteenth (15th) day of July, 2027.

Maker agrees to an effective rate of interest that is the rate stated above plus any additional
rate of interest resulting from any other charges in the nature of interest paid or to be paid in
connection with this Note.

If any payment required under this Note is not paid when due, then, at the option of Holder,
Maker shall pay a “late charge” equal to the greater of three percent (3%) of the amount of that
payment or Five Hundred and No/100 Dollars ($500.00), to compensate Holder for administrative
expenses and other costs of delinquent payments. This late charge may be assessed without notice,
shall be immediately due and payable or, at the option of Holder, added to principal, and shall
be in addition to all other rights and remedies available to Holder.

Acceptance by Holder of any payment which is less than payment in full of all amounts due and
payable at the time of such payment shall not constitute a waiver of Holder’s right to demand
payment of the balance due, or any other rights of the Holder at that time or any subsequent
time.

All payments on this Note shall be applied first to the payment of any costs, fees or other
charges incurred in connection with the indebtedness evidenced hereby, next to the payment of
accrued interest and then to the reduction of the principal balance.

This Note is secured by, among other things, a Deed of Trust, Assignment of Rents, Security
Agreement and Fixture Filing (“Deed of Trust”) of even date herewith, executed by Maker, as
trustor, in favor of the Holder, as beneficiary, encumbering property situate in Pima County,
Arizona. Such Deed of Trust and all other documents or instruments securing the indebtedness
evidenced by this Note or executed or delivered in connection with the indebtedness evidenced by
this Note are hereinafter called the “Loan Documents.” If Holder is made a party to any
litigation by reason of this Note or any of the Loan Documents, Maker agrees to pay all expenses
of Holder and such expenses shall bear interest at the rate of fifteen percent (15%) from the
date such expenses are actually paid by Holder. Maker specifically waives trial by jury for any
matter involving this Note or the Loan Documents.

Time is of the essence of this Note.

Upon the occurrence of any of the following events (“Events of Default”), Holder may, at its sole
option, to be exercised at any time thereafter, with notice to Maker of such option being hereby
expressly waived, declare the entire unpaid principal balance of this Note and all unpaid,
accrued interest thereon, immediately due and payable:

	(a)	 	The failure of Maker to make any payment of principal and/or interest on this Note
within ten (10) days of its due date;
	 
	(b)	 	The failure of Maker to comply with any provisions, obligations, or other representations
contained in this Note or any of the Loan Documents and such failure is not cured by the
performance so required, and the remediation of any consequences the delay in such

05-115863.03

Promissory Note

Crestline Investments, L.L.C.

Tucson, Arizona

Thrivent Loan No. 86070

2

 

	 	 	performance may have caused, within fifteen (15) days after notice of such
failure is given to Maker, provided, however, any failure shall be deemed an Event of
Default upon the occurrence thereof (for which no notice shall be required and no cure
period shall be available to Maker) if such failure (i) is the third (3rd) to occur within
any period of twelve (12) consecutive months (and notice of the first two (2) failures has
been sent to Maker), regardless of whether the same or different failures are involved and
notwithstanding that Maker may have cured within any applicable cure period any previous
failures occurring within such twelve (12) month period, or (ii) in the reasonable
discretion of Holder, constitutes or creates a clear and present emergency or threat to
property described in the Deed of Trust or the lien or security interest created in any of
the Loan Documents. In the event the fifteen (15) days cure period applies to a failure
under this subparagraph (b) and such failure cannot, in the sole discretion of Holder,
reasonably be cured within said fifteen (15) day period, Maker shall have an additional
thirty (30) days to cure such failure so long as Maker is diligently pursuing said cure.
In no event shall the cure period exceed the total of forty-five (45) days.

The failure of Holder to exercise the foregoing option or any other right or remedy available
hereunder, under any Loan Document, at law, or in equity, shall not constitute a waiver of, or
impair, the right to exercise said option or any other right or remedy in the event of any
continuing or subsequent such failure.

After maturity of any installment of the Note (and such failure to pay such installment continues
for ten (10) days) or after maturity of this Note, including maturity upon acceleration, the
amount of the installment or the unpaid principal balance, all accrued and unpaid interest and all
other amounts payable hereunder, as applicable, shall bear interest, until paid at the rate of
fifteen percent (15%) from and after maturity until paid. Maker shall pay all costs and expenses,
including actual and reasonable attorneys’ fees and court costs, incurred in the collection or
enforcement of all or any part of this Note. All such costs and expenses shall be secured by the
Deed of Trust and by all other Loan Documents. In the event of a dispute between Maker and Holder
regarding the interpretation of the Note or the Loan Documents the prevailing party shall be
entitled to court costs and reasonable attorneys’ fees incurred resolving the interpretation and
such court costs and attorneys’ fees shall be set by the court and not by jury (trial by jury
being waived) and shall be included in any judgment.

Notwithstanding the above, Maker agrees that in the Event of Default, followed by acceleration of
the maturity of this Note, a tender of an amount necessary to satisfy the entire indebtedness
shall be deemed a voluntary prepayment, and to the extent permitted by law, shall include the
following prepayment privilege fee; provided further that if such tender occurs during the (i)
loan year one through the first six months of the second loan year; (ii) loan year four through
the first six months of the fifth loan year; (iii) loan year seven through the first six months of
the eighth loan year; and (iv) loan year ten through the first six months of the eleventh loan
year, Maker shall pay a prepayment fee equal to the greater of (i) eight percent (8%) of the
outstanding principal balance or (ii) the amount prepaid times the privilege rate (defined below).
A loan year is each twelve (12) month period starting one month prior to the Commencement Date.

05-115863.03

Promissory Note

Crestline Investments, L.L.C.

Tucson, Arizona

Thrivent Loan No. 86070

3

 

Except as provided below, Maker shall have no right to prepay the principal balance of
this Note during (i) loan year one through the first six months of the second loan year; (ii) loan
year four through the first six months of the fifth loan year; (iii) loan year seven through the
first six months of the eighth loan year; and (iv) loan year ten through the first six months of
the eleventh loan year (the “Prohibited Prepayment Periods”). Commencing with the (a) last six
months of the second loan year through the first nine months of the third loan year; (b) last six
months of the fifth loan year through the first nine months of the sixth loan year; (c) last six
months of the eighth loan year through the first nine months of the ninth loan year; and (d) last
six months of the eleventh loan year through the first nine months of the
twelfth loan year (each a “premium prepayment period”), Maker shall have the right, following the
giving of not less than sixty (60) days prior written notice to Holder, to prepay all (and not
less than all) of the then outstanding principal balance of this Note, together with all interest
accrued, but unpaid thereon to the date of prepayment, plus a premium equal to the greater of (i)
one percent (1%) of the outstanding principal balance of this Note or (ii) the amount prepaid
times the privilege rate. The privilege rate shall be equal to the product obtained by taking the
difference between (1) six and one-quarter percent (6.25%) or the interest rate in effect at the
time of such calculation in the event that Holder has exercised its option to reset the interest
rate and (2) the market yield of U.S. Treasury issues as quoted daily in The Wall Street
Journal which have the closest maturity date (month and year) to the date this Note can be
prepaid at par and multiplying this difference by the remaining term of the premium prepayment
period (the remaining term to be expressed as a fraction equal to the number of days remaining in
the premium prepayment period over 365). The prepayment privilege fee will be reduced to a present
value on a per period basis discounted at the above Treasury issues rate. During the last three
months of (A) the third loan year; (B) the sixth loan year; (C) the ninth loan year; and (D) the
twelfth loan year, Maker shall have the right to prepay this Note in full, upon sixty (60) days
prior written notice to Holder, without premium.

UPON AT LEAST SIX (6) MONTHS PRIOR WRITTEN NOTICE, HOLDER HAS THE OPTION TO DECLARE THE ENTIRE
UNPAID PRINCIPAL BALANCE OF THE NOTE AND ALL UNPAID, ACCRUED INTEREST THEREON, IMMEDIATELY DUE
AND PAYABLE AT THE END OF THE TWELFTH (12TH) LOAN YEAR OR ANY TIME THEREAFTER.

Enforcement of Maker’s liability hereunder shall be limited to the secured property, and any
other collateral Holder may hold to secure payment of this Note, and Holder shall not be entitled
to seek or obtain any deficiency judgment against Maker, except that Maker shall be and remain
fully personally liable for the following:

	(i)	 	tenant security deposits with respect to each lease to the extent not used to satisfy
tenant arrearages of rent or to satisfy damages caused by tenant default;
	 
	(ii)	 	rents paid more than one (1) month in advance of its due date;
	 
	(iii)	 	rents and other similar sums received by Maker from the secured property after Maker has
failed to pay Holder any sum then due and payable or after an Event of Default unless
applied to (A) normal and necessary operating expenses of the secured property or (B) the
indebtedness evidenced by this Note (It is understood and agreed that all revenues

05-115863.03

Promissory Note

Crestline Investments, L.L.C.

Tucson, Arizona

Thrivent Loan No. 86070

4

 

	 	 	derived from the secured property are to be held by Maker as a trust fund to
be used first for the payments due under this Note and the then due and payable legitimate
operating expenses of the secured property and only after such payments shall the revenues
be used for Maker’s personal use and/or distribution.);
	 
	(iv)	 	insurance or condemnation proceeds used for purposes other than those set forth in Section
5 of the Deed of Trust, or as otherwise approved in writing by Holder;
	 
	(v)	 	amounts necessary to pay taxes, assessments or any other charges by a governmental entity
which are a lien upon the secured property at the time Holder takes actual possession of the
secured property or has a receiver appointed;
	 
	(vi)	 	amounts necessary to pay any construction lien, mechanics’ liens, materialmen’s liens or
similar type lien against the secured property arising out of the acts or omissions of
Maker, provided, however, that Maker shall have the right to contest the amount or validity
of any such lien, by appropriate legal proceedings if: (x) the legal proceedings shall
operate to prevent the collection of such lien and (y) Maker shall deposit with Holder or
with the appropriate court or other governmental authority or title insurance company
satisfactory to Holder an amount, with such subsequent additions thereto as may be necessary
or sufficient in Holder’s opinion to pay such liens, together with all estimated interest
and penalties in connection therewith;
	 
	(vii)	 	taxes and fees required to be paid to any government entity for the transfer of title;
	 
	(viii)	 	damages suffered by Holder due to material misrepresentation or waste committed by Maker,
its agents or employees; and
	 
	(ix)	 	all actual and reasonable attorneys’ fees and other costs (including interest accrued as
provided herein on any delinquent payments) incurred by Holder in order to recover from
Maker any amounts for which Maker remains personally liable as provided in subparagraphs (i)
through (viii) above.

Further, Maker shall remain personally liable for the prompt payment of the Loan, to the extent
of the then outstanding principal amount of the Loan, plus accrued but unpaid interest thereon
and any other sums due pursuant to this Note or the Loan Documents, and actual and reasonable
attorneys’ fees and all other costs of collection, upon the occurrence of any of the following:

	(i)	 	Maker used fraud to induce Holder to make the Loan evidenced by this Note;
	 
	(ii)	 	Holder is prevented from acquiring title to the secured property following an Event of
Default and Holder is unsuccessful in collecting on any title insurance policy that it holds
in connection with the secured property because of forfeiture of Maker’s title under
federal, state or local laws;
	 
	(iii)	 	Maker voluntarily files a petition or commences any case or proceeding under any
provision or chapter of the United States Bankruptcy Code or any member of Maker files an
involuntary petition against Maker;

05-115863.03

Promissory Note

Crestline Investments, L.L.C.

Tucson, Arizona

Thrivent Loan No. 86070

5

 

	(iv)	 	There is an unconsented transfer of interest in the secured property as
defined in Section 6.4 of the Deed of Trust.

Maker, sureties, guarantors and endorsers hereof: (a) agree to be jointly and severally bound,
(b) severally waive any homestead or exemption right against said debt, (c) severally waive
demand, diligence, presentment for payment, protest and demand, and notice of extension,
dishonor, protest, demand and nonpayment of this Note, (d) consent that Holder may extend the
time of payment or otherwise modify the terms of payment of any part or the whole of the debt
evidenced by this Note, at the request of any other person primarily liable hereon, and such
consent shall not alter nor diminish the liability of any person, and (e) agree that Holder may
setoff at any time any sums or property owed to any of them by Holder.

This Note shall be binding upon Maker and its successors and assigns and shall inure to the
benefit of the Holder hereof, and any subsequent holders of this Note, and their successors and
assigns.

All notices required or permitted in connection with this Note shall be given at the place and in
the manner provided in the Deed of Trust for the giving of notices.

In the event of any inconsistency between the provisions of this Note and those of the Loan
Documents, the provisions of this Note shall control over those of the Loan Documents.

This Note shall in all respects be governed and construed in accordance with the laws of the State
of Arizona. Venue shall be appropriate only in Tucson, Arizona. The Maker recognizes that a
Court may find that certain provisions of this Note may test and/or exceed the limits imposed by
law with respect to notice and/or waivers of rights. However, the Maker intends for the law to be
interpreted as broadly as possible to support the enforcement of this Note in accordance with its
terms. If any provision of this Note is found by a court of law to be illegal, unenforceable, or
contrary to public policy, then it is the intent of Maker that such provision be given force to
the fullest possible extent permitted by law, and that the remainder of the Note be construed as
if such illegal provision were not contained therein, and that the rights, obligations, and
interests of Maker and Holder under the remainder of the Note shall continue in full force and
effect. For example, if from any circumstances whatsoever, fulfillment of any provision in this
Note or the Loan Documents, would result in an amount paid or agreed to be paid which exceeds the
highest lawful rate permissible under applicable usury laws, then the obligation to be fulfilled
shall be reduced to the limit of such validity, and if Holder shall receive as interest an amount
which would exceed the highest lawful rate, such amount shall be applied to the reduction of the
unpaid principal balance due hereunder in the inverse order of maturity without the application of
a prepayment privilege fee, and not to the payment of interest.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

05-115863.03

Promissory Note

Crestline Investments, L.L.C.

Tucson, Arizona

Thrivent Loan No. 86070

6

 

IN WITNESS WHEREOF, these presents are executed as of the date first written above.

	 	 	 	 	 

	CRESTLINE INVESTMENTS, L.L.C.,	 	 
	an Arizona limited liability company	 	 
	 
	 	 	 	 
	By: 

Name:
Its:

	 	/s/ Alvin Kivel
 

Alvin Kivel
 

Manager
	 	  

05-115863.03

Promissory Note

Crestline Investments, L.L.C.

Tucson, Arizona

Thrivent Loan No. 86070

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